Just-in-Time and Human Resource Management in Non-Repetitive Manufacturing

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Just-in-Time and Human Resource

Management in Non-Repetitive Manufacturing

By

Martin Winters

S2211416

Master’s Thesis

Technology and Operations Management

Words: 8899

University of Groningen

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ABSTRACT

Purpose - The aim of this research was to further investigate lean bundles in non-repetitive manufacturing. This research continued earlier research by further investigating the effect of the differences between repetitive and non-repetitive manufacturing on JIT, HRM, and the relationship between JIT, HRM and performance.

Methodology - A survey and an illustrative case study were used in this research. The survey was used to see whether different lean bundles are important in non-repetitive and repetitive manufacturing and to test whether there is a different relationship between JIT, HRM and performance in a non-repetitive compared to a repetitive manufacturing context. The illustrative case study was conducted after the survey to give more in-depth information about the role of JIT and HRM in both a non-repetitive and a repetitive manufacturing context and through this case study possible explanations for the survey results were developed.

Findings - No direct effect of JIT on performance was found. Therefore, the effect of HRM on performance was not mediated by JIT. HRM had a direct effect on performance and on JIT in both repetitive and non-repetitive manufacturing. Therefore, HRM could be suitable ground for JIT and have a direct effect on performance. Product customization is proposed as one of the major differences between non-repetitive and repetitive manufacturing for JIT. Temporary workers are proposed as one of the major differences between non-repetitive and repetitive manufacturing for HRM.

Research limitations/implications - Limitations of this research are a small dataset of non-repetitive manufacturing firms and the case study was conducted at one company and only based on interviews. Future research could focus on the proposed differences between non-repetitive and non-repetitive manufacturing, product customization for JIT and temporary workers for HRM and the possible shifting roles of the lean bundles JIT and HRM in general.

Practical implications - HRM should be regarded as more than only suitable ground for other lean practices. JIT may be less applicable for companies who produce highly customized products. HRM may be more important in non-repetitive manufacturing, because of their role regarding temporary workers.

Originality/value - This paper is new, because it investigated HRM and the relationship between JIT, HRM and performance in a non-repetitive manufacturing context. This was not done before.

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PREFACE

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1. INTRODUCTION

The implementation of JIT is not the same in a repetitive manufacturing context, compared to a non-repetitive manufacturing context (White & Prybutok, 2001). 7 out of 10 JIT practices that these authors investigated were significantly different implemented in a non-repetitive manufacturing context compared to a repetitive manufacturing context. Bortolotti et al. (2013) tested the applicability of JIT in a non-repetitive manufacturing context in a large sample. These authors concluded that JIT could have a modest or even negative effect on the responsiveness of non-repetitive manufacturing firms. Furthermore, these authors point out that future research should focus on other aspects of lean manufacturing, such as the role of the HRM bundle in a non-repetitive manufacturing context. It is important to investigate the HRM bundle, because “JIT changes the previously existing work environment so that the

importance of proper human resource management increases” (Demeter & Matyusz, 2011

p.156). A different role of JIT in a non-repetitive manufacturing context could lead to a different work environment, where a different role of HRM is required.

This study will not be the first study conducted on the relationship between JIT, HRM and performance. For example Matsui (2007) found that JIT production interrelates with HRM, JIT strongly influences HRM and HRM supports JIT production at the same time. Dal Pont, Furlan & Vinelli (2008) found that the HRM bundle is suitable ground for the other lean bundles to be implemented on. These authors further state that firms, who do not succeed in good JIT implementation often did not give their employees good upfront training programs. In these studies the importance of HRM in relation to JIT and performance is emphasized. However the relationship between JIT, HRM and performance in a non-repetitive manufacturing context is not yet been investigated.

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non-repetitive manufacturing context could have an influence on the relationship between JIT, HRM and performance as well.

Dal Pont et al. (2008) argue that HRM has a positive effect on performance, but that this effect is mediated by JIT. This indirect relationship of HRM on performance could be the case in a repetitive manufacturing context, where JIT has a strong positive impact on performance. But when the relationship between JIT and performance is not clear in a non-repetitive manufacturing context, and where it could even be counterproductive to implement JIT (Bortolotti et al., 2013), the role of the HRM bundle could be different in a non-repetitive manufacturing context. Therefore, it is stated in this research that instead of being a suitable ground for other lean bundles, the HRM bundle has a direct impact on performance in a non-repetitive manufacturing context.

