Study on World class manufacturing an investigation of Hayes

Description
Although Hayes and Wheelwright originally coined the term ‘world class manufacturing’, the global manufacturing environment has undergone many changes since their work. In the study, we seek to determine whether the practices which they described are still relevant in today’s manufacturing environment.

Ž . Journal of Operations Management 17 1999 249–269
World class manufacturing: an investigation of Hayes and
Wheelwright’s foundation
Barbara B. Flynn
a,)
, Roger G. Schroeder
b,1
, E. James Flynn
a,2
a
Wake Forest UniÕersity, Babcock Graduate School of Management, P.O. Box 7659, Winston-Salem, NC 27109-7659, USA
b
UniÕersity of Minnesota, Carlson School of Management, 332 Management and Economics Building, 271 19th AÕenue South,
Minneapolis, MN 55455, USA
Received 30 October 1996; accepted 31 August 1998
Abstract
Although Hayes and Wheelwright originally coined the term ‘world class manufacturing’, the global manufacturing
environment has undergone many changes since their work. In the study, we seek to determine whether the practices which
they described are still relevant in today’s manufacturing environment. We also look at their list of competitive priorities and
examine whether they function as tradeoffs, as Hayes and Wheelwright suggested, or whether there are synergies between
Ž .
them. The World Class Manufacturing WCM Project data set, comprised of plants in the machinery, electronics and
transportation components industries, was used to construct measures to correspond to the practices and performance
measures suggested by Hayes and Wheelwright. The results indicated that Hayes and Wheelwright’s practices were related
to competitive performance, and that the addition of new manufacturing practices resulted in further improvements in
competitive performance. Thus, Hayes and Wheelwright’s practices are robust and have provided a foundation for the use of
new manufacturing practices. In addition, there was strong support for the notion that the use of world class manufacturing
practices, alone and in combination with new manufacturing practices, leads to the achievement of simultaneous competitive
advantages, supporting the synergies perspective. q1999 Elsevier Science B.V. All rights reserved.
Keywords: World class manufacturing; Operations management; Manufacturing performance
1. Introduction
The term ‘world class manufacturing’ was first
used by Hayes and Wheelwright in 1984. Since then,
the concept has been embraced, expanded and en-
)
Corresponding author. Tel.: q1-336-758-3672; fax: q1-336-
758-4514; e-mail: [email protected]
1
Tel.: q1-612-624-9544; fax: q1-612-626-1316; e-mail:
[email protected].
2
Tel.: q1-336-758-1886; fax: q1-336-758-4514; e-mail:
[email protected].
hanced by a number of authors, who have reinforced
some of Hayes and Wheelwright’s ideas, added some
new practices and ignored others. In this paper, we
analyze the foundation provided by Hayes and
Wheelwright’s work, to determine whether it re-
mains relevant in today’s environment.
Hayes and Wheelwright’s work on world class
manufacturing is important to the field of operations
strategy for several reasons. First, Hayes and Wheel-
wright were the first authors to use the term ‘world
class manufacturing’, laying the foundation for the
work of countless future authors. This is particularly
0272-6963r99r$ - see front matter q 1999 Elsevier Science B.V. All rights reserved.
Ž . PII: S0272- 6963 98 00050- 3
( ) B.B. Flynn et al.rJournal of Operations Management 17 1999 249–269 250
important due to the credibility associated with the
work of Hayes and Wheelwright because of their
seminal work in the area of operations strategy
Ž .
Hayes and Wheelwright, 1979, 1984 .
Second, Hayes and Wheelwright described world
class manufacturing as a set of practices, implying
that the use of best practices would lead to superior
performance. This practice-based approach to world
class manufacturing has been echoed by numerous
Ž .
authors since then. For example, Voss 1995 de-
scribes world class manufacturing as a subset of the
‘best practices’ paradigm of operations strategy.
Much of the study of Japanese manufacturing in
recent years has also focused on the discernment and
use of best practices.
Third, Hayes and Wheelwright were among the
first authors in the operations management arena to
address the issue of tradeoffs vs. synergies in manu-
facturing performance, building on the earlier work
Ž .
of Skinner 1969 . They made a substantial contribu-
Table 1
Summary of Hayes and Wheelwright’s practices
Dimension Rationale Practices
Workforce skills and capabilities U.S. firms have neglected development of Ø Apprenticeship programs
workforce skills and capabilities; this should Ø Cooperative arrangements with voca-
not be left to the schools tional technical institutes
Ø Internal training institutes
Ø Extensive advanced training and retrai-
ning beyond entry level, focusing on skills,
work habits and motivation
Management technical competence U.S. firms experience technical weakness Ø Ensure a significant number of managers
among their managers have engineering or technical degrees
Ø Train potential managers, early in their
careers, in a variety of technologies impor-
tant to the firm
Ø Rotate managers through various func-
tions, to broaden their experience
Competing through quality U.S. firms need to focus on what is impor- Ø Seek to align products and processes to
tant to customers meet needs that are important to customers
Ø Long-term commitment to quality
Ø Strong attention to product design
Ø Involvement of all functions in product
design and quality improvement
Workforce participation Real participation is more than simply Ø Develop a culture of trust between work-
putting employees into teams ers in various departments and between
workers and management
Ø Routine, close contact between manage-
ment and workers
Ø Develop participation policies to ensure
that ‘We’re all in this together’
Rebuilding manufacturing engineering Unique capabilities of equipment can’t be Ø Invest in proprietary equipment
copied Ø Bolster ability to perform sophisticated
maintenance, process upgrades and continu-
ous improvement of existing equipment
Incremental improvement approaches Win the race by creating a constantly Ø Continuous improvement in small incre-
escalating standard ments
Ø Continually adapt to changes in customer
needs
Ž . Adapted from Hayes and Wheelwright 1984 , pp. 375–385.
( ) B.B. Flynn et al.rJournal of Operations Management 17 1999 249–269 251
tion to this debate by arguing that it was important to
have a clear set of priorities between the dimensions
of competitive performance because it was poten-
tially dangerous to try to achieve superior perfor-
mance on multiple dimensions simultaneously. This
debate continues to rage, particularly in the strategic
management field.
In this paper, we address both the robustness of
Hayes and Wheelwright’s original set of practices
and the issue of tradeoffs vs. synergies between
dimensions of competitive performance by testing a
set of propositions in a sample of manufacturing
plants in the machinery, electronics and transporta-
tion components industry in the U.S. We begin by
comparing the practices suggested by Hayes and
Wheelwright with current descriptions of practices
associated with world class manufacturing, pointing
out departures from Hayes and Wheelwright, as well
as consistencies. We then turn to a summary of the
debate about whether the dimensions of competitive
performance represent tradeoffs or synergies, citing
support for each perspective from both the opera-
tions management and strategic management litera-
tures. Finally, the empirical testing and results are
described.
2. Hayes and Wheelwright’s foundation for world
class manufacturing
2.1. Practices
Although Hayes and Wheelwright are primarily
known for their set of stages of manufacturing’s
Ž .
strategic role in the organization 1984 , their frame-
work for manufacturing strategy structure and infras-
Ž .
tructure 1984 and their product-process matrix
Ž .
1979 , they were also the first to use the term
‘world class manufacturing’. Since then, the term
has been used and popularized by many other au-
thors. Hayes and Wheelwright’s description of world
class manufacturing focuses on six practices, some
of which are taken for granted today and others
which seem fairly unique.
There are marked differences between Hayes and
Wheelwright’s set of practices and those described
by recent researchers in this area. Given the dramatic
changes which have taken place in the global manu-
facturing arena since 1984, is Hayes and Wheel-
wright’s set of world class manufacturing practices
still relevant? Will they be more effective if used in
concert with additional, more recently popularized
practices?
2.1.1. Hayes and Wheelwright’s perspectiÕe
Ž .
