Cumulative manufacturing capabilities: an extended model and new empirical evidence

Abstract

There has been intense debate in the manufacturing strategy literature on the way in which firms work on different manufacturing capabilities, with two opposing approaches considered – the trade-off model and the sand cone model. Analysis of these models has essentially been based on study of the links amongst four classic manufacturing capabilities (quality, delivery, flexibility, and cost efficiency) and has obviated the need to consider environmental protection as an important manufacturing capability. This study analyses the theoretical arguments and the prior empirical evidence on the two models, and proposes and tests an extended sand cone model which includes the environmental protection objective alongside the four traditional ones. The research uses structural equation modelling and data from a sample of 274 manufacturers to contribute additional empirical evidence on the existence of cumulative effects amongst manufacturing capabilities. It is observed that the predominant strategic model in these firms is one of multiple, non-incompatible capabilities with cumulative effects according to the following sequence: quality, delivery, flexibility, environmental protection, and cost efficiency.

Keywords:

• manufacturing strategy
• manufacturing capabilities
• trade-offs
• sand cone model
• environmental protection

Acknowledgements

The authors would like to thank the Editor and the anonymous referees for their helpful comments and suggestions. The authors would also like to thank Spanish Ministerio de Ciencia y Tecnologıa (SEJ2006-04753/ECON) for its financial support. A preliminary version of this paper was published as working paper no. 371/2008 in Colección de Documentos de Trabajo de la Fundación de las Cajas de Ahorros (FUNCAS).