Core Competence Research Papers - Academia.edu (original) (raw)

Increasing market turbulence and customer sophistication compel companies to manufacture customised quality products in arbitrary order quantities, within short time scales without cost penalties. These competitive requirements are important for customer loyalty and long-term survival but they can eat deep unto profits. The solution to stable profits and long term survival therefore lies in further development of resource competencies and elimination of trade-offs amongst them. Two such resources are empowered employees and process automation. More importantly, the two should be complementary in their impacts. This is a means of eliminating trade-offs amongst manufacturing capability and performance measures. A literature review discusses the relationship amongst the concepts of employee empowerment, process automation, manufacturing capability and performance. The discussion of process automation focused on cellular layout of plants as a means of introducing a hybrid system of flexible and intelligent automation. A hybrid system enhances ability to cope effectively with varying machining, forming and assembly requirements of product families. Also, the discussion of empowerment focuses on training and teaming as the means of earning worker cooperation , involvement and commitment. The following variables were used in the study. Empowerment was measured by teaming spirit amongst individuals and functions, employee training and development, employees' commitment to their jobs and company, involvement, and autonomy over methods and tools. An assessment of the type of process automation was based on cellular design, range of automated processes, machine flexibility, machine intelligence and plant mobility. Manufacturing capability was valued in terms of low cost, quality conformance, dependability, speed, customisation, volume flexibility and new technology leadership. Finally, performance as gauged by sales turnover, net profit, market share, proportion of sales turnover from new products, customer loyalty and performance relative to competitors. In order to enable a compact analysis, the variables were reduced to ten factors using principal component analysis. The ten factors were used to propose a path model of expected relationships. The main hypothesis was that higher levels of process automation and employee empowerment result in higher levels of manufacturing capability and business performance. Multiple regression analysis was used to identify significant path coefficients, using a cutoff probability level of 0.10. Data analysis shows that empowerment and automation have positive impacts on manufacturing capability and business performance. However, out of twenty-four expected relationships, seven were significant at p< 0.05 whilst two others were significant at p < 0.10. However, the significant relationships have far reaching implications for research and practice. For example, factor analysis identified two dimensions of business performance-financial and market standing but the former was not significant. and therefore excluded from the results. This result is important in that most prior studies of this type tend to focus on financial performance measures alone. In addition, flexible automation and cost leadership were insignificant. Intelligent automation impacts on quality leadership and also bypassed manufacturing capabilities to exert a direct influence on performance.