Improvement and innovation capabilities in manufacturing: Linking practice bundles to strategic goals and supplier collaboration

In an era of hyper-competition, manufacturing firms are increasingly adopting innovative manufacturing practices as a means to achieve competitive advantage. This dissertation seeks to understand the link between innovative manufacturing practices and plant improvement and innovation capabilities, and several contingency factors related to these two capabilities including strategic goals and supplier collaboration. This dissertation includes three interrelated essays.;The first essay, "Towards a plant level theory of capabilities: definitions and measurement", conceptualizes and measures product/process improvement and innovation capabilities. It draws on the resource-based theory to define capabilities as routine/practices bundles. Analysis of a sample of 189 plants indicates that improvement and innovation capabilities are each reflected in a bundle of operational practices, thus confirming our conceptualization of capabilities.;The second essay is entitled "Linking plant goals and operational performance: the mediation effect of capabilities". In this essay, a Structural Equation Model (SEM) that specifies the linkage from strategic manufacturing goals to two critical plant operational performance mediated by improvement and innovation capabilities is empirically tested using data from a sample of manufacturing plants. The results indicate that plant goals influence improvement and innovation capabilities, which in turn influence operational performance, thus providing evidence that capabilities are a "missing link" that translates the plant goals into realized operational performance.;The third essay, entitled "An analysis of the relationship between supplier collaboration and plant improvement and innovation capabilities", investigates how collaboration with suppliers is related to plant capabilities in product/process improvement and innovation. The moderating effect of environmental clockspeed on this relationship is also examined. Analysis using a sample of 189 manufacturing plants indicates that supplier collaboration is significantly related to plant improvement and innovation capabilities, and the magnitude of the relationship varies across external environments with different clockspeeds. Specifically, supplier collaboration in quality improvement appears to be equally important for both improvement and innovation capabilities regardless of environmental clockspeeds. However, supplier collaboration in new product development is only related to plant innovation capability in high clockspeed environment but has no direct effect on plant improvement capability. The findings have important implications for plant managers about effectively collaborating with suppliers.