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Alignment of strategic benchmarking performance measures: a lean manufacturing perspective.

INTRODUCTION

Benchmarking is an effective improvement tool utilized by organizations for improving aspects of organizational competitive priorities such as cost, quality, delivery, flexibility, and customer service. 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, 1993; Whiting, 1991). The primary reasons world-class organizations use benchmarking are: 1) Benchmarking is a flexible tool that can be used for gradual continuous improvement as well as for major changes of process reengineering (Bogan & English, 1994). 2) It is a valuable educational tool that provides opportunity to learn and prepare a company for change, because it exposes employees to new approaches, systems, and procedures of other organizations (Welch, 1993; Kuebler, 1993; Zairi, 1994). 3) It is an efficient tool to capitalize on proven ideas and to avoid the cost of additional resources for developing new ideas from scratch. 4) It is an effective tool for improving quality, increasing customer satisfaction, while minimizing both the cost of good quality as well as the cost of poor quality (Blanchard, 2008).

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, & Harris, 2007). Since 1987, benchmarking has been a major component of the Malcolm Baldrige National Quality Award criteria; it has consistently influenced more than half of the total Baldrige points (Bogan & English, 1994; Ford & Evans, 2001). The practice of benchmarking is also being widely used for six sigma process and for organizations seeking ISO 9000 certification.

Although for the past three decades there has been a considerable volume of research on the application of benchmarking in various areas of business, the primary focus of the research has been on short term technical and financial aspects of benchmarking. Fundamental strategic factors such as changing organizational culture, recognizing external environmental factors, and building organizational core competencies have been generally disregarded. However, research for the past two decades shows that organizations with an effective LM system are successful not only in areas such as inventory reduction and quick delivery, but also in other areas such as quality improvement, supply chain management, and new product development (Handfield, 1993; Meybodi, 2005b; Pettersen, 2009). The focus of this article is to examine if there are relationships between LM practices and alignment of benchmarking performance measures.

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, energy, and customer service. 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. Successful application of benchmarking at British Royal mail has been reported by Zairi and Whymark (2000). Applications of benchmarking to public procurement, world-class purchasing, and to the US service sectors have been reported respectively by Raymond (2008), Newman, Hanna, and Duffett (1995), and Roth et al. (1997). Bartley, Gomibuchi, and Mann (2007) utilized benchmarking to provide insights into how organizations can develop more customer-focused culture. Seong-Jong et al. (2009) used benchmarking to measure the performance of a number of specialty coffee stores. Singh, Narain, and Yadav (2006) utilized benchmarking and performance measurement to investigate supply chain management practices at a number Indian manufacturing organizations. They found that Indian organizations were using benchmarking mainly as a continuous improvement tool. Chia et al. (2009) also employed a balanced scorecard approach to measure the performance of a number of entities in the supply chain. The authors concluded that, despite the need to utilize a balanced performance measurement, organizations primarily focused on the use of traditional financial measures. Gurumurthy and Kodali (2009) utilized benchmarking to assess the implementation of lean manufacturing. 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 to measure operational performance of organization utilizing internet based services has been reported by Hadaya (2009). A comprehensive list of legal and ethical issues of benchmarking is presented by Vaziri (1992). 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), Gleich et al. (2008), Watson (2001), Chen and Paetsch (1995), O'Dell and Grayson (2000), and Evans and Dean (2003). Furey (1987), Goldwasser (1995), Kaplan and Norton (1992), Talluri and Vazacopoulos (1998), and Kaplan and Norton (2001) argued that, to be effective, benchmarking activities need to be integrated into long term organizational strategy and the process needs to employ a broad range of balanced performance measures that are consistent with organizational strategy. The balanced performance measure approach provides a framework that helps managers to identify what mix of performance metrics needs to be measured that are aligned with overall organization strategy. In other words, the balanced performance measures enable organizations to clarify their mission and strategy and translate them into action. They provide feedback on multiple financial and non-financial performance metrics and allow organizations to consistently implement their strategies. 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. The objective of this article is to examine if there are relationships between LM practices and utilization of a balanced benchmarking performance measures that are consistent with organizational strategy.

