When to measure productivity: lessons from manufacturing and supplier‐selection strategies

Abstract

Purpose -This study aims to identify the set of circumstances that requires productivity information. It is part of an effort to improve productivity measurement. For this research, when to measure productivity is addressed by linking with manufacturing and supplier-selection strategies. Design/methodology/approach -A survey is developed in order to gain insights into three areas: manufacturing strategies, supplier-selection strategies for maintenance services (MS), and productivity. The development and distribution of a survey are conducted jointly with the Federation of Thai Industries. There are 40 companies completed the survey. The analysis on top executives' opinions, by the correlation analysis, is based on a two-stage manner. The first stage is to list a circumstance that indicates the positive relationships between manufacturing and supplier-selection strategies. The second stage is to match each circumstance with productivity information. Findings -Altogether, they are nine circumstances that need productivity information. For example, when delivery is selected as a manufacturing strategy and quality is chosen as a supplier-selection strategy for MS, productivity measurement is required for an effective management process. Practical implications -Awareness of the relationship between strategic decisions and productivity information helps strengthen performance measurement and subsequently a management process. A strong management process can drive organizational policies and objectives. Originality/value -The more insights into when to measure productivity have been urged by several prominent researchers. A research methodology in this study is also perceived to be useful for possible future applications.

Operations capability, productivity and business performance

“…A firm’s survival depends on its ability to create, access, and utilize new resources, build on its capabilities platform, and make the capabilities more inimitable to achieve competitive advantage (Peteraf, 1993; Yu et al , 2014; Barrales-Molina et al , 2015; Yu and Ramanathan, 2016). The resource-based view (RBV) of the firm further suggests that heterogeneity in firm performance is due to ownership of resources that have differential productivity (Makadok, 2001; Phusavat et al , 2009). Although it has been argued that the productivity and efficiency gains from organizational capabilities such as operations are critical in ensuring that firms maintain their competitive advantage (Krasnikov and Jayachandran, 2008; Phusavat et al , 2009), our understanding of the association between operations capability, productivity, and performance is still very limited.…”

“…The resource-based view (RBV) of the firm further suggests that heterogeneity in firm performance is due to ownership of resources that have differential productivity (Makadok, 2001; Phusavat et al , 2009). Although it has been argued that the productivity and efficiency gains from organizational capabilities such as operations are critical in ensuring that firms maintain their competitive advantage (Krasnikov and Jayachandran, 2008; Phusavat et al , 2009), our understanding of the association between operations capability, productivity, and performance is still very limited. There are still two important issues that have not been addressed in the literature.…”

Modeling of factors affecting supplier selection on start-ups during frequent pandemic episodes like COVID-19

“…Ganguly (2014) presents a proactive supply chain performance technique that considers risky and may be utilized during the supplier selection/audit. Phusavat et al (2009) determine the conditions that necessitate productivity data. It's part of a larger initiative to enhance productivity assessment.…”

Negligent retention of counterproductive employees

“…In addition to the human resource implications of counterproductive-employee behavior and negligent retention, management should be aware of the actual costs associated with the impact that retaining counterproductive employees has on overall organizational performance (Axelrod et al, 2002;Mount et al, 2006). In most organizations, processes are in place to calculate the traditional costs of doing business, such as the cost of producing a product, the cost of scrap, the cost of maintaining work facilities and equipment, the cost of the various elements of the total compensation package, and other miscellaneous costs (Cecil and King, 2011;Coles et al, 2007;Drysdale et al, 2010;Liberopoulos et al, 2007;Keles et al, 2011;Margret, 2002;Ohlson, 2006;Patterson, 2008;Phusavat et al, 2009;Ramírez and Nembhard, 2004;Thilmany, 2008;Williamson, 1981). Furthermore, most organizations are probably capable of determining the approximate cost of sabotaged equipment and employee theft (Mount et al, 2006).…”