Physical distribution service quality in Internet retailing: service pricing, transaction attributes, and firm attributes

This paper develops a theoretical framework and empirically investigates physical distribution service (PDS) quality by Internet retailers in their transactions with consumers. An analysis of data that measure hundreds of electronic commerce transactions along with data at the firm level shows that higher shipping and handling charges are good indicators of better PDS quality. Other transaction-level conditions and firm-level attributes also affect PDS quality, as measured by availability, timeliness, and reliability. Most notably, when the net price of products transacted increases, PDS reliability and availability decline. Furthermore, Internet-retailer size is found to favor PDS availability whereas, surprisingly, newer Internet retailers exhibit a higher level of PDS availability than many of their incumbent competitors.     

The deployment of temporary production workers in assembly operations: a case study of the hidden costs of learning and forgetting

The dynamics of workforce skill levels has a considerable impact on plant-level performance that is commonly overlooked by managers of manufacturing operations. In this study, we present a discrete event simulation model inspired by and validated in an actual manufacturing setting that includes short product life cycles, mid-volume production quantities, and a production environment consisting of assembly, inspection and testing.The effect of worker skill dynamics is analyzed using a factorial experimental design that contrasts the use of temporary versus permanent workers on manufacturing cost performance. The manufacturing costs assessed include labor, inspection and testing. The cost of reworking a defect is captured as an increase in the labor consumption. Materials costs are not assessed. At the core of the analysis, it is assumed that temporary workers have relatively less skill and therefore have higher average production times, higher average defect rates associated with their assembly activity, and lower rates of learning. In addition, the variance of the production time is higher for the temporary workers. Despite these indicators of performance problems, temporary workers may be used because of the considerably lower wage rate compared to permanent employees.Our in-depth case analyses shows that assigning skilled permanent workers to upstream build operations was superior to other policies deploying temporary workers, regardless of lot size or product complexity. Attesting to the importance of the labor mix component of manufacturing strategy, workforce deployment policies tended to dominate product switching frequency (a proxy variable for lot size and product mix) in impacting costs.     

Beyond improved quality: the motivational effects of statistical process control

The deployment of statistical process control (SPC) in manufacturing environments is a prominent global phenomenon. Managers have frequently justified investments in SPC by citing and/or demonstrating the improvements in quality and costs from the effective implementation and practice of SPC. This paper complements this rationalization by presenting conceptual arguments and empirical evidence to further our understanding of the motivational effects that result from the deployment of SPC within production environments. Several hypotheses derived from relating the deployment of SPC to process operators’ jobs and their affective reactions to work are tested using data provided by 100 process operators. The empirical results, generated from applying path analysis, suggest that the effective implementation and practice of SPC, in fact, would create more enriched jobs for process operators that lead to higher levels of work motivation and job satisfaction.     

Project management infrastructure: The key to operational performance improvement

Process improvement programs such as Six Sigma, Lean, and Lean Sigma are very important and deserve serious academic research attention. However, definition problems make it difficult to study any specific type of process improvement program. Therefore, this study defines two organizational level program management factors, Strategic Project Selection (SPS) and Project Management Infrastructure (PMI), that are independent of any specific process improvement program. Drawing upon current literature, this study develops and tests theoretical models that relate SPS and PMI to operational performance improvement and to each other. Using empirical data collected from 53 supplier plants of one large high-tech firm, this study finds that at the plant level, SPS mediates the relationship between PMI and operational performance improvement. This insight contributes to both theory development and practice, suggesting that a viable strategy for a process improvement program’s success is to focus on PMI in order to enhance SPS and ultimately improve performance. Not to be reproduced or quoted without written permission from the authors.     

