Core manufacturing capabilities for optimal supply chain management

Abstract

This dissertation addresses two main themes regarding the core manufacturing capabilities required for optimal management of supply chain. Under the first theme, I have identified the three fundamental dimensions of manufacturing capability: controllability, flexibility, and integrating capability. With an empirical analysis of 193 manufacturing firms, the relationship among these capabilities and how much impact each capability has on business performance are revealed. Exploratory factor analysis indicates that each capability consists of three factors: environmental, efforts, and performance. The results of multiple regression analysis imply that each capability efforts enhance its performance. I also show that controllability and flexibility performance, along with integration efforts, significantly contributes to improving overall business performance. Various relationships among these capabilities are found in detail through a path analysis. I further present that the relationship between controllability and flexibility is not always a tradeoff and is highly associated with integrating capability. This implicates that the tradeoff relationship can be overcome, leading to the improvement of both controllability and flexibility, especially when a firm has obtained a superior level in one of these manufacturing capabilities. Under the second theme, I have analyzed the decision-making process of vendor-managed inventory (VMI). With the supply chain that comprises a single vendor and a single retailer, the dynamics of decision factors of the two participants are investigated. I have developed a differential game model so as to obtain the properties of optimal solutions. Based on these insights, a numerical analysis is conducted using the Japanese digital camera data. I show that the two participants, namely, the retailer and the vendor, in the VMI relationship utilize three categorized coordination levers that encompass structural levers, operational levers, an...