STRATEGIC BENCHMARKING PERFORMANCE MEASUREMENT

Lean manufacturing (LM) has been a great force in the world of manufacturing since the early 1980s. Some of its main benefits, such as inventory reduction, quick delivery, quality improvement, and cost reduction, have been well documented (Cook & Rogowski, 1996; Hobbs, 1994; Temponi & Pandya, 1995). LM focuses on reduction or elimination of all kinds of wastes in the organization (Payne, 1993; Womack & Jones, 2003; Jacobs & Chase, 2011). Managers across various industries practicing total quality management and six sigma have recognized that effective performance measurement is the key for organizational success. Without effective performance measurement a company doesn't know the real problem, who is responsible, where improvement efforts are needed, and the amount and type of necessary resources. The special focus of well-known quality improvement and quality award processes such as six sigma, ISO 9000, the 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), in the past organizations 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 non-financial 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 strategies and deployment of the strategies 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., 2002; Madigan, 1992). By using measurable performance results with a focus on the entire organization, managers will be able to determine their progress toward long term goals and objectives. In a number of LM studies, researchers showed that organizations with an effective LM system 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 (Cumbo, Kline, & Bumgardner, 2006; Handfield, 1993; Meybodi, 2005b). Cook and Rogowski (1996) argued that, to understand application of LM in other areas, one has to carefully examine the two fundamental principles of waste elimination and respect for people in a LM system. Looking at LM 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 if there are differences between LM organizations and conventional organizations in alignment of strategic benchmarking performance measures. Specifically, the focus of the article is to test the following nine hypotheses:

H1: Lean manufacturing companies are more consistent than conventional companies in setting their long term balanced goals and objectives.

H2: Lean manufacturing companies are more consistent than conventional companies in recognizing environmental factors to set their goals and objectives.

H3: Lean manufacturing companies are more consistent than conventional companies in building their core competencies to support their goals and objectives.

H4: Lean manufacturing companies are more consistent than conventional companies in aligning their competitive priorities with their goals and objectives.

H5: Lean manufacturing companies are more consistent than conventional companies in placing a higher emphasis on elements of competitive priorities such as flexibility, agility, and time based competition.

H6: Lean manufacturing companies are more consistent than conventional companies in aligning their competitive capabilities with their competitive priorities.

H7: Lean manufacturing companies are more consistent than conventional companies in aligning their manufacturing objectives with their competitive priorities.

H8: Lean manufacturing companies are more consistent than conventional companies in placing a higher emphasis on fundamental organizational and human development manufacturing objectives.

H9: Lean manufacturing companies are more consistent than conventional companies in using a broad range of balanced performance measures that are aligned with organizational strategy.

RESEARCH METHODOLOGY

A questionnaire-based mailed survey was used to collect data for testing the hypotheses. The survey contained a series of questions on the use of strategic and operational benchmarking performance measures for conventional and LM organizations. Strategic questions are concerned about organizational mission and goals, as well as attitude toward customers, competition, technology, globalization, development of core competencies, and organizational competitive priorities. 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 the Midwestern United States. A sample of 500 manufacturing firms was chosen from manufacturers' directories of the states of Illinois, Indiana, Ohio, Michigan, and Wisconsin. The sample covered 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 objectives, and whether the company practices a number of LM principles. Out of 91 completed surveys received, 84 surveys were usable resulting in a response rate of 17%. Out of 84 usable surveys, 33 respondents declared their organization practices LM principles and 51 respondents considered their organizations to be conventional organizations. For each element of the survey, the respondents were asked to rate the element based on the degree of importance (1=low importance, 5=high importance) to the company for the next five years.

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% and plant managers accounted for 30% of the sample. About 35% of the sample had other managerial positions such as operations/production managers, quality managers, and the remaining 6% were production line supervisors. In terms of manufacturing experience, about 28% of the respondents had between 10 to 20 years and 60% had more than 20 years of manufacturing experience.

RESEARCH RESULTS

Corporate Goals and Objectives

Table 1 and 2 show, respectively, the mean importance ratings for corporate goals and objectives and strategic environmental and core competencies factors. Table 1 shows that the ranking of the corporate goals and objectives for conventional companies are building market share, maximizing profits, and customer satisfaction. The corresponding rankings for LM companies are customer satisfaction, building market share, and maximizing profits. Table 1 also indicates that although between conventional and LM companies there are no significant differences in the ratings of building market share and maximizing profits, there is a significant difference between the two classes of companies in the rating of customer satisfaction. In fact, as the data clearly shows, LM companies rated customer satisfaction significantly higher than the conventional companies. This indicates that while the objective of both types of companies is market expansion and profit making, LM companies seek to achieve these through customer satisfaction. Hence, in terms of consistency we may conclude that overall hypothesis H1 is supported by the data.