Hayes and Wheelwright 1984 developed their
concept of world class manufacturing based on in-
depth analysis of the practices implemented by
Japanese and German firms, as well as U.S. firms
which had competed equally with the Japanese and
German firms. The term ‘world class manufacturing’
was used because these firms were associated with
outstanding performance in their global industries,
resulting in their being described as ‘world class’.
Hayes and Wheelwright found that there were many
commonalties between these highly successful firms,
arguing that the key to building competitive strength
is related to six world class manufacturing practices,
summarized in Table 1.
Hayes and Wheelwright found that, relative to
firms in Germany and Japan, U.S. firms had ne-
glected workforce skills and capabilities. They rec-
ommended a proactive stance on the part of U.S.
manufacturers, focusing on apprenticeships, internal
training institutes and cooperative arrangements with
vocational technical institutes. They also found man-
agement technical competence lacking, relative to
Japan and Germany, making management of cutting
edge manufacturing a significant challenge. In addi-
tion to providing technical training for managers,
they suggested developing more managers with engi-
neering or technical degrees, and rotating managers
through technical functions in their organizations.
Although Hayes and Wheelwright called the third
practice competing through quality, their definition
is substantially narrower than recent definitions of
quality management, focusing primarily on the prod-
uct design function, with customers as the drivers of
quality. In terms of workforce participation, Hayes
and Wheelwright emphasized that development of
true worker participation moves beyond simply
putting employees into teams, focusing on culture
change and policies which support employee partici-
pation.
Hayes and Wheelwright’s fifth practice, rebuild-
ing manufacturing engineering, describes the inter-
( ) B.B. Flynn et al.rJournal of Operations Management 17 1999 249–269 252
nal development of equipment with unique character-
istics, which is difficult for competitors to copy.
They also stressed the importance of developing
employees’ ability to maintain and improve their
own equipment. Finally, Hayes and Wheelwright
speak of ‘Tortoise and Hare’ approaches to competi-
tion, or incremental improÕement approaches. While
U.S. firms have traditionally pursued strategic leaps
as a means of manufacturing improvement, Hayes
and Wheelwright suggest that world class competi-
tors pursue continuous improvement in small incre-
ments, winning the race by creating a constantly
escalating standard.
2.1.2. Recent PerspectiÕes
More recent authors have developed their own
descriptions of world class manufacturing practices,
often building on new manufacturing practices, such
as quality management and JIT. In the following
section, we examine two recent descriptions of world
class manufacturing, both based on extensive obser-
vation in world class firms, representing the state of
the art in world class manufacturing practices.
Ž
The first was developed by Schonberger 1986,
.
1990a,b, 1996 , who provides a list of 16 principles
of world class manufacturing. Many of these corre-
spond to Hayes and Wheelwright’s practices, al-
though not necessarily directly. A comparison of
Hayes and Wheelwright’s prescriptions with Schon-
berger’s principles is contained in Table 2. In addi-
Ž .
tion, we consider the work of Giffi et al. 1990 , who
summarizes the attributes of world class organiza-
tions. Those which are related to Hayes and Wheel-
wright’s practices are also summarized in Table 2.
2.1.2.1. Workforce skills and capabilities. Schon-
berger emphasizes the importance of employee de-
velopment, focusing primarily on internal means of
development, such as cross-training, job rotation and
reinforcement of employee development accomplish-
ments, through rewards and recognition. Giffi, Roth
and Seal’s attributes are somewhat broader, suggest-
ing that employee skill development should progress
in tandem with technology development, and that
rewards should be based on the ability to achieve
meaningful goals. Thus, employee development con-
tinues to be an important part of world class manu-
facturing practices. However, its focus has moved
beyond training to include job rotation, cross-train-
ing, rewards and recognition, and linkages with the
firm’s strategy.
2.1.2.2. Management technical competence. Al-
though Hayes and Wheelwright emphasize the im-
portance of having managers with a technical back-
ground, this practice is largely ignored by Schon-
berger. Giffi, Roth and Seal approach this practice
only in the broadest sense, stating that a new knowl-
edge base is required as advanced technology is
installed. Thus, recent descriptions of world class
manufacturing practices lack the suggestion that
management would benefit from an engineering or
technical background, acquired through education,
training or job rotation.
2.1.2.3. Competing through quality. The maxim of
designing for customer needs has become a corner-
stone of most quality management approaches. Like-
wise, it is supported by recent descriptions of world
class manufacturing. However, while Hayes and
Wheelwright focus exclusively on developing prod-
ucts and processes that meet customer needs and
involving all functions in product design, Schon-
berger adds the importance of producing at close to
the customers’ rate of use. He also takes the concept
of cross-functional design a step further, suggesting
organizing the firm by families of customers or
products. Giffi, Roth and Seal extend this to the
notion of ‘customer closeness’, where every em-
ployee has a customer whom he or she personally
relates to. They also emphasize the strategic goal of
making customers the core of an organization’s exis-
tence. Thus, the concept of designing for customer
needs continues to be an important world class man-
ufacturing practice. However, it has moved beyond
the design function to have organizational and strate-
gic implications.
2.1.2.4. Workforce participation. Hayes and Wheel-
wright express concern that many efforts at worker
participation are superficial, stressing the need for
culture change and policies to ensure that, ‘We’re all
in this together’. Schonberger, however, remains at a
fairly superficial level in discussing worker participa-
tion. He prescribes that employees should be in-
volved in activities such as recording their own
( ) B.B. Flynn et al.rJournal of Operations Management 17 1999 249–269 253
Table 2
Comparison of recent descriptions of world class manufacturing with Hayes and Wheelwright’s world class manufacturing practices
Hayes and Wheelwright’s world class Corresponding Schonberger principles Corresponding Giffi, Roth and Seal attributes
manufacturing practices
Workforce skills and capabilities Ø Principle 8: Continually enhance Ø Promote and measure knowledge and skill
human resources through cross-training, development
job and career-path rotation and im-
provements in health, safety and secu-
rity
Ø Principle 9: Expand the variety of Ø Invest in people; develop a pattern for updating
rewards, recognition, pay and celebra- workforce skills and capablilities consistent with
tion—to match the expanded variety of the evolution of technology within the organization
employee contributions
Ø Seek ways to liberate the teams from traditional
organizational controls, and reward and motivate,
based upon ability to achieve meaningful goals
Management technical competence Ø Identify the competitive advantage of the knowl-
edge base that advanced technology can create;
simultaneously implement new technology and
develop the new knowledge base
Competing through quality Ø Principle 1: Team up with cus- Ø Define quality in terms of the customers’ needs.
tomers, organizing by families of cus- Make customer closeness the number one priority
Ž tomers or products what customers Ø Integrate the concept of customer closeness into
. buyruse the organization so that everyone in the organiza-
Ø Principle 7: Operate close to cus- tion has a customer, and everyone’s goal is to pro-
tomers’ rate of use or demand vide quality product and service to his or her
customer
Ø Regard customers as the core of your existence
Workforce participation Ø Principle 4: Frontline employee Ø Dissolve the boundaries between management
involved in change and strategic and worker and between functionally segregated
planning—to achieve unified purpose staff units, to create dynamic cross-functional teams
charged with resolving both strategic and opera-
tional issues
Ø Principle 11: Frontline teams record Ø Empower teams of workers to carry out the
and own process data at the workplace mission of the organization
Ø Eliminate the terms ‘supervisors’ and ‘supervi-
sion’. Develop leaders who can create and execute
the strategic vision through the teams
Rebuilding manufacturing engineering Ø Principle 14: Improve present equip- Ø Develop an investment strategy for the continual
ment and human work before consider- enhancement of technology throughout the organi-
ing new equipment and automation zation, based on a clearly defined vision of future
competitive requirements
Ø Principle 15: Seek simple, flexible, Ø Carefully plan technological upgrades to be
movable, low-cost, readily available consistent with infrastructural upgrades. Benefits
equipment and work facilities—in mul- can be achieved only when the infrastructure is
tiples, one for each productrcustomer capable of integrating and exploiting the technol-
family ogy advantage offered
Incremental improvement approaches Ø Principle 3: Dedicate to continual, Ø Develop manufacturing operations that are flexi-
rapid improvement in quality, response ble and able to respond rapidly to changes in
time, flexibility and value products and markets
Ø Principle 5: Cut to the few best Ø Develop measurement systems that encourage
components, operations and suppliers continual learning
( ) B.B. Flynn et al.rJournal of Operations Management 17 1999 249–269 254
Ž . Table 2 continued
Hayes and Wheelwright’s world class Corresponding Schonberger principles Corresponding Giffi, Roth and Seal attributes
manufacturing practices
Ø Principle 10: Continually reduce Ø Evaluate the success of your human assets on the
variation and mishaps basis of their ability to learn, adapt to change, and
improve performance within their areas of responsi-
bility
Ø Develop accelerated and integrative learning
programs
process data and in continuous improvement, but
offers no suggestions for ensuring genuine involve-
ment. Giffi, Roth and Seal are more specific, sug-
gesting the development of cross-functional teams,
elimination of supervisors and other practices for
breaking down barriers between workers and man-
agement. They also emphasize the important role of
good leaders in the development of team members.
