Managing manufacturing process innovation – New manufacturing technology adoption as a ...

123 Pages·2013·1.59 MB·English

by  Stefan Schrettle

Managing manufacturing process innovation – New manufacturing
technology adoption as a dynamic capability

D I S S E R T A T I O N
of the University of St.Gallen,
School of Management,
Economics, Law, Social Sciences
and International Affairs
to obtain the title of
Doctor of Philosophy in Management

submitted by

Stefan Schrettle

from

Germany

Approved on the application of

Prof. Dr. Thomas Friedli

and

Prof. Dr. Oliver Gassmann

Dissertation no. 4179

Difo-Druck GmbH, Bamberg 2013
The University of St.Gallen, School of Management, Economics, Law, Social
Sciences and International Affairs hereby consents to the printing of the present
dissertation, without hereby expressing any opinion on the views herein expressed.

St.Gallen, May 17, 2013

The president:

Prof. Dr. Thomas Bieger
Dedicated to my parents, my family and friends
Acknowledgements
First, I would like to thank my referee Prof. Dr. Thomas Friedli and my co-referee
Prof. Dr. Oliver Gassmann for introducing me into the academic world and giving me
the chance to pursue my own research interests. Their demand for relevance and rigor
has been a guiding principle for me and my work.
I also would like to thank Dr. Maike Scherrer for her guidance through the entire
dissertation process. Her friendly advice and support encouraged me to overcome
obstacles and difficulties on my way.
I am deeply grateful to Prof. Dr. Morgan Swink. It was - and still is - an honor for me
to work with a person whose influential work has shaped the academic world in such a
way. Dr. Swink was my mentor during my visit at Texas Christian University, who
challenged and encouraged me and by doing so, enriched my understanding of
research. Moreover, Morgan and his family hosted me, introduced me to local cultural
traditions and gave me a sense of home during my stay abroad.
Finally and most important, I would like to say thank you to my family for their
unconditional support and love throughout my life. To my parents Konrad und Anna,
who have the biggest stake in making me the person I am by providing me with both
friendly guidance and the freedom to gain my own experience. To Thomas and
Barbara for their warm support and review of parts of this work. And in particular to
Verena, for her patience and tolerance as well as all the little things in life.

