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INNOVATIONS IN COMPETITIVE MANUFACTURING INNOVATIONS IN COMPETITIVE MANUFACTURING Edited by PAUL M. SWAMIDASS Professor of Operations Management College ofBusiness And Associate Director Thomas Walter ,Center for Technology Management Tiger Drive, Room 104 Auburn University, AL 36849-5358 ~. " SPRINGER SCIENCE+BUSINESS MEDIA, LLC Library of Congress Cataloging-in-Publication Innovations in competitive manufacturingl edited by Paul M. Swamidass. p. cm. Includes bibliographical references and index. ISBN 978-1-4613-5687-5 ISBN 978-1-4615-1705-4 (eBook) DOI 10.1007/978-1-4615-1705-4 1. Production management. 2. Manufactures--Technological innovations--Management. 3. Industrial management. 4. Competition. 1. Swamidass, Paul. M. TS 155 .1536 2000 658.5--dc21 00-055105 Copyright © 2000 Springer Science+Business Media New York Originally published by Kluwer Academic Publishers in 2000 Softcover reprint of the hardcover 1s t edition 2000 AlI rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, mechanical, photo copying, recording, or otherwise, without the prior written permission of the publisher, Springer Science+Business Media, LLC Printed an acid-free paper. CONTENTS Alphabetical List of Authors IX Preface XI I. Introduction 1. Innovations in Competitive Manufacturing: FromJIT to E-Business 3 II. Competitive Posture 15 2. Manufacturing Strategy 17 3. Core Manufacturing Competencies 25 (See also Supplier Partnerships as Strategy; and International Manufacturing) III. Competitive Customer Service 33 4. Customer Service, Satisfaction, and Success 35 (See also Total Quality Management) IV. Developing Competitive Processes 45 5. Business Process Reengineering and Manufacturing 47 6. The Evolution of Enterprise Resource Planning 59 V. Competing on Quality 67 7. Total Quality Management 69 v vi Contents 8. The Implications of Deming's Approach 83 (See also Performance Excellence: The Malcolm Baldrige National Quality Award Criteria) VI. The Rise of Work Teams 93 9. Teams: Design and Implementation 95 (See also Concurrent Engineering) VII. Competing on Flexibility and Automation 107 10. Flexible Automation 109 11. Manufacturing Flexibility 117 u.s. 12. Manufacturing Technology use in the and Benefits 137 13. Agile Manufacturing 145 14. Virtual Manufacturing 155 VIII. Lean Manufacturing 165 15. Just-in-Time Manufacturing 167 16. Lean Manufacturing Implementation 177 17. Total Productive Maintenance (TPM) 187 18. Transition to Cell Manufacturing: The Case ofDuriron Company Inc., Cookeville Valve Division (1988-1993) 199 19. Predictive Maintenance: The Case of Della Steam Plant 215 IX. Product Design and Development Redefined 229 20. Product Design for Global Markets 231 21. Concurrent Engineering 245 (See also Teams: Design and Implementation) 22. Product Development and Concurrent Engineering 263 23. Mass Customization 275 24. Mass Customization and Manufacturing 283 25. Integrated Product Development: The Case of Westinghouse Electronic Systems 297 x. The Revolution in the Supply Chain 323 26. Supplier Partnerships as Strategy 325 27. Supply Chain Management: Competing Through Integration 333 28. Developing a Supply Partner: The Case of Black & Decker and TEMIC Telefunken (1992-1994) 343 XI. Competing Globally 359 29. International Manufacturing 361 (See also Product Design for Global Markets) Contents vii XII. Opportunities in Tackling Environmental Problems 371 30. Environmental Issues and Competitive Manufacturing 373 XIII. The Revolution in Costing and Performance Measurement 383 31. Activity-Based Costing 385 32. Target Costing 399 33. Balanced Scorecards 407 34. Performance Excellence: The Malcolm Baldridge National Quality Award Criteria 413 Company-Index 427 Index 431 ALPHABETICAL LIST OF AUTHORS Black, JT, Auburn University, Alabama, USA Bloom, Matthew, University ~r Notre Dame, Indiana, USA Burnham, John M., Tennessee Technological University, Tennessee, USA Chinnaiah, Pratap, Northeastern University, Massachusetts, USA Cooper, M. Bixby, Michigan State University, Michigan, USA Darlow, Neil, Cranfield University, UK De Meyer, Arnoud, INSEAD, France Duray, Rebecca, University if Colorado-Colorado Springs, Colorado, USA Edland, Timothy W, Morgan State University, Maryland, USA Evans, James, University of Cincinnati, Ohio, USA Fawcett, Stanley, Brigham Young University, Utah, USA Goo, Gee-In, Morgan State University, Maryland, USA Hadjinicola, George, University ~r Cypress, Cypress Kamarthi, Sagar V, Northeastern University, Massachusetts, USA Kamauff, Jr., John W, University of Virginia, Virginia, USA ix x Alphabetic list of authors Klassen, Robert, University cif Western Ontario, Ontario, Canada Kumar, Ravi, University cif Southern California, California, USA LaForge, R. Lawrence, Clemson University, South Carolina, USA Lambert, David, Tennessee Technological University, Tennessee, USA Landel, Robert D., University cif Virginia, Virginia, USA Leavy, Brian, Dublin City University, Ireland Loch, Christoph, INSEAD, France McCreery, John, North Carolina State University-Raleigh, North Carolina, USA McKone, Kathleen, University oj Minnesota, Minnesota, USA Natarajan, R., Tennessee Technological University, Tennessee, USA Parker, Rodney P, University cif Michigan, Michigan, USA Raju, PK., Auburn University, Alabama, USA Ramanan, Ramachandran, University cif Notre Dame, Indiana, USA Richards, Larry, University cif Virginia, Virginia, USA Sankar, Chetan S., Auburn University, Alabama, USA Smith, Jr., Charles W, Tennessee Technological University, Tennessee, USA Smunt, Timothy, lMlke Forest University, North Carolina, USA Sridharan, V, Clemson University, South Carolina, USA Stecke, Kathryn, University