Thus, worker participation remains intact in recent
world class manufacturing practices. Like Hayes and
Wheelwright, Giffi, Roth and Seal express concern
that developing genuine worker participation is a
challenge, moving beyond the implementation of
superficial programs.
2.1.2.5. Rebuilding manufacturing engineering.
Hayes and Wheelwright consider the development of
proprietary equipment to be critical to becoming a
world class manufacturer. In fact, it is one of their
‘litmus tests’ of whether an organization has truly
achieved world class status, because organizations
that develop and maintain their own equipment know
more about what is critical to their business than
their suppliers.
Neither Schonberger nor Giffi, Roth and Seal
explicitly address proprietary equipment. Both, how-
ever, do address issues related to technology. Schon-
berger has a strong bias against investments in
overly-sophisticated equipment, suggesting investing
in the simplest equipment possible and improving
present equipment before considering new equip-
ment and automation. This is somewhat consistent
with Hayes and Wheelwright’s proprietary equip-
ment practice; by developing proprietary equipment,
a firm can customize it to its unique needs, rather
than purchasing unneeded capabilities. Giffi, Roth
and Seal, on the other hand, do not discuss the level
of sophistication of technology investments. Rather,
their attributes focus on appropriate ways for devel-
oping the infrastructure to support technology, at
whatever level it may be. Thus, proprietary equip-
ment, per se, is not a part of recent descriptions of
world class manufacturing. This represents a major
departure from Hayes and Wheelwright’s practices,
since they consider it to be a cornerstone of world
class manufacturing.
2.1.2.6. Incremental improÕement approaches. Hayes
and Wheelwright are quite vague in their discussion
of incremental improvement approaches. Schon-
berger and Giffi, Roth and Seal build upon Hayes
and Wheelwright’s foundation by providing very
specific suggestions about ways in which improve-
ment can be pursued. Schonberger focuses on the
continuous improvement of information, perfor-
mance improvements and quality. He also stresses
the importance of simplification as a form of im-
provement. Giffi, Roth and Seal discuss improve-
ment in terms of flexibility, rapid response, measure-
ment systems, human assets and learning programs.
Thus, both Schonberger and Giffi, Roth and Seal
include incremental improvement approaches in their
description of world class manufacturing, providing
details about areas of implementation not described
by Hayes and Wheelwright.
2.1.3. Summary
In looking at Hayes and Wheelwright’s practices,
it is interesting to note that some continue to be
integral to descriptions of world class manufacturing,
while others have dropped out. In particular, work-
force skills and capabilities, competing through qual-
ity, worker participation and incremental improve-
ment approaches have been strongly supported by
( ) B.B. Flynn et al.rJournal of Operations Management 17 1999 249–269 255
recent accounts of world class manufacturing, and in
most cases, further elaborated upon. This is sup-
ported by numerous anecdotal accounts of the effec-
tiveness of such practices. On the other hand, recent
accounts of world class manufacturing have largely
ignored prescriptions for management technical com-
petence and rebuilding manufacturing engineering.
This is supported by recent empirical work. For
example, Voss and his colleagues visited over 500
manufacturing plants to assess progress on practices
Ž
and performance measures Hanson and Voss, 1993;
Voss, 1995; Voss and Blackmon, 1996; Voss et al.,
.
1997 . They list 46 practices and performance mea-
sures related to world class manufacturing, including
practices related to workforce skills and capabilities,
competing through quality and worker participation.
Although they don’t explicitly include incremental
improvement approaches as a practice, many of their
practices are elements of incremental improvement,
as well. However, like Schonberger and Giffi, Roth
and Seal, Voss, et al. does not include practices
related to management technological competence or
rebuilding manufacturing engineering.
2.1.4. New manufacturing practices
Recent work by Schonberger, Giffi, Roth and
Seal and Voss, et al. differs from the work of Hayes
and Wheelwright by its inclusion of two other key
Ž .
constructs, described by Clark 1996 as ‘new manu-
facturing practices’. Use of new manufacturing prac-
tices, such as quality management and JIT, has led to
Ž
impressive results during the past decade Clark,
.
1996 . Manufacturers which applied these ap-
proaches noted significant improvements in competi-
tive position and increases in productivity and relia-
bility of their products.
‘Concepts such as TQM, JIT and continuous im-
provement are not simply new techniques; taken
together, they represent a new conceptualization of
Ž .
the manufacturing system Clark, 1996, p. 47 .’
Thus, the question of whether these new manufactur-
ing practices have become elements of world class
manufacturing can be raised.’
The first is a broader definition of practices asso-
ciated with quality management. Although quality
management has been defined many ways by various
authors, the definitions appear to be coalescing into a
three-pronged definition. Both academics and practi-
tioners have described quality management as a set
of practices related to three elements: customer fo-
Ž
cus, employee involvement and process focus Dean
.
and Bowen, 1994 . Hayes and Wheelwright took a
narrow approach, focusing primarily on customer
focus in their definition of quality management.
However, they also included employee involvement
in their conceptualization of world class manufactur-
ing. Thus, only process focus was notably lacking
from Hayes and Wheelwright’s work.
Second, the use of JIT has become widespread in
recent years. Its influence is particularly evident in
Schonberger’s work on world class manufacturing.
The domain of JIT practices can be divided into two
sets: core JIT practices, such as use of a demand pull
system and setup time reduction, and practices which
comprise the infrastructure for supporting the use of
those practices, such as workforce involvement in
scheduling and improving the production process
Ž .
Flynn et al., 1995 . Infrastructure practices are well
represented in Hayes and Wheelwright’s world class
manufacturing practices, however this set lacks prac-
tices related to the core practices of JIT.
2.2. CompetitiÕe performance
2.2.1. The tradeoffs perspectiÕe
Ž .
Hayes and Wheelwright 1984 defined competi-
tive priorities as the ways in which a firm chooses to
compete in the marketplace and the types of markets
it pursues, defined in Table 3. It is reasonable to
infer that the use of world class manufacturing prac-
tices will led to superior performance in some subset
of these competitive priorities.
Hayes and Wheelwright stress that, within an
industry, different firms or business units differ in
the emphasis given to each competitive priority, thus
creating their own unique strategic profile. However,
they explicitly advise against the pursuit of multiple
competitive priorities, stating,
Ž .
‘It is difficult if not impossible , and potentially
dangerous, for a company to try to compete by
offering superior performance along all of these
dimensions simultaneously, since it will probably
end up second best on each dimension to some other
company that devotes more of its resources to devel-
Ž .
oping that competitive advantage p. 41 .’
