The impact of just-in-time practices on consistency of benchmarking performance measures.

INTRODUCTION

In today's global market, knowledge about top competitors' businesses is crucial for improving and sustaining organizational competitive advantage. Benchmarking is a valuable tool that provides opportunity to learn from other organizations. It is an effective means for learning and change because it exposes employees to new approaches, systems, and procedures (Welch, 1993; Kuebler, 1993; Zairi, 1994). Benchmarking may be defined as a process in which an organization tries to learn from the best-in-class organizations, determine how the best-in-class achieve superior performance levels, and utilize those practices as benchmarks to their own organization (Watson, 1992 and 1993; Whiting, 1991). Benchmarking is a flexible tool that can be used for gradual continuous improvement, as well as for major changes of process reengineering. Deming (1982) and a number of other quality advocates have strongly recommended the use of benchmarking as an essential component of continuous improvement (Graham, 1993; Ishikawa, 1985; Venetucci, 1992; Dawkins, Feeny, and Harris, 2007). For the past three decades, world-class organizations have utilized benchmarking to improve aspects of their competitive advantages such as cost, quality, delivery, and customer service. The use of benchmarking as an effective quality improvement tool was started by Xerox in the early 1980s in order to overcome severe international competition. Since 1987, benchmarking has been a major component of the Malcolm Baldrige National Quality Award criteria. Out of a total of 1000 Baldrige points, benchmarking has consistently influenced more than 500 points (Bogan and English, 1994). No other quality fundamentals, such as process management, employee involvement, and quality planning, have had such a broad influence on the Baldrige criteria as benchmarking. Positive attitude toward learning and the use of benchmarking have been common characteristics of Baldrige winners and finalists (Ford and Evans, 2001). The practice of benchmarking is also being widely used for six sigma process and for organizations seeking ISO 9000 certification.

LITERATURE REVIEW

Since the early 1980s, a large number of articles have been written on the development and application of benchmarking in diverse areas of businesses such as manufacturing, health care, marketing, supply chain, human resources, and accounting. Harrison (1999) presents an analysis of the evolution of different aspects of benchmarking activities. A comparison of the Xerox and Kodak benchmarking processes has been reported by Bogan and English (1994). Although the two benchmarking methods utilize a different number of steps, their overall benchmarking activities are quite similar. Zairi and Whymark (2000) report successful results of the application of benchmarking at British Royal mail. Applications of benchmarking to world-class purchasing and to the U.S. service sectors have been reported respectively by Newman, Hanna, and Duffett (1995) and Roth et al. (1997). Singh, Narain, and Yadav (2006) utilized benchmarking and performance measurement to investigate supply chain management practices at a number of Indian manufacturing organizations. They found that Indian organizations were using benchmarking mainly as a continuous improvement tool. Bartley, Gomibuchi, and Mann (2007) utilized benchmarking to provide insights into how organizations can develop more customer-focused culture. Practical application of lead benchmarking and performance measurement to achieve organizational change has been investigated by Moffett, Anderson-Gillespie, and McAdam (2008). Goncharuk (2008) investigated the capability of using performance benchmarking tools for estimation of efficiency in gas distribution companies. The use of benchmarking as an effective organizational learning tool has been presented by Senge (1990), Garvin (1993), Ford and Evans (2001), Smith (1997), Hambly (1997), Watson (2001), Chen and Paetsch (1995), O'Dell and Grayson (2000), and Evans and Dean (2003). A comprehensive list of legal and ethical issues of benchmarking is presented by Brue (2002), Vaziri (1992), and Bogan and English (1994).

Although the content of these articles is diverse, their primary focus has been on short term technical and financial aspects of benchmarking. These articles typically address the technical aspects of departmental benchmarking along with limited success stories. As argued by Furey (1987), Goldwasser (1995), Kaplan and Norton (1992), Ahmed and Rafiq (1998) and Talluri and Vazacopoulos (1998), benchmarking is more than a comparative analysis of financial and technical measures from one company to another. To be effective, benchmarking activities need to be integrated into organizational strategy and the process needs to employ a broad range of balanced performance measures consistent with organizational strategy (Kaplan and Norton, 2001).

