Abstract
The aim of this study is to investigate the relationships between manufacturing strategy, practices and performance, and the role of economic context in these relationships. Based on international data collected in 840 firms from 21 countries, a theoretical model with those relationships was tested using Structural Equation Modeling. The results demonstrate that economic context has no effect on strategy, and a negative effect on manufacturing practices and performance. The findings also show that strategy positively affects performance directly and indirectly through the adoption of manufacturing practices. This study contributes for theory and provides managerial insight, showing that for manufacturing firms to be successful in improving their performance it is important to achieve consistency between strategy and the manufacturing practices adopted by the firms. Besides, the study also shows that companies not only have to develop an appropriate strategy to improve performance, but also need to understand how context affects their strategic decisions on manufacturing practices.
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Acknowledgments
The authors thank the financial support provided by National Council for Scientific and Technological Development (CNPq), Brazil; and State of Minas Gerais Research Foundation (FAPEMIG), Brazil.
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Appendix A—Variables and Preliminary Statistics
Appendix A—Variables and Preliminary Statistics
Variables | Factor loading | Communality | Reliability |
|---|---|---|---|
Economic context | |||
Higher education and training | 0.893 | 0.798 | 0.889 |
Goods market efficiency | 0.927 | 0.859 | |
Labor market efficiency | 0.805 | 0.648 | |
Financial market development | 0.844 | 0.712 | |
Technological readiness | 0.842 | 0.708 | |
Strategy | |||
Better product design and quality | 0.747 | 0.558 | 0.706 |
Better conformance to customer specification | 0.730 | 0.533 | |
Superior product assistance/support | 0.678 | 0.459 | |
Offer more product customization | 0.664 | 0.441 | |
Offer new products more frequently | 0.587 | 0.354 | |
Manufacturing practices | |||
Quality improvement and control | 0.751 | 0.564 | 0.835 |
Improving equipment availability | 0.808 | 0.652 | |
Benchmarking/self-assessment | 0.755 | 0.571 | |
Use of advanced processes | 0.649 | 0.421 | |
Development towards a “factory for the future” | 0.756 | 0.572 | |
Engaging in process automation programs | 0.737 | 0.544 | |
Performance | |||
Conformance quality | 0.745 | 0.555 | 0.817 |
Product quality and reliability | 0.782 | 0.611 | |
Volume flexibility | 0.723 | 0.523 | |
Mix flexibility | 0.722 | 0.521 | |
Product customization ability | 0.666 | 0.444 | |
New product introduction ability | 0.703 | 0.494 | |
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Gambi, L.d., Boer, H., Boer, H.E.E., Gerolamo, M.C. (2020). The Influence of Economic Context on the Relationship Between Manufacturing Strategy, Practices and Performance. In: Thomé, A.M.T., Barbastefano, R.G., Scavarda, L.F., dos Reis, J.C.G., Amorim, M.P.C. (eds) Industrial Engineering and Operations Management. IJCIEOM 2020. Springer Proceedings in Mathematics & Statistics, vol 337. Springer, Cham. https://doi.org/10.1007/978-3-030-56920-4_33
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