Table 2 shows for conventional companies, the ranking of strategic environmental and core competencies factors is focused on competition, building innovative and agile organization, developing knowledge workforce, and understanding global issues and technology. However, the ratings for these factors are not as strong as the ratings of the corporate goals and objectives in Table 1. This is perhaps an indication of a typical reactive strategy by conventional companies in which the primary focus of managers is to increase market share and profits. Understanding external environmental factors such as competitors' strategies, global issues, and building innovative and agile organizations through development of knowledge workforce and state of the art technology to effectively deal with environmental factors are not under prime consideration. For conventional companies, understanding the causes for such strategic misalignment between corporate goals and objectives and detection of external factors as well as proactive development of organizational strategic core competencies is crucial. Table 2 shows for LM companies, building innovative and agile organization and developing strategic workforce as the top two strategic environmental factors. These are closely followed by understanding of competition, global issues, and technology. The last column of Table 2 clearly shows that for LM organizations, the mean rating for these five elements is significantly higher than the mean ratings of the corresponding items for conventional organizations. This is an indication that, unlike conventional companies, LM organizations focus more on understanding external environmental factors and especially building organizational core competencies through development of a knowledge workforce and state of the art technology. In fact, LM organizations often develop their core competencies first and then utilize a proactive strategy to find opportunities for exploiting their core competencies to develop new products and services to achieve competitive advantage in the market. Statistical result of Table 2 clearly supports hypotheses H2 and H3.

Competitive Priorities

The rating of the elements of competitive priorities for conventional and LM organizations is shown in Table 3. From Table 3, the respondents from conventional 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. It indicates the responding managers believe that quality factors are still important elements of competition. However, the ranking of delivery reliability, price, and fast delivery as the next three competitive priorities indicate that managers also believe on the importance of delivery and price. Relative low ranking of factors such as customization, new product development, speed, and ability to make design changes is inconsistent with the corporate strategy of customer satisfaction through building innovative and agile organization.

The right side of Table 3 shows that the respondents from LM companies ranked product reliability, delivery reliability, fast delivery, design change, new product development (NPD) speed, and product customization as their top six important competitive priorities. The ranking of product reliability as the top competitive priority indicates that managers of LM companies also believe in the importance of quality as an essential element of competitive advantage. However, the ranking of delivery reliability, fast delivery, design change, NPD speed, and product customization as the next five competitive priorities indicate that the respondents also believe in the importance of time based competition, agility, and product customization. Table 3 also shows that conformance quality and price as elements of competitive priorities ranked relatively low by LM companies. This rather interesting result indicates that, unlike conventional companies, the responding managers from LM companies believe that conformance quality and low price are no longer the primary elements of competitive advantage. From the results of Table 3, one can conclude that overall LM organizations are more consistent than conventional organizations in aligning their competitive priorities with their corporate goals and objectives. Also from Table 3, it is clear that LM companies place more emphasis on the elements of time based competition, agility, and product customization. Hence, statistical results of Table 3 clearly support hypotheses H4 and H5.

To help understand relative strength of organizational competitive capabilities, the respondents were asked to rate relative competitive strength of their organization with respect to 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 capability relative to the best competitors. The mean strength scores for each element of competitive priorities for conventional and LM organizations are shown respectively in Table 4 and 5. As the last column of Table 4 indicates, for conventional 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, delivery reliability, price, and quick delivery as the top five competitive priorities, organizational capabilities of those elements are not that strong. This imbalance between organizational competitive priorities and their competitive capabilities is a serious area that needs to be investigated. Statistical results of Table 5 indicate the mean strength of the elements of competitive priorities for LM companies is significantly higher than conventional companies. In fact, statistical tests indicate that, unlike conventional companies, the mean strength for majority of the elements of competitive priorities is close or higher than the mean importance ratings. This indicates for LM companies there is a better alignment between competitive priorities and organizational competitive capabilities; hence, it is obvious that the data supports hypothesis H6.

Manufacturing Objectives

Table 6 shows the ratings of the elements of manufacturing objectives for conventional and LM companies. Table 6 suggests for conventional companies the future role of the manufacturing unit is to focus on improving conformance quality, product reliability, 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 competitive priorities. Statistical results in the last column of Table 6 supports this statement by demonstrating that the mean importance ratings of these cost elements for conventional companies is significantly higher than the corresponding cost elements for LM 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, agility, and customization, production managers are often rewarded based on efficiency measures such as cost cutting or capacity utilization. Table 6 also indicates relative low emphasis on strategic factors such as changing organizational culture, improving inter-functional communication, improving employee empowerment, improving employee morale, and improving supplier relationship for conventional companies. Since these are the foundation of world-class organizations, there needs to be more emphasis on these factors. Also, there should have been a higher emphasis on important factors such as eliminating waste, improving NPD speed, improving product design change, and reducing inventories.