( ) B.B. Flynn et al.rJournal of Operations Management 17 1999 249–269 256
Table 3
Operationalization of dependent variables
a
Dependent variable Hayes and Wheelwright’s definition Operationalization
Cost Unit cost Cost improÕement stwo-year change in cost
Quality–performance High reliability or performance in a standard Mean of two perceptual items which measured
product perceived customer satisfaction with perfor-
mance
Quality–features Features or capabilities unavailable in compet- Percent of sales from products introduced in the
ing products last five years
Dependability–specifications Doing the work as specified Percent of items shipped without requiring
rework
Dependability–on-time delivery Delivery of products on time Percent of deliveries shipped on time
Dependability–service Being ready to mobilize resources instantly to Perception of customer relations, relative to the
ensure that any failures are corrected immedi- industry
ately
Product flexibility Ability to handle difficult, nonstandard orders Perception of plant’s product flexibility, relative
and to take the lead in new product introduction to its global industry
Volume flexibility Ability to accelerate or decelerate production Perception of plant’s volume flexibility, relative
very quickly and juggle orders so as to meet to its global industry
demands for unusually rapid delivery
a
Ž . From Hayes and Wheelwright 1984 , p. 40.
Instead, they suggest that a firm must attach a clear
set of priorities among the dimensions, which is
supported over time by various decisions about re-
source allocation, rewards, competitive profiles, re-
search and development, etc.
The idea of tradeoffs among competitive priorities
Ž .
echoes the well-known work of Porter 1981, 1985 ,
who divided competitive priorities into cost and dif-
ferentiation, which included quality dependability,
flexibility and other attributes. He referred to at-
tempting to simultaneously pursue both competitive
priorities as being a ‘recipe for mediocrity’, describ-
ing such a firm as ‘stuck in the middle’. Kotha and
Ž .
Orne 1989 attribute the lack of success of mixed
approaches to two causes. First, firms which pursue
multiple competitive priorities simultaneously lack
critical focus, producing neither effective reduction
in costs nor differentiation which is sufficient to
attract a premium price. Second, organizations which
follow a mixed approach are positioned in the mid-
dle of their industry, close to competitors which have
strengths resulting from their product and process
characteristics. Empirical support for Porter’s per-
Ž .
spective is provided by Dess and Davis 1984 and
Ž .
replicated by Robinson and Pearce 1988 , whose
work provided construct validity of Porter’s typol-
ogy. They found that firms which pursued generic
strategies, rather than mixed strategies, exhibited
superior performance.
The tradeoffs perspective can be traced back to
Ž .
the seminal work of Skinner 1969 , who described
the diversity of strengths and weaknesses of organi-
zations and how they can be used as a means of
differentiation from competitors. Likewise, produc-
tion systems have different operating characteristics.
Thus, Skinner states that the task of manufacturing
strategy is to configure production systems to reflect
the priorities and tradeoffs inherent in an organiza-
tion’s competitive situation and strategy.
Ž .
Hayes and Pisano 1994 describe the fundamen-
tal robustness of the tradeoffs perspective over time.
Many common practices today can trace their roots
to it. For example, the focused factory concept is
based on the premise that no single organization can
Ž
do all things equally well. Process choice Hill,
.
1989 which prescribes matching product and market
evolution with manufacturing process characteristics,
is based on the idea of shifting competitive priorities
as a product matures.
Ž .
Clark 1996 describes two central propositions of
manufacturing strategy represented by the tradeoffs
perspective. First, there are many ways for an orga-
nization to compete, including low cost, rapid deliv-
ery, superior performance, etc. Second, organizations
( ) B.B. Flynn et al.rJournal of Operations Management 17 1999 249–269 257
cannot be all things to all people. While an organiza-
tion must meet minimum standards on all dimen-
sions of customer choice,
‘ . . . firms that try to do everything exceptionally
well and fail to develop competitive priorities will
end up second best to those firms that concentrate
Ž .
their efforts Clark, 1996, p. 45 .’
The work of a number of more recent authors,
Ž . Ž .
including Hill 1989 , Anderson et al. 1989 , and
Ž .
Miller and Roth 1994 continues to support these
propositions.
2.2.2. The synergies perspectiÕe
A number of authors have questioned whether
there are necessarily tradeoffs between competitive
Ž .
priorities. Ferdows and DeMeyer 1991 , although
acknowledging that tradeoffs sometimes exist, ar-
gued that they can be avoided through the use of a
cumulative approach, which begins by establishing a
strong foundation of high quality operations. This
should be followed by developing capability in de-
pendability, flexibility and, finally, cost. Thus, pur-
sued in a specific order, competitive priorities can
reinforce each other, rather than functioning as trade-
offs.
Ž .
Hill 1988 observed two weaknesses in the trade-
offs perspective. First, many industries do not have a
unique low cost position. This is particularly true of
mature industries, where most firms have already
achieved minimum-cost structures. In these indus-
tries, firm which also differentiate are rewarded by
superior economic performance because their prod-
ucts have more value. Hill also demonstrated that
differentiation can be a means to achieve an overall
low cost position. Although the immediate effect of
differentiation may be to increase unit costs, there is
frequently a long-run reduction of cost as demand
for a more valuable product increases, due to learn-
ing effects and economies of scale and scope. This is
consistent with the ‘quality is free’ discussion of
Ž .
quality by Crosby 1979 .
Ž .
More recently, D’Aveni 1994 criticized the
tradeoff perspective for being static and presenting a
‘‘simple accounting-based view of where profits
Ž .
come from’’ 1994, p. 3 . He noted that a dynamic
approach should incorporate how competitors would
Ž .
react and maneuver all four bases of competition: 1
Ž . Ž .
cost and quality, 2 timing and know-how, 3
Ž .
strongholds, and 4 deep pockets. This results in
hypercompetition, where a firm’s goal is to achieve a
temporary advantage and continuously disrupt the
market, in order to destroy the advantage of competi-
tors.
Ž .
Kotha and Vadlamani 1995 found Porter’s ty-
pology inadequate as they attempted to fit it to the
strategies of a sample of discrete parts manufactur-
ers. They speculated that their findings differed from
earlier empirical work because of changes in the
competitive environment caused by increased global
competition and changes caused by the introduction
of new manufacturing practices, such as JIT and
quality management, which may have increased the
complexity of the competitive environment.
Ž .
According to Schonberger 1986 , the tradeoff
theory has been outdated by world class manufactur-
ing, in which the adoption of world class practices
stimulates solutions to quality problems, thus, elimi-
nating unnecessary stocks, reducing waste and pro-
cessing. This is reflected in a compression of costs
and a reduction of lead time. The resulting absence
of tradeoffs requires that a world class manufacturer
modify its managerial focus so that it no longer
analyzes and chooses which types of performance to
focus on, but rather, achieves high level perfor-
mance, across the board. This is supported by the
Ž
empirical work of other authors Ferdows and De-
Meyer, 1991; Vickery et al., 1993; Ward et al.,
.
1994 .
Ž .
Womack et al. 1990 supported this approach in
The Machine That Changed the World, using the
term ‘lean producer’ to describe an organization
which pursued multiple competitive priorities simul-
taneously.
‘The lean producer combines the advantages of craft
and mass production, while avoiding the high cost of
the former and the rigidity of the latter . . . it requires
keeping far less than half the needed inventory on
site, resulting in fewer defects and producing a greater
Ž .
and ever-growing variety of products p. 13 .’
Ž .
New 1991, 1992 attempted to integrate the
tradeoff and synergy approaches. He criticized
Ž .
Schonberger’s 1986 position, pointing out that little
research evidence has been offered in support of the
( ) B.B. Flynn et al.rJournal of Operations Management 17 1999 249–269 258
abandonment of the tradeoffs model, other than case
examples, which are almost universally taken from
Ž
high volume, repetitive manufacturing plants New,
.
1991 . However, he also pointed out that a great deal
of the empirical research which supports the trade-
offs theory was completed before the widespread
growth of innovative managerial practices such as
JIT and quality management. According to New, the
radical changes which have taken place in the defini-
tion of performance, the use of production technolo-
gies and the organization of management and human
resources have dramatically changes the context of
these performance areas. The result is that some
classical tradeoffs can be overcome today, whereas
others remain unaltered and some new tradeoffs have
been created. For example, while quality defined as
conformance is no longer considered a tradeoff with
cost, delivery time and flexibility, quality defined as
‘features’ will have a negative impact on delivery
times.