The impact of employee satisfaction on quality and profitability in high-contact service industries

The extant operations management literature has extensively investigated the associations among quality, customer satisfaction, and firm profitability. However, the influence of employee attributes on these performance dimensions has rarely been examined. In this study we investigate the impact of employee satisfaction on operational performance in high-contact service industries. Based on an empirical study of 206 service shops in Hong Kong, we examined the hypothesized relationships among employee satisfaction, service quality, customer satisfaction, and firm profitability. Using structural equations modeling, we found that employee satisfaction is significantly related to service quality and to customer satisfaction, while the latter in turn influences firm profitability. We also found that firm profitability has a moderate non-recursive effect on employee satisfaction, leading to a “satisfaction–quality–profit cycle”. Our empirical investigation suggests that employee satisfaction is an important consideration for operations managers to boost service quality and customer satisfaction. We provide empirical evidence that employee satisfaction plays a significant role in enhancing the operational performance of organizations in the high-contact service sector.     

Demand chain management: an integrative approach in automotive retailing

Recent reviews of the ‘operations management’ (OM) research literature have shown a surprising little shift towards empirical methodologies from traditional modelling solution methods. In addition, there is generally a lack of empirical testing and validation of manufacturing strategies. Coupled to this fact is that empirical work is rarely carried out in an inter-disciplinary manner, with the complete combination of OM, marketing, strategy, lean thinking and accounting approaches particularly poorly researched. Fully cross-functional integrative empirical research is required to help support the understanding of the applicability of OM practices within industry. This paper explores such an integration of approaches developed within the ‘lean thinking, strategic cost management, marketing and policy deployment areas’. In order to investigate the approach a single automotive retailer is used as an instrumental case. The results of the study show that the new approach stands up well as an integrative approach that can prove highly beneficial results. However, the pilot work also identified a number of limitations that are the basis of further refinement and testing of the method.     

An analysis of job dissatisfaction and turnover to reduce global supply chain risk: Evidence from China

Suppliers’ labor problems in developing countries have emerged as a key risk in global supply chains. In China's coastal industrial zones, where most Fortune 500 companies have established their manufacturing bases, local suppliers are facing serious labor turnover problems. High labor turnover rates have caused poor quality, low productivity, and unfilled orders in supply chains. Applying a combination of quantitative techniques to determine the reasons why workers leave China's export factories, this research tries to identify the root causes of job dissatisfaction leading to turnover and provides managerial implications that may assist managers in dealing with labor-related supply chain risks.     

Project success and project team management: Evidence from capital projects in the process industries

Efficient project execution is a key business objective in many domains and particularly so for capital projects in the process industries, but existing project management research gives little direction about how project team factors influence three important capital project outcomes: cost, schedule, and operability. After an extensive cross-disciplinary review of the general team and project management literatures, we constructed and tested a theoretically based, five-dimensional model of organizational context, project team design, project team leadership, project team processes, and project outcome factors. We examined the model by means of an empirical study of 56 newly completed capital projects executed by 15 Fortune 500 companies in the process industries. The results indicate the value of disaggregating project outcomes for research purposes. Different bundles of project team factors were found to drive project cost, schedule, and operability. Project team efficacy, cross-functional project teams, autonomous project team structure, and virtual office usage were the strongest predictors of project cost effectiveness. Continuity of project leadership, cross-functional project teams, and project manager incentives were the strongest predictors of project construction schedule. In contrast, clear project goals and an office design to facilitate effective communication were the main predictors of plant operability. Implications of these findings for researchers and project practitioners are discussed. One major practical implication of our findings is that project managers need to clearly focus and prioritize their goals for each project so they can adopt the appropriate bundles of project team practices that will facilitate their goal achievement.     

From supply to demand chain management: efficiency and customer satisfaction

How do companies in the fast-growing industries achieve good customer satisfaction together with efficiency in supply chain management (SCM)? This inductive case study of six customer cases of Nokia Networks, one of the leading providers of mobile telecommunication technology, led to propositions exploring that question. Good relationship between the customer and the supplier contributes to reliable information flows, and reliable demand information flows in turn contribute to high efficiency—these are well-researched issues also in other industry environments. But in a fast-growing systems business such as mobile telecommunications industry, the supplier needs to be able to adapt its offering to a wide variety of customer situations and needs. Understanding the customer’s situation and need together with the right offering contributes to good co-operation in improving the joint demand chain, which further leads to superior demand chain efficiency and high customer satisfaction.     

