اولویت های بازار، تنظیمات تولید و عملکرد کسب و کار: تجزیه و تحلیل تجربی از ساختار برندگان سفارش

This study carries out an empirical test of the order-winners framework in manufacturing organizations. Hill [Hill, T., 1985. Manufacturing Strategy: The Strategic Management of the Manufacturing Function, first ed. Macmillan, Basingstoke; Hill, T., 2000. Manufacturing Strategy: Text and Cases, second ed. Palgrave, Basingstoke] proposed the order-winners framework to help managers to improve understanding about markets and to develop a consistent manufacturing strategy. The framework defines ideal profiles of products and markets, and manufacturing and investment decisions that relate to alternative process choices. The study tests the hypothesis of a negative relationship between misfit to an ideal profile defined in the framework and business performance in domestic market share, return on sales, and return on investment in a survey of 183 manufacturers from 17 countries. Results found a significant negative relationship between misfit and domestic market share. The study contributes to operations management research by developing a methodology to measure fit as profile deviation in the context of manufacturing, and applying this methodology to the order-winners framework.

Manufacturing strategy formulation has been one of the core issues in operations management research over the last two decades. Several authors, e.g. Fine and Hax (1985), Platts and Gregory (1990), Slack (1994), and Prochno and Corrêa (1995), have proposed theoretical frameworks to link operations management decisions to the corporate strategy. However, a major drawback with these frameworks has been the lack of empirical research to validate their approaches and the proposed relationships between competitive priorities and operations decisions (Swamidass et al., 2001). This has led to a situation in which no manufacturing strategy framework has received general acceptance in the literature (Berry et al., 1999). This validation problem includes the order-winners framework. Hill (2000) proposed the order-winners framework to help managers to improve understanding of their markets and to “… prioritize the investments and developments to better support the needs (order-winning and qualifying criteria) of current and future markets” (p. 88). The framework assists in the selection of a coherent set of choices in manufacturing strategy, using a product profiling approach that compares market and manufacturing decisions across multiple dimensions (Voss, 1995 and Bozarth and Berry, 1997). Ideal profiles specified in the framework include aspects of markets (ex. order-winner priorities), products (ex. product type), and manufacturing and investment (ex. level of capital investment). Each profile corresponds to one of the five process choices of project, jobbing, batch, line, and continuous processing. Despite its wide recognition and durability in the manufacturing strategy field, critical analysis of the order-winners framework has been restricted to Spring and Boaden's (1997) theoretical reappraisal. To the best of my knowledge, the only empirical support to date consists of case study applications in Berry et al. (1999) and Hill (2000). In an attempt to fill this research gap, this study carries out an empirical test of the order-winners framework in manufacturing. Specifically, it tests the hypothesis of a negative relationship between business performance and a misfit to ideal profiles of products and markets, and manufacturing and investment defined in the framework. The analysis uses data from the third round of the International Manufacturing Strategy Survey (IMSS-III). The sample consists of 183 manufacturers of fabricated metal products, machinery, and equipment from 17 countries.