Stefan Schrettle
Friedberg, July 2013
V
Table of content

Acknowledgements ..................................................................................................... IV
Table of content ............................................................................................................ V
List of Figures ............................................................................................................. VII
List of Tables .............................................................................................................. VII
List of abbreviations ................................................................................................ VIII
Executive Summary .................................................................................................... IX
1 Introduction and Structure .................................................................................... 1
2 Literature Review ................................................................................................... 4
2.1 Definitions..................................................................................................................... 4
2.1.1 Process Innovation ............................................................................................................. 4
2.1.2 Manufacturing Technology and AMT ............................................................................... 5
2.2 Benefits of New Manufacturing Technologies ............................................................. 7
2.2.1 Operational Performance ................................................................................................... 7
2.2.2 Organizational Performance .............................................................................................. 8
2.3 The Resource-based View and Dynamic Capabilities ................................................ 10
3 Overview of Academic Papers ............................................................................. 12
3.1 Practical Relevance ..................................................................................................... 12
3.2 Theoretical Research Gap ........................................................................................... 17
4 Unlocking the potential of process innovation: a conceptual framework for
the exploitation of advanced manufacturing technologies ...................................... 25
4.1 Abstract ....................................................................................................................... 25
4.2 Introduction ................................................................................................................. 25
4.3 The resource-based view and dynamic capabilities¨ .................................................. 26
4.4 Conceptual Framework ............................................................................................... 28
4.5 Discussion and Conclusion ......................................................................................... 36
5 Turning sustainability into action: Explaining firms' sustainability efforts and
their impact on firm performance ............................................................................. 37
5.1 Abstract ....................................................................................................................... 37
5.2 Introduction ................................................................................................................. 37
5.3 Decision making regarding sustainability ................................................................... 41
5.3.1 Strategic decision making ................................................................................................ 41
5.3.2 Path dependency in decision making ............................................................................... 42
5.3.3 Towards a decision making process to address the sustainability challenge ................... 43
5.4 Development of a conceptual framework ................................................................... 44
5.4.1 Drivers of Sustainability .................................................................................................. 45
5.4.2 Decision-Making towards sustainability ......................................................................... 48
5.4.3 Components of a sustainability move .............................................................................. 49
VI
5.4.4 Characteristics of a sustainability move .......................................................................... 53
5.4.5 Knowledge Management ................................................................................................. 54
5.4.6 Firm Performance ............................................................................................................ 56
5.4.7 Moderating Effects .......................................................................................................... 59
5.5 Conclusion .................................................................................................................. 60
6 New Process Technology Investments: The Impacts of Technology Scanning
and Centralized Technology Departments on Investment Timing and Business
Performance ................................................................................................................ 64
6.1 Abstract ....................................................................................................................... 64
6.2 Introduction ................................................................................................................. 64
6.3 Theory Development .................................................................................................. 67
6.3.1 Technology Scanning ...................................................................................................... 68
6.3.2 Investment Timing ........................................................................................................... 69
6.3.3 Centralized Technology Management ............................................................................. 71
6.3.4 New Process Technologies as a Source of Competitive Advantage ............................... 73
6.4 Research methodology ................................................................................................ 74
6.4.1 Data collection ................................................................................................................. 74
6.4.2 Sample description .......................................................................................................... 75
6.4.3 Measures .......................................................................................................................... 76
6.5 Results ......................................................................................................................... 80
6.6 Discussion and Post Hoc Analysis .............................................................................. 84
6.7 Conclusion and Limitations ........................................................................................ 87
7 Concluding Chapter ............................................................................................. 90
References ..................................................................................................................... 94
Appendix ..................................................................................................................... 112
Curriculum Vitae ........................................................................................................ 113
VII
List of Figures
Figure 1: Structure of the dissertation ............................................................................. 3
Figure 2: Share of industrial countries in world manufactures exports ........................ 13
Figure 3: Share of developing economies in world manufactures exports ................... 14
Figure 4: Reasons for process technology failure ......................................................... 16
Figure 5: The adoption process of new manufacturing technologies ........................... 18
Figure 6: Technology adoption and sustainability management .................................. 21
Figure 7: Investment timing of new manufacturing technologies ................................ 23
Figure 8: Assumptions underlying the technology adoption process ........................... 29
Figure 9: Conceptual Framework for Manufacturing Technology Adoption .............. 29
Figure 10: Decision-making framework in the context of sustainability ..................... 45
Figure 11: Research Model Paper 3 .............................................................................. 67
Figure 12: Overview Centralized Technology Departments ........................................ 77
Figure 13: Interaction between Scanning Activities and Presence of a CTD............... 83

List of Tables
Table 1: List of technology items ................................................................................... 7
Table 2: Overview of academic papers ......................................................................... 24
Table 3: Constructs and Measurement Items ................................................................ 79
Table 4: Intercorrelation Matrix.................................................................................... 80
Table 5: Regression of Scanning Frequency on Strategic Importance ......................... 81
Table 6: Regression of Early Investment on Hypothesized Drivers ............................. 82
Table 7: Regression of Business Performance on Early Investment ............................ 83
Table 8: Regression analysis, including only firms with a CTD .................................. 85
Table 9: Regression of Business Performance on Relative Investment Timing .......... 87
VIII
List of abbreviations

