The Value Contribution of Manufacturing Technology Suppliers

Abstract

This research examined the value of advanced manufacturing technology (AMT) supplier support by testing a structural model that relates need for support with actual support received, and the impact of that support on implementation, operational and business success. Current research is expanded by simultaneously testing the relationship between these factors in a single model. The recent adoption of a specific subset of AMT was the unit of analysis. The proposed model has good statistical fit and the four hypotheses were supported. Firms adopting new manufacturing technologies benefit from collaborative relationships with manufacturing technology suppliers, suggesting that the service capabilities of technology suppliers be critically evaluated during supplier and AMT selection. Companies use AMT to achieve higher performance on multiple competitive dimensions and to drive business outcomes (Zhang et al., 2006). However, some AMT adoption processes fail to deliver the planned benefits (Baldwin and Lin, 2002;Percival, 2009) AMT refers to a range of computer controlled technologies and organizational processes used to develop and produce a product (Lewis and Boyer, 2002;Small, 2007). This research focuses on a subset of AMT: computerized numerical control (CNC) machines, direct numerical control (DNC) machines, material working lasers, and robots. This AMT subset is referred to as Shop Floor Manufacturing Technologies (SFMT) for this research. Focusing on SFMT mitigates the moderating impact of technology type (King and He, 2006;Hsiao and Yang, 2011).A Supplier Support Technology Adoption Model was developed and tested to determine the value of AMT supplier support. Results indicate that supplier support facilitates successful technology adoption. Further, technology implementation success is associated with eventual operational success which in turn is positively associated with business performance success. These results suggest that companies should critically evaluate the need for supplier support prior to selecting an AMT. The following section reviews the literature to develop the research model and hypotheses. The research methodology is then discussed, followed by a presentation of the results. The discussion section presents managerial implications, limitations of the research, and future research directions. Review of the literature and model developmentAMT includes a variety of computer-based systems and organizational practices that are used in the development and production of a product (Lewis and Boyer, 2002;Small, 2007). AMT has been categorized by function: stand-alone