This study provides two major contributions to manufacturing strategy research and practice. First, it develops a methodology for measuring fit as profile deviation in the context of manufacturing. Even though the concept of fit has always been at the core of manufacturing strategy research, its empirical measurement has proven to be a challenging and elusive task. Frameworks such as Hill's (2000) product profiling, Slack's (1994) importance-performance matrix, and Platts and Gregory's (1990) manufacturing audit are useful for guiding broad strategic discussions, but they often provide limited guidance with regard to measurement and analysis procedures in empirical research. Starting with Venkatraman's (1989) Euclidean distance scheme, this study developed a measurement procedure using deviation measures and regression analysis that might be used by other researchers aiming at investigating the empirical effects of fit configurations in manufacturing. The second major contribution has been the application of the study methodology to the empirical analysis of the order-winners framework. Despite its recognition and durability, the framework has had limited empirical validation. The results suggest that misfit to a profile of products and markets, and manufacturing and investment choices defined in the order-winners framework may be negative and significantly related to market share performance. This indicates that the negative association between operations strategy misfit and performance found by Vickery (1991), Choe et al. (1997), and Smith and Reece (1999) among others similarly apply to the order-winners framework. The study findings not only reinforce the importance of achieving fit in manufacturing strategy but also, and perhaps more importantly to academics and practitioners, validate the use of profiles defined in the order-winners framework to support market share performance. 5.1. Order-winners, manufacturing configuration, and business performance The results suggested that misfit to a profile of products and markets, and manufacturing and investment decisions defined in the order-winners framework was negative and significantly related to performance in market share and non-significantly related to performance in return-on-sales and return-on-investment. Close examination of results in light of Hill's (2000) analysis of corporate objectives suggests that findings concerning market share and ROI were consistent with the framework and its implications. Increasing market share appears, indeed, to be the major objective with adoption of the framework. Despite its tautology, the definition of order-winners as “… those criteria that win the order” (p. 37), describes well the framework purpose. This definition is also consistent with the author's view of functional strategies, which was expressed in another work: “markets are the common denominator of functional strategies. Firms need to be intent on maintaining current market share, growing share in current markets and entering new markets” (Hill, 1997, p. 263). Other authors have also highlighted the pre-eminence of market share as business performance target in the order-winners framework. Hörte and Ylinenpää (1997) explored hypotheses of a negative association between managers/customers disagreement about order-winners and performance, which was measured in terms of sales and sales growth. O’Neil and Iveson (1991) and Bommer et al. (2001) have also reiterated the view that manufacturing focus on order-winners aim at growing volume and market share. Contrary to market share, the coefficients of relationship between misfit and ROS and between misfit and ROI had a low level of significance. Hill (2000) did not appear to expand the discussion on ROS beyond its listing as a usual corporate strategy objective. However, his thorough analysis of the framework implications for accounting and financial control appears to indicate that ROI is not an appropriate measure of success with the framework implementation: “excessive use of return on investment (ROI) distorts strategy building” (p. 275). He points out to a potential trade-off between ROI and market share, and advises managers to make the investments that are needed to guarantee sales even at the expenses of capital returns: In times of capital rationing, the argument put forward in support of high return-on-investment thresholds is that they motivate a company to cream off the more appropriate investment proposals and hence use available funds for the best opportunities. But this line of argument fails to assess the relevance of investment proposals in the context of an agreed corporate strategy … at worst, the investments essential for manufacturing to provide its contribution to market objectives are not even made. For instance, delays in inappropriate investment would lead to costs not declining as expected … loss of market share would eventually follow (Hill, 2000, pp. 275–276). Does this imply that no specification of manufacturing strategy fit can support performance in ROS and ROI? Certainly not, and this is not how the results from this study should be interpreted. For example, Randall and Ulrich (2001) found a positive relationship between product variety/supply chain structure match and performance in ROS and ROI. What this study has found is that fit as specified in the order-winners framework can relate significantly to market share, but not necessarily to ROS and ROI. Moreover, the analysis used cross-sectional data on manufacturing strategy choices and performance, and thus did not capture the potential long-term effects of misfit. This presents an opportunity for further studies to validate the framework in a longitudinal basis. 