Journal of Operations Management 19 (2001) 521–540

Process-technology fit and its implications for

manufacturing performance
Ajay Das a,∗ , Ram Narasimhan b
a Department of Management, Zicklin School of Business, Baruch College, City University of New York,
Box F-1813, 17 Lexington Avenue, New York, NY 10010, USA
b Department of Marketing and Supply Chain Management, Eli Broad Graduate School of Business,

Michigan State University, East Lansing, MI 48824, USA

Received 21 September 1999; accepted 9 April 2001

Abstract
This study investigates the issue of fit between process environment and advanced manufacturing technology, and its impact
on manufacturing and business performance. We find that different process environments tend to align advanced manufacturing
technology investments in distinct profiles, which are associated with superior performance. Deviations from these ‘ideal’
profiles are shown to have a negative impact on manufacturing performance. The findings also suggest that firms are not
fully exploiting the potential afforded by AMT investments to compete in off-diagonal positions in the Hayes–Wheelwright
framework. © 2001 Elsevier Science B.V. All rights reserved.
JEL classification: M11 (production management)

Keywords: Technology management; Operations strategy; Empirical research

1. Introduction have been developed in the operations management

The concept of ‘fit’ or alignment has been dis-
cussed and investigated in many disciplines. The
business strategy literature has examined fit between
environment and strategy in different contexts and
found that lack of fit has significant effects on perfor-
mance (Hofer, 1975; Hambrick, 1980; Venkatraman
and Prescott, 1990). The supply chain management
literature has studied fit as a function of alignment be-
tween sourcing practices and product life cycle (PLC)
stage (Birou et al., 1998). Similarly, frameworks link-
ing process type to market characteristics and PLC
∗ Corresponding author. Tel.: +1-212-802-6920;
fax: +1-212-802-6873.
E-mail address: ajay das@baruch.cuny.edu (A. Das).
literature (Hayes and Wheelwright, 1979; Hill, 1994).
While addressing different issues, these investiga-
tions have all stressed the link between the extent
of alignment achieved by a firm and its performance
outcomes.
Hayes and Wheelwright (1979) in their semi-
nal paper, suggested that superior manufacturing
performance is contingent on the degree of align-
ment between the process environment and the
volume–variety characteristics of the market. Differ-
ent process environments would, therefore, empha-
size different goals. A jobshop would likely compete
on the basis of customization and flexibility, and a
flow shop on delivery and cost performance. Accord-
ingly, investments in machinery and personnel can
be expected to differ across process environments.

0272-6963/01/$ – see front matter © 2001 Elsevier Science B.V. All rights reserved.
PII: S 0 2 7 2 - 6 9 6 3 ( 0 1 ) 0 0 0 6 4 - X
522 A. Das, R. Narasimhan / Journal of Operations Management 19 (2001) 521–540
As is well known, jobshops utilize general-purpose
machines and multi-skilled workforce, and assembly
lines use dedicated equipment with less-skilled la-
bor. Hayes and Wheelwright (1979) argue that firms
not aligned in terms of market, process technology
and labor choices, i.e. firms not ‘on the diagonal’
would suffer performance setbacks. However, recent
advances in technology have enabled firms to oper-
ate in off-diagonal positions without the performance
penalties predicted by the Hayes and Wheelwright
(1979) framework. These developments have height-
ened research interest in the role and use of advanced
manufacturing technologies and practices, in different
process environments. Safizadeh et al. (1996) found
that companies in line flow industries are success-
fully operating in “off-diagonal” positions in Hayes
and Wheelwright’s (1979) framework, meeting cus-
tomization requirements by deploying flexible manu-
facturing systems and practices. Similarly, there are
examples of firms using cellular manufacturing lay-
outs with small production lots in a jobshop environ-
ment to achieve efficiencies comparable to line-flow
operations (Markland et al., 1998). Computer-aided
design and manufacturing techniques are being em-
ployed to reduce product development and production
cycle times.
A growing body of evidence thus suggests that
off-diagonal positions in Hayes and Wheelwright’s
(1979) framework are indeed viable through the use
of advanced manufacturing technologies and prac-
tices. However, these studies have not attempted to
develop a prescriptive model to address the question:
are there ideal configurations of advanced manufac-
turing technology investments that result in superior
manufacturing performance for a given process en-
vironment? The answer to this question will help
firms in two ways: enable them to evaluate and ad-
dress gaps in their advanced technology investment
patterns vis-à-vis an ‘ideal’ configuration; and deter-
mine whether advanced technology would facilitate
a move to an “off-diagonal” position, to pursue what
might be non-traditional competitive goals for their
process environment. This paper attempts to develop
an answer to this central research question of strategic
importance.
The next section discusses past research on man-
ufacturing process and manufacturing technology.
Based on the literature, a conceptual model is devel-
oped leading to a set of propositions related to the
central research question of interest. The succeeding
sections describe scale development, data collection
and analysis, and statistical testing of the proposi-
tions. The paper concludes with a discussion of the
findings and their implications for manufacturing
strategy theory and practice.
2. Overview of the literature
Choosing a manufacturing process type is a strate-
gic decision in operations management, with atten-
dant implications for performance. The literature on
process choice presents a strong rationale for align-
ing process type with PLC stage and product/market
characteristics (Hayes and Wheelwright, 1979; Hill,
1994). High variety, low volume market environments
would demand a process capable of small produc-
tion run sizes and high set-up frequencies, with rel-
atively low set-up costs. A jobshop would address
these needs allowing a firm to compete on flexibility,
customization and new product development capabil-
ities. Low variety, high volume market environments
would require extended production runs, and usually
entail relatively high set-up costs. An assembly line
best fits this environment, where cost and quality are
primary strategic capabilities. Empirical evidence in
the literature supports these perspectives. Ward et al.
(1992) found that “typical producers” align process
choice decisions with PLC stages. Safizadeh et al.
(1996) allude to the strategic importance of align-
ment between process choice and a firm’s competitive
priority.
Firms pursue competitive goals by adopting
what they deem to be appropriate technology ini-
tiatives. New technologies in the form of pro-
grammable machines, flexible manufacturing systems,
computer-aided design (CAD), computer-aided engi-
neering (CAE), and computer-aided manufacturing
(CAM) practice innovations such as worker teams and
cellular manufacturing have allowed high volume pro-
ducers to offer more variety, and created opportunities
for efficient small lot manufacturing for these produc-
ers. Advanced manufacturing technologies have also
been adopted by jobshops to reduce costs. Computer
numerical controlled (CNC) machines, CAD, CAM,
and operator teams are widely used across different
 A. Das, R. Narasimhan / Journal of Operations Management 19 (2001) 521–540
manufacturing environments (Markland et al., 1998;
Boyer et al., 1996). Given that different process en-
vironments have different manufacturing goals, it is
reasonable to argue that some differences can be ex-
pected in the way that different process environments
would configure their technology-based initiatives.
For example, cellular manufacturing may be more
compatible with a low volume jobshop environment,
than a repetitive assembly line situation. In contrast,
set-up time reduction programs are more likely to be
found in assembly line systems. Similarly, the use of
machine robots would be more common in assem-
bly line settings than in jobshops. Past research has
examined technology investment preferences among
different firms (Boyer et al., 1996). What has not
been investigated is how advanced manufacturing
technologies can be “best” deployed in different pro-
cess environments. Do ‘ideal’ profiles of technology
initiatives exist for different process environments?
This research investigates this question across two
different process environments — jobshop and as-
sembly lines — representing contrasting points in the
volume–variety continuum.
3. Conceptual framework
Fig. 1 shows the conceptualized relationships
among process environment, technology-based ini-
tiatives, and manufacturing performance. The frame-
work shows advanced manufacturing technology
initiatives as a multi-dimensional construct, encom-
passing initiatives in manufacturing design, manufac-
turing technology, manufacturing infrastructure, and
human resource management practices. The research
proposition is that jobshop and assembly environ-
ments will configure resource investments in these
technology dimensions in different patterns, to maxi-
mize manufacturing performance. Alignment or lack
thereof, between process environment and technology
investments is hypothesized to be a determinant of
manufacturing performance. By implication, it can
be argued that the technology investments of those
firms that achieve superior manufacturing perfor-
mance constitute an “ideal profile”, in the sense that
these investments exhibit a high degree of fit with the
process environment. This study examines two key
propositions underlying the framework.
523
• Different process environments tend to align ad-
vanced manufacturing technology investments in
identifiable ‘ideal’ profiles.
• That deviations from these ‘ideal’ profiles have a
negative impact on manufacturing performance.
In regard to the first proposition, little research ex-
ists on process-based differences in the adoption of
advanced manufacturing technologies and practices.
Interestingly, the few studies that have touched on
such differences emerged with contending perspec-
tives. McDermott et al. (1997) found that both main
market as well as niche firms pursued advanced man-
ufacturing technologies and practices, such as invest-
ments in CNC equipment and work cell organization.
They concluded that there was essentially no differ-
ence in the rate and scope of adoption of advanced
manufacturing technologies and practices across dif-
ferent operational environments. In a sense, jobshops
and assembly line processes aspired to mimic each
other’s unique capabilities, while maintaining their
own process-based advantages. Jobshops invest in
CNCs and re-organize work-flow processes to achieve
some of the efficiencies of large-scale production,
while line processes do the same in order to reduce
changeover costs and increase responsiveness (Mc-
Dermott et al., 1997; Safizadeh et al., 1996). As such,
one would not expect to see substantive differences be-
tween jobshop and assembly line processes, in regard
to the types of advanced manufacturing technologies
and practices adopted. The distinction would lie in
the different nature of the goals pursued by different
processes, and not the state of use of advanced man-
ufacturing technology or practice, per se. However,
Swamidass and Kotha (1998) report otherwise. In a
study of 160 manufacturing firms, they distinguished
between “high volume automation technology” and
“low volume automation technology”. “Low volume
automation technology” comprised of CNC ma-
chines, programmable controllers, CAD/CAM and
FMS, technologies that facilitate flexibility and re-
sponsiveness. Such technologies would be compatible
with a jobshop process environment, characterized by
low volumes and customization responsiveness. An
assembly line would use “high volume automation
technology”, comprised of computer-aided inspection
and testing, robotics and manufacturing automation
protocol. Swamidass and Kotha (1998) extended their
524 A. Das, R. Narasimhan / Journal of Operations Management 19 (2001) 521–540