In a benchmarking study article, Meybodi (2005a) demonstrated the inconsistency of traditional organizations in choosing benchmarking performance measures at various levels of organization. That is, performance measures chosen by managers at operational levels were inconsistent with overall organizational strategy. The lack of a consistent strategy is a major impediment in building core competencies to ensure long term organizational competitiveness. In a number of JIT studies, researchers showed that organizations with effective JIT systems are successful not only in areas such as inventory reduction and quick delivery, but also in other areas such as quality improvement and new product development (Handfield, 1993; Meybodi, 2005b; Pettersen, 2009). As argued by Cook and Rogowski (1996), to understand application of JIT in other areas one has to carefully examine the two principles of eliminating waste and respecting people of a JIT system. Looking at JIT as a process used to eliminate waste and respect people, rather than as an inventory reduction and frequent delivery method, its principles can be applied to other areas including services in which there is no physical inventory.

The objective of this article is to investigate the consistency of benchmarking performance measures at various levels of organization for JIT and traditional organizations. Specifically, the focus of the article is to answer the following research questions:

1. Are JIT organizations more consistent than traditional organizations in scanning external environmental factors to set their overall corporate goals and objectives?

2. Are JIT organizations more consistent than traditional organizations in aligning their core competencies with their goals and objectives?

3. Are JIT organizations more consistent than traditional organizations in aligning their competitive priorities with their goals and objectives?

4. Are JIT organizations more consistent than traditional organizations in aligning their core capabilities with their competitive priorities?

5. Are JIT organizations more consistent than traditional organizations in aligning their manufacturing performance objectives with their competitive priorities?

6. Are JIT organizations more consistent than traditional organizations in aligning their manufacturing action plans with their manufacturing performance objective?

BENCHMARKING AND PERFORMANCE MEASUREMENT

Just-in-time systems, total quality management (TQM), and six sigma have helped organizations to recognize that effective performance measurement is at the core of organizational success. Managers across various industries practicing JIT, TQM and six sigma have also recognized the importance of managing integrated processes, as well as the fact that what gets measured is what gets managed and improved. The special focus of well-known quality improvement and quality award processes such as six sigma, ISO 9000, Malcolm Baldrige National Quality Award, and the Deming prize on benchmarking and performance measurement is perhaps a clear indication of the critical role of these elements in managing and improving organizational processes. As argued by Eccles (1991) and Eccles and Nohria (1992), organizations in the past used performance measurements that contributed primarily to short-term financial and technical results. How the organization achieved those results and their impact on the entire organization was secondary. Today, managers understand that focus on short-term financial and technical results without consideration to overall organizational strategy could produce devastating results over the long term. As a result, organizations are learning to manage the system in a way that crosses departmental boundaries. In this new horizontally integrated system, organizations need to accept a long-term perspective and to utilize balanced, broad reaching financial and nonfinancial performance measures to carefully improve the competitiveness of the entire organization. This approach requires that benchmarking organizations develop a complete understanding of their own business strategy and deployment of the strategy into functional strategies. This process will ensure that there is a consensus within the organization about long term and short-term performance measures that are consistent with organizational mission and goals (Day, 1992; Papke-Shields et al., 2000; Madigan, 1992). By using measurable performance results with focus on the entire organization, managers will be able to determine their progress toward long term goals and objectives.

METHODOLOGY

A questionnaire-based mailed survey was used to examine the six questions stated earlier. The survey contained a series of questions on the use of strategic and operational benchmarking performance measures for traditional and JIT organizations. Strategic questions are concerned with organizational mission and goals, as well as attitude toward customers, competition, technology, globalization, and development of core competencies. Operational items are related to specific technical performance measures such cost, quality, and delivery.

The target population for this study consisted of manufacturing firms in Midwestern United States. A sample of 500 manufacturing firms was chosen from manufacturers' directories in the states of Illinois, Indiana, Ohio, Michigan, and Wisconsin. The sample covers organizations in a variety of industries ranging from fabricated metal, communication, electronics, automotive, toots, chemicals, rubber, and paper products. In addition to general organization and managerial profile items, the survey contained a series of questions regarding organizational goals and objectives, competitive priorities, manufacturing performance objectives, manufacturing action plans, and JIT system. Out of 91 completed surveys received, 84 surveys were usable resulting in a response rate of 17 percent. Out of 84 usable surveys, 33 respondents declared their organization to be a JIT organization and 51 respondents considered their organization to be a traditional organization.