5.2. Implications for practice The findings have direct implications for manufacturing organizations that aim to maintain or increase market share. These organizations must continuously review their manufacturing strategies to identify the aspects of market priority, product structure, manufacturing configuration, and investment that deviate from the remaining areas of their business. Strategic review must be followed by action to reduce deviation through changing the configuration of one or more mismatched aspects. For example, the framework indicates that maintaining work-in-process levels above the industry average at plants that aim at competing on price and standard products is detrimental to performance. In this situation, managers must either reduce work-in-process or, eventually, use the existing work-in-process to support improvements in delivery speed and product customization. The previous example also illustrates how multiple paths can similarly lead to improved fit in manufacturing strategy. This is due to the framework assumption of equifinality, i.e. that multiple profiles of market and manufacturing can be similarly effective. Again, as repeated many times before, managers are encouraged to move away from panaceas and strategy replication; what is necessary is to raise awareness about the requirements and capabilities of the current operations, and to introduce initiatives to reinforce the match between markets, products, manufacturing, and investment. 5.3. Limitations and future research As with any other study, this analysis had limitations that might be addressed in future research. The first limitation concerned the specification of ideal fit configurations that assumed linearity of profile dimensions in the framework. For example, CAPINV would always increase and SPECPROD always decrease from low volume to high volume processes. However, few profile dimensions have perfect linear relationship with process choice in the framework. For example, ‘type of product’ should be ‘special’ in both project and jobbing systems, and ‘standard’ in both line and continuous systems. The assumption of linearity between fit dimensions and process choice enabled the estimation of a single misfit measure for all respondents. Future studies might develop analytical procedures such as cluster analysis or nonlinear regression models to incorporate nonlinear functions in the analysis. Seven variables were used to represent the organizations profile, even though the order-winners framework incorporates a greater number of dimensions. The choice of variables followed reliability concerns (using variables with direct representation in the survey database), the focus on dimensions that clearly discriminated between low volume and high volume processes, and the attempt to strike a balance in the number of variables representing the different categories of products and markets, and manufacturing and investment represented in the framework. Still, since three of the seven variables related to the choice of order-winners (with the remaining four variables measuring choices in product and process configuration), the study's fit equation might have given comparatively higher emphasis to competitive priorities than it was originally considered in the framework. Thus, even though the results appeared to validate my choice, future research might expand the study scope to test the order-winners framework using a broader range of profile dimensions. Misfit was measured as profile deviation under assumption of equifinality. Under this approach, the average of the standardized scores of organization i represents its own ideal profile. From the perspective of individual respondents, this approach appeared to be fair, as it minimized the misfit score of each organization. Still, one might argue that this ‘average profile’ would not always correspond to the organization's ‘best profile’, and that the identification of the best profile should follow the analysis of external variables such as competitors’ practices and customer requirements. However, this proposal might also have validation problems, as researchers would need to specify what particular configuration of order-winners, products, and processes should correspond to variations in competitive practices and customer requirements. Further research is needed to compare the merits of these and other alternative approaches in measuring fit as profile deviation. Finally, the analysis was limited to a survey of manufacturers of fabricated metal products, machinery, and equipment (ISIC 38). Therefore, caution must be taken in generalizing results to other industries. The focus on a single sector aims to maximize homogeneity and internal validity, and minimize the influence of variance between sectors. Future studies might incorporate data from different sectors and control for industry variance. Given the complexity and limitations of the measurement procedure, one might be tempted to ask, “should I even try to measure manufacturing strategy fit”? As has been discussed before, fit is one of the core concepts in manufacturing strategy, and most of its formulation and audit frameworks are based on the notions of internal and external fit. However, most of these frameworks remain largely untested for lack of development in empirical methods. From an organization's practical and individual perspective, those frameworks are perhaps more easily applied using an intuitive, semi-structured approach. However, from a research perspective, the way forward seems to be to develop better empirical methods to evaluate the benefits of fit as prescribed by existing manufacturing strategy frameworks. Despite its limitations, this study is the first to provide a broad empirical assessment of the order-winners framework. Its results also reinforce the opportunity for more research to measure fit and draw the limits of manufacturing strategy frameworks. There is now considerable agreement on the need for developing manufacturing strategies and achieving fit between marketing and manufacturing decisions. However, most of the methods that focus on this task remain largely untested, leaving practitioners and academics with limited indication as to the principles underlying alternative methods, their applicability to different manufacturing contexts, and their support to business performance. This study reinforces the need and opportunity for more research to outline the principles, purpose, and benefits of existing manufacturing strategy frameworks.