Organisational learning in SMEs: a process improvement perspective

Productivity Improvement Using Simulated Value Stream Mapping: A Case Study of the Truck Manufacturing Industry

The accumulation of process waste in the production line causes fluctuations, bottlenecks, and increased inventory in workstations disrupting process flow. In this paper, the optimal process flow that will improve productivity using simulated value stream mapping (SVSM) for decision-making to provide consistency, minimise errors and non-value adding times in the implementation phase of VSM in the truck manufacturing industry. The proposed methodology applied a discrete event simulation for production process operations improvement to eliminate non-value adding times and provide good quality products at the lowest cost and highest efficiency. The results are the analysis of the current state of the production system in a South African truck manufacturing industry as a potential solution for the production system’s future state. The identified non-value adding times in the six most critical workstations were eliminated by SVSM resulting in a productivity improvement of 4%, most importantly bringing the productivity to 95% and total cycle time improvement to 451 for small units and 466 for large units. The results proposed combined VSM and simulation techniques based on empirical data from the observation during time measurement. The Yamazumi confirms the issues observed and the NVA recorded by showing how close the process cycle times are to the TAKT time, which enhance the LEAN application by DES to increase productivity and performance improvement to remain competitive in the global economy.

Does organizational learning differ in manufacturing and service firms? Evidence from Mexico

Purpose

This paper aims to investigate organizational learning (OL) at the individual, group and organizational levels in service and manufacturing firms in Mexico to determine if there are differences in how OL operates or in the link between OL and firm performance.

Design/methodology/approach

The authors surveyed experienced managers from 1,093 Mexican firms across a range of service and manufacturing industries, using the Strategic Learning Assessment Map (Bontis et al., 2002).

Findings

Organizational learning processes (OLPs) were highly similar in service and manufacturing firms and OL had a strong positive association with performance in both types of firms. OLPs at the individual level had a slightly greater impact on performance for service firms.

Research limitations/implications

The results provide further evidence of the strong link between OL and firm performance. There were no significant correlations of firm size or age with the OLPs or firm performance. However, the micro-companies that constitute 95% of Mexican firms were under-represented in the sample.

Practical implications

OLPs are equally important in manufacturing and service firms and across developed and developing economies. Therefore, OL should pervade all organizations. Managers should create cultures that encourage employees to produce new ideas and share those ideas with peers and supervisors through both formal and informal communication processes.

Social implications

The findings indicate that the individual employees’ contributions to OL are the main driver of the impact of OLPs on firm performance and that individual-level learning processes are even more relevant for service firms than for manufacturing firms. As value co-production takes place simultaneously at the moment of the service delivery/service consumption, the individual learning stock is fundamental for enhanced firm performance.

Originality/value

The authors believe this to be the first large-scale study to compare OLPs in manufacturing and service firms across industries in a major emerging market.

Effects of inter- and intra-organizational learning activities on SME innovation: the moderating role of environmental dynamism

Purpose

This study aims to investigate how the inter-organizational learning (inter-OL) of small and medium enterprises (SMEs) promote intra-organizational learnings (intra-OL) and how inter- and intra-OL jointly promote organizational innovation in the Korean electronics industry. This study also examines the moderating effect of organizational dynamism.

Design/methodology/approach

A unique theoretical model shows how inter-OL promotes organizational innovation through intra-OL, knowledge flows and stocks. Data was collected from 201 SMEs in the Korean electronics industry and analyzed by structural equation modeling.

Findings

The findings show that inter-OL directly and indirectly influences innovation. Inter-OL promotes both knowledge flows and stocks, but the only feedforward flows influence innovation through knowledge stocks while feedback flows directly influence innovation. Additionally, the study finds an indirect effect of inter-OL on knowledge stocks and a strong direct effect on innovation when dynamism is high. Intra-OL activities fully mediate between inter-OL and innovation when dynamism is low.

Research limitations/implications

This study uses single informants to measure all constructs. Future studies should use multiple informants.

Practical implications

This study shows that OL in SMEs is shaped by internal processes and external collaborations. Maintaining a connection with various external knowledge sources and creating collaborative opportunities to share learning experiences is critical to innovation.

Originality/value

This study is the first to empirically examine the relationship between inter- and intra-OL activities within a conceptual framework. The study provides a strategic view of how to facilitate OL activities considering the degree of organizational dynamism.

The role of employees' participation and managers' authority on continuous improvement and performance

Purpose

Drawing on the theoretical concept of organisational fit, this paper questions the relevance of employees' participation in the link between continuous improvement (CI) and operational performance. The literature has long emphasised that to be successful, CI implementation needs to rely on employees' involvement as soon as its inception. This paper argues that this approach is not generalisable.

Design/methodology/approach

Based on a database of 330 firms across 15 countries, regression analyses were used to hypothesise that the fit between CI and employee participation is positively associated with operational performance, and that the fit between CI and centralisation of authority is negatively associated with operational performance. The authors also ran a robustness check with polynomial regression analyses and the response surface methodology.