Assessing the effectiveness of the Malcolm Baldrige National Quality Award model with municipal government

This study examines the applicability of the MBNQA 2002 criteria to the government sector and contributes to the growing body of literature that addresses the need for performance metrics for government organizations. As the MBNQA is being proposed and pilot tested in government organizations, this work provides support for the transference and application of the model to government services in a municipal government.This study demonstrates the first structural model test using Partial Least Square (PLS) of an instrument that was based on a one-to-one item to criteria correspondence. We collected data from a city government and used PLS to analyze the survey data and tested the MBNQA model fit. The findings of this study show that the proposed Malcolm Baldrige National Quality Award (MBNQA) criteria-based instrument provides a viable set of measures for a municipal government to review and measure their business (organization) processes. These measures can enhance decision making about resource allocations because such measures allow evaluation of processes and a better understanding of the integration among these processes.     

The impact of service design and process management on clinical quality: An exploration of synergetic effects

While service design and process management have received research attention in the past, there is limited empirical work examining both factors in the hospital setting. Through operationalizing focus as a service design approach and quality improvement (QI) initiatives as process management efforts, we hypothesize that focus and QI initiatives affect clinical quality both individually and collectively. Utilizing heart attack procedures as the study context, we examine a set of hypotheses based on a panel dataset consisted of 201 hospitals from 2005 to 2011 in the state of Florida. After accounting for potential lag effects and endogeneity biases, we find empirical support to the proposed hypotheses.     

Quality management practices and their relationship to buyer’s supplier ratings: a study in the Korean automotive industry

This research explores if quality management practices are different among suppliers whose performance is rated high, medium, or low by a common buying company and identifies which specific practices contribute to the differences. The entire population of first-tier suppliers to a Korean auto assembler was surveyed to measure use of quality management practices. Useable returns were received from 25% of the suppliers surveyed. To measure conformance quality and overall rating, suppliers were categorized into high, medium, and low performing groups based on the buying company’s data. Multivariate analysis of variance was done using general linear model (GLM-MANOVA) to explore differences in the high-, medium-, and low-performing supplier groups based on their use of quality management practices. No statistically significant differences were found when suppliers were categorized based on conformance quality. However, when categorized based on overall rating, the highest rated suppliers were found to emphasize process management and employee satisfaction to a greater degree than the lowest rated suppliers.     

Approaches to mass customization: configurations and empirical validation

Mass customization is a paradox-breaking manufacturing reality that combines the unique products of craft manufacturing with the cost-efficient manufacturing methods of mass production. Although this phenomenon is known to exist in practice, academic research has not adequately investigated this new form of competition. In this research, we develop a configurational model for classifying mass customizers based on customer involvement in design and product modularity. We validate this typology through an empirical analysis and classification of 126 mass customizers. We also explore manufacturing systems and performance implications of the various mass customization configurations.     

Toward an integrative approach to designing service experiences: Lessons learned from the theatre

A critical element in designing a new service and ultimately achieving customer delight and loyalty, particularly for competitive services where the customer–service provider interface is high, deals with the delivery of memorable personal experience. Since many such services rely on attributes of theatre-like performance, this research examines the process by which theatre plays are chosen, designed and developed with the objective of better understanding how performance excellence is realized. Theatre plays were chosen as a basis for study because of their long history of mastering the critical elements of performance staging and the reputation for opening on time at near peak performance levels. Using a case-based, qualitative research approach, the theatre play process is described, implications are extracted and a corresponding management process model is presented. Research and management implications for new service design and service delivery excellence are suggested.     

The adoption of innovative work practices in service establishments

Using data from the 1994 US National Establishment Survey, the author investigates differences between manufacturing and service establishments in the use of five innovative work practices: total quality management, self-managed teams, job rotation, job sharing and flextime. Service establishments are more likely to use job sharing and flextime. Manufacturing establishments are more likely to use total quality management and self-managed teams. These results hold when controlling for establishments’ business strategies, worker demographics, institutional connections and use of technology. Determinants of adoption of total quality management, self-managed teams and flextime also varied by sector.     

