Managing the Interrelationships Between Manufacturing System Elements for Productivity Improvement in the Factory

Abstract

For manufacturers, productivity improvements are essential. Understanding how to improve productivity is fundamental for gaining a strong competitive position with sustainable growth and ensuring the survival of the business. Productivity is key, and it is essential that we understand how managers influence improvements as they intertwine numerous talents and processes to build the ‘DNA’ of a factory. Productivity science has been a key aspect of operations management research since the 1980s, and productivity differs across factories. Many pragmatic and empirical reasons have been highlighted and managers are familiar with them, but the managers know less about how they work together and literature barely touches on the impact of organic management as it relates to the identification and mitigation of barriers that appear at multiple stages in improving productivity. A systems perspective on improving productivity in the factory is widely neglected in operations management. Organisational studies and systems theory can help in understanding how success can arise from less-understood management practices and methods, but fragmented knowledge has led to confusion and disagreement over the various manufacturing system elements and their interrelationships in productivity improvement. Thus, manifold manufacturing system elements, including technical resources like machines, human resources with their social needs, and management control systems or environmental elements like labour market regulations, must be considered in managers’ orchestration of productivity improvement. The many attributes of manufacturing organisations and their elements are quite broad in scope, and their interrelationships are complex. Highlighting them in a way that deconflicts and facilitates intricate activities would benefit continuous productivity improvement. To achieve this, we must answer the question, ‘How do managers manage manufacturing system elements and their interrelationships to improve productivity?’ Several aspects of systems theory relate to this question, and three of the articles in this dissertation address these. The first article, ‘Managing productivity improvement in a complex manufacturing world: What we know from 40 years of OM literature’, illuminates and organises various productivity improvement options and identifies the resulting complexities faced by managers. It is a systematic literature review that applies contingency systems view to identify factories’ system elements and investigate their effects and the interrelationships involved. The second article, ‘Productivity improvement and multiple management controls: Evidence from a manufacturing firm’, has a single case design that follows an abductive approach. The actions of managers and their management mechanisms were investigated by applying the lens of multiple management control systems. In the third article, ‘Exploring the control problems and the interplay of management control systems for productivity outcome on the assembly line’, the management control systems theory was used to examine the control problems managers apply to manage their teams on shop floors for productivity outcomes. The author’s full-time presence at the case firm allowed for deep insights that would otherwise have been inaccessible. This article-based dissertation investigates how managers in factories, the unit of analysis, engage in the orchestration of the many interrelationships among manufacturing elements as they pursue productivity improvements, which is the phenomenon researched. This dissertation provides a novel systems view of productivity management at factories and therewith an opportunity to gain deeper insights into the barriers hindering productivity improvement. It conveys a new understanding that productivity management must be understood as a multi-dimensional responsibility of managers in the manufacturing system involving highly individual decision-making opportunities, resulting in differentiated actions and tasks. Five different overall types of system elements are identified and three different dimensions of interrelationships between them are investigated, providing the basis for specific managerial tasks, which are described for each dimension. Further, this dissertation describes the heterogeneity of complexity in relations to productivity improvement in the factory. On the one hand, the findings suggest that complexity is high through the manifold options to improve productivity and interrelationships between resources to control. On the other hand, the complexity can be diverse, for instance as shop floor managers face few control problems but each of them requiring high social interaction with the team. It highlights a different understanding of middle managers’ roles as determined by day-by-day management as they continuously drive improvement activities. For practitioners, the findings provide a catalogue of 83 elements structured into nine themes as practical options managers can draw on to improve the productivity outcomes of their factory floors. Above this, it provides specific guidance how to handle these many options to improve and many examples of tasks how to overcome and mitigate conflicts between resource elements for productivity improvement.