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The impact of manufacturing and supply chain improvement initiatives: A survey comparing make-to-order and make-to-stock firms

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  • Olhager, Jan
  • Prajogo, Daniel I.

Abstract

Manufacturing firms aim at improving both internal and external processes to improve the competitive advantage. Such initiatives include lean practices as well as supplier rationalization and integration. In this paper, we analyze these improvement initiatives and their impact on business performance. In particular, we explore potential differences between make-to-order (MTO) and make-to-stock (MTS) firms. We use data from 216 Australian manufacturing firms. We find a clear difference of improvement focus between MTO and MTS firms. MTO firms exhibit a significant impact of supplier integration on business performance, but not for lean practices and supplier rationalization. The situation is completely reversed for MTS firms, since they have significant effects for internal lean practices and supplier rationalization, but not for logistics integration with supplier. The results show that the distinction between MTO and MTS firms is important when analyzing manufacturing and supply chain improvement initiatives.

Suggested Citation

  • Olhager, Jan & Prajogo, Daniel I., 2012. "The impact of manufacturing and supply chain improvement initiatives: A survey comparing make-to-order and make-to-stock firms," Omega, Elsevier, vol. 40(2), pages 159-165, April.
    • Handle: RePEc:eee:jomega:v:40:y:2012:i:2:p:159-165
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    1. Ghobadian, Abby & Talavera, Irene & Bhattacharya, Arijit & Kumar, Vikas & Garza-Reyes, Jose Arturo & O'Regan, Nicholas, 2020. "Examining legitimatisation of additive manufacturing in the interplay between innovation, lean manufacturing and sustainability," International Journal of Production Economics, Elsevier, vol. 219(C), pages 457-468.
    2. Prajogo, Daniel & Olhager, Jan, 2012. "Supply chain integration and performance: The effects of long-term relationships, information technology and sharing, and logistics integration," International Journal of Production Economics, Elsevier, vol. 135(1), pages 514-522.
    3. Prajogo, Daniel & Chowdhury, Mesbahuddin & Yeung, Andy C.L. & Cheng, T.C.E., 2012. "The relationship between supplier management and firm's operational performance: A multi-dimensional perspective," International Journal of Production Economics, Elsevier, vol. 136(1), pages 123-130.
    4. Pereira, Daniel Filipe & Oliveira, José Fernando & Carravilla, Maria Antónia, 2022. "Merging make-to-stock/make-to-order decisions into sales and operations planning: A multi-objective approach," Omega, Elsevier, vol. 107(C).
    5. Agra, Agostinho & Poss, Michael & Santos, Micael, 2018. "Optimizing make-to-stock policies through a robust lot-sizing model," International Journal of Production Economics, Elsevier, vol. 200(C), pages 302-310.
    6. Ýbrahim S. Karakadýlar & Ben J. Hicks, 2015. "Exploring the Moderating Role of Lean Production on Supplier Performance: An Empirical Study of Turkish Automotive Part Suppliers," Bogazici Journal, Review of Social, Economic and Administrative Studies, Bogazici University, Department of Economics, vol. 29(2), pages 73-97.
    7. Lu, Qihui & Chen, Xiangfeng, 2018. "Capacity expansion investment of supplier under make-to-order and make-to-stock supply chains," International Journal of Production Economics, Elsevier, vol. 198(C), pages 133-148.
    8. Dirk Pieter van Donk & Ron van Doorne, 2016. "The impact of the customer order decoupling point on type and level of supply chain integration," International Journal of Production Research, Taylor & Francis Journals, vol. 54(9), pages 2572-2584, May.
    9. Bacchetti, Andrea & Saccani, Nicola, 2012. "Spare parts classification and demand forecasting for stock control: Investigating the gap between research and practice," Omega, Elsevier, vol. 40(6), pages 722-737.
    10. Bortolotti, Thomas & Boscari, Stefania & Danese, Pamela, 2015. "Successful lean implementation: Organizational culture and soft lean practices," International Journal of Production Economics, Elsevier, vol. 160(C), pages 182-201.
    11. Chuang, Chia-Hung & Zhao, Yabing, 2019. "Demand stimulation in finished-goods inventory management: Empirical evidence from General Motors dealerships," International Journal of Production Economics, Elsevier, vol. 208(C), pages 208-220.
    12. Santosh Kumar Pattanayak & Supriyo Roy & Biswajit Satpathy, 2019. "Does Integration of Business Processes and ERP Improves Supply Chain Performances? Evidence from Indian Capital Goods Industry," Vision, , vol. 23(4), pages 341-356, December.
    13. Jhang, Shih-Sian (Sherwin) & Ogden, Joseph P. & Suresh, Nallan C., 2019. "Operational and financial configurations contingent on market power status," Omega, Elsevier, vol. 88(C), pages 91-109.
    14. Danese, Pamela, 2013. "Supplier integration and company performance: A configurational view," Omega, Elsevier, vol. 41(6), pages 1029-1041.

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