The human resource barriers to managing quality in China

China has one of the fastest growing economies in the world. The challenge for the future is likely to be the extent to which Chinese operations can utilize modern management techniques to improve product and service quality. This paper explores some of the problems that were affecting the management of quality within two foreigninvested enterprises (FIEs) based in the Shenzhen region of China. The paper argues that the provision of new factories and machinery was not sufficient in itself to ensure the maintenance of quality standards. Quality management in the West has become synonymous with increased employee involvement and developing customer-orientated cultures (Rees, 1998). The success or otherwise of quality management initiatives therefore depends upon the co-operation and enthusiasm of employees (Wilkinson et al ., 1998; Oliver and Wilkinson, 1992). Quality management within the case companies was hampered by the prevailing work ethic and was hindered by inadequate human resource and management systems. The study highlighted poor standards of training, dissatisfaction over levels of remuneration, and poor communication within the case companies. The paper argues that the problems experienced by the companies were inextricably linked to aspects of China's historical development. This history has helped to engender employee attitudes and behaviours that are poorly understood. Models of quality management are needed which are sensitive to the Chinese operating context.     

The path to outcome delivery: Interplay of service market strategy and open business models

Firms in a variety of manufacturing sectors as well as the software industry have increasingly embraced services alongside their product portfolios in order to improve financial performance. Yet, the key question “How do service market strategy change and the accompanying business model change interact, and how does their interplay affect value creation?” remains open. Relying on twelve case studies of firms that have shifted towards providing highly advanced services (e.g. outcome-based contracts), theoretical propositions concerning the interplay of market strategy and business model on value creation are derived. The firms studied report two interdependent changes: first, they evolve the market strategy from provision of pure products to provision of services and then outcomes, in order to achieve a better fit with customer needs and to grow their service businesses. Second, they rely increasingly on partners and suppliers to provide new activities that are outside their competence base. This 'open business model' allows them to grow their new service businesses effectively and efficiently. At the same time, however, the shift to a service market strategy requires enhanced accountability to customers and increases the threat of penalties in the case of failure, while reliance on partners and suppliers leads to loss of control over the activity system and increases the threat of failure due to third party dependency. Thus, this paper finds that the success of firms that shift to services and outcomes hinges on their ability to balance the trade-off between increased value (i.e. growth, efficiency and effectiveness) and increased uncertainty associated with service market strategy/open business model interplay.     

Services cultural alignment in offshoring: The impact of cultural dimensions on offshoring location choices

Empirical research on the growing wave of services offshoring has examined the impact of several key factors such as wages and personnel quality on firm choices of offshore locations. However, examinations of culture in services offshoring to date have largely been confined to the relatively coarse concept of aggregate cultural differences between the home and host countries. We propose that specific cultural attributes are more closely aligned with successful service provision. We empirically examine our theoretical development of service cultural alignment and investigate the impact of cultural dimensions on the location of service offshoring projects. In addition, we examine whether Western and Asian firms have different cultural preferences in terms of the location of services offshoring projects. We find that host countries with lower levels of Hofstede's uncertainty avoidance as well as higher levels of individualism and power distance are able to attract greater numbers of service offshoring projects, even after controlling for macroeconomic, linguistic, and risk-related factors. We did not find that Western and Asian firms have different cultural preferences in this regard. We discuss implications of the findings with respect to theory, managerial practice, and governmental policy.     

Multicomponent Efficiency Measurement and Shared Inputs in Data Envelopment Analysis: An Application to Sales and Service Performance in Bank Branches

In most applications ofDEA presented in the literature, the models presented are designedto obtain a single measure of efficiency. In many instances however,the decision making units involved may perform several differentand clearly identifiable functions, or can be separated intodifferent components. In such situations, inputs, in particularresources, are often shared among those functions. This sharingphenomenon will commonly present the technical difficulty ofhow to disaggregate an overall measure into component parts.In the present paper, we extend the usual DEA structure to onethat determines a best resource split to optimize the aggregateefficiency score. The particular application area investigatedis that involving the sales and service functions within thebranches of a bank. An illustrative application of the methodologyto a sample of branches from a major Canadian bank is given.