2.3. Hypotheses
This discussion leads to a number of hypotheses.
The first tests whether there is a relationship between
Hayes and Wheelwright’s world class manufacturing
practices, taken as a set, and competitive perfor-
mance. Support of this hypothesis would indicate
that Hayes and Wheelwright developed a robust set
of practices that lead to improvements in competitive
performance.
H1: Hayes and Wheelwright’s world class manufac-
turing practices will be related to competitive perfor-
mance.
The second and third hypotheses are designed to
test whether the addition of new manufacturing prac-
tices will lead to better performance than Hayes and
Wheelwright’s world class practices, alone. This will
help in determining whether Hayes and Wheel-
wright’s practices form a foundation for the imple-
mentation of other practices, as well as whether there
are any key constructs missing from their conception
of world class manufacturing. The second hypothesis
tests the incremental effect of quality management
practices which focus on process improvement. It
suggests that these practices, combined with Hayes
and Wheelwright’s world class manufacturing prac-
tices, will be more strongly related to competitive
performance than Hayes and Wheelwright’s world
class manufacturing practices in isolation. Similarly,
the third hypothesis tests whether the addition of
core JIT practices to Hayes and Wheelwright’s prac-
tices and quality management process improvement
practices will lead to further performance improve-
ments.
H2: Quality management process improvement prac-
tices will be related to competitive performance,
given the use of Hayes and Wheelwright’s world
class manufacturing practices.
H3: Core JIT practices will be related to competitive
performance, given the use of Hayes and Wheel-
wright’s world class manufacturing practices plus
quality management process improvement practices.
Taken together, these hypotheses test whether
Hayes and Wheelwright’s world class manufacturing
practices form a foundation upon which other prac-
tices can effectively build. Conversely, they also test
whether there were missing constructs in Hayes and
Wheelwright’s original conception of world class
manufacturing.
The fourth hypothesis addresses the tradeoffs vs.
synergies debate by testing whether the use of these
practices leads to improved performance on more
than one dimension of competitive performance si-
multaneously. Support of this hypothesis would re-
fute the assertion of Hayes and Wheelwright and
other authors that the competitive priorities necessar-
ily represent tradeoffs and would support the work of
Ž
more recent authors, such as Schonberger 1986,
.
1990a,b, 1996 who believe that synergies between
competitive priorities can be achieved through the
use of world class manufacturing practices.
H4a: Hayes and Wheelwright’s world class manu-
facturing practices will be simultaneously related to
more than one dimension of competitive perfor-
mance.
H4b: Quality management process improvement
practices will be simultaneously related to more than
one dimension of competitive performance, given the
( ) B.B. Flynn et al.rJournal of Operations Management 17 1999 249–269 259
use of Hayes and Wheelwright’s world class manu-
facturing practices.
H4c: Core JIT practices will be simultaneously re-
lated to more than one dimension of competitive
performance, given the use of Hayes and Wheel-
wright’s world class manufacturing practices and
quality management process improvement practices.
3. Method
3.1. Sample
The data used for this study was gathered as part
Ž .
of the WCM Project Flynn et al., 1996 . The level
of analysis was the plant, because the plant is where
best practices are implemented and their effect is
most strongly evidenced. For example, Schonberger
Ž .
1986 described some John Deere plants as world
class, while others were quite traditional. Thus, a
corporate level sample would not allow accurate
assessment of the impact of practices on perfor-
mance.
The research design was a stratified sample of
three plant types: world class reputation, traditional
and Japanese-owned. The world class reputation
plants were randomly selected from a master list of
world class manufacturers, compiled from several
sources, including Schonberger’s Honor Roll and
industry experts. The traditional plants were ran-
domly selected from Dunn’s Guide: The Metalwork-
ing Directory, a source of plant-level information
about manufacturing plants. The third type of plant
consisted of Japanese-owned plants operating in the
U.S. These were randomly selected from a
Japanese-language source published by JETRO.
Within each of these strata, plants were randomly
selected in three industries: machinery, electronics
and transportation components.
3.2. Data collection
The plant manager of each sampled plant was
contacted by telephone to solicit the firm’s participa-
tion. Participating plant managers each appointed a
plant research coordinator to serve as liaison with the
research team. The packet of questionnaires was sent
to the plant research coordinator. It included 21
questionnaires, targeted at various respondents in the
plant. For example, the accounting questionnaire re-
quested performance information, while the direct
labor questionnaire contained a set of scales de-
signed to determine workers’ perceptions of prac-
tices and culture at the plant. The research coordina-
tor distributed to questionnaires to the named man-
agers and a random sample of 10 direct laborers.
Respondents were asked to return their question-
naires to the plant research coordinator in sealed
envelopes. When the entire set had been received,
the plant research coordinator returned the packet of
sealed envelopes to the research team. A subset of
the information gathered through the questionnaires
was used for this study.
In return for participating, each firm was provided
with a detailed profile of its practices and perfor-
mance, as well as benchmark data on practices and
performance in its industry. This yielded a response
rate of 60% of the firms that were contacted. Analy-
sis of the industry, size and location of responding
and nonresponding firms did not indicate any signifi-
cant differences; although it was not possible to
question nonrespondents on items more relevant to
the hypotheses, there was not a respondent bias
indicated in this basic analysis.
3.3. Variables
3.3.1. Independent Õariables
There were ten independent variables, correspond-
ing to Hayes and Wheelwright’s six world class
manufacturing practices, plus four variables which
measured quality management process improvement
and core JIT practices. The measures for these vari-
ables were constructed after the WCM Project data
had been collected, by selecting the perceptual and
objective measures which corresponded most closely
to Hayes and Wheelwright’s description of world
class practices from the existing WCM Project data
set. In some cases, this meant selecting items from
several of the original WCM Project scales and
combining them to develop a new scale which more
accurately measured a construct as Hayes and
Wheelwright described it. The complete measures
are listed in Appendix A. The quality management
process focus and core JIT scales were not modified
from the original scales in the WCM Project data set.
( ) B.B. Flynn et al.rJournal of Operations Management 17 1999 249–269 260
Worker deÕelopment was an eight-item scale
which focused on training, skill level and criteria for
employee selection, measuring Hayes and Wheel-
wright’s ‘workforce skills and capabilities’. Man-
agement technical competence was measured by the
objective measure of the percentage of the staff
having engineering or technical degrees. ‘Competing
through quality’ was operationalized as design for
customer needs, to reflect Hayes and Wheelwright’s
narrow focus within the domain of quality manage-
ment. The scale contained items drawn from scales
measuring customer orientation and coordination
among functional areas in designing new products.
Worker participation was measured by a scale which
contained items which measured team problem solv-
ing and the environment for team problem solving,
including communication, supervisory support and
performance evaluation. ‘Rebuilding manufacturing
engineering’ was operationalized as proprietary
equipment, an objective item which measured the
percentage of the plant’s equipment which was ven-
dor equipment modified for the plant’s use, propri-
etary equipment designed by the plant or proprietary
equipment designed and built by the plant. Finally,
‘incremental improvement approaches’ was opera-
tionalized as continuous improÕement, measured by
a scale which contained items which measured belief
in and support for continuous improvement. On all
scale variables, lower values indicate better perfor-
Ž .
mance a value of 1 indicates ‘strongly agree’ .
Quality management process focus was opera-
tionalized with two scales. Process control deals
with techniques to control process variability, includ-
ing the use of SPC, foolproofing, inspection and the
use of standardized process instructions. Feedback of
information describes the extent of process feedback
received by employees, including defect rates, sched-
ule compliance, machine breakdown frequency and
quality performance. Two scales were selected to
represent core JIT practices. Pull system describes
the extent to which production is driven by customer
demand, and JIT supplier relations describes the
extent of coordination with suppliers to ensure JIT
deliveries.