Findings

CI–employee participation fit is positively associated with operational performance, suggesting that there is less need for employees to be involved when a firm has scarcely developed CI. Employee participation becomes gradually more relevant as CI progresses. Moreover, the results demonstrate that the CI–centralisation of authority fit is negatively associated with operational performance, suggesting that a top-down management approach with centralised authority is preferable when CI is low, whereas a bottom-up management approach is helpful when a firm has extensively developed CI.

Originality/value

This research draws on the concept of organisational fit to explore the relationships between internal practices in the operations management literature. The authors suggest that managers should dynamically balance the practices of employee participation and centralisation of authority as CI improves. This study highlights that CI has different evolutionary levels that require different managerial approaches and practices.

The role of social media in managing supplier attractiveness

Purpose

Managing attractiveness is a constant challenge to mobilize relationship-specific investments, especially in a business environment increasingly enhanced by social media (SM) activities. There is limited knowledge on how SM activities contribute to supplier attractiveness, so decisions about strategizing with SM and consequent resource allocations become highly uncertain. The purpose of this paper is to examine how suppliers’ SM activities influence supplier attractiveness.

Design/methodology/approach

Altogether, 57 senior managers were interviewed: 32 semi-structured in-depth interviews were conducted with senior managers in strategic decision-making roles regarding SM on the supplier side, along with 20 senior managers responsible for purchasing or looking after supplier development; one-to-one interviews were complemented by a focus group with 5 senior managers on the buyer side.

Findings

The study reveals an inverse U-shaped relationship between the intensity of the supplier’s SM activity and its attractiveness and offers a set of propositions about the influence of SM on supplier attractiveness, with special regard to the perceived risks of increased transparency and becoming “too social” on SM.

Practical implications

The study highlights SM management results for supplier attractiveness and their impact areas on business growth and supply chain development.

Originality/value

This paper provides in-depth insights into the role of SM in managing supplier attractiveness. Various effects of SM activities are identified that aim to contribute to the body of literature on supplier attractiveness as well as SM management in buyer–supplier relationships.

Tacit knowledge transfer and spillover learning in ramp-ups

Purpose

With shortening product life cycles and an increasing number of product variants, manufacturing firms perform more production ramp-ups. In this context, learning is crucially important to quickly achieve high production process quality and stability. The paper aims to discuss this issue.

Design/methodology/approach

Through a laboratory experiment, this study analyzes spillover learning between consecutive ramp-ups and how this phenomenon is influenced by tacit knowledge transfer through observation and imitation.

Findings

The results prove the existence of spillover learning between consecutive ramp-ups. Moreover, they provide evidence how tacit knowledge transfer through observation and imitation enhances learning of new tasks in consecutive production ramp-ups.

Research limitations/implications

Future research could focus on the specific psychological processes driving tacit knowledge transfer and spillover learning, a topic which is only touched upon in this paper.

Practical implications

The findings show that manufacturing firms should not only aim at reaching a steep learning curve during a single production ramp-up, but should also take into account the effects of spillover learning with regard to future production ramp-ups. Furthermore, the paper provides novel insights concerning the allocation of workers to production tasks with regard to previous experience when introducing new personnel and during ramp-up phases.

Originality/value

Previous evidence on the existence and characteristics of spillover learning in production ramp-up situations is not conclusive. This paper provides new and unambiguous insights by considering different organizational settings.

Organisational learning in small and medium sized South African energy project organisations

Purpose

The purpose of this paper is to explore, using fine-grained exploratory multi-case studies, organisational learning practices – and associated constraints – impacting the performance of four small- and medium-sized project organisations which deliver energy efficiency projects in South Africa and whose learning practice mixes are of wider significance for the emerging project society in the region.

Design/methodology/approach

The unit of analysis is the Energy Efficiency Demand Side Management (EEDSM) programme; a US$104m grant funded the initiative directed at supporting energy efficient retro-fit projects across local municipalities in South Africa. Thematic analysis is undertaken, based on multiple exploratory interviews with project practitioners working for small- and medium-sized EEDSM project organisations.

Findings

Recognising the criticality of tacit knowledge as a focus for learning, within unstructured, novel, non-routine and technically specialised learning contexts in particular, the widespread lack of organisational harnessing through linkages to strategy and performance are noted, and advocacy is offered for the development of appropriate learning cultures linked to communities of practice that bring specialists together from across regional project societies.

Research limitations/implications

The socio-political context of the EEDSM programme, although briefly addressed for its organisational cultural implications, was not given detailed consideration in the exploratory interviews. This would have enhanced the idiographic complexity of the findings, while also reducing prospects for distilling generalisable organisational learning improvement opportunities for emerging project societies. However, the study does not seek to provide evidence for specific learning practice effects on performance as this was not something the interviewees felt able to comment on in significant detail.

