Absorptive capacity and mass customization capability

Abstract

PurposeThe purpose of this paper is to investigate the effects of a manufacturer's absorptive capacity (AC) on its mass customization capability (MCC). Design/methodology/approachThe authors conceptualize AC within the supply chain context as four processes: knowledge acquisition from customers, knowledge acquisition from suppliers, knowledge assimilation, and knowledge application. The authors then propose and empirically test a model on the 2 relationships among AC processes and MCC using structural equation modeling and data collected from 276 manufacturing firms in China. FindingsThe results show that AC significantly improves MCC. In particular, knowledge sourced from customers and suppliers enhances MCC in three ways: directly, indirectly through knowledge application, and indirectly through knowledge assimilation and application. The study also finds that knowledge acquisition significantly enhances knowledge assimilation and knowledge application, and that knowledge assimilation leads to knowledge application. Originality/valueThis study provides empirical evidence of the effects of AC processes on MCC. It also indicates the relationships among AC processes. Moreover, it reveals the mechanisms through which knowledge sourced from customers and suppliers contributes to MCC development, and demonstrates the importance of internal knowledge management practices in exploiting knowledge from supply chain partners. Furthermore, it provides guidelines for executives to decide how to manage supply chain knowledge and devote their efforts and resources in absorbing new knowledge for MCC development.

Linking supply chain quality integration with mass customization and product modularity

“…Investing in supplier development can improve the quality of components and thus reduce supply chain vulnerabilities and quality risks. We also suggest managers involve suppliers into new product development and quality improvement projects because suppliers can provide valuable knowledge and capabilities that can improve the competitiveness of a manufacturer's products and processes (Zhao et al, 2015c). Although researchers argue that quality integration with customers can prevent quality problems and reduce costs of product failures (Huo et al, 2014;Flynn and Zhao, 2015), managers should be aware that customer quality integration cannot directly improve competitive performance.…”

“…For example, a manufacturer can apply time-based manufacturing practices (Tu et al, 2001), adopt sociotechnical work-design principles (Liu et al, 2006), implement cross-functional integration and coordination (Liu et al, 2012b;Zhang et al, 2014), design a flat organizational structure (Zhang et al, 2014), use information technologies to support strategic and operational decision making (Jitpaiboon et al, 2013;Trentin et al, 2012), and develop knowledge management systems to learn from supply chain partners and create knowledge internally (Huang et al, 2008;Zhang et al, 2015c). In addition, we suggest managers apply modular product designs and product platforms to reduce production varieties (Tu et al, 2004).…”

“…When making decisions on the specifications of modules, cross-functional teams play important roles because functional departments may have different interests and priorities (Lai et al, 2012). Moreover, product modularity drives a manufacturer to learn from customers because the feedback and suggestions acquired from customers help a manufacturer to improve the designs of modules as well as recombine modules in innovative ways (Zhang et al, 2015c). Product modularity also decomposes complex products into simple modules and divides product designs into selfcontained tasks, facilitating customer involvement in product development and quality improvement (Duray et al, 2000).…”

“…A manufacturer can thus provide customers with reliable products (Flynn and Flynn, 2005;Huo et al, 2014). Frequent customer contact and qualification can lead to agreements on quality requirements and product specifications between a manufacturer and customers, which reduce market uncertainties and gaps between customers' perception and expectation on quality (Foster, 2008;Zhang et al, 2015c). Customer involvement enables a manufacturer to use customers' resources and skills in new product development and quality improvement, enhancing flexibility and innovativeness (Lai et al, 2012;Zhang et al, 2014).…”

“…Mass customizers can respond to an increasingly uncertain, competitive, and complex environment and align their businesses with customer requirements (Fogliatto et al, 2010;Salvador et al, 2009;Zhang et al, 2015c). They usually implement advanced channel management, inventory management, and production planning techniques, build lateral relations for internal interactions, and actively manage environments by cooperating with supply chain partners (Trentin et al, 2012;Jitpaiboon et al, 2013).…”