Fig. 1. Process environments and manufacturing technologies/practices.

investigation to examine the use of advanced technol-
ogy in high performers in different strategic segments
(Kotha and Swamidass, 2000). They reported positive
associations between cost leaders’ performances and
the use of design and low volume technologies, and,
between differentiators’ performances and the use of
design, information, low volume and high volume
technologies. These latter findings are striking in that
they reinforce the conclusions of McDermott et al.
(1997). The premise is that cost leaders use low vol-
ume technologies to reduce the transition penalties
in acquiring jobshop like flexibilities, while jobshops
employ high volume technologies to pursue line flow
efficiencies. Albeit, as noted by Kotha and Swami-
dass (2000), differentiators with low volume, high
flexibility operational demands (i.e. jobshops) profit
from a broader spectrum of advanced manufactur-
ing technologies and practices, relative to companies
that seek cost leadership through volume economies
(i.e. assembly lines). It bears noting that the use of
 A. Das, R. Narasimhan / Journal of Operations Management 19 (2001) 521–540 525

design and low volume technologies are prevalent
in both process environments. This study conceptu-
alizes ‘ideal profiles’ of technology investments as
patterns of advanced manufacturing technologies and
practices associated with high performing firms in
different processes.
Based on the above discussion, it was anticipated
that the advanced manufacturing technologies and
practices employed in high performing jobshops and
assembly lines would not differ radically. The ex-
ceptions would be for individual variables such as
set-up time reduction practices and robotics that can
be expected to be more useful for assembly lines,
and cellular manufacturing that can re-structure the
jumbled work flow of a jobshop into more regular
patterns. Accordingly, an a priori ideal profile of ad-
vanced manufacturing technologies and practices for
best performers in both jobshops and assembly lines
was developed for the study (Table 1).
There are two observations that need to be made
with respect to Table 1. By definition, ‘ideal profiles’
should be comprised of only those technologies and
practices that impact performance. However, it was
not possible to categorically identify those technolo-
gies/practices that impact performance in advance, for
the sample of firms in this study. Therefore, all four
AMT dimensions, manufacturing technology, man-
ufacturing design, manufacturing infrastructure and
human resources management were considered as po-
tential influences on performance, and items relating
to each dimension were included in the envisaged,
a priori ideal profile. Second, process-contingent
differences in the intensity of use of each manufac-
turing technology or practice were not hypothesized

Table 1
Envisaged AMT items in ‘ideal’ profiles
Item measure Technologies/practices in ideal profile Used in

Jobshops Assembly line

Manufacturing technology (MT) Use of CNC technology Yes (Y)a Yes (Y)
Use of computer-aided manufacturing Yes (Y) Yes (Y)
Use of flexible manufacturing systems No (Y) Yes (Y)
Use of set-up time reduction methods No (N)a Yes (Y)
Use of robotics No (N) Yes (N)
Human resources management (HRM) Worker cross-training Yes (Y) Yes (N)
Use of operator teams Yes (Y) Yes (Y)
Decentralized decision making for production schedluing Yes (Y) Yes (Y)
Decentralized decision making for operator tasks Yes (Y) Yes (Y)
Manufacturing design (MD) Use of computer-aided engineering Yes (Y) Yesb
Use of computer-aided design Yes (Y) Yes
Use of modularization in product design Yes (Y) Yes
Use of computer-aided testing Yes (N) Yes
Manufacturing infrastructure (MI) Use of Kanban systems Nob Yes
Use of automated material handling systems No Yes
Use of in-plant EDI systems Yes Yes
Use of bar coding Yes Yes
Use of real-time process controls Yes Yes
Use of preventive maintenance Yes Yes
JIT supplier deliveries No Yes
Cellular manufacturing/group technology Yes No
Safety stock only for unique components Yes Yes
a ‘Y’ indicates that the item found inclusion in the final ideal profile developed from the sample data. ‘N’ indicates the item did not

find inclusion in the final post-analysis ideal profile.

