An Empirical Study On The Manufac-turing Capability Improvement Path Based On Strategic Type

Economic globalization makes manufacturing companies to face the competi-tion from all over the world, with the fierce competition, competing on simple di-mension of competitive capability is more and more difficult. Meanwhile, the diver-sification of customer needs also brought challenges to manufacturing companies,product innovation become crucial for manufacturing companies’ survival and de-velopment. To get competitive advantages, Manufacturing companies have to im-prove multiple dimensions of manufacturing capabilities, as always mentioned, thecost, quality, delivery, flexibility and innovation.The cumulative model provide an option for improving manufacturing capabil-ities, via object programming, manufacturing companies could improve multipledimensions of manufacturing capabilities. But in traditional cumulative model, in-novation was referred as an ultimate capability and was developed after cost. Asproduct life cycle becomes more and more short, innovation is becoming a standardcapability, therefore, it’s necessary to reconsider the position of innovation in thecumulative model. In addition, the cumulative model ignored the impact of compa-ny’s strategic choice, taking from a contingent theory perspective, a firm’s manu-facturing capability improvement path is affected by its external environment andinternal strategic choice, therefore, it’s necessary to differentiate the manufacturingcapabilities improvement path between different strategic types.Based on750manufacturing plants from21countries, this research conductedan empirical study on the innovation embedded cumulative model. In addition, thisre-search examined the different manufacturing capability improvement path of twostrategy type: the cost-oriented and innovation-oriented strategy. Result show that:first, the improvement of quality has a positive impact on delivery, the improvementof delivery has a positive on innovation, while the improvement of innovation has aposi-tive impact on flexibility, and finally, the improvement of flexibility has a pos-itive impact on cost efficiency. Second, as for a cost-oriented company, quality is thefun-damental capability, then delivery, innovation and cost efficiency. Third, as forinno-vation-oriented company, quality is the fundamental capability, then delivery,innova-tion and flexibility.This research contributes to the literature by providing different improvementsequence for cost-oriented and innovation-oriented companies, which implied thatwhen making manufacturing capability improvement choices, managers should firsttake the strategic choice into account, then choose a best way to improve manufac- tur-ing capabilities.