Table 4 contains descriptive statistics on the inde-
pendent variables, indicating that there were none
with extreme values. Table 5 describes the sample in
terms of average response to the independent and
dependent variables. Although the purpose of this
paper was not to compare responses between world
class, Japanese-owned and traditional plants, nor is
the sample size sufficient for such a comparison, this
table describes the variability of the sample.
Table 6 contains intercorrelation matrices between
variables, illustrating a broad range of relationships,
from y0.31 to 0.85, with many of the relationships
Ž .
significant at p-0.05. Lewis-Beck 1990 describes
several indicators of high multicollinearity, including
a substantial R
2
value for the regression equation,
combined with statistically insignificant coefficients,
and coefficients which change greatly in value when
independent variables are dropped or added to the
equation. Both of these existed, to some extent, in
the original regression analysis. Using the test sug-
Table 4
Descriptive statistics
Independent variables Dependent variables
Variable Mean Standard Variable Mean Standard
deviation deviation
Employee development 2.26 0.41 Cost 19,249.00 51,517.51
Management technical competence 6.23 10.18 Quality–performance 3.57 1.10
Design for customer needs 2.29 0.45 Quality–features 64.14 31.30
Worker participation 2.43 0.37 Dependability–specifications 85.57 8.49
Proprietary equipment 23.04 31.10 Dependability–on-time delivery 2.07 20.14
Continuous improvement 2.53 0.35 Dependability–service 3.00 0.73
Process control 2.97 0.61 Flexibility–product 2.46 0.64
Feedback of information 2.68 0.44 Flexibility–volume 0.72
Pull system 2.80 0.46
JIT supplier practices 3.23 0.61
( ) B.B. Flynn et al.rJournal of Operations Management 17 1999 249–269 261
Table 5
Description of sample
Variable ‘Best’ Plant type
value
Traditional World class Japanese-owned
Independent variables Employee development Low 2.39 2.18 2.25
Management technical competence High 5.08 6.82 6.48
Design for customer needs Low 2.41 2.27 2.21
Worker participation Low 2.61 2.33 2.40
Proprietary equipment High 22.36 41.09 0.00
Continuous improvement Low 2.66 2.48 2.47
Process control Low 3.19 2.84 2.91
Feedback of information Low 2.91 2.54 2.58
Pull system Low 3.18 2.71 2.56
JIT supplier relationship Low 3.53 3.07 3.16
Dependent variables Cost improvement High 1265.21 8916.06 49,360.19
Quality–performance Low 3.79 3.89 2.93
Quality–features High 63.13 59.53 87.24
Dependability–on-time delivery High 75.92 89.75 89.09
Dependability–specifications High 91.87 89.54 93.37
Dependability–service Low 2.38 1.97 1.93
Product flexibility Low 3.12 2.81 3.14
Volume flexibility Low 2.42 2.41 2.57
n
Table 6
Intercorrelation matrices
a. Independent Õariables
1 2 3 4 5 6 7 8 9 10
1. Employee development – 0.06 0.41 0.65 y0.07 0.56 0.36 0.41 0.28 0.50
2. Management technical competence – 0.05 0.03 0.28 y0.08 y0.18 y0.06 y0.07 0.11
3. Design for customer needs – 0.60 0.12 0.63 0.36 0.59 0.44 0.47
4. Worker participation – 0.06 0.78 0.32 0.64 0.57 0.85
5. Proprietary equipment – 0.12 y0.05 0.14 y0.05 0.12
6. Continuous improvement – 0.44 0.64 0.44 0.69
7. JIT supplier relations – 0.56 0.12 0.30
8. Pull system – 0.47 0.71
9. Process control – 0.45
10. Feedback of information –
b. Dependent Õariables
1 2 3 4 5 6 7 8
1. Cost – y0.17 0.14 0.24 0.09 y0.17 y0.13 y0.11
2. Quality–performance – y0.08 y0.16 y0.13 y0.01 0.09 y0.14
3. Quality–features – y0.17 0.12 y0.14 I0.35 y0.19
4. Dependability–specifications – 0.16 y0.21 y0.21 I0.33
5. Dependability–on-time delivery – I0.31 y0.16 y0.30
6. Dependability–service – 0.21 0.24
7. Flexibility–product – 0.47
8. Flexibility–volume –
Correlation coefficients listed in bold type are significant at p-0.05.
( ) B.B. Flynn et al.rJournal of Operations Management 17 1999 249–269 262
gested by Lewis-Beck, each independent variable
was regressed on all other independent variables.
The majority of the R
2
values approached 1.0, indi-
cating that high multicollinearity exists. Thus, the
analysis was limited to describing the effects of the
interrelated independent variables as a set, rather
than as individual variables. This is theoretically
appropriate, since we are considering the effects of
three interrelated sets of variables: world class manu-
facturing practices, quality management process fo-
cus practices and core JIT practices.
Table 7 summarizes the reliability and validity
analysis of the independent variables. The Cronbach’s
alpha values were all in excess of 0.70, indicating
that the scales are reliable. Support for construct
validity is provided by the remaining columns of the
table. The alpha values were higher than the average
interscale correlation, providing evidence of diver-
gent validity. Further evidence of divergent validity
is provided in the itemrtotal correlations, which
indicate a higher correlation between items and the
scales they are associated with than the correlation
between items and the remaining scales. Although
unidimensionality is also a part of construct validity,
it was not tested for because the world class manu-
facturing scales were constructed to specifically
measure Hayes and Wheelwright’s practices which,
as they stated, were clearly not unidimensional. For
example, Hayes and Wheelwright’s description of
worker skills and capabilities includes both worker
training and apprenticeship programs, and worker
training is broken into three practices: content, moti-
vation and work habits.
3.3.2. Dependent Õariables
There were seven dependent variables, corre-
sponding to Hayes and Wheelwright’s description of
the dimensions of competitive priorities. They in-
clude a mix of objective and perceptual measures,
summarized in Table 3. Like the independent vari-
ables, the dependent variables were operationalized
by selecting the measure which most closely corre-
sponded to Hayes and Wheelwright’s definition from
the WCM Project data set. Although some of the
operationalizations do not correspond perfectly to
Hayes and Wheelwright’s definitions, the measures
used were the best approximations of Hayes and
Wheelwright’s definitions available. Cost was opera-
tionalized as cost improÕement, since absolute mea-
sures of cost would be difficult to interpret, due to
size differences within the sample. Descriptive statis-
tics on the dependent variables are provided in Ta-
bles 4 and 5, while Table 6 contains their intercorre-
lation matrix.
3.4. Analysis
The standard assumptions of multiple regression
were verified prior to conducting the analysis. The
assumptions of constant variance, no influential out-
liers and normality were verified using the following
Table 7
Reliability and validity of independent variables
Cronbach’s Average Itemrtotal correlation
alpha interscale
Scale Non-scale
correlation
items items
Employee development 0.78 0.36 0.64 0.24
Ž . Management technical competence objective n.a. 0.03 n.a. 0.04
Design for customer needs 0.80 0.41 0.59 0.24
Worker participation 0.92 0.50 0.75 0.38
Ž . Proprietary equipment objective n.a. 0.009 n.a. 0.09
Continuous improvement 0.88 0.46 0.58 0.35
Pull system 0.72 0.24 0.57 0.39
JIT supplier relationship 0.72 0.27 0.61 0.21
Process control 0.76 0.20 0.46 0.26
Feedback of information 0.90 0.59 0.73 0.31
( ) B.B. Flynn et al.rJournal of Operations Management 17 1999 249–269 263
plots: residuals by predicted values, rankits plot of
residuals, studentized residuals by case number,
Cook’s distances by case number and Leverage val-
Ž .
ues hat matrix diagonal . The Shapiro–Wilk statistic
provided a further test for normality. Neither the
plots nor the Shapiro–Wilk statistic indicated any
potentially significant departures from assumptions.