The survey data indicates the majority of respondents had various levels of managerial positions of organization with less than 500 employees. Presidents and vice presidents accounted for 29 percent and plant managers accounted for 30 percent of the sample. About 35 percent of the sample had other managerial positions such as operations/production managers, quality managers, and the remaining 6 percent were production line supervisors. In terms of manufacturing experience, about 28 percent of the respondents had between 10 to 20 years and 60 percent had more than 20 years of manufacturing experience.

RESULTS

Table 1 shows the mean importance ratings of the elements of corporate goals and objectives for traditional and JIT companies. The respondents were asked to rate each element based on the degree of importance (1=low importance, 5=high importance) to the company for the next five years. Table 1 indicates that, for traditional companies, the top three corporate goals and objectives are building market share, maximizing profits, and focusing on customer satisfaction. Being in a better competitive position with respect to quality and customer satisfaction is a possible explanation for market expansion and profit making posture. However, the mean ratings for the last four elements of competition, core competencies, globalization, and technology are not as strong as the mean ratings of the first three elements. This is perhaps an indication of typical reactive strategy by traditional companies in which the primary focus of managers is on marketing and financial goals. Understanding external environmental factors such as competition, global issues, technology, and developing core competencies to effectively deal with these factors are considered to be secondary. For these companies, understanding the causes for such strategic misalignment between corporate goals and objectives and proactive development of organizational core competencies is crucial.

Table 1 shows, for JIT companies, the top two corporate goals and objectives are customer satisfaction and building core competencies. These are closely followed by understanding technology, global, and competition issues. Table 1 indicates that, for JIT organizations, the mean rating for these five elements is significantly higher than the mean ratings of the corresponding items for traditional organizations. This is a clear indication that, unlike traditional companies, JIT organizations focus more on customer satisfaction, understanding external environmental factors, and especially building organizational core competencies. In fact, JIT organizations often develop their core competencies first, then utilize a proactive strategy and look for opportunities to exploit their core competencies to achieve a competitive advantage. Statistical result of Table 1 clearly indicates that the answer to the first two questions is yes.

The mean importance ranking of the elements of competitive priorities for traditional and JIT companies are shown respectively in Table 2 and 3. The importance ratings are similar to the ones stated earlier. From Table 2, the respondents from traditional companies ranked product reliability, conformance quality, delivery reliability, price, and fast delivery as the top five important competitive priorities. The ranking of product reliability and conformance quality as the top two competitive priorities is consistent with corporate strategy and goals. It indicates that managers believe that quality factors are still important elements of competitive advantage. However, the ranking of delivery reliability, price, and fast delivery as the next three competitive priorities indicate that the respondents also believe on the importance of delivery and price.

From Table 3, the respondents from JIT companies ranked product reliability, delivery reliability, fast delivery, new product development (NPD) speed, and product customization as their top five important competitive priorities. The ranking of product reliability as the top competitive priority indicates that managers of JIT companies also believe in the importance of quality as an essential element of competitive advantage. However, the ranking of delivery reliability, fast delivery, NPD speed, and product customization as the next four competitive priorities indicate that the respondents also believe in the importance of the elements of time-based competition and product customization. Table 3 also shows that conformance quality and low price as elements of competitive priorities ranked sixth and seventh. This rather interesting result indicates that, unlike traditional companies, the responding managers from JIT companies believe that conformance quality and low price are no longer the primary elements of competitive advantage. Relative low ranking of these two along with the last three competitive priorities is perhaps an indication that these elements represent order qualifiers and the top five factors are order winners. In other words, competitive market considers the last five competitive priorities as a given. To attract customers, organizations must perform on the basis of the top five competitive elements. From the results of Table 2 and 3, one can conclude that overall JIT organizations are more consistent in aligning their competitive priorities with their goals and objectives and hence the answer to the third question is "yes."