b Manufacturing design was not significantly associated with performance for assembly lines. Hence, following the prescribed method-

ology, items from this particular AMT dimension were not included while developing the ideal profile for assembly lines. Similarly,
manufacturing infrastructure was not significantly associated with performance in either jobshops or assembly lines, and items for this
AMT dimension were excluded from the ideal profiles.
526 A. Das, R. Narasimhan / Journal of Operations Management 19 (2001) 521–540
a priori-the primary research objective was to explore
if patterns of AMT usage exist-since the extent of
inter-pattern differences across process environments,
was of secondary interest. Generally speaking and
based on previous studies (Kotha and Swamidass,
2000), it was expected that jobshops may use the
advanced manufacturing technologies/practices listed
in the envisaged ideal profiles to a greater extent than
assembly lines, for performance gains.
This research differs from previous studies in three
distinct ways. First, this research examines tech-
nology initiatives in a broad context, employing a
holistic configuration approach that seeks to iden-
tify patterns of technology investments related to
performance. This is in sharp contrast to the tradi-
tional examination of bi-variate interaction effects on
performance. The product–process matrix suggests
specific machine technology types for specific pro-
cess environments (Hayes and Wheelwright, 1979;
Markland et al., 1998). We explore the use of ad-
vanced manufacturing technologies across different
process environments. Second, this study examines
the alignment between process environment and tech-
nology investments, whereas previous research has
focused on process-market congruence issues (Ward
et al., 1992; Safizadeh et al., 1996). A final difference
pertains to a methodological issue. Previous inves-
tigations have employed analytical methods such as
cluster analysis to identify technology investment
patterns. Cluster analysis and similar categorization
techniques, however, do not allow any calibration of
the degree of differences among or within different
groups. For instance, Boyer et al. (1996) use cluster
analysis to group firms in terms of differences in their
mean scores on the advanced manufacturing tech-
nology dimensions: “design”, “manufacturing” and
“administrative”. Although this approach is useful
for identifying clusters of technology investments, it
does not provide a composite measure of the degree
of inter-group difference. This study employs a com-
posite measure of inter-group differences and relates
that to manufacturing performance.
4. Methodology
This section describes the development of con-
structs, measurement scales and the sampling proce-
dure followed in the study.
4.1. Sampling
Data for this analysis was collected from purchas-
ing executives, as part of a larger study that examined
the interface between purchasing and manufacturing.
The National Association of Purchasing Management
(NAPM)’s Title 1 list of senior members from manu-
facturing industries was consulted to prepare the sam-
ple frame, since high-ranking respondents tend to be
more reliable sources of information than their subor-
dinate ranks (Philips, 1981). The SIC codes included
in the sample were as follows:
SIC 34 fabricated metal products, except
machinery and transportation equipment
SIC 35 industrial and commercial machinery
and computing equipment
SIC 36 electronic and other electrical equipment
and components
SIC 37 transportation machinery and items
SIC 38 measuring, analyzing and controlling
instruments, photographic, medical and
optical goods
These SICs are established users of AMT in dis-
crete product manufacturing (Snell and Dean, 1992;
US Department of Commerce, 1988), represent con-
trasting process environments, and together with SIC
39, comprise over 40% of the sales of the US manu-
facturing sector (US Department of Commerce, 1988).
The unit of analysis was the plant.
Data collection was conducted in two phases. Phase
1 involved preliminary site visits, interviews and
surveying of executive management in the sourcing
and manufacturing areas across different industries.
Pilot-tests of the instrument and initial interviews
with purchasing and manufacturing executives (at
the same location) did not reveal any significant dif-
ferences between responses. The item measures did
not require detailed technical knowledge of equip-
ment or practices. It was found that senior materials
management were relatively conversant with man-
ufacturing demands and situations. As a post hoc
test of inter-rater reliability, manufacturing managers
from a random sub-sample of 20 responding firms
were contacted to obtain responses to the manufac-
turing related items in the questionnaire. Telephone
interviews were conducted with seven responding
 A. Das, R. Narasimhan / Journal of Operations Management 19 (2001) 521–540
manufacturing managers. Paired comparisons of
scores were made between the purchasing and man-
ufacturing respondents for the manufacturing related
questionnaire items, for each of the seven firms. The
average inter-rater reliability was 0.96, evidencing a
high degree of agreement between purchasing and
manufacturing respondents on manufacturing related
issues (James et al., 1984). Further, respondents were
asked to confirm whether they had consulted with
manufacturing in responding to manufacturing re-
lated questions — 38% of the respondents replied in
the affirmative. Phase 2 of the data collection pro-
cess, following Dillman’s (1978) guidelines, involved
mailing the survey to senior level NAPM members
selected at random from the NAPM member list.
The mailing package consisted of a cover letter, the
survey and a reply paid return envelope. Assuming
a conservative 15–20% response rate, the mailing
was addressed to around 1700 potential respondents.
A great deal of time and effort was invested in the
data collection. A multi-faceted strategy was imple-
mented, that included an explanation to potential re-
spondents of the adverse consequences of incomplete
responses, three follow-up mailings (two with sur-
veys attached and one post card reminder), and phone
calls and faxes. A reminder post card was mailed to
all non-respondents after a week of mailing. Writ-
ten follow-ups (with duplicate questionnaires) were
mailed to all non-respondents approximately 3 weeks
after the initial mailing. Respondents were promised a
benchmarking report of their operating characteristics
as an incentive to participate.
Two mailings of the survey instrument resulted in
a total of 322 responses, excluding returns, refusals
and unusable responses. The response rate of 19%
compares well with past studies (Gupta and Somers,
1996). Table 2 shows the respondent profile. Tests for
non-response bias across the first (n = 200) and sec-
ond (n = 122) wave of respondents did not show any
significant results. An ANOVA test did not reveal any
statistically significant differences among the category
means for company sales, plant sales or number of
employees across the different SIC groups. The data
appeared to be biased towards larger plants, as evident
from the comparisons with census data. One explana-
tion may be that respondents were asked to focus on
the key plant in their company in their responses. In
view of the possible bias, caution is urged in general-
527
izing the results of the study to smaller organizations
in the manufacturing sector.
4.2. Measures
Respondents were required to identify the produc-
tion processes that accounted for the most time in the
manufacture of their major product(s), and categorize
that as a jobshop or assembly process environment.
Pilot tests and interviews had confirmed that managers
had an adequate understanding of the volume and va-
riety connotations of jobshop and assembly processes.
Further 82% of the responding plants from the post
hoc inter-rater reliability sample had identical clas-
sifications by purchasing and manufacturing respon-
dents on the primary type of manufacturing process
employed in their plants. Measures were developed
for the remaining constructs, based on the literature.
The responses were measured on a 1–5-Likert scale,
consistent with past practice in many studies (Swami-
dass and Kotha, 1998; Swamidass and Newell, 1987;
Venkatraman, 1990).
Past research has described advanced manufactur-
ing technology as a multi-dimensional construct that
includes the use of ‘hard’ machine related aspects:
robotics, CNC hardware, CAD/CAM, etc.; and ‘soft’
practice/process related aspects: Kanban, set-up time
reduction techniques, JIT, etc. (Burgess and Gules,
1998; Clark, 1996; Dean and Snell, 1996; Roth and
Giffi, 1995; McCutcheon et al., 1994; Tranfield et al.,
1991). The construct definitions provided by Tranfield
et al. (1991) and Boyer et al. (1996) were of interest
to this research because of their breadth of scope,
transcending automated machine typology to enfold
CAD/CAM, information technology, configurational
processes, use of JIT/Kanban, and administrative
processes in their description of an advanced man-
ufacturing system. Boyer et al. (1996) empirically
derived three separate dimensions of AMT: design,
manufacturing and administrative. Design included
a mix of design and process technologies such as
CAD, CAE, CAM, computer-aided process planning,
and the use of CNC equipment. Manufacturing cov-
ered technology elements such as FMS, real time
process control systems and robotics, while the ad-
ministrative dimension included MRPII, EDI, and
knowledge and decision support systems. Swamidass
and Kotha’s (1998) dimensionalization of the AMT
528 A. Das, R. Narasimhan / Journal of Operations Management 19 (2001) 521–540