Originality/value

Learning practice studies for small- and medium-sized project organisations remains sparse, so are studies of business environments within developing countries, in general, or sub-Saharan Africa, in particular. Looking beyond narrow individual project views of performance, the present study’s project society-based business environment is theorised as both constraining and benefiting from the project-learning practices discussed by the respondents.

The relative importance of improvement routines for implementing lean practices

Purpose

This paper examines whether and when improvement routines are critical for implementing lean practices in small- and medium-sized manufacturing enterprises (SMEs). Improvement routines such as “employees initiate and carry through improvement activities” are generally seen as an important means to achieve the full benefit of structural lean interventions. Womack and Jones (2003) suggest that these improvement routines should be developed as the company becomes more experienced in lean. The purpose of this paper is to explore the relative importance of individual improvement routines at various degrees of lean practice implementation.

Design/methodology/approach

A Between-Case Comparison Analysis (Dul and Hak, 2012) and a Necessary Condition Analysis (Dul, 2016) were performed on self-assessment data from 241 respondents at 38 Dutch manufacturing SMEs.

Findings

The importance of improvement routines depended on the degree of lean practice implementation. Lean practices could be implemented to some extend without developing specific improvement routines, yet certain routines were necessary for more advanced implementations of lean. These routines relate to employees conducting shared improvement activities and in the most advanced cases to aligning different improvement activities.

Originality/value

These findings question existing lean implementation models that neglect improvement routines and indicate the need to integrate improvement routines into every lean transformation for it to be sustainable.

Supply chain alignment as process: contracting, learning and pay-for-performance

Purpose

The purpose of this paper is to understand how buyers and suppliers in supply chains learn to align their performance objectives and incentives through contracting.

Design/methodology/approach

Two longitudinal case studies of the process of supply chain alignment were conducted based on 26 semi-structured interviews and 25 key documents including drafts of contracts and service level agreements.

Findings

The dynamic interplay of contracting and learning contributes to supply chain alignment. Exchange-, partner- and contract framing-specific learning that accumulates during the contracting process is used to (re)design pay-for-performance provisions. Such learning also results in improved buyer-supplier relationships that enable alignment, complementing the effect of contractual incentives.

Research limitations/implications

The study demonstrates that the interplay of contracting and learning is an important means of achieving supply chain alignment. Supply chain alignment is seen as a process, rather than as a state. It does not happen automatically or instantaneously, nor is it unidirectional. Rather, it is a discontinuous process triggered by episodic events that requires interactive work and learning.

Practical implications

Development of performance contracting capabilities entails learning how to refine performance incentives and their framing to trigger positive responses from supply chain counterparts.

Originality/value

The paper addresses supply chain alignment as a process. Accordingly, it stresses some important features of supply chain alignment.

Perceptions of growth-impeding constraints acting upon SMEs’ operations and the identification and use of transitionary paths to elevate them

Purpose

The purpose of this paper is to know which growth-impeding constraints are perceived to act upon operations of small- to medium-sized (SME) companies by their owner-managers and to recommend transitionary paths to elevate constraints and increase contribution levels made by SMEs’ operations. To do so, this research has been primarily founded upon Hayes et al.’s (2005) operations contribution model for differentiating between different levels of operations’ contribution, and secondarily on the theory of constraints philosophy to explain the perceptions of constraints found at each level – current and future.

Design/methodology/approach

An open-ended survey and a series of group workshops have gathered new empirical data about these perceptions, which were coded using the relational content analysis to identify a parsimonious set of perceptual growth-impeding constraint categories. The most popular transitions were identified and a correlation of frequency rank orders between “perceived current” and “perceived future” constraints categories was calculated, and likely transitionary paths for growth are discussed. Three SME case studies were documented in related action research to contextualise survey findings.

Findings

The most popular transition was from “neutral” to “leading”. A lack of people capability was perceived to be the most commonly reported growth-impeding constraint category, followed by a combined lack of process competence and product and service innovation, further followed by a lack of skills in information technology automation. In addition, a new conceptual model has been generated inductively to address shortcomings found in the original operations contribution model (Hayes et al., 2005) during its application to UK SMEs. The new model is referred to in this paper as the “Operations Growth Rocket”.

Research limitations/implications

This research only used data from UK SMEs.

Practical implications

This work should help SME owner-managers to overcome growth-impeding constraints that act upon their operations and assist them to develop more effective actions and paths to increase the contribution levels made by their operations. This in turn should support growth of their organisations. Findings will also inform teaching about more effective operations management in SMEs.

Social implications

This work should help UK SMEs to grow, which in turn will strengthen the UK economy.

Originality/value

A novel approach and new data from 208 SMEs modify a classical operations contribution model (Hayes et al., 2005). This is achieved by considering transitionary paths to be meta-categories continua abstracted from constraint categories combined with case data for moving towards higher levels of operations contribution, rather than using discrete growth-impeding and growth-constraining “levels”. This research has inductively generated a new version of the classical contribution model that should be more suitable for stimulating growth in (UK) SMEs.