An examination of the relationship between manufacturing flexibility and firm performance

Abstract

Purpose -The purpose of this paper is to test the mediating role of three types of innovation (product, process, and organizational) in the relationship between manufacturing flexibility and performance. Design/methodology/approach -Building on the resource-based view, the paper examines the indirect effects of manufacturing flexibility on organizational performance considering product, process, and organizational innovation as mediating variables. A sample of 159 Spanish firms is taken to test the proposed theoretical model through structural equations modeling using the partial least squares approach. Findings -The effect on organizational performance of adopting a flexible productive system is mediated by incorporating product, process, and organizational innovation. This paper calls for caution in defending flexible manufacturing systems as universally efficient solutions, and argues that their productivity is linked to the complementary introduction of organizational and technological innovations. Practical implications -Firms that pursue manufacturing flexibility should develop innovation capabilities to obtain an improvement in organizational performance. Therefore, managers should bear in mind that the mere fact of adopting a flexible manufacturing system will not guarantee improvements in firm performance. If manufacturing flexibility is to help improve company performance, managers should use this flexibility to generate organizational capabilities based on product, process, and organizational innovations, since these are capabilities that can create competitive advantages. Originality/value -Operations management literature has not reached a consensus about the effect of manufacturing flexibility on organizational performance. This paper helps both academics and managers to gain a better understanding of this question by considering the mediating effect of three types of innovation (product, process, and organizational) in this relationship.

Non-technical innovation: Organizational memory and learning capabilities as antecedent factors with effects on sustained competitive advantage

“…However, in the present study, the terminology and definition proposed by ODCE are applied because these have a unifying character that encompasses the essence of both the traditional and more recent definitions. This definition and terminology have also been adopted in recent papers (Armbruster et al, 2008(Armbruster et al, , 2006Camisón & Villar-López, 2010).…”

“…The scale distinguishes between three dimensions: organizational innovations in business practices, innovations in workplace organization, and new organization methods in a firm's external relations, each of which is measured using three reflective items. The scale has been validated by Camisón and Villar-López (2010).…”

Proposition of a model for measuring adherence to lean practices: applied to Turkish automotive part suppliers

“…Having an acceptable level of market share (Tracey and Tan 2001, Yusuf and Adeleye 2002, Kaynak 2003, Nahm et al 2004, Carr and Kaynak 2007, Kaynak and Hartley 2008, Zhou et al 2009, Camison and Lopez 2010, Yang et al 2011). .…”

Knowledge Creation Process and Sustainable Competitive Advantage: the Role of Technological Innovation Capabilities

“…According to previous literature [26,49], "technological innovation capabilities" have also been conceptualized as a multidimensional construct, which includes two dimensions: process innovation capability and product innovation capability. Process innovation capability is defined as a firm's ability to develop new or significantly changed productive and technological processes.…”

“…The measurement scale used in prior work [27] consisted of 11 reflective items, which assessed the extent to which process innovation capability constitutes a particular strength for the firm in comparison with its main competitors. Product innovation capability is defined as a firm's ability to develop new or significantly improved products [26,49,50]. According to prior work [27], the measurement scale was made up by five reflective items, which assessed the extent to which product innovation capability constitutes a particular strength for the firm in comparison with its main competitors.…”