Table 2
Sample profile of respondents
Number of valid 322
responses
Respondent titles VP’s/director 50
purchasing/materials
Purchasing/commodity/ 179
materials managers
Senior buyers/buyers 7
Other titles 6
(operations manager,
purchasing engineer)
No response 80
Total no. of plants with 240
identifiable SIC codes

SIC Plant sales number ≤US$ 1 US$ 1–10 US$ US$ US$ US$
million million 10–50 50–100 100–500 >500
million million million million
Plant sales distributiona
34 No. of plants 0 3 16 4 4 2
35 No. of plants 0 8 36 30 23 5
36 No. of plants 0 6 14 10 18 5
37 No. of plants 0 1 14 10 5 3
38 No. of plants 0 3 8 4 6 2
Total 0 21 88 58 56 17

Average no. Average no.

of employees of employees
(data) (census)
No. of employees distributionb
34 334 (range 30–2000) 41
35 430 (range 30–1700) 35
36 400 (range 31–2000) 93
37 464 (range 30–2000) 126
38 504 (range 20–2000) 67

Process Jobshop Batch Repetitive Continuous

characteristics
No. of respondents 109 71 117 24
(total sample)c
a Average plant sales as manually estimated from US census 1997 — SIC 34: US$ 6.10 million; SIC 35: US$ 7.25 million; SIC

36: US$ 20.38 million; SIC 37: US$ 41.65 million; SIC 38: US$ 11.96 million. Census figures are estimates and may not be strictly
comparable with sample data; www.census.gov/epcd.
b Outliers eliminated — in excess of 90% of responding plants in these SIC classifications reported no. of employees ≤2000.
c Figures do not include missing responses.

construct was not very different from Boyer et al.’s
(1996) classification. They (the former) developed
four dimensions: information exchange and planning
technologies (MRPII, EDI, etc.), and production de-
sign technology (CAD/CAE), and distinguished be-
tween high-volume automation technology (robotics,
manufacturing automation, computer-aided inspec-
tion, etc.) and low-volume automation technology
(CNC, CAD. CAM, FMS). A careful examination
of these conceptualizations reveals three clear AMT
domains: a design domain that is concerned largely
with design technologies, a manufacturing domain
 A. Das, R. Narasimhan / Journal of Operations Management 19 (2001) 521–540
that involves mainly process related technologies,
and an infrastructural domain that comprises infor-
mation and production planning and control techno-
logies.
One key aspect of successful AMT systems that
researchers have neglected to integrate under the
rubric of advanced manufacturing technologies and
practices is the human element. It is now widely
recognized that the benefits of hard investments in
advanced technology are largely moderated by con-
current investments in soft technologies and practices
(Cagliano and Spina, 2000; McDermott and Stock,
1999; Parthasarthy and Sethi, 1992). Highly skilled
and trained workers are believed to be an essential
attribute of successful AMT systems, because of
the increasing complexity of the technology and the
plant-wide integration to which such technologies
often lead (Upton and McAfee, 1988; Cohen and
Apte, 1997; Adler, 1988). Increased complexity is
also associated with increased operational uncertain-
ties, requiring an organic structure that allows more
front-line decisions (Burns and Stalker, 1961). In
fact, Ward et al. (1994) developed an infrastructural
factor, involving worker training, empowerment, and
job-enrichment. Based on the above discussion and
recognizing the inseparable role of human resource
management practices in advanced manufacturing
technology implementation (Snell and Dean, 1992),
advanced manufacturing technology was defined as
the collective use of advanced manufacturing, design,
infrastructural, and human resource management
practices and systems in a plant. Specifically, the
construct encompassed the following.
• Manufacturing technology (MT): The use of ad-
vanced manufacturing systems — CNC machines.
CAM, and flexible manufacturing systems.
• Manufacturing design (MD): The use of computer-
aided design, engineering and testing.
• Manufacturing infrastructure (MI): The use of in-
frastructural support systems — JIT manufacturing,
automated material handling, Kanban, minimal in-
ventories, preventive equipment maintenance, ac-
celerated die changes and set-ups, parts bar coding,
and EDI usage in manufacturing.
• Human resource management (HRM): The use of
innovative human resource management practices
and structures in manufacturing — cross-functional
529
teams, decentralized decision-making and worker
cross training.
Specific item measures for the AMT construct were
adapted from the technology scales developed by
Swamidass and Kotha (1998), Ward et al. (1994) and
Boyer et al. (1996). Table 3 shows the list of initial
item measures.
A Bartlett Chi-square test resulted in statistically
significant Chi-squares for both jobshop and assembly
line data matrices, thus permitting factor analysis on
the data. There were between 3 and 8 missing values
on 16 variables in the jobshop data and between 1 and
7 missing values on 17 variables in the assembly line
data, out of the total of 40 variables involved in the
analysis. These missing values were replaced by the
mean values of the relevant variables, which is conven-
tional when the number of missing cases is not exces-
sive. There were 117 and 109 cases for the assembly
line and jobshop process environments, respectively.
Table 3
List of initial item measures for AMT
Likert scale: 1 (very low) to 5 (very high)
Manufacturing technology
The use of flexible integrated manufacturing systems
The use of CNC technology
The use of computer-aided manufacturing
The use of robotics
Manufacturing design
The use of computer-aided design
The use of computer-aided engineering
The use of computer-aided testing
Modularization in design
Manufacturing infrastructure
The use of automated material handling systems
The use of Kanban/similar manufacturing practices
The use of in-plant electronic data interchange systems
The use of real-time process controls
The use of bar-coding
The use of set-up time reduction techniques
The use of preventive maintenance
JIT supplier deliveries
Cellular manufacturing organizations
Group technology
Maintaining safety-stock only for unique components
Human resources management
The use of cross-trained employees
The use of teams in manufacturing
The use of decentralized decision-making in manufacturing
530 A. Das, R. Narasimhan / Journal of Operations Management 19 (2001) 521–540

A confirmatory factor analysis for advanced manu-
facturing technology factors was performed on both
jobshop and assembly line process data. The maxi-
mum number of variables in the CFAs was 23 — the
sample sizes of 117 and 109 were deemed adequate
vis-à-vis the recommended guideline of 5–10 subjects
per variable (Tinsley and Tinslay, 1987). Initial com-
munalities were set at 1.00, and a varimax rotation
with Kaiser normalization was performed on all fac-
tors. As an additional step, a promax oblique rotation

Table 4
Factor analysis results for the AMT constructa
Factor Item Loading Loadings
(varimax) (promax)

