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Manufacturing management quality and factory performance (RV 98/90/TM/CIMSO6)

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Recent studies on the use of Total Quality Management (TQM) tools in manufacturing management have proved mixed evidence of their performance benefits. This study develops an operational model of manufacturing management quality, which can be translated into managerial actions. The plant is viewed as comprising three key business processes, the supply chain, strategy deployment, and product and process development. Management quality is defined as a combination of six quality dimensions: delegation and integration supported by participation, process measurement, communication, and employee development. Management quality applied across the key business processes yields process improvement as an outcome. An improvement track record, in turn, drives factory growth. The authors find empirical support for this odel, based on data from two separate data sets: - higher manufacturing management quality leads to higher continuous improvement in the key manufacturing processes, which in turn leads to higher volume growth for the plant. - manufacturing management quality offers competitive advantage because it is difficult to imitate. Imitation is hard as management quality must be applied as consitent system in order to bring benefits. - manufacturing management quality is found to be higher in the automotive and electronics industries than in other sectors. This provides evidence that even imperfectly imitable management practices diffuse sooner or later, first within and then across industries. No competitive advantage lives forever. - there are differences in growth drivers by economic region. In Japan, most profitability leverage derives from improvements in new product introduction into the plant, and in the US and Europe from new product development. Manufacturing improvements are important across all three regions.

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