To help understand relative strength of organizational core competencies, the respondents were asked to rate relative competitive strength of their organization with respect to the competitors who are doing best for each element of competitive priorities. A five-point scale, where 1 corresponds to weak and 5 to strong, is used to indicate managers' perceptions of the company's current competitive strength relative to the best competitors. The mean strength scores for each element of competitive priorities are also shown in Table 2 and 3. Statistical tests indicate that, for traditional companies, the mean strength of the top five competitive priorities is significantly lower than the mean importance. This indicates that for these companies, although managers ranked product reliability, conformance quality, price, and quick delivery as the top five important competitive priorities, strength of organizational core competencies of those elements is not that strong. This imbalance between competitive priorities and organizational core competencies is a crucial area that needs to be investigated.

Table 3 also shows the mean strength of the elements of competitive priorities for JIT companies. Summary data indicates that the mean strength of the elements of competitive priorities for JIT companies is significantly higher than traditional companies. In fact, statistical tests indicate that, unlike traditional companies, the mean strength for majority of the elements of competitive priorities is close or higher than the mean importance ratings. This indicates for JIT companies there is a better balance between competitive priorities and organizational core capabilities and hence providing "yes" as the answer to the fourth question.

Table 4 shows the mean importance ranking of the elements of manufacturing performance objectives for traditional and JIT companies. Table 4 also demonstrates statistical results of the comparison of manufacturing performance objectives for traditional and JIT companies. Table 4 suggests for traditional companies that the future role of manufacturing units is to continuously focus on improving conformance quality, product design, and supplier quality. Reducing the costs of labor, overhead, materials, set-up, and increasing capacity utilization are the next set of objectives. The first three objectives are consistent with competitive priorities and the strategic importance organizations are placing on customer focus as a means to expand market share and maximize profits. However, the early emphasis on reducing costs and increasing capacity utilization for the next five objectives seems to be inconsistent with the ranking of competitive priorities. Statistical results in the last column of Table 4 supports this statement by demonstrating that the mean importance ratings of these cost elements for traditional companies is statistically larger than the corresponding cost elements for JIT companies. Such inconsistency may be due to miscommunication among managers at various levels or the results of inconsistent evaluations and reward systems. That is, while organizational strategy calls for customer focus, quality, and customization, production managers are often rewarded based on efficiency measures such as cost cutting or capacity utilization. Table 4 also indicates relatively low emphasis on factors such as changing organizational culture, improving inter-functional communication, improving employee morale, and improving supplier relationships. Since these are the foundation of world-class organizations, there needs to be more emphasis on these factors. Also, eliminating waste, reducing logistics and material handling costs, and reducing inventories should have been ranked higher next to reducing other cost items. The letters H and L in Table 4 indicate major factors that should have been ranked higher or lower due to inconsistency in the ranking. The statistical result in the last column of Table 4 shows the mean importance ratings of these fundamental factors for JIT companies is significantly larger than the corresponding factors for traditional companies support the statement.

Table 4 shows, unlike traditional companies, JIT organizations place higher emphasis on fundamental organizational factors such as changing organizational culture, improving interfunctional communication, improving employee morale, improving team work, and improving supplier relationships. This is followed by eliminating wastes, improving quality, improving elements of time-based competition and customization, reducing inventory, and improving efficiency by reducing costs and increasing capacity utilization. The ranking of these factors is consistent with the principles of JIT and previous JIT research (Meybodi, 2004, 2005b). Overall, Table 4 indicates that the answer to the fifth question is "yes."

Manufacturing action plans to achieve performance objectives and competitive priorities for traditional and JIT companies are shown in Table 5. Table 5 shows statistical results of comparison manufacturing action plans for traditional and JIT companies. The respondents were asked to rate each action plan based on the relative degree of emphasis (1 = little emphasis, 5 = great emphasis) the company will place have the next five years. Table 5 shows that, for traditional organizations, manufacturing primary action plans will focus on a number of quality improvement activities followed by linking manufacturing strategy into corporate strategy and manufacturing reorganization. While the emphasis on quality improvement activities is a sound action plan, the order of the last two activities should have been reversed. Since understanding the links between manufacturing strategy, corporate strategy, and manufacturing reorganization is the key in setting organizational strategy, the ranking for these activities should have been prior to quality improvement activities. Since investing in human infrastructures can help organizations accomplish the tasks of quality improvement, cost cutting and lead time reduction, there should have been higher emphasis on job enrichment and other employee related activities such as training, empowerment, teamwork, and compensation. Also, because product reliability and improving product design ranked first and second under competitive priorities and manufacturing performance objectives, more emphasis should have been given to process fail-safeing and process analysis. The letter H in Table 5 indicates factors that should have been ranked higher.