AMT Advanced Manufacturing Technologies
e.g. exempli gratia (for example)
et al. et alii
HVAT High-volume automation technology
IEPT Information exchange and planning technology
IM Integrated Manufacturing
IP Intellectual Property
JIT Just-in-Time
LVFAT Low-volume flexible automation technology
MPI Manufacturing process innovation
OM Operations Management
PDT Product design technology
RBV Resource-based view
TPM Total Productive Maintenance
TQM Total Quality Management
WTO World Trade Organization
IX
Executive Summary
The competitive landscape for business operations has changed dramatically
during the last decades due to increasing global competitive pressure that has
accelerated the pace of technological change. Especially manufacturing firms are
facing cost pressure from developing countries and growing product complexity, while
quality requirements are increasing and customer demands are rapidly changing. Many
industries have experienced a paradigm shift from standardized, big scale
manufacturing to low-volume manufacturing with flexible product characteristics.
These developments constantly force manufacturing firms to adapt production
processes to the latest technological trends and developments, but only few companies
successfully manage the implementation of new process technologies in order to
improve operational and business performance.
This study helps to improve management capabilities of process technology
change by providing fundamental insights into the design of adoption processes and
the investment strategy for manufacturing technologies. The first paper identifies
relevant determinants that affect the exploitation of new manufacturing technologies’
benefits. We develop a conceptual framework of an effective adoption process that
represents a dynamic capability and a potential competitive advantage for a firm.
The second paper analyses technological change in manufacturing units with a
special focus on the impact of sustainability management. The importance of the triple
bottom line is steadily increasing, in particular for resource intensive manufacturing
firms due to rising costs for energy supply and resource inputs as well as stricter
governmental regulation. The presented framework supports adequate strategic
decision-making to address the challenge of ecological sustainability in order to turn
sustainability efforts into superior firm performance.
The third paper analyzes the investment timing in new process technologies and
its impact on business performance. We show that early investors can realize a first-
mover advantage if certain information processing capabilities are in place.
Additionally, our study identifies methods and organizational structures that trigger the
beneficial business outcome of technological leadership in process technologies.
To summarize, this piece of work provides numerous theoretical and managerial
implications that are of upmost importance for manufacturing managers and addresses
some of the most crucial research gaps in the operations management literature.
X
Zusammenfassung
Im Laufe der letzten Jahre hat sich das globale Geschäftsumfeld dramatisch
geändert. Durch die Globalisierung ist der Konkurrenzdruck merklich gestiegen, was
u.a. zu einer Erhöhung der Dynamik des technologischen Wandels geführt hat. Gerade
die produzierende Industrie ist einem zunehmenden Kostendruck von Herstellern aus
Entwicklungsländern ausgesetzt, während gleichzeitig die Produktkomplexität bei
steigenden Qualitätsansprüchen wächst und sich Kundenpräferenzen immer schneller
ändern. Viele Industrien erleben dabei einen Wandel weg von standardisierter
Massenproduktion hin zu flexibler Fertigung von geringeren Stückzahlen. Diese
Entwicklungen stellen produzierende Unternehmen vor die Herausforderung ihre
Produktionsprozesse an die neuesten technologischen Erkenntnisse anzupassen. Dabei
gelingt es nur den wenigsten Unternehmen, neue Prozesstechnologien erfolgreich
einzuführen, um neben der Operational Performance auch das Betriebsergebnis
nachhaltig zu steigern.
Die vorliegende Arbeit schafft die Grundlagen, um den technologischen Wandel
im Bereich von Fertigungstechnologien besser managen zu können, indem neueste
Erkenntnisse zum Design von Technologie-Adoptionsprozessen sowie zur
Investmentstrategie für neue Prozesstechnologien zur Verfügung gestellt werden. Im
Rahmen des ersten Artikels werden relevante Einflussfaktoren für die Ausgestaltung
eines Adoptionsprozesses für Fertigungstechnologien dargelegt. Diese werden in
einem Referenzmodell konsolidiert, das zur effektiven Steuerung der
Technologieadoption dient. Der zweite Artikel analysiert die Auswirkungen von
Nachhaltigkeitsüberlegungen auf die Auswahl strategischer Unternehmensinitiativen.
Speziell die produzierende Industrie ist von höheren Energie- und Rohstoffkosten
sowie zunehmenden gesetzlichen Auflagen betroffen. Deshalb wurde ein
Referenzmodell entwickelt, um optimale strategische Entscheidungen im Hinblick auf
die Herausforderungen ökologischer Nachhaltigkeit zu ermöglichen. Der dritte Artikel
analysiert die Auswirkungen des Investitionszeitpunkts in neue Proesstechnologien auf
das Betriebsergebnis. Es wird aufgezeigt, dass durch die Technologieführerschaft im
Produktionsumfeld ein first-mover advantage realisiert werden kann, während
gleichzeitig geeignete Methoden zur Erlangung dieses Wettbewerbsvorteils
identifiziert werden. Damit liefert die vorliegende Arbeit wichtige wissenschaftliche
Erkenntnisse, die speziell für Produktions- und Technologieunternehmen die
Realisierung eines strategischen Wettbewerbsvorteils bieten.