The managerial implications of this research are how the differences between non-repetitive and repetitive manufacturing affect the relationship between JIT, HRM and performance, and the role of JIT and HRM. This research provides new insights and possible explanations on the relationship between JIT, HRM and performance, and the role of JIT and HRM in general, in a non-repetitive manufacturing context and in a repetitive manufacturing context.

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2. BACKGROUND

2.1 JIT

JIT is a fundamental set of lean manufacturing practices and among those lean bundles which exert a strong direct impact on operational performance (Shah & Ward, 2003; Dal Pont et al., 2008). According to Schonberger (1982) the aim of JIT is to avoid that parts are been made or delivered before they are needed, he explains this by stating that: “The idea is to provide

subassemblies just in time to go into final assemblies, fabricated parts just in time to go into subassemblies, and purchased materials just in time to go into fabricated parts”

(Schonberger, 1982 p.2). According to Ahmad, Schroeder, & Sinha (2003) regarded Schonberger (1982) simplicity as the guiding theme for JIT manufacturing. While Ahmad et al. (2003) used a definition, which states that eliminating waste is the primary objective of JIT practices. Dal Pont et al. (2008) gave a more extensive view, by stating that inventory reduction, fewer setups and shorter lead times will be attained by implementing JIT, which will lead to lower costs.

These definitions of JIT focus on the implementation of JIT in the internal process. The overall performance of a company however can be further improved when JIT is implemented both internally and externally (Flynn, Schroeder, & Flynn, 1999; Furlan, Dal Pont, & Vinelli, 2011a). External integration can be divided in upstream integration (towards suppliers) and downstream integration (towards customers) (Frohlich & Westbrook, 2001). Shah & Ward (2007) state that a company has to address the operationalization of suppliers and customers to be lean. According to Furlan et al. (2011a) should companies first implement the internal JIT bundle and then the external JIT bundles. Both internal and external JIT are included in the JIT bundle in this research, because of the further possible improvements in performance of external JIT integration with suppliers and customers.

2.2 HRM

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role of the HRM bundle is to make sure that the other lean bundles can be implemented effectively (Dal Pont et al., 2008). Bonavia & Marin-Garcia (2011) agree with these authors, by stating that the role of HRM is fundamentally supportive. Contradictory, Shah & Ward (2003) found that HRM does have a direct positive effect on performance. These authors state that HRM has a separate and identifiable effect on performance.

2.3 Performance

The five basic performance objectives are applicable to running operations at an operational day-to-day level, which require tightly defined objectives (Slack, Chambers & Johnston, 2010). These five basic performance objectives are quality, speed, dependability, flexibility and cost (Slack et al., 2010). These basic performance objectives are used in previous literature to investigate performance (Shah & Ward, 2003; Dal Pont et al., 2008; Furlan et al., 2011a; Furlan et al., 2011b). In this research performance was measured very detailed with 23 items, but these items were based on the five basic performance objectives.

2.4 Differences between non-repetitive and repetitive manufacturing

Hayes & Wheelwright (1984) gave a very extensive list of differences between a repetitive and non-repetitive manufacturing context. For a repetitive manufacturing context the following characteristics are listed by these authors, a low variety of standardized products, very predictable material requirements, a fixed schedule, long production runs, few and costly setups, equipment with a special purpose, the job content of a worker is small, the skill level of a worker is low and high control over suppliers. For the inventory levels of a repetitive manufacturing context the authors gave the following characteristics, raw material and finished goods inventories are high and work-in-process is low.

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manufacturing firms typically are efficient (White & Prybutok, 2001). Santos et al. (2007) defined a non-repetitive manufacturing process as a process where the working cycle is not fixed and the products that are being made are not identical. Bortolotti et al. (2013) discussed product customization and demand variability as the most important differences between repetitive and non-repetitive manufacturing. Product customization has a big impact on the manufacturing strategy, because it is more difficult to forecast, when product customization is high, which means that companies have to use make-to-order (MTO) or engineer-to-order (ETO) manufacturing strategies.

