Sparking Manufacturing Innovation: How Temporary Interplant Assignments Increase Employee Idea Values

Abstract

Shop-floor employees play a key role in manufacturing innovation. In some companies, up to 75% of all productivity gains are the result of bottom-up employee ideas. In this paper, we examine how employee interplant assignments—short problem-solving jobs at other manufacturing plants within the same firm—influence employee-driven manufacturing innovation. Using unique idea-level data from a large European car parts manufacturer, we show that interplant assignments significantly increase the value of employees’ improvement ideas due to the short-term transfer of production knowledge and long-term employee learning. Both effects are amplified by assignments to plants that have high functional overlap (i.e., plants producing similar products using similar processes and machinery). One implication is that, for the purpose of employee-driven manufacturing innovation, assignments between peripheral plants can be more effective than assignments to and from central plants. These findings are robust to several econometric tests. Our study provides novel and detailed empirical evidence of manufacturing innovation, and goes beyond previous research on the learning curve (learning by doing) by investigating how interplant assignments affect the value of employees’ improvement ideas (learning by moving).

(joint work with Philipp Cornelius, RSM (NL)  and Bilal Gokpinar, UCL (UK))

Biography

Prof. Dr. Fabian Sting is chaired professor of Supply Chain Management – Strategy and Innovation at University of Cologne, Germany and Professor of Digital Supply Chain Innovation at Rotterdam School of Management, Erasmus University (part-time). His research and teaching interests are in the areas of Operations Strategy, Supply Chain Innovation, and Project Management. His work revolves around the question of how organizations can implement, reinforce, and shape their strategy by innovating their operations. Specific topics include:
•    Manufacturing technology strategy and Industry 4.0
•    Managing change initiatives and collaborative projects
•    Employee behavior in agile operations and projects
•    Frontline product and process innovation and shopfloor employee ideation

This research has been published or is forthcoming in leading academic journals such as Academy of Management Journal, Management Science, Production and Operations Management, Journal of Operations Management as well as in premier practitioner journals such as Harvard Business Review, and MIT Sloan Management Review. He teaches courses on undergraduate, graduate, and executive levels. For his courses "Operations Management" and "Primaire Processen" Fabian Sting received multiple teaching awards. Before joining RSM Fabian Sting was Postdoctoral Research Fellow at INSEAD's Technology and Operations Management Department and visiting scholar at Northwestern University. He holds a Doctorate from WHU and graduate degrees in Management Science (KU Eichstätt-Ingolstadt) and Applied Mathematics (FU Hagen).

More info about Prof. Fabian Sting