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Literature review
The purpose of this research was to determine those characteristics that enable plants to achieve high levels of operating performance at plant level across a wide range of measures. Much of the existing work in this area has concentrated on the interactions between the performance measures themselves.
One of the earliest writers on this subject was Skinner (1969, 1974). He developed the concept of strategic trade-offs: achievement of high levels of performance on one factor can only be achieved at the expense of performance on one or more other factors.
Further support for the existence of trade-offs between different performance areas was provided by Hayes and Wheelwright (1984), Richardson et al. (1985), Rosenfield et al . (1985), Fine and Hax (1985) and Wacker (1987). These authors refined Skinner's original ideas and identified the following main performance areas between which trade-offs might be expected to exist:
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quality consistency;
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quality specification;
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lead-time;
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delivery reliability;
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cost;
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flexibility;
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innovativeness.
However, in recent years the existence of trade-offs has been questioned. Schonberger (1986) has been the most notable of these critics, stating that, for the modern manufacturing company, trade-offs no longer exist. He argues that the factors leading to excellent performance on one factor also lead to excellent performance on the other factors. Therefore, world class companies are able to out-perform their competitors on every aspect of performance.
In support of this, Schroeder et al. (1991) have shown that many companies, particularly Japanese companies, are capable of producing extremely high quality products at extremely low costs. Numerous authors (Deming,1982; Juran et al. , 1974; Crosby, 1979; Garvin, 1988; Skinner, 1986) have shown how investment in quality improvement programmes can lead to simultaneous improvements in quality consistency and cost efficiency.
In an attempt to provide an explanation of the dynamic nature of trade-offs, Ferdows and De Meyer (1990) have developed what they refer to as the sand cone model. This is based on the proposition that competences are cumulative rather than mutually exclusive. They suggest that lasting improvements in performance always involve the same sequence in the performance improvement process. First quality is improved. Then, while improvements in quality continue, reliability is improved. Next, while improvements in these two performance areas improve...