Competitive Priority in Operation Management

Summary Article Review: Competitive Priority in Operations management

OVERVIEW

• The commonly accepted competitive priority on the manufacture area are: quality importance, cost importance, delivery time importance, and flexibility importance.
• Peter T Ward, Jhon K. McCreery, Larry P. Ritzman, and Deven Sharma try to research competitive priorities in operations management due to measuring strategic variable often required judgement from top executive management on the operation function.
• The judgement of level measurement may be error, due to less data information or only coming from justification from field operation.
• The purpose of the research to develop scales for commonly accepted competitive priority base on 114 manufacturing site data.
• The authors try getting more insight related measuring strategy perception from operation executive.  And also try to test the consistence of manager to answer the question related competitive priority.

COMPETITIVE PRIORITY

There is broad agreement that manufacturing competitive priories can be expressed in term at least four basic components:

1. Low Cost: manufacturing cost related categories included direct production costs, productivity, capacity utilization, and inventory reduction.
2. Quality: performance, feature, reability, conformance, durability, serviceability, aesthetics, and perceived quality.
3. Delivery: ability to deliver as promise schedule
4. Flexibility: product mix, volume, change over, modification.

METHOD

The data used came from 114 different manufacturers located in the Midwestern, and northwestern regions of the US. The sample reflecting manufacturing composition on that region. Samples of 400 company was selected, 200 were contacted by phone to solicit their participation in the study. 175 firms agree to participate and 110 firms actually responded (55%). 200 question was also mailed and get 34 response (17%).  Author eliminate plan that were not discrete part of manufactures in order to achieve the homogeneous. Plan from following sectors are included: fabricated metal, industry equipment, electrical and electronic equipment, transportation equipment, instruments, and miscellaneous manufacture. The unit of measure for this study is a primary product line at individual manufacturing plan.

RESULT

• From the analysis indicated that each of the four competitive priorities can be captured reasonably, if imperfectly in a single dimension.
• Alpha values are .8, .72, .79, .70 for cost, quality, deliver time, and flexibility importance. This indicated that consistency of manage for construct the measured.
• The interrater agreement values for the four construct are .94 for cost, .84 for quality, .85 for delivery time, .89 for flexibility. The result indicated that the 27 pairs of managers exhibited a high level of agreement about the competitive priorities for their business.
• Using measured values for cost and flexible as predictor variable, analysis of variance result indicated significant relationship (at .05 levels) between competitive priorities and process choice.  The importance of cost as a competitive priority increases as process choice mover from the job shop setting to the flow shop setting.
• The importance of flexibility as strategic capability is lower for plans that have flow type process design.

CONCLUSION

• The evidence suggests that the instrument can provide reliable data and that the constructs measured are valid.
• Operation measures of key decision variables such as competitive priorities are useful to both decision makers and researcher.
• Measures of competitive priorities are particular important because these variable are thought to guide decisions made on process choice, technology, capacity, manufacturing planning, control system and quality (Hayes & Wheelwright, 1984; Skinner, 1969). The development of measuring competitive priorities is critical.
• The usefulness to researchers of better measures of competitive priority is clear.
• Relation between process choice and competitive priority is central.
• Adopted conceptual and empirical research is importance for practicing managers.
• Importance to researcher to build each other work using scale to give proved reliable and valid methodology to measuring variable research.

...