Although product customization is a big difference between non-repetitive and repetitive manufacturing, it does not significantly moderates the relationship between JIT and performance (Bortolotti et al., 2013). Demand variability however does have an effect on performance according to these authors, by affecting the responsiveness. JIT companies only protect themselves against small fluctuations with extra-capacity (Bortolotti et al., 2013), so not the big demand variability were non-repetitive manufacturing companies have to deal with. According to these authors this creates greater risks of stock-outs and delivery problems. It could be even counterproductive to implement JIT with very high levels of demand fluctuations (Bortolotti et al., 2013). Therefore, the impact of JIT on performance is not so strong and clear, and could it even be counterproductive, in a non-repetitive manufacturing context. This could explain why non-repetitive firms are less progressive in their utilization of JIT practices compared to repetitive firms (White & Prybutok, 2001). These authors state that the repetitive manufacturing firms had a higher utilization of all the JIT practices under investigation. They further state that this is not surprising, because JIT was designed in a repetitive manufacturing context.

2.5 Hypotheses

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not as clear and direct in a non-repetitive manufacturing context compared to a repetitive manufacturing context (White & Prybutok, 2001; Bortolotti et al., 2013). This is not surprising looking at all the differences between a repetitive and non-repetitive manufacturing context explained in the previous paragraph. And keeping in mind that JIT was designed in a repetitive manufacturing context (White & Prybutok, 2001).

Therefore it is proposed in this research, that in a non-repetitive manufacturing context, both HRM and JIT have a direct effect on performance (figure 2.1).

Figure 2.1: Conceptual model non-repetitive manufacturing context

Hypothesis 1: In a non-repetitive manufacturing context, HRM has a direct effect on performance.

Hypothesis 2: In a non-repetitive manufacturing context, JIT has a direct effect on performance.

For a repetitive manufacturing context it is proposed that JIT has a direct effect on performance and JIT mediates the effect of HRM on performance (figure 2.2).

Figure 2.2: Conceptual model repetitive manufacturing context

Human Resource

Management Just-in-Time Performance

Human Resource Management

Just-in-Time

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Hypothesis 3: In a repetitive manufacturing context is the effect of HRM on performance mediated by JIT.

Hypothesis 4: In a repetitive manufacturing context, JIT has a direct effect on performance.

3. METHODOLOGY

In this research both a survey and an illustrative case study were conducted. First the survey was conducted to see the differences between implemented lean bundles in a repetitive and non-repetitive manufacturing context, and to test whether HRM has a direct effect on performance or that this effect is mediated by JIT in both contexts. By the survey approach data is collected from a large number of organizations and analysed with statistical techniques, which makes it generalizable (Gable, 1994). However, the survey approach often gives a “snap-shot” of a situation on a certain moment, which gives little information about the underlying meaning of the data (Gable, 1994). Therefore an illustrative case study was conducted after the survey. The purpose of this case study was to develop possible explanations for the survey results. More in-depth information about the role of JIT and HRM in both repetitive and non-repetitive manufacturing was provided through this illustrative case study. The strength of a case study is that it provides the opportunity to ask penetrating questions and capture the richness of organizational behavior (Gable, 1994). However the conclusions from case studies may not be generalizable (Gable, 1994). When using both methods, the two methods will complement each other’s shortcomings.

3.1 Survey

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turn in non-response or the filling in of the survey in chunked parts (Blumberg et al., 2011). On the other hand could the postponement of a respond also mean that the participant wants to collect more information or talk with others, this could mean an increase in quality (Blumberg et al., 2011). There was no one specific function, which had to fill in the questionnaire, but it had to be a person with sufficient knowledge about the lean operations of the company. One person had to fill in the questionnaire per company. Companies with the following industry codes (ISIC code Rev 3.2 code D) were selected: 15, 28, 29, 30, 31, 32, 33, 34 and 35.