Jobshop
Manufacturing technology (MT) (α = 0.819) Use of CNC technology 0.770 0.678
Use of flexible manufacturing systems 0.742 0.775
Use of computer-aided manufacturing (CAM) 0.807 0.824
Manufacturing design (MD) (α = 0.687) Use of computer-aided design (CAD) 0.763 0.753
Use of computer-aided engineering (CAE) 0.762 0.825
Modularization in designb 0.598 0.443
Manufacturing infrastructure (MI) (α = 0.747) Use of bar coding 0.798 0.670
Use of EDI 0.559 0.604
Use of material handling equipment 0.576 0.608
Use of cellular manufacturingb 0.534 0.575
Human resources management (HRM) Decentralized decision 0.885 0.848
(α = 0.820) making for distributing
operator tasks for the day
Decentralized decision making 0.875 0.859
(operator teams/individuals) for
(micro) production scheduling
Operator teams in manufacturing 0.658 0.630
Cross-trained employeesb 0.616 0.622
Assembly line
Manufacturing technology (α = 0.819) Use of CNC technology 0.870 0.844
Use of flexible manufacturing systems 0.832 0.840
Use of computer-aided manufacturing 0.544 0.578
Use of set-up time reduction techniquesc 0.624 0.682
Manufacturing design (α = 0.739) Use of computer-aided design 0.858 0.851
Use of computer-aided engineering 0.786 0.739
Use of computer-aided testingc 0.562 0.561
Manufacturing infrastructure (α = 0.730) Use of bar coding 0.694 0.666
Use of EDI 0.639 0.551
Use of material handling equipment 0.814 0.746
Use of roboticsc 0.648 0.599
Human resources management (α = 0.824) Decentralized decision making 0.780 0.721
for distributing operator tasks
for the day
Decentralized decision making 0.824 0.799
(operator teams/individuals) for
(micro) production scheduling
Operator teams in manufacturing 0.718 0.801
a Cronbach’s α-values shown in parenthesis.
b Items specific to jobshop process.
c Items specific to assembly line process.
 A. Das, R. Narasimhan / Journal of Operations Management 19 (2001) 521–540
Table 5
Factor analysis results for composite manufacturing performance (α = 0.872)a
Factors
Manufacturing cost reduction (α = 0.783)
Quality performance (α = 0.825)
New product introduction time reduction
performance (α = 0.790)
Delivery performance (α = 0.897)
Customization responsiveness performance
(α = 0.821)
a The extent to which the plant has been able to meet its performance goals in.
procedure was performed on the data, using principal
axis factor extraction. Tinsley and Tinslay (1987) state
that an oblique rotation procedure (promax method
recommended) will produce a solution comparable to
a orthogonal rotation procedure, if the underlying fac-
tor dimensions are essentially orthogonal. The results
of the promax rotated analysis were found to be sim-
ilar to those obtained using the varimax rotated anal-
ysis (see Table 4).
Items loading on the AMT dimensions — MT, MD,
MI and HRM — are shown in Table 3. Reliabilities
(Cronbach’s α) for the scales exceeded the recom-
mended 0.70 cut-off point (Nunnally, 1978; Churchill,
1979).
As Table 4 shows, the factor loadings were essen-
tially similar across both jobshop and assembly line
environments, with a few exceptions. Items specific to
jobshops were ‘modularization in design’, ‘use of cel-
lular manufacturing’ and ‘cross-trained employees’.
Items specific to assembly lines were ‘use of set-up
time reduction techniques’, ‘use of computer-aided
testing’ and ‘use of robotics’. The remaining items
loaded on the same factors for both process types. To
test the conceptual validity of the AMT construct, a
second order confirmatory factor model was developed
using the first order factors. All the first order factor
531
Items Loading
Relative to internal goals 0.903
Relative to primary competition 0.778
No. of defects/product reduction relative 0.857
to internal goals
No. of defects/product reduction relative to relative to 0.895
primary competition
Relative to internal goals 0.865
Relative to primary competition 0.893
Delivery speed relative to internal goals 0.839
Delivery speed relative to primary competition 0.754
Delivery dependability relative to internal goals 0.871
Delivery dependability relative to primary competition 0.819
Meeting customization requests relative to internal goals 0.821
Meeting customization requests relative 0.876
to relative to primary competition
loadings in the second order analysis were above 0.70
and the composite reliability of the AMT construct
was well above 0.70.
Manufacturing performance goals have traditionally
included product quality, manufacturing cost, delivery,
flexibility and innovation (Krajewski and Ritzman,
1999). This research measured manufacturing per-
formance along five dimensions: manufacturing cost
reduction, quality improvement (conformance), deliv-
ery speed and reliability, customization responsive-
ness (flexibility), and new product introduction time.
Item measures were adapted from existing scales for
manufacturing performance (Miller and Roth, 1994;
Dean and Snell, 1996). The item measures required
respondents to evaluate their firm’s manufacturing
performance against internal goals and competitor
performance. A factor analysis was performed re-
sulting in five distinct factors corresponding to the
conceptualized performance dimensions (Table 5).
Convergent validity for the all the CFAs was de-
termined by the strong and significant (0.534–0.903;
P < 0.5) item loadings (see Tables 4 and 5). 1 All
1 The means and variances of the variables used in the factor
analysis, associated correlation matrices, and the initial and final
communalities are available from the corresponding author.
532 A. Das, R. Narasimhan / Journal of Operations Management 19 (2001) 521–540
inter-factor correlations were found significantly dif-
ferent from 1.00, and the average variance extracted
for each factor in a CFA model was found greater
than the squared correlation between that factor and
any other factor in that model, providing a rigor-
ous verification of discriminant validity (Fornell and
Larcker, 1981). Content validity was ensured by the
adaptation of item measures from previous scales
in the literature and through pre-tests of the instru-
ment.
5. Data analysis
The data analysis procedure was based on the busi-
ness strategy literature on fit and alignment (Drazin
and Van de Ven, 1985; Venkatraman and Prescott,
1990). The sequence of analysis for each process en-
vironment was as follows:
1. identify the strategic manufacturing capabilities;
2. identify specific AMT domains that influence these
capabilities;
3. develop ‘ideal’ profiles of AMT resource alloca-
tions;
4. develop a measure of deviation from these ‘ideal’
profiles;
5. relate the measure of deviation to manufacturing
performance.
First, each manufacturing performance dimension
was related to firm level profit, sales growth, ROA
and market growth performance. Earlier studies have
linked site-based factors such as buyer–supplier re-
lationship, manufacturing process improvement, and
production competence with broader firm-level per-
formance (Carr and Pearson, 1999; Samson and
Terziovski, 1999; Choe et al., 1997). Firm perfor-
mance along the financial and market dimensions was
assessed through self-reported measures that asked
respondents to indicate their company’s performance
relative to competition, on a ‘high–low’ Likert scale
(Venkatraman, 1990). Past research indicates that
managerial evaluations correspond closely to objec-
tive data obtained from both internal and external
sources (Dess and Robinson, 1984; Venkatraman and
Ramanujam, 1987). The majority of respondents be-
longed to companies for which relevant published
financial or market data could not be found. However,
the profit measures reported by respondents in 25 pub-
licly traded companies were compared with objective
financial data (E∗ Trade Inc., 2000). Approximately
80% of the self-reported measures were consistent
with the objective data. Significant correlations iden-
tified those manufacturing performance dimensions
that related to firm level performance. Table 6 shows
the results of the correlation analysis.
Customization responsiveness and new product
introduction time reduction were found to have a
statistically significant association with market share
and sales growth, respectively for jobshops. Qual-
ity of conformance emerged as a strategic priority
for assembly line environments. Manufacturing cost
reduction related to three firm level performance out-
comes, for both process environments. Given these
process-specific strategic manufacturing capabili-
ties, the next step was to identify AMT domains of
strategic value in different process environments. A
regression analysis was done using the four AMT do-
mains as independent variables, and process-specific
strategic manufacturing capabilities as the dependent
variables. Tables 7 and 8 report the results of the
regression analysis.
The results indicated that the AMT domains of
human resources management and manufacturing
technology significantly influence several strategic
manufacturing capabilities, in both jobshop and as-
sembly line processes. Manufacturing design was
found to influence manufacturing customization ca-
pabilities. Manufacturing infrastructure did not have
a significant relationship with any manufacturing
priority in either type of process.
Next, ‘ideal’ profiles of AMT resource allocations
were developed for each process environment, fol-
lowing Venkatraman and Prescott’s (1990) procedure.
For this purpose, a composite measure of manufac-
turing performance was developed for each process
environment, aggregating scores on significant manu-
facturing performance dimensions. Past studies have
developed and used similar composite measures of
performance (Ward et al., 1994). To illustrate, a com-
posite manufacturing performance measure for a firm
operating as a jobshop was computed by taking the
mean of its summed scores on manufacturing cost
reduction, customization responsiveness and new
product introduction time reduction — manufacturing
 A. Das, R. Narasimhan / Journal of Operations Management 19 (2001) 521–540 533

