Presents a framework of manufacturing competence, and tests its theoretical validity using empirical data from a large‐scale survey. Interesting findings include: the regression analysis shows that manufacturing competence is better represented when low‐priority capabilities are not explicitly considered; the manufacturing competence index appears to have more significant statistical relationships with some performance measures (such as the return on assets and return on sales) than with others – manufacturing matters, but not equally to all the financial and market performance; the concept of manufacturing competence is found to be more influential in determining the business performance in the electronics sector than in the machinery industry. Does manufacturing competence matter equally in all industries, or does it matter more in a specific industry? If so, what makes manufacturing competence so important? Advocates further study to answer these questions and to complete the theory of manufacturing competence.

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Business strategy Competitive priorities Relative importance of competitive capabilities Manufacturing objectives Relative emphasis on performance targets Action plansChoice of improvement programmes Business performance Manufacturing strategy process

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