Table 5 also indicates that for JIT companies manufacturing primary action plans will focus on manufacturing reorganization, linking manufacturing strategy into corporate strategy, developing collaborative supply chain, and integrating information systems into supply chain. Focus on a number of employee related issues such as employee training, empowerment, teamwork, and fair compensation followed by a set of quality improvement activities are the next series of manufacturing action plans. These ranking are consistent with organizational goals and objectives and with the principles of JIT systems. The test result in the last column of Table 5 supports the above statements by demonstrating the statistical significance of these manufacturing action plans. Analysis of the results in Table 5 clearly indicates the answer to the sixth question also to be "yes."

CONCLUSION

This article examined the differences between traditional and JIT companies in selecting consistent benchmarking performance measures. A set of six questions was developed to examine the consistency of the decision at various organizational levels. Statistical results indicate the following:

* At the corporate level, the primary goals and objectives for traditional organizations are market expansion and profitability by focusing on customer service. However, understanding external environmental factors such as competition, global issues, technology, and developing core competencies to effectively deal with these factors are considered to be secondary. This indicates the existence of possible misalignment between organizational goals and objectives and proactive development of core competencies for traditional companies. For JIT organizations, there is a better alignment between organizational goals and objectives and proactive development of core competencies.

* The respondents from traditional companies ranked product reliability, conformance quality, delivery reliability, price, and fast delivery as the top five important competitive priorities. The top five competitive priorities from JIT companies were product reliability, delivery reliability, fast delivery, new product development speed, and product customization. It is clear that while traditional companies placed higher emphasis on price, JIT companies emphasized more the elements of time-based competition. Also, for JIT companies there is a better balance between importance of competitive priorities and strength of organizational core competencies.

* For manufacturing performance objectives, the respondents from traditional companies ranked improving conformance quality, product design, and supplier quality as the top three, followed by reducing the costs of labor, overhead, materials, set-up, and increasing capacity utilization. However, JIT organizations placed higher emphasis on fundamental organizational factors such as changing organizational culture, improving inter-functional communication, improving employee morale, improving team work, and improving supplier relationships. Since the latter factors are the foundation of successful organizations, it seems JIT organizations have been more consistent in placing greater emphasis on these factors.

* For traditional companies, manufacturing action plans will primarily focus on quality improvement activities followed by linking manufacturing strategy into corporate strategy, manufacturing reorganization, and employee related activities. While the emphasis on quality improvement activities is a sound action plan, the order of the last two activities should have been reversed. For JIT companies, manufacturing primary action plans will focus on manufacturing reorganization, linking manufacturing strategy into corporate strategy, developing collaborative supply chain, and integrating information systems into supply chain. Focus on a number of employee related issues such as employee training, empowerment, teamwork, and fair compensation followed by a set of quality improvement activities are the next series of manufacturing action plans. The ranking for JIT organizations are more consistent with organizational goals and objectives and with the principles of JIT systems.

* In summary, the article showed evidence of misalignment, inconsistencies, and lack of consensus in selecting benchmarking performance measures at various levels of traditional organization. However, JIT organizations are more consistent in choosing benchmarking performance measures. Managerial implication of the article is that lessons learned from a JIT system go beyond inventory reduction and frequent deliveries. Since successful implementation of JIT principles requires a thorough understanding of organizational strategy and deployment of the strategy into sub strategies, JIT companies have a better understanding of choosing consistent benchmarking performance measures at various levels of organization.

REFERENCES

Ahmed, P.K., & Rafiq, M. (1998). Integrated benchmarking: A holistic examination of select techniques for benchmarking analysis. Benchmarking for Quality Management and Technology, 5(3), 225-242.

Bartley, B., Gomibuchi, S., & Mann, R. (2007). Best practices in achieving a customer-focused culture. Benchmarking: An International Journal, 14(4), 482-496.

Bogan, C. E., & English, M. J. (1994). Benchmarking for best practices. New York: McGraw Hill.