3.1.1 Measurement development

In this paragraph the different forms of validity and reliability will be discussed. First the validity of the measures was determined. Starting with the content validity. The content validity refers to whether the concept under investigation is represented by the meaning of a set of items (Karlsson, 2009). Through literature review the content validity was ensured. Subsequently, according to Karlsson (2009) a factor analysis can be used to test the convergent and discriminant validity. An exploratory factor analysis with a fixed amount of factors (two factors, JIT and HRM) was conducted. Convergent validity refers to different items that measure the same construct, and whether the outcomes of these different items are in line (Karlsson, 2009). Contradictory, is discriminant validity about the difference between items that measure the different constructs, and whether these measures are distinct (Karlsson, 2009). The items that were used for the measurement of the HRM bundle and for the JIT bundle were placed in two different constructs with an exploratory factor analysis. Items that had a to low impact on their construct (absolute value below: 0.40) were deleted for further tests. Cross loadings, which are items with an absolute value above: 0.40 on both constructs, were removed for further tests as well. The remaining items with their absolute values can be seen in table 3.1.

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Just-In-Time. JIT was measured by 24 items, all on a scale from 1 (strongly disagree) to 5 (strongly agree). The scale was highly reliable (α = .934).

Human Resource Management. HRM was measured by 22 items, all on a scale from 1 (strongly disagree) to 5 (strongly agree). The scale was highly reliable (α = .947).

Performance. Performance was measured by 23 items, all on a scale from 1 (strongly disagree) to 5 (strongly agree). Performance was defined as: the performance now compared to the performance three years ago. The scale was highly reliable (α = .892).

Table 3.1: Factor Analysis

Constructs and Items SL

JIT Setup time reduction

Small lot sizes Pull production Equipment layout Daily schedule adherence Preventive maintenance Supplier JIT link

Customer JIT link

Our workers are trained to reduce setup time.

Employees redesign or reconfigure equipment to shorten setup time. We work to lower setup times in our plant.

Our employees practice setups to reduce the time required. We work to lower lot sizes in our plant

We emphasize small lot sizes.

Production is ‘pulled’ by the current demand of the next station. Production is ‘pulled’ by the shipment of finished goods. We use Kanban, squares, or containers of signals for production control.

We use a ‘pull’ production system.

The layout of our shop floor facilitates low inventories and fast throughput.

Products are classified into groups with similar routing or processing requirements.

Families of products determine our factory layout.

We have laid out the shop floor so that processes and machines are in close proximity to each other.

Our schedule is designed to allow time for catching up because of production stoppages for quality problems.

We usually complete our daily schedule as planned. We emphasize preventive maintenance.

We do preventive maintenance during non-productive time. Our suppliers supply us on a just-in-time basis.

We receive parts from suppliers on time.

We can depend upon on-time delivery from our suppliers. Our suppliers deliver to us on short notice.

Suppliers provide us the appropriate quantity needed. Our customers receive just-in-time deliveries from us.

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HRM Management leadership Multifunctional employees Teamwork Employee involvement Employee empowerment Training

Management accepts responsibility for continuous improvement. Plant management creates and communicates a vision focused on continuous improvement.

Plant management is personally involved in quality improvement projects.

Employees undergo cross-functional training.

Our employees receive training to perform multiple tasks. Our employees are flexible, multi-skilled, and trained. Employees are given a broader range of tasks. Teams are extensively used at this plant Our plant forms teams to solve problems

Many problems have been solved through small group sessions. Our plant is organized into production teams.

Ideas from employees are actively used.

Employees are encouraged to make suggestions for improving performance at this plant.

Shop floor employees are actively involved in suggestion programs. Management encourages employees to exchange opinions and ideas. Employees are involved in the product quality planning process. Employees are encouraged to make independent decisions. Employees are provided with autonomy and responsibility. Our employees regularly receive training to improve their skills. Management at this plant believes that continual training and upgrading of employee skills is important.

Our plant employees receive training and development in work place skills, on a regular basis.

There is a formal training program for employees.

,584 ,569 ,492 ,711 ,694 ,693 ,611 ,748 ,681 ,667 ,614 ,770 ,718 ,706 ,685 ,554 ,676 ,657 ,725 ,719 ,715 ,534

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3.2 Case study

This case study was illustrative and explorative, because the HRM bundle and the relationship between HRM, JIT and performance were not yet investigated in a non-repetitive manufacturing context. Case studies can be used for exploration and the purpose of an explorative research is to uncover areas for research and theory development (McCutcheon & Meredith, 1993; Voss, Tsikriktsis, & Frohlich, 2002). And a case study makes it possible to investigate a phenomenon in its real-life setting (Blumberg et al., 2011).

