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The impact of manufacturing and supply chain improvement initiatives: A survey comparing make-to-order and make-to-stock firms

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  • Olhager, Jan
  • Prajogo, Daniel I.
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    Abstract

    Manufacturing firms aim at improving both internal and external processes to improve the competitive advantage. Such initiatives include lean practices as well as supplier rationalization and integration. In this paper, we analyze these improvement initiatives and their impact on business performance. In particular, we explore potential differences between make-to-order (MTO) and make-to-stock (MTS) firms. We use data from 216 Australian manufacturing firms. We find a clear difference of improvement focus between MTO and MTS firms. MTO firms exhibit a significant impact of supplier integration on business performance, but not for lean practices and supplier rationalization. The situation is completely reversed for MTS firms, since they have significant effects for internal lean practices and supplier rationalization, but not for logistics integration with supplier. The results show that the distinction between MTO and MTS firms is important when analyzing manufacturing and supply chain improvement initiatives.

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    Bibliographic Info

    Article provided by Elsevier in its journal Omega.

    Volume (Year): 40 (2012)
    Issue (Month): 2 (April)
    Pages: 159-165

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    Handle: RePEc:eee:jomega:v:40:y:2012:i:2:p:159-165

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    Related research

    Keywords: Survey research Decoupling point Lean practices Logistics integration Supplier relationships Business performance;

    References

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    1. Ben Naylor, J. & Naim, Mohamed M & Berry, Danny, 1999. "Leagility: Integrating the lean and agile manufacturing paradigms in the total supply chain," International Journal of Production Economics, Elsevier, vol. 62(1-2), pages 107-118, May.
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    3. Seidmann, Abraham & Sundararajan, Arun, 1997. "The effects of task and information asymmetry on business process redesign," International Journal of Production Economics, Elsevier, vol. 50(2-3), pages 117-128, June.
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    5. Yue, Jinfeng & Xia, Yu & Tran, Thuhang, 2010. "Selecting sourcing partners for a make-to-order supply chain," Omega, Elsevier, vol. 38(3-4), pages 136-144, June.
    6. Tseng, Fang-Mei & Chiu, Yu-Jing & Chen, Ja-Shen, 2009. "Measuring business performance in the high-tech manufacturing industry: A case study of Taiwan's large-sized TFT-LCD panel companies," Omega, Elsevier, vol. 37(3), pages 686-697, June.
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    8. van Donk, Dirk Pieter, 2001. "Make to stock or make to order: The decoupling point in the food processing industries," International Journal of Production Economics, Elsevier, vol. 69(3), pages 297-306, February.
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    11. Kannan, Vijay R. & Tan, Keah Choon, 2005. "Just in time, total quality management, and supply chain management: understanding their linkages and impact on business performance," Omega, Elsevier, vol. 33(2), pages 153-162, April.
    12. Awi Federgruen & Ziv Katalan, 1999. "The Impact of Adding a Make-to-Order Item to a Make-to-Stock Production System," Management Science, INFORMS, vol. 45(7), pages 980-994, July.
    13. Berger, Paul D. & Gerstenfeld, Arthur & Zeng, Amy Z., 2004. "How many suppliers are best? A decision-analysis approach," Omega, Elsevier, vol. 32(1), pages 9-15, February.
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    Cited by:
    1. Prajogo, Daniel & Olhager, Jan, 2012. "Supply chain integration and performance: The effects of long-term relationships, information technology and sharing, and logistics integration," International Journal of Production Economics, Elsevier, vol. 135(1), pages 514-522.
    2. Danese, Pamela, 2013. "Supplier integration and company performance: A configurational view," Omega, Elsevier, vol. 41(6), pages 1029-1041.
    3. Prajogo, Daniel & Chowdhury, Mesbahuddin & Yeung, Andy C.L. & Cheng, T.C.E., 2012. "The relationship between supplier management and firm's operational performance: A multi-dimensional perspective," International Journal of Production Economics, Elsevier, vol. 136(1), pages 123-130.

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