Table 6
Significant correlations between manufacturing performance and firm performancea
Net profits Sales growth ROA Market share

Jobshop process (n = 109)

Manufacturing cost reduction 0.2736∗∗ 0.2868∗∗ 0.2189∗∗ n.s.b
Customization responsiveness n.s. n.s. n.s. 0.2125∗∗
New product introduction time n.s. 0.2195∗ n.s. n.s.
Assembly line process (n = 117)
Quality 0.2298∗ n.s. n.s. n.s.
Manufacturing cost reduction n.s. 0.2290∗ 0.2199∗ 0.1977∗
a All financial, market and manufacturing performance measures are on a 1 (very low) to 5 (very high) Likert scale, and are relative

to primary competition.
b n.s.: not significant at P < 0.05.
∗ P < 0.05.
∗∗ P < 0.01.

performance dimensions significantly related to firm
performance for jobshop environments. Firms in each
process type were then ranked on their respective
composite manufacturing performance score, and the
top 10% companies identified. The mean score of
this group of high performing companies on each
critical AMT dimension was computed to develop
an ‘ideal’ profile of AMT resource configuration, for
each process environment. Table 9 presents the ‘ideal
profiles’ developed based on this procedure for job-
shop and assembly line processes, respectively. The
‘ideal profiles’ show the distinct combinations (and

Table 7
Regression runs-AMT domains vs. strategic manufacturing capabilities jobshop process (n = 109)
Independent variables B S.E. B β P

Dependent variable: manufacturing cost reduction performancea

Manufacturing technology 0.199 0.070 0.314 0.006
Manufacturing design (−)0.073 0.092 (−)0.083 0.428
Manufacturing infrastructure 0.007 0.102 0.008 0.945
Human resources management 0.207 0.082 0.260 0.013
Dependent variable: customization responsiveness performanceb
Manufacturing technology (−)0.116 0.082 (−)0.154 0.157
Manufacturing design 0.353 0.107 0.339 0.001
Manufacturing infrastructure 0.147 0.119 0.138 0.220
Human resources management 0.106 0.095 0.112 0.263
Dependent variable: new product introduction time reduction performancec
Manufacturing technology (−)0.128 0.077 (−)0.177 0.102
Manufacturing design 0.160 0.102 0.160 0.119
Manufacturing infrastructure 0.113 0.113 0.110 0.322
Human resources management 0.299 0.090 0.327 0.001
Dependent variable = delivery performance (not related to firm performance in jobshops)d
Manufacturing design 0.241 0.084 0.273 0.005
Human resources management 0.068 0.091 0.084 0.455
Manufacturing infrastructure 0.123 0.135 0.125 0.363
Manufacturing technology (−)0.038 0.078 (−)0.059 0.629
a R2 = 0.179, adjusted R2 = 0.146, significant at P = 0.001.
b R2 = 0.168, adjusted R2 = 0.136, significant at P = 0.001.
c R2 = 0.180, adjusted R2 = 0.149, significant at P = 0.003.
d R2 = 0.074, adjusted R2 = 0.065, significant at P = 0.005.
534 A. Das, R. Narasimhan / Journal of Operations Management 19 (2001) 521–540

Table 8
Regression runs-AMT domains vs. strategic manufacturing capabilities assembly line process (n = 117)
Independent variables B S.E. B β P

Dependent variable: manufacturing cost reduction performancea

Manufacturing technology 0.058 0.075 0.085 0.441
Manufacturing design 0.102 0.071 0.143 0.153
Manufacturing infrastructure 0.002 0.079 0.003 0.981
Human resources management 0.152 0.070 0.226 0.032
Dependent variable: quality performanceb
Manufacturing technology 0.202 0.101 0.214 0.048
Manufacturing design 0.058 0.096 0.058 0.548
Manufacturing infrastructure 0.086 0.105 0.082 0.416
Human resources management 0.117 0.095 0.125 0.221
Dependent variable: new product introduction time
reduction performance (not related to firm performance
in assembly line firms)c
Human resources management (only significant variable) 0.251 0.068 0.331 0.000
a = 0.126, adjusted
R2 = 0.094, significant at P = 0.005.
R2
b R2 = 0.135, adjusted R2 = 0.105, significant at P = 0.003.
c R2 = 0.110, adjusted R2 = 0.102, significant at P = 0.0.

intensities of use) of manufacturing technologies align advanced manufacturing technology investments

and practices, that were found to be associated with
superior performance in jobshop and assembly line
environments.
The identification of ‘ideal profiles’ for different
processes validated the first research proposition of
this paper: different process environments tend to
in identifiable ‘ideal’ profiles. The composition of the
‘ideal profiles’ show that processes may differ in their
choice and intensity of use of manufacturing tech-
nologies and practices associated with superior man-
ufacturing and business performance. For instance,
jobshops were seen to deploy CNC technology and

Table 9
‘Ideal’ profiles of AMT resource allocations
Significant AMT domaina Item measure Mean score (and S.D.) of ideal profile

Jobshop Assembly line

MT Use of CNC technology 2.83 (1.40) 3.27 (1.85)

Use of computer-aided manufacturing 3.30 (1.34) 3.36 (1.69)
Use of flexible manufacturing systems 3.20 (1.40) 2.91 (1.87)
Use of set-up time reduction methods – 3.45(1.63)
HRM Worker cross-training 3.80 (1.03) –
Use of operator teams 2.60 (1.90) 3.73 (1.42)
Decentralized decision making for scheduling 2.90 (1.52) 2.91 (1.57)
Decentralized decision making for operator tasks 2.90 (1.60) 3.00 (1.48)
MD Use of computer-aided engineering 3.83 (1.15) Not significantly related to
strategic manufacturing
capabilities
Use of computer-aided design 3.75 (0.82) –
Use of modularization in product design 3.50 (1.27) –
a AMT domains found to significantly influence strategic manufacturing capabilities.
 A. Das, R. Narasimhan / Journal of Operations Management 19 (2001) 521–540 535

manufacturing operator teams to a lesser extent, as
compared to assembly lines. On the other hand, both
process types emphasized decentralized decision mak-
ing about equally. The ‘ideal profiles’ also identified
several technologies and practices that were exclusive
to a specific process type. Worker cross-training, the
use of CAE and CAD, and the use of modularization
in design were found to be associated with improved
strategic manufacturing performance in jobshops. This
does not necessarily mean that successful assembly
line process firms do not deploy these technologies.
Rather, the use of these technologies in assembly lines
did not appear to contribute to those manufacturing
performance dimensions that were found to affect firm
performance in assembly line environments.
dimensions, obtained from their regressions on strate-
gic manufacturing capabilities (see Tables 7 and 8).