Although the interviews were conducted at one company, two cases can be distinguished within this company. Voss et al. (2002) explained that one company could involve different cases. The company where the interviews were conducted uses two different manufacturing strategies. It operates with a MTO (80%) or an ETO (20%) manufacturing strategy, depending on the order. The company standardized the MTO process and made it as repetitive as possible. For the ETO orders standardization is not possible and this process is non-repetitive. Therefore both contexts could be investigated within this company. The results of multiple cases are considered more robust than single cases (Blumberg et al., 2011).

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It is important to pay attention to reliability and validity in case study research (Voss et al., 2002). There are different dimensions of validity: construct validity, internal validity and external validity (Voss et al., 2002). “Construct validity is the extent to which we establish

correct operational measures for the concepts being studied” (Voss et al., 2002 p.211). To

ensure construct validity, interviews were conducted with multiple persons within the company and there was observed whether predictions about relationships were confirmed (Voss et al., 2002). Internal validity is about to what extent the research findings provide information about causality (Pelham & Blanton, 2007). High internal validity means that changes in the dependent variable are caused by the independent variable (Pelham & Blanton, 2007). Interval validity is ensured by conducting interviews with multiple persons within the company, who belong to different layers in the organization. External validity is about the extent to which research findings describe the real world (Pelham & Blanton, 2007). The external validity of this study would have been greater when multiple companies would have been investigated, because this would have made the outcomes more generalizable (Voss et al., 2002). However, this case was meant to be illustrative and with the available resources an investigation of multiple companies was not possible. “Reliability refers to the consistency or

repeatability of a measure or observation” (Pelham & Blanton, 2007 p.68). So when the

research is repeated the same results should be found. A case study protocol was used to ensure reliability (Voss et al., 2002).

4. RESULTS

4.1 Survey

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engineer-to-order group and 43 companies into the make-to-stock group. As can be seen from figure 4.1 is JIT (blue) more important for make-to-stock companies than for the engineer-to-order companies. Looking at the green bars, which represent HRM, figure 4.1 shows that HRM is more important for order companies. The performance (beige) of the engineer-to-order companies is slightly better. Figure 4.2 shows the means of JIT, HRM and performance in the entire dataset. This figure shows that JIT is slightly more important overall compared to HRM.

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Figure 4.2: Descriptive statistics entire dataset

Secondly, the correlations for the entire dataset are summarized in table 4.1. As can be seen in this table, the relationship between HRM and performance is positive and significant, r = .415, p < .01. There was a significant positive relationship between HRM and JIT as well, r = .502, p < .01. The relationship between JIT and performance was positive but less significant, r = .208, p < .05.

Table 4.1: Correlation entire dataset

HRM JIT Performance HRM JIT Performance - ,415** ,502** - ,208* -

** Correlation is significant at the .01 level (2-tailed). * Correlation is significant at the .05 level (2-tailed).

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The repetitive manufacturing dataset are the remaining 106 companies of the entire dataset. The make-to-order manufacturing strategy is the most non-repetitive manufacturing strategy after engineer-to-order, but the case study company showed that it is possible to standardize a make-to-order process, make it repetitive and implement JIT. Therefore are the remaining companies, whose manufacturing strategies consist of a make-to-order, an assemble-to-order and/or a make-to-stock strategy, regarded as repetitive.

Table 4.2: Correlation non-repetitive context

HRM JIT Performance HRM JIT Performance - ,466* ,523* - ,283 -

* Correlation is significant at the .05 level (2-tailed).

As can be seen in table 4.2, the relationship between HRM and performance is positive and significant in the non-repetitive manufacturing context, r = .523, p < .05. There was a significant positive relationship between HRM and JIT as well, r = .466, p < .05. The relationship between JIT and performance was not significant.

Table 4.3: Correlation repetitive context

HRM JIT Performance HRM JIT Performance - ,407** ,495** - ,176 -

** Correlation is significant at the .01 level (2-tailed).

Table 4.3 shows a positive and significant relationship between HRM and performance in the repetitive manufacturing context, r = .495, p < .01. There was a significant positive relationship between HRM and JIT as well, r = .407, p < .01. The relationship between JIT and performance was not significant.

