AN ANALYSIS OF THE RELATIONSHIPS BETWEEN SUPPLY CHAIN MANAGEMENT/JUST IN TIME MANUFACTURING/THEORY OF CONSTRAINT AND MANUFACTURING PERFORMANCE ACROSS COUNTRIES WITH A TRADITIONALLY STRONG MANUFACTURING PRESENCE USING ALTERNATING CONDITIONAL EXPECTATIONS ALGORITHM

Abstract

This study seeks to investigate the relationships between Supply Chain Management and Just-in-time Manufacturing/Theory of Constraints with Manufacturing Performance. The study attempts to unearth the main contributing factors of success for plant managers to take note of. We used data collected from the third round of the High Performance Manufacturing (HPM) project initiated by Schroeder & Flynn. These data were from the Transportation Components, Electronics and Machinery industries from Japan, Germany, Italy and the United States of America. The four countries were specifically chosen because of their traditionally strong manufacturing background. The unit of analysis is the plant level. Typically, linear regression models such as Ordinary Least Squares are used in similar studies. In our study, we used the Alternating Conditional Expectations algorithm to uncover underlying non-linear relationships between Supply Chain Management/Theory of Constraints and Just-in-time Manufacturing, and Manufacturing Performance. Significant relationships existed between dimensions of Supply Chain Management and Just in time Manufacturing/Theory of Constraints, and Manufacturing Performance. The Use of Kanban, Use of Theory of Constraints and Repetitive Nature of Master Schedule displayed negative association with Manufacturing Performance during the initial period of implementation, and a positive association during the latter period. Equipment layout, Just in-time link with customers and Coordination of Plant Activities presented positive relationships with Manufacturing Performance while Supply Chain Planning displayed negative association with Manufacturing Performance. Implications, limitations and potential future direction of research were also provided.