The hypotheses were tested using hierarchical
regression analysis, where groups of independent
variables were entered cumulatively, according to the
logic dictated by the sequence of the hypotheses. At
each step, analysis of variance was used to determine
the statistical significance of the regression equation.
At steps following the first, the change in the cumu-
lative R
2
was reported and tested for significance
Ž .
using a t-test Cohen and Cohen, 1987 to determine
whether the set of variables added at that step added
to the predictive power of the regression equation.
The first hypothesis tested the relationship be-
tween each of the dependent variables and the set of
world class manufacturing practice variables, taken
as a group, by constructing eight regression equa-
tions, one for each dependent variable. The second
and third hypotheses were tested by adding the set of
quality management process focus and core JIT prac-
tice variables, respectively, to each of the equations
and assessing their incremental impact. The fourth
hypothesis was resolved by examination of the re-
sults of the tests of the first three hypotheses to
determine if the sets of practices were simultane-
ously related to more than one dimension of compet-
itive performance.
4. Results and discussion
Table 8 shows the results of the regression analy-
sis. It indicates that the set of world class manufac-
turing practices was significantly related to cost,
quality–performance, product flexibility and volume
flexibility. This provides support for the first hypoth-
esis, indicating that the world class manufacturing
practices described by Hayes and Wheelwright are
related to competitive performance.
The test of the second hypothesis indicates that
the addition of quality management process focus
variables led to several results. First, it led to the
significance of the regression equations which had
dependent variables related to dependability. This
was not surprising, given that the scales which were
added dealt with the process focus dimension of
quality management. Although the world class man-
ufacturing practices included the quality manage-
ment dimensions of customer focus and employee
involvement, process focus measures had been ab-
sent. Explicitly focusing on reducing process vari-
ability by a number of means would be expected to
be related to improved dependability. This is consis-
tent with the cumulative model described by Fer-
Ž .
dows and DeMeyer 1991 , where there are syner-
gies between dependability and quality management,
provided that the foundation of quality management
is established before dependability is pursued.
In addition, support was provided for the inclu-
sion of the additional quality management variables
by the t-test results. They indicated that the addition
of the quality management process focus variables
increased the predictive power of six of the eight
regression equations. Thus, it can be concluded that,
although the set of world class manufacturing prac-
tices described by Hayes and Wheelwright provides
a strong foundation for competitive performance, the
addition of new manufacturing practices focusing on
process improvement offer opportunities for even
better performance.
The test of the third hypothesis was also sup-
ported, with the addition of variables related to core
JIT practices having a similar effect. All regression
equations were statistically significant, with the ex-
ception of quality–features. Further, the addition of
the JIT practice variables led to increased predictive
power for the equations related to quality and de-
pendability. This supports the work of Flynn et al.
Ž .
1995 , which suggests that the use of JIT practices
leads to improved quality performance. Although
quality management practices provide tools and ap-
proaches for solving quality problems, the problems
are not always readily apparent. Through inventory
Ž .
reduction the ‘rocks and river’ effect , JIT provides
a potent means of finding quality problems, which
can then be solved using quality management tools
and approaches. This may also provide support for
Ž .
the proposition of Flynn et al. 1995 that there is a
common infrastructure which supports the successful
implementation of both JIT and quality management
(
)
B
.
B
.
F
l
y
n
n
e
t
a
l
.
r
J
o
u
r
n
a
l
o
f
O
p
e
r
a
t
i
o
n
s
M
a
n
a
g
e
m
e
n
t
1
7
1
9
9
9
2
4
9
–
2
6
9
2
6
4
Table 8
Summary of results
Ž . Ž . Dependent Hayes and Wheelwright Quality management variables H JIT variables H
3 4
2 2 Ž . variable variables H
1 Cumulative F DR t Cumulative F DR t
2 2 2 2
2 2 Ž . Ž R Adj. R R Adj. R
Ž . R Adj. R F
Ž . Ž . Ž . Cost 0.37 0.26 3.33)) 0.42 0.28 2.91)) 0.05 3.77))) 0.43 0.24 2.29)) 0.01 0.91
Ž . Ž . Ž . Quality– 0.37 0.26 3.34)) 0.37 0.22 2.39)) 0.00 0.00 0.39 0.19 1.93) 0.02 2.30))
performance
Ž . Ž . Ž . Quality– 0.22 0.08 1.55 0.34 0.18 2.06) 0.12 9.43))) 0.37 0.16 2.20)) 0.03 2.60))
features
Ž . Ž . Ž . Dependability– 0.21 0.07 1.50 0.42 0.27 2.86)) 0.21 17.91))) 0.42 0.23 2.20)) 0.00 0.00
specifications
Ž . Ž . Ž . Dependability– 0.19 0.04 1.30 0.42 0.28 2.90)) 0.23 20.74))) 0.47 0.30 2.69)) 0.05 4.00)))
on-time delivery
Ž . Ž . Ž . Dependability– 0.21 0.07 1.50 0.25 0.07 1.35 0.04 2.64)) 0.36 0.14 1.65 0.11 7.75)))
service
Ž . Ž . Ž . Product flexibility 0.46 0.36 4.81))) 0.47 0.33 3.49))) 0.01 0.00 0.48 0.30 2.74)) 0.01 1.00
Ž . Ž . Ž . Volume flexibility 0.30 0.17 2.37)) 0.37 0.21 2.33)) 0.07 5.92))) 0.37 0.16 1.79) 0.00 0.00
df s40 for all models.
)))p-0.001.
))p-0.01.
)p-0.05.
( ) B.B. Flynn et al.rJournal of Operations Management 17 1999 249–269 265
practices. The practices suggested by Hayes and
Wheelwright may function most effectively as that
infrastructure, providing the foundation for the use of
quality management and JIT.
Examination of the results provides evidence sup-
porting the fourth hypothesis. The set of world class
manufacturing practice variables was simultaneously
related to cost, quality and flexibility. When the set
of quality management process focus practices was
added, the combined set of practices was simultane-
ously related to cost, quality, dependability and flexi-
bility. With the addition of JIT practices, all dimen-
sions of competitive performance continued to be
statistically significant, with significantly increased
predictive power for the equations related to quality
and dependability. Combined, this provides strong
support for the notion that the employment of world
class practices leads to the achievement of simulta-
neous competitive advantages related to cost, quality,
dependability and flexibility.
5. Conclusions
Three issues drove the analysis described in this
paper. First, although Hayes and Wheelwright’s
thoughts about world class manufacturing practices
were developed in the early 1980s, have they been
robust to the changes that have taken place since
then in the global manufacturing arena? We found
strong support that this is true. The use of the
practices which Hayes and Wheelwright described
was strongly related to competitive performance.
Furthermore, this relationship was robust to differ-
ences in measurement of competitive performance,
with the world class manufacturing practices signifi-
cantly related to cost, quality–performance, product
flexibility and volume flexibility. Thus, we have
concluded that Hayes and Wheelwright’s set of world
class manufacturing practices have stood the test of
time.
Second, will the use of these practices be more
effective if they are used in concert with new manu-
facturing practices? To that we can also answer a
resounding yes. When quality management practices
which emphasize process focus were added to the set
of world class manufacturing practices, predictive
power increased significantly, across most of the
measures of competitive performance. The addition
of quality management practices also allowed com-
petition on the basis of dependability, which the
world class manufacturing practices, alone, were not
able to achieve. The addition of JIT practices further
increased the explanatory power. This suggests that
Hayes and Wheelwright’s conception of world class
manufacturing, although robust in and of itself, can
be improved through the addition of new manufac-
turing practices. Thus, it forms a foundation for the
implementation of other practices, functioning as a
supportive infrastructure.
Third, are there tradeoffs between dimensions of
competitive performance, as Hayes and Wheel-
wright, Porter and other authors have contended? To
the contrary, we found strong evidence of synergies.
