Linking competitive priorities, smart manufacturing advancement and organizational microfoundations

Abstract

PurposeSmart Manufacturing (SM) lies at the core of Industry 4.0. Operations management research has investigated the determinants of SM advancement but there is still limited understanding of the linkages between SM and organizational factors and about whether both the technological and organizational subsystems for SM are guided by firms’ competitive priorities. To close these gaps, building on operations strategy theory, this paper aims to empirically test a model positing that competitive priorities drive SM advancement. The relation between competitive priorities and SM advancement is assumed to be mediated by organizational microfoundations.Design/methodology/approachUsing data from a single respondent survey with 234 firms in the automotive component industry, structural equation modeling is adopted to test the model hypotheses. Relevant constructs are measured with reference to the lead plant for SM.FindingsFindings highlight that SM advancement is driven by the need to simultaneously compete in terms of cost, quality and delivery, thus suggesting that manufacturers view SM as a mean to develop multiple manufacturing capabilities. Organizational microfoundations fully mediate the relation between competitive priorities and SM advancement.Originality/valueResults have implications for SM research, as they provide an understanding of the strategic priorities of firms engaging in SM. Findings also bear relevance for manufacturing executives engaged in the SM transformation, as they provide quantitative evidence that shaping an adequate organizational environment is a prerequisite for SM advancement.

Investigating the impact of smart manufacturing on firms' operational and financial performance

“…Recently, a growing strategic emphasis has been placed on reducing production costs due to intensified competition and the need to finance investments tied to the transition to electric mobility (Arcidiacono et al ., 2023a). The joint strategic focus on the cost, quality, delivery priorities prompts the adoption of SM, which manufacturers consider a mean to serve multiple strategic goals (Arcidiacono et al ., 2023b). In this respect, our findings complement past research by showing that SM adoption coherently results in performance improvements along those dimensions that motivate its introduction in the first place, and empirically confirm that SM supports firms in simultaneously developing multiple manufacturing capabilities.…”

“…However, our finding can be explained considering the peculiar characteristics of the industry sector in which this study was conducted. In fact, recent empirical research has highlighted that for automotive component manufacturers flexibility is the least relevant competitive priority (Arcidiacono et al ., 2023b). Since strategy orients firms' decisions concerning technology adoption (Rosenzweig and Easton, 2010), firms in this industry exhibit low adoption rates for SM technologies aimed at enhancing flexibility (Delic and Eyers, 2020).…”

“…Sz asz et al, 2021). Since SM technologies evolve at unprecedented speed (Arcidiacono et al, 2023b), these contributions fail to capture the impact of the latest technology advancements. Contributions building on more recent datasets, have analyzed the influence of SM on specific dimensions of OP, such as cost or flexibility (e.g.…”

“…Bag et al ., 2021). In fact, automotive has approached SM at early stages (Kamble et al ., 2020) and investments have typically been larger than in any other manufacturing sector (Arcidiacono et al ., 2023b). Therefore, automotive firms are particularly aware of performance benefits tied to SM.…”

Enterprise social media and knowledge creation capability: a comparison between pre- and post-COVID-19 pandemic

“…The results of factor loadings, Cronbach's alpha, and composite reliability (CR) values are presented in Table 2. For all constructs, the factor loadings of items are significant and greater than the cutoff value of 0.5 (Arcidiacono et al, 2023;Flynn et al, 2010). We dropped four items for KCC because of their low factor loadings (Fornell and Larcker, 1981).…”