Effective product development requires firms to unify internal and external participants. As companies attempt to create this integrated environment, two important questions emerge. Does a high level of internal integration lead to a higher level of external integration? In the context of product development, this study considers whether internal integration in the form of concurrent engineering practices affects the level of external integration as manifested by customer integration, supplier product integration, and supplier process integration. External integration, in turn, may influence competitive capabilities, namely product innovation performance and quality performance. Second, using contingency theory, do certain contextual variables moderate the linkages between integration strategy (external and internal) and performance? Specifically, this study considers whether uncertainty, equivocality, and platform development strategy change the relationships among internal integration, external integration, and competitive capabilities. Data collected from 244 manufacturing firms across several industries were used to test these research questions. The results indicate that both internal and external integration positively influence product innovation and quality and ultimately, profitability. With respect to contingency effects, the results indicate that equivocality moderates the relationships between integration and performance.

The measurement of unobservable (latent) variables has been a recent phenomenon in the manufacturing research area. Most available empirical research in manufacturing has been exploratory in nature and has borrowed its methods extensively from other fields such as psychology, sociology, and marketing. Traditional exploratory techniques have been used to provide preliminary scales and assess measurement properties. Manufacturing researchers have, however, overlooked the assessment of unidimensionality, an essential measurement property and a basic assumption of measurement theory. An explicit evaluation of unidimensionality can be accomplished with a confirmatory factor analysis (CFA) of individual measures as specified by a multiple‐indicator measurement model. A paradigm for scale evaluation incorporating CFA for the assessment of unidimensionality is outlined here along with methodology to assess other measurement properties such as convergent validity, discriminant validity, composite reliability, and average variance extracted. A measurement model is tested first followed by a structural model of interest. The hypothesized structural model relates pull production with two of its antecedents, setup improvement and preventive maintenance practices. It further relates pull production to one of its consequences, delivery dependability. Responses from 244 firms are used to test the measurement and structural model.

We investigate here antecedents and consequences of supplier integration (black-box and gray-box) in product development activities. Antecedents include embeddedness with suppliers, supply base rationalization, and supplier selection based on product development capabilities. Product innovation and quality are modeled as returns of supplier integration in product development. We also assess the moderating role that firm size may play in the relationships we posit. Our research framework relies primarily on the social network perspective (SNP) and using a sample of 157 firms we found support for many of the posited hypotheses. Specifically, we found that embeddedness with suppliers is positively related to supply base rationalization and supplier selection based on product development capabilities. Supply base rationalization has a significant positive impact on gray-box integration (i.e., suppliers working along side the customer's engineers for product development) but not black-box integration (i.e., suppliers carry out on their own the development of components or parts for the customers). On the other hand, selecting suppliers based on their product development capabilities leads to higher levels of both gray-box and black-box integration. Only gray-box integration manifests statistically significant positive effects towards product innovation. The effects of black-box integration are negligible. Product innovation exhibits strong positive effects on quality. We also found partial support for the moderating impact of firm size. Supply base rationalization practiced by small firms has a statistically significant negative impact on black-box integration but there is no statistically significant effect for large firms. Supply base rationalization is statistically related to gray-box integration only for large firms. Finally, the positive effects of product innovation on quality are more potent for large firms. #

a b s t r a c tPerformance measurement (PM) systems have been popularized over the last 20 years and the operations management literature is replete with discussion of metrics and measurement systems. Yet, a comprehensive nomological network relating types of PM system uses to organizational capabilities and performance is lacking. Furthermore, there is scant empirical evidence attesting to the explanatory efficacy of PM systems as it relates to organizational performance. We view PM system uses through the lenses of the Resource Orchestration Theory (ROT) and explore specific relationships of underlying variables by relying on the Organizational Information Processing Theory (OIPT). Resting on the extant literature, we identify two types of uses which include Diagnostic Use (the review of critical performance variables in order to maintain, alter, or justify patterns in an organizational activity) and interactive use (a forward-looking activity exemplified by active and frequent involvement of top management envisioning new ways to orchestrate organizational resources for competitive advantage) and relate them along with their interaction (i.e., dynamic tension) to organizational capabilities. We further link capabilities to target performance, which subsequently impacts organizational performance (operationalized through both perceptual and objective financial performance measures). The nomological network is tested via a cross sectional study (386 Italian firms) while the efficacy of PM systems to explain organizational performance is examined by using longitudinal panel data approaches over a 10 year period. There is sufficient evidence to suggest that the use of PM systems leads to improved capabilities, which then impact performance. Contrary to the extant literature, however, we discovered that Diagnostic Use appears to be the most constructive explanatory variable for capabilities. On the other hand, in light of a longitudinal study, we also uncovered that Diagnostic Use experienced depreciating returns as far as objective financial measures are concerned. Also, when high levels of Diagnostic Use were coupled with low levels of Interactive Use, they produced the lowest levels of organizational capabilities. Conversely, high levels of both types of PM system use generated extraordinary high levels of capabilities. There is sufficient evidence to suggest that organizations cannot rely merely on Diagnostic Use of PM systems. We also learned that the effects of PM systems (measured via adaptation) fade unless high learning rates are applied. We offer detailed recommendations for future research which have theoretical as well as empirical implications. (X. Koufteros), verghese-a@mays.tamu.edu (A.J. Verghese), llucianetti@unich.it (L. Lucianetti). construct integrated PM systems and Gunasekaran et al. (2004) proposed a framework for supply chain performance measurement. Melnyk et al. (2004) discuss metrics and performance measurement while Neely (1999; 2005) furnished a treatise on the evolution of performance ...