ANTECEDENTS OF LEADTIME COMPETITIVENESS IN MAKE-TO-ORDER MANUFACTURING FIRMS

This study develops a framework for analysing time-based competition and examines four supply-chain management strategies in make-to-order markets which can lead to cycle-time reduction: cross-functional product design participation, 'just-in-time' purchasing systems with suppliers, improved supplier delivery and quality performance, and work-in-process lot size reduction. A structural model and relevant measures were developed to assess the impact of these strategies on time-based competition, and the model was tested using interview data with managers in 40 plants from nine industries. Both just-in-time purchasing and supplier performance were found to have a significant effect on leadtime competitiveness, while cross-functional design and lotsize reduction did not. Several explanations for the lack of significance of the latter two variables were suggested based on qualitative observations and post-hoc analysis. Although the analysis suggests that the greatest progress towards time-based competitiveness can be made in the area of procurement of materials, the study points to the importance of managing the entire supply chain to attain this strategic advantage.