Brue, G. (2002). Six sigma for managers. New York: McGraw-Hill.

Chen, I. J., & Paetsch, K. (1995). Benchmarking: Quality managers' perspective. Proceedings of the Decision Sciences Institute, 1623-1625.

Cook, R. L., & Rogowski, R. A. (1996). Applying JIT principles to process manufacturing supply chains. Production and Inventory Management, 1st Quarter, 12-17.

Dawkins, P., Feeny, S., & Harris, M.N. (2007). Benchmarking firm performance. Benchmarking: An International Journal, 15(6), 693-710.

Day, C. R. (1992). Benchmarking's first law: Know thyself! Industry Week, 241(4), 70.

Deming, W. E. (1982). Quality productivity and competitive position. Cambridge, MA: MIT Center for Advanced Engineering Study.

Eccles, R. G. (1991, January-February). The performance measurement manifesto, Harvard Business Review, 69(1), 131-137.

Eccles, R. G., & Nohria, N. (1992). Beyond the hype: Rediscovering the essence of management. Boston: Harvard Business School.

Evans, J. R., & Dean, J.W. (2003). Total quality management, organization and strategy (3rd ed.). Cincinnati, OH: Thomson Southwestern.

Ford, M. W., & Evans, J. R. (2001). Baldrige assessment and organizational learning: The need for change management. Quality Management Journal, 8(3), 9-25.

Furey, T. R. (1987). Benchmarking: The key to developing competitive advantage in mature markets. Planning Review, 15, 30-32.

Garvin, D. (1993). Building a learning organization. Harvard Business Review, 41-48.

Goldwasser, C. (1995). Benchmarking: People make the process. Management Review, 84, 39-45.

Goncharuk, A. G. (2008). Performance benchmarking in gas distribution industry. Benchmarking: An International Journal, 15(5), 548-559.

Graham, J. (1993, January 14). Benchmarking:What you need to make it work. Purchasing, 63-75.

Handfield, R. (1993). Distinguishing features of just-in-time systems in the make-to-order/assemble to order environment. Decision Sciences, 24(3), 581-602.

Hambly, L. (1997). Sun Microsystems embeds quality into its DNA. The Quality Observer, 45, 16-20.

Harrison, N. J. (1999). A research agenda for benchmarking. Proceedings of the Decision Sciences Institute, 1394

Ishikawa, K. (1985). What is total quality control? The Japanese way. Englewood Cliffs, NJ: Prentice Hall.

Kaplan, R. S., & Norton, D. P. (1992). The balance scorecard-measures that drive performance. Harvard Business Review, 71-79.

Kaplan, R. S., & Norton, D. P. (2001). The strategy focused organization. Cambridge, MA: Harvard Business School Press.

Kuebler, A. (1993). The quest for excellence 5. Annual Conference of Baldrige Award Winners, AT&T Universal Card Services Presentation, Feb. 15-17.

Madigan, J. M. (1992). Measures matrix chart, Eastman Kodak Company. A Paper Presented to Strategic Planning Institute.

Meybodi, M. Z. (2005a). Strategic manufacturing benchmarking. The TQM Magazine, 17(3), 249-258.

Meybodi, M. Z. (2005b). The impact of just-in-time practices on new product development: A managerial perspective. International Journal of Product Development, 2(3), 254-265.

Meybodi, M. Z. (2004). Similarities between just-in-time manufacturing and simultaneous new product development [Electronic version]. Business-Quest Journal, http://www.westga.edu/~bquest/2004/just-in-time.htm

Moffett, S., Anderson-Gillespie, K., & McAdam, R. (2008). Benchmarking and performance measurement: A statistical analysis. Benchmarking: An International Journal, 15(4), 368-381

Newman, R.W., Hanna, M., & Duffett, W. (1995). World class purchasing: A benchmarking of the best. Proceedings of the Decision Sciences Institute, 1617-1619.

O'Dell, C., & Grayson, C. J. (2000). Identifying and transferring internal best practices. APQC White Paper.

Papke-Shields, K. E., Malhotra, M. K., & Grover, V. (2002). Strategic manufacturing systems and their linkage to planning system success. Decision Sciences, 33(1), 1-30.

Pettersen, J. (2009). Defining lean production: Some conceptual and practical issues. TQM Journal, 21(2), 127-142.