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Table 4.4: Mediation entire dataset

Dependent variable JIT Performance Performance

Independent variable HRM JIT R Square .42*** ,17 .33*** ,25 .33*** .00 ,25 (*** p < .01)

As can be seen from table 4.4 and figure 4.3 was the effect of HRM on JIT significant for the entire dataset, b = .42, p = .000. The effect of the mediator JIT on performance, while controlling for HRM, was not significant, b = .00, p = 1.00. As such, there is no partial mediation. While controlling for the mediator JIT, the effect of HRM on performance was still significant b = .33, p = .000. Therefore, there is no full mediation.

Figure 4.3: Mediation entire dataset Table 4.5: Mediation non-repetitive context

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Table 4.5 and figure 4.4 show that the effect of HRM on JIT was significant in the non-repetitive manufacturing context as well, b = .50, p = .044. The mediator JIT, while controlling for HRM, had no significant effect on performance, b = .03, p = .837. Therefore, there is no partial mediation. The effect of HRM on performance, while controlling for the mediator JIT, was still significant, b = .32, p = .054. As such, there is no full mediation. Therefore, hypothesis 1 is supported and hypothesis 2 is rejected.

Figure 4.4: Mediation non-repetitive manufacturing context Table 4.6: Mediation repetitive manufacturing context

Independent variable HRM JIT R Square .40*** ,17 .33*** ,25 .33*** -.02 .25 (*** p < .01)

As can be seen from table 4.6 and figure 4.5, in the repetitive manufacturing context was the effect of HRM on JIT significant as well, b = .40, p = .000. The regression of the mediator JIT on performance, while controlling for HRM, was not significant, b = -.02, p = .755. Therefore, there is no partial mediation. Controlling for the mediator JIT, HRM was still a significant predictor of performance, b = .33, p = .000. As such, there is no full mediation. Therefore, hypothesis 3 and hypothesis 4 are rejected.

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Figure 4.5: Mediation repetitive manufacturing

4.2 Case study

4.2.1 Relationship JIT, HRM and performance

All three interviewees stated that a direct relationship of both JIT and HRM on performance was the best description of the situation at their company. They stated that the effect of HRM on performance was not mediated by JIT. As the production director explained: “HRM does

not always has an influence on JIT, actually the influence of HRM on JIT is very low, because JIT is much more affected by the process itself.” However, the production director further

explains, that there are some supporting activities from HRM for JIT, but HRM has other influences at performance as well according to him. Besides the direct effect of HRM, the company started much later with the development of HRM compared to JIT and other lean practices. The reason for the later development of HRM was that the focus first has to be on the production function and not on the secondary functions. During the implementation of lean practices the company grew very rapid, this was positive, but also gave insecurity for the long-term results. “When the amount of orders of customers grows rapidly, the first focus has

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4.2.2 JIT

JIT is very important for the company, as the production director explained: “First, we have

the deal with the customer, that is JIT, we always want to supply our products on time. And then the whole process starts and everything that is to early or to late disturb the process. To early means that there are products, which are not used, so this means working capital and space. And to late be always hours, because somebody is waiting for something, which means rescheduling. Our products consist of thousand different parts, and one part can cause a lot of trouble.” He further explained that although JIT is very important for the company, it is

important for the standardized products, and they tried to make the production process of these standardized products as repetitive as possible. The head of the production team stated:

“For our standardized products is JIT very important, it is very important for the mechanics to have the right information and right material according to a good planning.”

For the engineer-to-order customer specific products it is difficult to implement JIT, and costs and throughput time should be less important. In this situation, a new customer specific product has to be developed by the engineering department. In addition, when something is engineered, there are always mistakes, which have to be corrected, and therefore it is important to perform tests to find mistakes and to make sure that all the mistakes are corrected. Further does the purchasing department has to buy products that are not standardized, so it could happen that the standard supplier cannot supply these products and new suppliers have to be found. Contradictory, for standardized products could the engineering be done in one day and all the parts could be purchased within one second, because everything is done automatically. This clearly shows the difference between a non-repetitive manufacturing context and a non-repetitive manufacturing context and the difficulty of implementing JIT in a non-repetitive manufacturing context. The head of the production team even stated that for a customer specific product it is better to place all the needed parts at the factory floor and then start building, and that JIT is not important then. The focus has to be on quality and finding possible mistakes that were made in engineering and solving these mistakes.

