The strategic influence of structural manufacturing decisions

Abstract

Purpose The purpose of this study is to examine the relationship between the implementation of certain structural manufacturing decisions and the importance that is attached to certain competitive priorities in the firm's business strategy. The paper seeks to analyse the role these decisions play in the creation of a firm's competitive advantage, and aims to provide evidence of which decisions provide the firm with strategically relevant production capabilities. Design/methodology/approach The hypotheses were tested using data collected from business units in the metal industry in Spain, by means of a postal survey. A total of 188 completed questionnaires were obtained and a structural equations analysis was conducted on the results. Findings This study has provided evidence for the strategic importance of structural decisions in the production area. The findings of this research suggest that the implementation of certain decisions can originate capabilities on which a competitive advantage can be based. Research limitations/implications The results of this research are specific to the industry, and the analysis is static. Further research should be conducted in other industries. A longitudinal study would be convenient, in order to obtain a good understanding of the causal relationships between structural production decisions and the competitive priorities emphasised in the business strategy. Practical implications Strategic management of the capabilities which derive from structural manufacturing decisions is shown to have a relevant role in the creation of competitive advantage. Originality/value The present paper contributes to the study of the strategic function of manufacturing from the perspective of manufacturing capabilities. In particular, we examine the strategic contribution of structural manufacturing decisions by contributing different capabilities.