Roth, A. V., Chase, R. B., Voss, C., Rose, E., & Menor, L. (1997). Benchmarking US services: Results and implications. Proceedings of the Decision Sciences Institute, 1510-1512.

Senge, P. M. (1990). The fifth discipline: The art and practice of learning organization. New York: Doubleday/Currency.

Singh, A., Narain, R., & Yadav, R.C. (2006). Benchmarking and performance measurement of supply chain management practices: A survey of Indian organizations. International Journal of Services and Operations Management, 2(4), 313-334.

Smith, G. P. (1997, January). A change in culture brings dramatic quality improvement. Quality Observer, 14-15 & 37.

Talluri, S., & Vazacopoulos, A. (1998). Efficiency evaluation and benchmarking in small and medium enterprises. Proceedings of the Decision Sciences Institute, 1421-1423.

Vaziri, H. K. (1992, November). Using competitive benchmarking to set goals, Quality Progress, 81-85.

Venetucci, R. (1992). Benchmarking: A reality check for strategy and performance objectives. Production and Inventory Management Journal, 33(4), 32-36.

Watson, G. H. (2001). Cycles of learning: Observations of Jack Welch. Six Sigma Forum Magazine, 1(1), 13-17.

Watson, G. H., (1992). The benchmarking workbook: Adopting best practices for performance improvements. Portland, OR: Productivity Press.

Watson, G. H. (1993). How process benchmarking supports corporate strategy. Planning Review, 21, 12-15.

Welch, J. (1993, January 25). Jack Welch's lessons for success. Fortune, 86-93.

Whiting, R. (1991). Benchmarking: Lessons from best-in-class. Electronic Business, 17, 128-134.

Zairi, M. (1994). Benchmarking: the best tool for measuring competitiveness. Benchmarking for Quality Management and Technology, 1(1), 11-24.

Zairi, M., & Whymark, J. (2000). The transfer of best practices: How to build culture of benchmarking and continuous learning-Part 1. Benchmarking: An International Journal, 7(1), 62-78.

Mohammad Z. Meybodi ([e-mail]) is Professor of Operations Management at Indiana University Kokomo, 2300 South Washington Street, Kokomo, IN 46904.

TABLE 1
IMPORTANCE RATINGS FOR CORPORATE GOALS AND
OBJECTIVES (1=Low Importance, 5=High Importance)

Factor                             Traditional      JIT

                                   Mean   SD     Mean   SD     p-value

Build market share                 4.67   1.27   4.66   1.23   0.145
Maximize profit                    4.59   1.32   4.53   1.27   0.136
Focus on customer satisfaction     4.41   1.15   4.82   1.31   0.014 *
Understand competitors' strategy   4.19   1.21   4.61   1.25   0.018 *
Build core competencies            3.68   1.39   4.75   1.35   0.005 *
Understand global strategies       3.83   1.37   4.72   1.26   0.005 *
Understand technology              3.87   1.32   4.73   1.41   0.005 *

significant at [alpha] = 0.05

SD=Standard Deviation, * = Statistically

TABLE 2
IMPORTANCE AND STRENGTH RATINGS FOR COMPETITIVE PRIORITIES
(TRADITIONAL COMPANIES)

(1=Low Importance, 5=High Importance) (1=Weak Strength, 5=Strong
Strength)

                        Importance     Strength

Factor                  Mean    SD    Mean    SD    p-value

Product reliability     4.61   1.22   3.51   1.24   0.000 *
Conformance quality     4.50   1.31   3.81   1.14   0.040 *
Delivery reliability    4.42   1.26   3.75   1.32   0.030 *
Price                   4.27   1.33   3.31   1.13   0.005 *
Fast delivery           4.18   1.28   3.26   1.32   0.005 *
Product customization   4.11   1.41   3.91   1.29    0.230
NPD speed               3.95   1.39   3.73   1.14    0.210
Performance             3.90   1.29   4.14   1.21    0.190
Service after sales     3.71   1.47   4.10   1.27    0.100
Volume flexibility      3.52   1.36   4.47   1.31   0.005 *

* = Statistically significant at [alpha] = 0.05

TABLE 3
IMPORTANCE AND STRENGTH RATINGS FOR COMPETITIVE PRIORITIES (JIT
COMPANIES)