The combination of Hayes and Wheelwright’s world
class manufacturing practices, quality management
process focus practices and JIT practices was simul-
taneously related to competitive performance, in
terms of cost, quality, dependability and flexibility,
on seven out of eight measures. This is not to say,
however, that the potential for tradeoffs does not
exist. The findings discussed here are limited to
organizations which employ world class practices.
This is consistent with the work of Schonberger, who
describes synergies between quality and cost, for
example; as the number of defects is reduced through
quality management, the amount spent on rework
and warranty work is reduced. Our findings suggest
that there are synergies between most dimensions of
competitive performance possible to organizations
which employ world class manufacturing practices.
There are many opportunities for future research
suggested by this paper. For example, the findings
were interpreted only by sets of practices, rather than
by individual practices, due to multicollinearity be-
tween the independent variables. Better articulation
of which specific practices are most critical to world
class manufacturing would be valuable, as well as
guidelines for which practices are related to syner-
gies between particular dimensions of competitive
performance. The predictive power of the regression
equations was increased by the addition of quality
management and JIT practices. Are there other new
manufacturing practices which should also be in-
cluded? Suggestions include practices related to
( ) B.B. Flynn et al.rJournal of Operations Management 17 1999 249–269 266
strategic management, international supply chain
management, fast product development strategies,
etc.
In this paper, we have sought to determine whether
Hayes and Wheelwright’s foundation for world class
manufacturing is relevant in today’s manufacturing
environment. We also sought to determine how world
class manufacturing practices functioned in the
achievement of competitive performance, examining
whether they supported dimensions of competitive
performance which were tradeoffs or synergies. We
found strong support for Hayes and Wheelwright’s
set of world class manufacturing practices. Thus, we
can conclude that the work of Hayes and Wheel-
wright provides a solid foundation for ensuing and
future work in the area of world class manufacturing.
We expect that the practices associated with world
class manufacturing will continue to evolve, as Hayes
and Wheelwright’s have, both in type and content.
Appendix A. Scale contents
(
A.1. World class manufacturing practices Hayes
)
and Wheelwright
A.1.1. Dimension 1: workforce skills and capabilities
Expanding the nature of worker training and other
approaches, to include motivation and work habits,
as well as the development of technical skills.
A.1.1.1. Employee deÕelopment.
1. Direct labor undergoes training to perform multi-
ple tasks in the production process.
2. Plant employees are rewarded for learning new
skills.
3. R: Our plant has a low skill level, compared with
our industry.
4. Direct labor technical competence is high in this
plant.
5. We use knowledge and skill level as a criterion in
selecting employers.
6. We use ability to work in a team as a criterion in
employee selection.
7. We use problem solving ability as a criterion in
selection of employees.
8. We use work values and ethics as a criterion in
employee selection.
A.1.2. Dimension 2: management technical compe-
tence
Technical literacy as a prerequisite for manage-
ment careers.
A.1.2.1. Management technical competence. Percent-
age of the staff having engineering or technical
Ž .
degrees objective item .
A.1.3. Dimension 3: competing through quality
True customer orientation and coordination among
functional areas in designing products. This construct
is not all encompassing, like TQM, but rather fo-
cuses on the design process and how the customer is
integrated into it.
A.1.3.1. Design for customer needs.
1. We frequently are in close contact with our
customer.
2. R: Our customers seldom visit our plant.
3. A very important objective is to obtain satisfied
customers.
4. Our customers give us feedback on quality and
delivery performance.
5. Customer requirements are thoroughly analyzed
in the new product design process.
6. There is a strong customer focus in our design
process.
7. Direct labor employees are involved to a great
Ž .
extent on teams or consulted before introduc-
ing new products or making product changes.
8. Manufacturing engineers are involved to a great
extent before the introduction of new products.
9. R: There is little involvement of manufacturing
and quality people in the early design of prod-
ucts, before they reach the plant.
10. We work in teams, with members from a variety
Ž .
of areas marketing, manufacturing, etc. , to in-
troduce new products.
Items 1, 2, 3, 4, 5, and 6 measure customer orienta-
tion, while items 7, 8, 9 and 10 measure coordination
among functional areas in designing products.
A.1.4. Dimension 4: Workforce participation
Real worker participation, including the use of
teams and the culture change which accompanies it.
This includes close contact between managers and
( ) B.B. Flynn et al.rJournal of Operations Management 17 1999 249–269 267
workers, a ‘we’re all in this together’ attitude and
worker-management cooperation.
A.1.4.1. Worker participation.
1. Quality of team participation is a significant part
of performance evaluation at this plant.
2. R: Strategies and goals are communicated pri-
marily to managers.
3. I know how we are planning to be competitive at
this plant.
4. Supervisors encourage the persons who work for
them to work as a team.
5. Supervisors encourage people who work for them
to exchange opinions and ideas.
6. Supervisors frequently hold group meetings
where the people who work for them can really
discuss things together.
7. R: Managers here are more likely to send a
memo than to tell us something face-to-face.
8. During problem solving sessions, we make an
effort to get all team members’ opinions and
ideas before making a decision.
9. Our plant forms teams to solve problems.
10. In the past three years, many problems have
been solved through small group sessions.
A.1.5. Dimension 5: rebuilding manufacturing engi-
neering
Ability to design and manufacture equipment for
their own factories, as well as perform major repairs
and modifications. Ability to compete on the basis of
unique process technology.
A.1.5.1. Proprietary equipment. Objective variable,
the sum of the percentage of the plants’ equipment
which is: vendor equipment which we modified for
our use, proprietary equipment designed by the com-
pany and proprietary equipment designed and built
by the company.
A.1.6. Dimension 6: incremental improÕement ap-
proaches
Ability to survive and thrive in a competitive
environment where success is based on a series of
small steps, rather than on a few dramatic break-
throughs. Steady improvement of ‘competitive effec-
tiveness’. Small steps, whose cumulative impact can
Ž .
be just as great as strategic leaps breakthroughs .
Continually striving to strengthen competitive posi-
tion
A.1.6.1. Continuous improÕement.
1. All employees believe that it is their responsibil-
ity to improve quality in the plant.
2. Continuous improvement of quality is stressed in
all work processes throughout our plant.
3. I am constantly working to improve quality.
4. R: Quality improvement is not a high priority for
me.
5. Workers are rewarded for quality improvement.
6. Supervisors are rewarded for quality improve-
ment.
7. If I improve quality, management will reward me.
8. Managers are rewarded for making continuous
improvements.
A.2. Core quality practices
These scales represent the dimension of process
focus, since Hayes and Wheelwright’s practices al-
ready adequately represent the dimensions of cus-
tomer focus and continuous improvement.
A.2.1. Process control
1. Processes in our plant are designed to be ‘fool
proof’.
2. We have standardized process instructions which
are given to personnel.
3. A large percent of the equipment or processes on
the shop floor are currently under statistical qual-
ity control.
4. We make extensive use of statistical techniques to
reduce variance in processes.
A.2.2. Feedback of information
1. Charts showing defect rates are posted on the
shop floor.
2. Charts showing schedule compliance are posted
on the shop floor.
3. Charts plotting the frequency of machine break-
downs are posted on the shop floor.
4. Information in quality performance is readily
available to employees.
5. Information on productivity is readily available to
employees.
( ) B.B. Flynn et al.rJournal of Operations Management 17 1999 249–269 268
A.3. Core JIT practices
A.3.1. Pull System
1. We have laid out the shop floor so that processes
and machines are in close proximity to each
other.
2. Direct labor is authorized to stop production for
quality problems.
3. We use a pull system to control our production.
4. We use a Kanban pull system for production
control.
5. We use kanban squares, containers or signals for
production control.
A.3.2. JIT supplier relations
1. Our vendors supply us on a just-in-time basis.
2. We receive daily shipments from most suppliers.
3. Our suppliers are certified, or qualified, for qual-
ity.
4. We have long-term arrangements with our suppli-
ers.
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