Plant role and the effectiveness of manufacturing practices

Many firms today operate international manufacturing networks (IMN) of plants, which may serve different purposes and have different levels of competences. This diversity influences the effectiveness of different manufacturing practices, which has not yet been explored in the literature. The purpose of this paper is to investigate the relationship between plant role and the “goodness” of its manufacturing practices.

Data are used from a sample of 471 plants from the sixth edition of the International Manufacturing Strategy Survey.

The findings show that plants with higher competences use more practices successfully than less competent plants. Furthermore, more competent plants tend to strengthen their differentiation performance, while less competent plants focus on and achieve cost performance improvements instead.

The associations between plant role, manufacturing practices and performance provide important input for the global design of a firm’s IMN as a whole, and the development of local plants within the network.

The “goodness” of manufacturing practices has not been investigated in the plant role literature; the effect of plant role on the “goodness” of manufacturing practices has not been studied in the OM contingency literature. This paper shows that while the role of a plant in a firm’s IMN hardly affects the efforts it puts into implementing different manufacturing practices, it has an important moderating influence on the performance implications of these practices.