LOFi = (bj (xij − µpj ))2
j ∈J
where i is the ith firm in sample (excluding firms in
ideal profile), bj , the standardized beta weight for the
jth significant AMT dimension, J the set of item mea-
sures for the critical AMT dimensions for a particu-
lar process environment, xij the score for firm i for
jth item measure and µpj the mean score for jth item
measure in the ideal profile.
A ‘LOF’ measure was calculated for each firm be-
longing to the two process environments. A represen-
tative computation is shown as follows:

Assembly process

Strategic manufacturing capabilities
AMT dimensions affecting cost and
quality capabilities
Item measures of MT and HRM
Illustrative computation for a firm2
Manufacturing cost reduction and quality performance (see Table 6)
MT (β = 0.214); HRM (β = 0.226) (see Table 7)
MT: Use of CNC machines, use of CAM, use of FMS, use of set-up
time reduction techniques
HRM: Use of operator teams in manufacturing, decentralized decision
making for distributing operator tasks, decentralized decision making
for production
 scheduling
LOF = [0.214{(firm’s score on CNC − 3.27)2 +
(firm’s score on CAM − 3.36)2 + (firm’s score on FMS − 2.91)2 +
(firm’s score on set-up time reduction techniques − 3.45)2 } +
0.226{(firm’s score on operator team − 3.73)2 +
(firm’s score on decentralized decision making for scheduling−2.91)2 +
(firm’s score on decentralized decision making for opeator tasks −
3.00)2 }]

The second research proposition of this paper
posited that deviations from the ‘ideal’ profiles will
have a negative impact on manufacturing perfor-
mance. Accordingly, a measure of deviation from the
ideal profile, ‘lack of fit’ (LOF), was calculated to
assess the extent to which the remaining firms di-
verged from the ideal profile of mean scores in AMT
investments. ‘LOF’ represents a composite, weighted
measure based on the deviation of a firm’s AMT item
measure scores from the mean item scores of the
group of firms comprising the ideal profile. Follow-
ing Venkatraman and Prescott (1990), weights were
The top 10% cases and the bottom 10% compos-
ite manufacturing performance cases were eliminated
from the sample prior to this computation. The latter
was done to avoid the possibility of restriction of range
bias (Venkatraman and Prescott, 1990). Finally, ‘LOF’
for each process environment was related to compos-
ite manufacturing performance. It was anticipated that
deviations from the ideal profile would have an ad-
verse effect on performance. Accordingly, the corre-
lations between ‘LOF’ and composite manufacturing
2 Values inside brackets indicates mean score on that item in