Table 6 shows, unlike conventional companies, LM 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 waste, improving quality, improving delivery and customization, reducing inventory, reducing cost, and increasing capacity utilization. The ranking of these factors is consistent with the principles of LM and previous research (Meybodi, 2005b). Statistical result in the last column of Table 6 shows the mean importance ratings of these fundamental organizational and human development factors for LM companies is significantly higher than the corresponding factors for conventional companies. Hence, it is clear that statistical result of Table 6 supports hypotheses H7 and H8.

For hypothesis H9, one needs to reexamine previous results, especially the results from Tables 36. The results from these tables showed that while the focus of conventional companies was on a number of quantitative cost reduction and quality improvement factors, LM organizations utilized more balanced quantitative and strategic qualitative factors. Specifically, LM organizations placed a higher emphasis on competitive priorities such as customization, agility, and time based competition. Also, LM companies gave a higher priority to fundamental organizational and workforce developmental factors such as changing organizational culture, linking manufacturing strategy into corporate strategy, improving inter-functional communication, and improving supplier relationship and, hence, hypothesis H9 is clearly supported by the data.

CONCLUSION

Consistency and alignment of performance measures at various levels is a crucial element of organizational competitiveness. The focus of this article was to examine if there are differences between conventional and LM organizations in the alignment of their strategic benchmarking performance measures. Statistical results indicate the following:

* LM companies are more consistent than conventional companies in setting their long term balanced goals and objectives.

* LM companies are more consistent than conventional organizations in recognizing external environmental factors such as competition, global issues, and technology.

* LM companies are more consistent than conventional companies in building their core competencies to effectively deal with external environmental factors.

* LM companies are more consistent than conventional companies in aligning their competitive priorities with their goals and objectives.

* LM companies are more consistent than conventional companies in aligning their competitive capabilities with their competitive priorities.

* LM companies are more consistent than conventional companies in aligning their manufacturing objectives with their competitive priorities.

* LM companies are more consistent than conventional companies in placing a higher emphasis on fundamental organizational and human development manufacturing objectives.

* LM companies are more consistent than conventional companies in using a broad range of balanced performance measures that are aligned with organizational strategy.

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Mohammad Z. Meybodi is Professor of Operations Management in the School of Business,Indiana University Kokomo. He earned his Ph.D. in Industrial Engineering and Operations Research from the University of Oklahoma.. His research areas of interest include benchmarking, just-in-time systems, new product development, and production planning. He has published in journals such as Annals of Operations Research, International Journal of Operations and Production Management, International Journal of Operations and Quantitative Management, Benchmarking: An International Journal, Advances in Competitiveness Research, The TQM Journal, and Mathematics Today.
TABLE 1. IMPORTANCE RATINGS FOR CORPORATE GOALS AND OBJECTIVES

(1=low importance, 5=high importance)

                      Conventional    LM
Factor                Mean     SD     Mean     SD      p-value

Build market share    4.61    1.27    4.66    1.23      0.125
Maximize profit       4.57    1.32    4.53    1.27      0.132
Satisfy customer      4.46    1.15    4.84    1.31      0.045 *

SD= Standard Deviation, * = Statistically significant at
[alpha] = 0.05

TABLE 2. IMPORTANCE RATINGS FOR STRATEGIC ENVIRONMENTAL
AND CORE COMPETENCIES FACTORS (l=low importance, 5=high importance)

                           Conventional    LM
Factor                     Mean     SD     Mean     SD     p-value

Understand competitors'    4.32    1.28    4.73    1.44    0.015 *
  strategy
Build innovative &         4.12    1.21    4.80    1.25    0.018 *
  agile organization
Develop knowledge          3.85    1.39    4.75    1.35    0.005 *
  workforce
Understand global          3.83    1.37    4.62    1.26    0.005 *
  strategies
Understand the state       3.78    1.32    4.70    1.41    0.005 *
  of technology

SD= Standard Deviation, * = Statistically significant at
[alpha] = 0.05

TABLE 3. IMPORTANCE RATINGS FOR COMPETITIVE PRIORITIES

(1=low importance, 5=high importance)