oj Michigan, Michigan, USA Swamidass, Paul M., Auburn University, Alabama, USA Swink, Morgan, Michigan State University, Michigan, USA Terwiesch, Christian, University oj Pennsylvania, Pennsylvania, USA Umble, Elisabeth, Texas A&M University, Texas, USA Weiss, Elliot, University cif Virginia, Virginia, USA Welch, John A., Tennessee Technological University, Tennessee, USA White, Gregory, Southern Illinois University-Carbondale, Illinois, USA Wilson, Dale A., Tennessee Technological University, Tennessee, USA PREFACE us. In the last fifty years, manufacturing has gone through a cycle: from strength in the fifties and sixties, to weakness in the seventies and eighties, and back again to strength in the nineties. There has never been a time in history when manufacturing management saw so many advances in a short period of two decades. The roaring us. competition for markets has forced manufacturers to become more competitive than ever. During the fifties and sixties, manufacturing was treated as a technical detail within us. manufacturing firms while technical personnel without a strategic or competitive perspective managed the function. In the postwar economy, it worked very well be cause competition for US. products was negligible. The resurgence of European and Japanese manufacturing by the end of sixties posed unprecedented competition for u.S. manufacturers. To make matters worse, in the early seventies, under the belief that the US. was a postindustrial society, investment in manufacturing began to be neglected. Competitive manufacturing in the US. was made possible by the progress made in a number of areas. For example, progress in competitive manufacturing is attributable to advances in the strategic use of manufacturing, cellular manufacturing, lean manufac turing, focused manufacturing, flexible automation, total quality management, supply chain management, design for manufacturing, mass custornization, improved costing, and so on. With the arrival of the first wave of high quality, competitive Japanese products in the US. in the seventies, the lack of strategic thinking in US. manufacturing became xi xii Preface more and more evident. It was followed by a period, when U.S. products progressively lost their market shares to more competitive Japanese products. Pressured by competition, U.S. manufacturers began the journey to competitive manufacturing in the late seventies; their efforts have brought revolutionary changes in U.S. manufacturing. The progress made by U.S. manufacturers in the area of com petitive manufacturing has transformed them into a very competitive bunch and the envy of the world. A survey! of over 1,000 U.S. manufacturers in the discrete prod ucts manufacturing industries (SIC 34-38) reveals that, between 1993 and 1997, U.S. manufacturers improved their average return on investment from about 13 percent to 16.85 percent. The average inventory turns improved from 6 to 9.7 between 1990 and 1997. During 1990 and 1997, the marked increase in the use of hard technologies such as local area networks (LAN) and soft technologies such as manufacturing cells was noticeable. Manufacturing managers whom I frequently meet in the U.S. are under constant pressure to think and act more competitively than ever before. For these managers and executives, who have either direct or indirect responsibility for competitive manufac turing, this book should serve as a good overview of the progress in manufacturing thinking and practices in the last two decades. This book is different from the books in the market devoted to single topics such as total quality management, just-in-time manufacturing, activity-based costing, concurrent engineering, and so on. This book covers all topics in this genre in 34 different articles written by various experts. Thus, this book should be attractive to manufacturing as well as non-manufacturing man agers who would like to read a single book to get an overview of the progress in manufacturing over the last two decades, and to understand what it means to their own company and their function. Almost any introductory text on operations management would touch all the topics covered in this book. However, introductory texts cannot do full justice to every topic. In this book, each article addresses one topic in-depth. The treatment of the topic is such that the articles are interesting and easy to read while presenting essential material. The more serious reader is provided with a list of references at the end of each article. This book is the product of over 40 experts. Competitive manufacturing covers so many topics, it is impossible for one writer to cover all aspects of it in sufficient depth. A single writer cannot duplicate the collective expertise of over 40 writers. While practicing managers and manufacturing professionals would find this book relevant, thousands of MBA and EMBA students, who take courses in operations man agement and manufacturing strategy, should find this book to be a valuable supplement to their textbooks. The references at the end of each chapter should be of value to students enrolled in MBA and EMBA programs. The book is arranged in 13 different chapters, each covering a major subject within manufacturing management (see the Table of Contents). Each chapter consists of 1 Swamidass, Paul M. "JccJlIlology 011 the Factory Floor III: 'iiyll1w/o,f:Y L'sc 111ld TraillillX ill the UlIited States. Washington, D.C,: The Manufacturing Institute of the National Association of Manufacturers, 1998; and S\vamidass, Paul M. Technology ()II the Factory Floor. Washington, D.C.: The National Association of Manufacturers, 1992.

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