derived from the beta coefficients of particular AMT the ideal profile of assembly line firms.
536 A. Das, R. Narasimhan / Journal of Operations Management 19 (2001) 521–540
Table 10
Correlations between ‘lack of fit’ and composite manufacturing
performancea
Jobshop
∗
LOF↔(−)0.261 Composite manufacturing performanceAssembly
Line
∗ of the relative magnitude of investments in individual
LOF↔(−)0.226 Composite manufacturing performance
a Asterisk (∗ ) indicates significant at P < 0.01.
performance were expected to be significant and neg-
ative. Table 10 shows the results of the correlation
analysis.
‘LOF’ was found to have a significant and negative
impact on composite manufacturing performance, in
both jobshop and assembly line processes.
6. Discussion of results
This section discusses the implications of the ideal
profiles and the use of AMT for strategic ends.
6.1. Ideal profiles
The results of the analysis validate the utility of
the ‘ideal profile’ methodology in production envi-
ronments. Development of an ideal profile represents
what the strategy literature calls a ‘holistic’ approach
to assessing fit (Venkatraman and Prescott, 1990). The
holistic perspective is based on the premise that con-
figurations, rather than bi-variate examinations (as in
regular interaction analysis), are important to com-
pletely describe a synergistic profile or system. The
technology items in the ideal profiles in this study
collectively describe and define the strategic technol-
ogy profile of the best performing (manufacturing per-
formance) companies. It is not necessary that mean
investments in all the technology items in an ideal
profile be uniformly higher than (or different from)
that in the remaining firms. For example, the means
scores for CNC technology use CAE and CAD, three
critical technology items for the low performing job-
shop firms, were higher than the mean scores for these
items in the ideal profile of the high performing job-
shops (3.00, 3.91 and 4.14 versus 2.83, 3.83 and 3.75,
respectively). This suggests that indiscriminate invest-
ment in all technology practices may not be associated
with improved performance. It can be speculated that
the firms in the ideal profile derive superior manufac-
turing performance from the synergies implicit in the
arrangement of their technology investments — the
issue is one of whether a specific pattern of invest-
ments is associated with performance gains, and not
technology practices. It is not our intention to general-
ize or prescribe an established ‘ideal profile’ of AMT
investments for individual jobshop or assembly line
process plants. Product-based differences and equifi-
nality considerations make it conceivable that other
ideal profiles will exist. Further study is required to
fully investigate these configurational synergies, per-
haps most appropriately through a case-based in-depth
analysis of manufacturing plants in the same product
market. In this study, the ‘ideal’ profile concept offers
a perspective on investment implications that can pro-
vide more clarity on synergies to be had in technology
choice decisions.
The relationship between LOF and performance un-
derscores the need to recognize patterns in technology
investments for competitive benchmarking and anal-
ysis. The ‘ideal’ profile methodology could provide a
valid composite, multivariate benchmarking tool for
decision-makers. An ideal profile could provide man-
agers with an opportunity to utilize the ‘LOF’ measure
to assess the degree of deviation from the benchmark
pattern of investments, identify gaps, consider avail-
able resources and associated risks, and implement
corrective strategies. To illustrate, a company operat-
ing multiple plants in a single industry could construct
an ‘ideal profile’ of technology investments from the
best performing plant in its industry, and assess the
performance implications of plant deviations from this
profile. If deviations from the best plant profile affect
performance significantly, management needs to iden-
tify the manufacturing levers to adjust them for im-
proved performance, i.e. closing the gaps in the plant
profile to reduce LOF and achieve better fit with the
ideal profile. For example, if comparison of a plant’s
profile with the ideal profile reveals gaps in opera-
tor teaming, use of CNC machines and use of CAD,
management should identify the reasons for these
gaps or deficiencies (lack of resources, lack of equip-
ment, plant culture, worker skills), consider available
resources, and establish and sequence targets for im-
provement in these areas. For practical reasons, it may
be easier for managers to initiate action in the softer,
 A. Das, R. Narasimhan / Journal of Operations Management 19 (2001) 521–540
less capital intensive operational dimensions of AMT,
such as HRM, and develop an improved profile, using
these dimensions. They can then quantify the extent of
deviation of the new improved profile from the ‘ideal
profile’, following the methodology outlined here,
re-assess (correlate) the performance consequences of
the deviation, and subsequently make the capital-based
equipment MT and MD investments, if warranted
from a cost/resource availability perspective.
A comparison of the ideal profiles developed from
the data with the envisaged ideal profiles (see Table 1)
revealed that most of the AMT items (belonging to
strategic AMT domains) in the a priori profiles found
inclusion in the final profile. Few exceptions are noted
on Table 1, and can be explained as an outcome of
the factor analysis, or as a result of a particular AMT
dimension not having a significant association with
performance. The results generally support earlier
findings of the broad use of AMT across different pro-
cess environments, albeit to achieve different strategic
objectives (Kotha and Swamidass, 2000; McDermott
et al., 1997).
6.2. Advanced manufacturing technology and
‘off-diagonal’ positions
6.2.1. AMT’s potential
The results show that the general purpose/dedicated
purpose technology investment divide between job-
shop and assembly environments (Hill, 1994), is being
bridged by advanced manufacturing technology. The
use of advanced manufacturing technology appears
to influence strategic capabilities across disparate
process environments. Theoretically, advanced man-
ufacturing technology should enable firms to operate
with success in off-diagonal positions, especially if
the technology elements are aligned with an ‘ideal
profile’ for that particular product industry. In such
cases, an ‘aligned’ firm would have an enhanced abil-
ity to compete with non-traditional capabilities. To
illustrate, a regression analysis showed that manufac-
turing design, a dimension of AMT, significantly af-
fected delivery performance in jobshops (see Table 7).
This suggests that it may be feasible for jobshops to
venture into delivery oriented markets based on exist-
ing technology capabilities. Similarly, regression runs
in assembly environments showed a significant link-
537
age between human resources management practices,
and new product introduction time reduction perfor-
mance (see Table 8), a manufacturing capability that
was not related to firm performance in this process
type. The data suggest that HRM practices such as
decentralization and teaming could help assembly
line manufacturers make successful lateral extensions
into “off-diagonal” positions in customization and
innovation driven markets.
6.2.2. AMT’s reality
With the exception of cost, companies in different
process environments used similar advanced manu-
facturing technology investments for very different
strategic manufacturing goals. This finding disaffirms
suggestions of a growing shift to “off-diagonal” posi-
tions, where for instance, continuous flow shops use
FMS to serve customization driven markets (Safizadeh
et al., 1996; Markland et al., 1998). The nature of
the manufacturing related “order winners” for each
process environment (see Table 6) implies that firms
operate within their traditional market environments
using compatible capabilities, without attempting to
re-define competition by pursuing non-traditional
capabilities. The strategic opportunities offered by
advanced manufacturing technology to dilute the in-
fluence of the volume–variety tradeoff seems to have
remained unexploited. The notion that firms remain
within their traditional markets is supported by the
data. The data show that the proportion of produc-
tion changes in jobshops (after release of production
schedules) due to changes in design and volume, was
in the range of 30–60%. Evidently, this suggests a
volatile market environment for jobshops, where use
of customization and new product introduction ca-
pabilities would be a preferred strategy for pursuing
market performance. The results show (see Table 6)
that firm performance in jobshops was indeed pos-
itively related to these manufacturing capabilities.
In contrast, delivery performance in jobshops did
not relate to their financial or market growth perfor-
mance, suggesting that jobshops were not operating in
time sensitive markets. The proportion of production
changes in assembly line firms was less than 10%
for design changes, and 10–20% for volume changes,
indicating a much more stable and mature market en-
vironment for these firms. Accordingly, it can be ex-
pected that these companies would emphasize quality,
538 A. Das, R. Narasimhan / Journal of Operations Management 19 (2001) 521–540
cost and other mature-market competitive goals. The
results validate this view — quality and cost reduction
performance in assembly line firms were found to be
positively related to financial and market growth
performance, whereas customization or new prod-
uct development was not. Inferentially, utilization
of advanced manufacturing technology in assembly
environments appears to center on controlling costs
and improving quality, whereas advanced manufac-
turing technology in jobshops seems to be utilized
for cost, customization and new product introduction
objectives.
Cost has not been a pressing concern for jobshops,
which have traditionally competed on the basis of
customization and product innovation. Manufacturing
technology and human resources management prac-
tices, two key dimensions of AMT, were associated
with cost reduction performance in jobshops (see Ta-
ble 7). Advanced manufacturing technology would
thus appear to have enabled jobshop firms in our sam-
ple to add cost-based strategies to their competitive
arsenal, an advantage lacking with general-purpose
technology.
6.2.3. AMT’s paradox
The findings of this investigation present an inter-
esting paradox in the use of advanced manufacturing
technology. Clearly, AMT has the potential to legit-
imize off-diagonal positions. Yet it is evidently not
being utilized for such objectives. Jobshops in our
study did not seem to use their AMT-based capabil-
ities to pursue markets with non-traditional capabili-
ties such as delivery performance. Similarly, assembly
firms in our sample did not appear to be deriving fi-
nancial or market gains from their technology enabled
ability to accelerate new product development cycle-
times.
A plausible reason for the lack of use of AMT to
gain entry into markets with different competitive re-
quirements could be that managers who acquire and
utilize AMT for traditional objectives, do not spend
time identifying the additional competitive opportuni-
ties available from the technology. AMT’s capability
to promote customization and product development
may not find articulation or application in assembly
environments. Another more reasonable explanation
for the paradox could lie in the frequent separation
between the manufacturing function and strategy for-
mulation process seen in many companies. Strategy
planners may lack knowledge of manufacturing capa-
bilities, especially if such capabilities are not readily
apparent to them. Marketing’s decision to compete
in specific markets may in fact determine the use of
AMT, in the absence of manufacturing’s input in busi-
ness strategy formulation. Regardless of the reasons
for not exploiting the potential of AMT, it is pertinent
to note that there is a growing body of evidence that
reports convergence of markets in terms of customer
expectations: customization, cost and quality (Pine,
1993; Kotha, 1995). In view of this emerging trend,
both jobshop and assembly line firms would be well
served if they identify and exploit the full capabili-
ties of advanced manufacturing technologies. Man-
ufacturing can ill afford to neglect AMT’s strategic
capability to introduce new forms of competition.
Although this study takes a systemic perspective
in understanding technology investments, the statis-
tical relationships between specific AMT dimensions
and strategic manufacturing capabilities merit men-
tion (see Tables 7 and 8). Manufacturing technology
was found to benefit manufacturing cost reduction in
jobshops. One can rationalize this relationship. For in-
stance, CNC and CAM technologies should result in
decreased set-up frequencies, improved set-up times,
more accurate scheduling and increased productivity,
all leading to reductions in manufacturing cycle times.
Lower manufacturing cycle times should lead to lower
manufacturing costs. To verify this, MT was regressed
on manufacturing cycle time reduction in jobshops,
with significant and positive results (P < 0.05). Man-
ufacturing design (CAD and CAE systems) was found
to relate positively to customization performance in
jobshops. Human resources management was found
to be an overarching influence on the achievement of
strategic manufacturing capabilities, supporting cur-
rent notions of the strategic importance of knowledge
factors. Manufacturing managers should be trained to
develop, foster, evaluate and reward the human ele-
ment in operations.
7. Conclusion
The development and testing of ‘ideal’ profiles of
advanced manufacturing technology resource invest-
ments underscores the strategic importance of aligning
 A. Das, R. Narasimhan / Journal of Operations Management 19 (2001) 521–540
technology investments with process requirements.
Theoretically, the existence of ideal profiles highlights
the concept of ‘domain navigation’ by companies —
the design of operational strategies to match com-
petitive environmental conditions (Venkatraman and
Prescott, 1990). The results validate the feasibility of
off-diagonal positions in the Hayes and Wheelwright
(1979) matrix, yet concurrently underscore the failure
of firms to adopt non-traditional positions for com-
petitive advantage. Contrary to recent speculations,
the results suggest that the use of AMT is still con-
fined to defined process goals and does not appear to
encourage firms to assume “off diagonal” positions in
the Hayes and Wheelwright (1979) framework. This
paradox bears further exploration.
This study validates a methodology for assessing
deviations from best-in-class patterns in a specific in-
dustry, and offers evidence of the existence of perfor-
mance linked patterns in technology investments. The
results can provide a stimulus for product focused,
case-based research that could lead to a more com-
plete understanding of how and why configurational
synergies develop in AMT investments. The impact of
transitions in process environments on technology in-
vestments also requires investigation. A longitudinal
investigation would allow the study of such changes.
It would also be interesting to examine whether in-
vestments in advanced manufacturing technology do-
mains follow particular implementation sequences in
different process environments.
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