                         Conventional    LM
Factor                   Mean     SD     Mean     SD     p-value

Product reliability      4.61    1.22    4.85    1.16     0.135
Conformance quality      4.50    1.31    4.34    1.34     0.242
Delivery reliability     4.42    1.26    4.73    1.28    0.040 *
Price                    4.39    1.33    4.33    1.32      0.27
Fast delivery            4.18    1.48    4.69    1.34    0.036 *
Product customization    4.03    1.41    4.55    1.23    0.045 *
NPD speed                3.95    1.39    4.63    1.36    0.010 *
Performance              3.90    1.29    4.30    1.21    0.048 *
Design change            3.82    1.32    4.65    1.31    0.009 *
Service after sales      3.71    1.47    4.29    1.44    0.042 *
Volume flexibility       3.52    1.36    4.05    1.31    0.040 *

* = Statistically significant at [alpha] = 0.05

TABLE 4. IMPORTANCE AND STRENGTH RATINGS FOR COMPETITIVE
PRIORITIES (CONVENTIONAL 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                    4.39    1.33    3.31    1.13    0.005 *
Fast delivery            4.18    1.48    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
Design change            3.82    1.32    3.76    1.35    0.240
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 5. IMPORTANCE AND STRENGTH RATINGS FOR COMPETITIVE
PRIORITIES (LM COMPANIES)

(1=low importance, 5=high importance)
(1=weak strength, 5=strong strength)

                         Importance      Strength
Factor                   Mean     SD     Mean     SD     p-value

Product reliability      4.85    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
Design change            4.65    1.30    4.73    1.18     0.193
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      4.34    1.34    4.61    1.25     0.153
Price                    4.33    1.32    4.75    1.19     0.120
Performance              4.30    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 6. COMPARISON OF MANUFACTURING OBJECTIVES FOR
CONVENTIONAL AND LM COMPANIES (l=low importance, 5=high importance)

                                  Conventional    LM
Factor                            Mean     SD     Mean     SD

Improve conformance               4.68    1.27    4.24    1.24
Improve product reliability       4.62    1.32    3.84    1.27
Improve supplier quality          4.48    1.44    4.19    1.31
Reduce labor costs                4.41    1.19    3.60    1.24
Reduce overhead costs             4.34    1.21    3.52    1.38
Reduce materials costs            4.28    1.36    3.41    1.21
Reduce set-up/changeover costs    4.22    1.42    3.36    1.27
Increase capacity utilization     4.17    1.25    3.30    1.37
Improve team work                 3.91    1.28    4.41    1.23
Increase delivery reliability     3.84    1.27    3.86    1.31
Change organizational culture     3.83    1.24    4.73    1.25
Eliminate wastes                  3.80    1.38    4.31    1.34
Increase delivery speed           3.74    1.23    3.82    1.45
Improve inter-functional comm.    3.71    1.45    4.64    1.23
Improve NPD speed                 3.66    1.29    4.53    1.34
Improve product design change     3.63    1.35    4.62    1.19
Reduce logistics and MH costs     3.62    1.25    3.28    1.28
Improve employee empowerment      3.60    1.41    4.42    1.33
Improve employee morale           3.56    1.46    4.58    1.21
Increase customization            3.45    1.28    3.68    1.14
Improve supplier relationships    3.41    1.36    4.37    1.22

Factor                            Significant? *

Improve conformance                     Y1
Improve product reliability             Y1
Improve supplier quality                Y1
Reduce labor costs                      Y1
Reduce overhead costs                   Y1
Reduce materials costs                  Y1
Reduce set-up/changeover costs          Y1
Increase capacity utilization           Y1
Improve team work                       Y2
Increase delivery reliability           No
Change organizational culture           Y2
Eliminate wastes                        Y2
Increase delivery speed                 No
Improve inter-functional comm.          Y2
Improve NPD speed                       Y2
Improve product design change           Y2
Reduce logistics and MH costs           No
Improve employee empowerment            Y2
Improve employee morale                 Y2
Increase customization                  No
Improve supplier relationships          Y2

(*) Y1 = Yes it is significant [alpha]=0.05 with mean for
conventional being larger than LM Y2 = Yes it is significant
[alpha]=0.05 with mean for LM being larger than conventional.
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Author:Meybodi, Mohammad Z.
Publication:Advances in Competitiveness Research
Article Type:Abstract
Geographic Code:1USA
Date:Jan 1, 2013
Words:6047
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