(1=Low Importance, 5=High Importance) (1=Weak Strength, 5=Strong
Strength)
                        Importance     Strength

                        Mean    SD    Mean    SD    p-value
Factor
Product reliability     4.85   1.16   4.78   1.24    0.217
Delivery reliability    4.73   1.28   4.77   1.14    0.315
Fast Delivery           4.69   1.24   4.80   1.32    0.226
NPD speed               4.63   1.36   4.70   1.09    0.167
Product customization   4.55   1.23   4.67   1.36    0.154
Conformance quality     4.50   1.34   4.61   1.25    0.153
Price                   4.53   1.32   4.75   1.19    0.120
Performance             4.33   1.22   4.47   1.28    0.162
Service after sales     4.29   1.44   4.80   1.23   0.008 *
Volume flexibility      4.05   1.31   3.95   1.37    0.163

* = Statistically significant at [alpha] = 0.05

TABLE 4
COMPARISON OF MANUFACTURING PERFORMANCE OBJECTIVES FOR
TRADITIONAL AND JIT COMPANIES (1=Low Importance, 5=High Importance)

                                                         Significant
                                     Mean        Mean    at [alpha]
Factor                           (Traditional)   (JIT)   =0.05? (*)

Improve conformance                  4.68        4.24        Y1
Improve product design               4.57        3.73        Y1
Improve supplier quality             4.48        4.19        Y1
Reduce labor costs (L)               4.41        3.60        Y1
Reduce overhead costs (L)            4.34        3.52        Y1
Reduce materials costs (L)           4.28        3.41        Y1
Reduce set-up/changeover costs
  (L)                                4.22        3.36        Y1
Increase capacity utilization
  (L)                                4.17        3.30        Y1
Improve team work                    3.91        4.41        Y2
Increase delivery reliability
  (H)                                3.84        3.86        No
Change organizational culture
  (H)                                3.83        4.73        Y2
Eliminate wastes (H)                 3.80        4.31        Y2
Increase delivery speed              3.74        3.82        No
Improve inter-functional
  communication (H)                  3.71        4.64        Y2
Increase NPD speed (H)               3.68        3.79        No
Reduce logistics and MH costs
  (H)                                3.65        3.28        No
Reduce inventories (H)               3.61        3.93        Y2
Improve employee morale (H)          3.56        4.58        Y2
Increase customization (H)           3.45        3.68        No
Improve supplier relationships
  (H)                                3.41        4.37        Y2

(*) Y1 = Yes with mean for traditional being larger than JIT
Y2 = Yes with mean for JIT being larger than traditional

TABLE 5
COMPARISON OF MANUFACTURING ACTION PLANS FOR TRADITIONAL AND
JIT COMPANIES (1=Low Emphasis, 5=High Emphasis)

                                                           Significant
                                       Mean        Mean    at [alpha]
Factor                             (Traditional)   (JIT)   =0.05? (*)

Quality at the source                  4.61        3.93        Y1
Quality circle                         4.53        3.83        Y1
SPC charts                             4.45        3.78        Y1
Brainstorming                          4.36        3.65        Y1
Quality improvement tools              4.37        3.60        Y1
Process capability                     4.25        3.55        Y1
ISO 9000                               4.27        3.52        Y1
Benchmarking                           4.21        3.41        Y1
Linking strategies (H)                 4.11        4.64        Y2
Manufacturing reorganization (H)       3.93        4.78        Y2
Manufacturing technologies             3.83        3.32        No
Concurrent engineering (H)             3.77        4.15        No
Job enrichment (H)                     3.64        4.45        Y2
Employee training (H)                  3.66        4.37        Y2
Employee empowerment (H)               3.52        4.30        Y2
Employee teamwork (H)                  3.47        4.27        Y2
Employee fair compensation (H)         3.40        4.21        Y2
Integrate IS into supply chain
  (H)                                  3.25        4.51        Y2
Collaborative supply chain (H)         3.12        4.56        Y2
Process fail-safeing (H)               2.85        3.15        No

(*) Y1 = Yes with mean for traditional being larger than JIT
Y2 = Yes with mean for JIT being larger than traditional