Three essays on: Continuous improvement in manufacturing

Continuous Improvement (CI) refers to a set of management practices which facilitate and support incremental and experience based improvements to existing products or processes. CI is known to generate an important part of productivity growth in manufacturing. Because of the successful use of CI by Japanese manufacturers, many U.S. and European manufacturers have recently regained interest in the implementation of CI as a competitive asset. Recent implementation efforts have shown, however, that, in order to imbed CI in a manufacturing organization, major organizational change is required.; In this dissertation we explore several issues regarding the impact of CI in manufacturing organizations. In the first two essays we focus on the continuous improvements in a manufacturing process that are driven by cycle time reduction. In one essay we use data from the Japanese automotive industry to show that the reduction of cycle time has had a statistically significant impact on the productivity growth in that industry. This empirical study shows that the goal of cycle time reduction and its use as an internal performance measure can be a strong catalyst for CI. In another essay we explore, by means of an actual implementation project in an IBM wafer fabrication facility, how a well designed production control system can support the efforts for continuous cycle time reduction. In a third essay, we link CI with production learning, a phenomenon described in the business and economics literature. We show that firms who use CI as a competitive asset face some interesting resource allocation problems. We look in particular at a decision problem of a firm that is producing two consecutive product generations.