Impact of manufacturing flexibility on manufacturing performance and business performance among Malaysian manufacturing firms

• Main Author: Tan, Kong Woun
• Format: Thesis
• Language: English; English
• Published: 2016
• Subjects: TS155-194 Production management. Operations management; HF5001-6182 Business
• Online Access: https://etd.uum.edu.my/6749/1/s91438_01.pdf; https://etd.uum.edu.my/6749/2/s91438_02.pdf; https://etd.uum.edu.my/6749/

The unclear relationships between manufacturing flexibility, manufacturing performance and business performance have been indicated in past literature. To seal the gap, this study aimed to investigate the impact of manufacturing flexibility on manufacturing performance and business performance. In this study, the researcher proposed a mediating framework where manufacturing performance serves as a mediator in the relationship between manufacturing flexibility and business performance. The components of manufacturing flexibility were mix flexibility, new product flexibility, labor flexibility, machine flexibility, material handling flexibility, routing flexibility and volume flexibility. The measures for manufacturing performance were product quality, cost reduction, lead time reduction, productivity and inventory minimization. Product market performance, customer satisfaction and profitability were used as the measures for business performance. Four main hypotheses were developed to test the interrelationships between manufacturing flexibility, manufacturing performance and business performance. The study was a cross-sectional study, employing the survey methodology, conducted in five manufacturing industries in Malaysia. The data obtained from 137 returned questionnaires were analysed using correlational and regression analyses. Results of the correlation analyses indicated that components of manufacturing flexibility were positively and highly correlated among themselves, thus suggesting that the components were interdependent. Meanwhile, findings of the regression analyses provided support that manufacturing flexibility has significant positive impacts on both manufacturing performance and business performance. In addition, the mediation role of manufacturing performance on the relationship between manufacturing flexibility and business performance was revealed. In other words, manufacturing flexibility improves business performance both directly and indirectly via manufacturing performance as the mediator. Specifically, all four main hypotheses tested in this study were supported. In conclusion, this empirical study provides insights about the interrelationships between manufacturing flexibility, manufacturing performance and business performance. Hence, this study allows researchers and practitioners to gain in-depth knowledge about the concept of manufacturing flexibility and its impacts.