4.2.3 HRM

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of HRM is to understand which people are needed in the organization and to find those people”. He further explained that according to him it does not make a difference whether

HRM has to find a person who has to be very inventive or a person who has to perform the same task every minute. From all the people in your country it is the task of HRM to find the people that are needed within the company.

The HR manager had a different opinion, he explained that the quality of the employee may be less important when the task that has to be performed is very repetitive and easy to understand and that it is harder to find temporary employees with the right education and skills for their process. The head of the production team shared the opinion of the HR manager, he explained: “Non-repetitive products have a higher level of difficulty, because

more mistakes are made in the engineering, so more skills are required from the mechanics. Where for standardized products less skilled mechanics can learn “a simple trick” and repeat this trick all the time.” So there is a clear difference for this company between the mechanics

needed for their standardized products and their customer specific products.

The HR manager further explained that the role of HRM is also very important in the monitoring of the need for temporary employees. He stated: “Back in the days a temporary

worker could stay within the company although the demand was lower, because we knew that demand would rise again within a couple of weeks. So that temporary worker was less productive, which costs a lot of money”. Therefore it is very important to monitor whether

temporary employees are really needed to cut costs. He stated: “The stricter we deal with

hiring temporary employees and firing them when the demand is lower, the better for the costs”.

5. DISCUSSION

5.1 Relationship JIT, HRM and performance

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stated that both JIT and HRM have a direct effect on performance. However, HRM had a direct positive effect on performance, but there was no significant effect of JIT on performance. A possible explanation could be, as was explained by the interviewees of the case study that the focus first has to be on the production department. In this case, the focus of many companies was on implementing the lean bundles concerning the production department, like JIT. Looking at the descriptive statistics, the mean of JIT was high, and slightly higher than HRM in the entire dataset. Therefore, many companies in the entire dataset invested in JIT and JIT is important for these companies. However the effect of JIT on performance is insignificant. Therefore, it could be that JIT has become an order qualifier instead of an order winner. Then all companies have to invest in JIT to be even considered by customers instead of the significant effect of JIT on performance that was found by Dal Pont et al. (2008) and Furlan et al. (2011b). JIT becoming an order qualifier and a shifting focus towards HRM could be an explanation for the results.

Dal Pont et al. (2008) stated that: “The HRM bundle represents suitable ground on which

other lean practices can be effectively build” (Dal Pont et al., 2008 p.156). This research

states that the role of HRM is bigger than just being suitable ground for other lean practices. The survey results showed only a direct effect of HRM on performance and no mediation effect, but this was caused by the fact that JIT had no significant effect on performance. This seems not realistic looking at earlier research (Cua, McKone, & Schroeder, 2001; Ahmad et al., 2003; Shah & Ward, 2003; Dal Pont et al., 2008; Furlan et al., 2011a; Furlan et al., 2011b; Danese, Romano, & Bortolotti, 2012; Bortolotti et al., 2013) and at the case study results, which both state that JIT has a direct effect on performance. As was explained by the interviewees, HRM does have some supportive activities for JIT, but HRM also has a direct effect on performance. This is confirmed by the survey results, these results show a significant effect of HRM on both JIT and performance in the entire dataset, and in both the non-repetitive and repetitive manufacturing context. In this way both Dal Pont et al. (2008) and Shah & Ward (2003) were right about the role of HRM, but both outcomes should be combined. HRM is suitable ground for JIT, but also has a direct effect on performance.

5.2 Differences between non-repetitive manufacturing and repetitive manufacturing

5.2.1 JIT

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could be made in the importance of JIT for standardized repetitive products and customer specific non-repetitive products. Bortolotti et al. (2013) concluded that product customization did not moderate the effect of JIT on performance. Looking at the results of the case study, an important characteristic of customer specific products may be overlooked by Bortolotti et al. (2013). This important characteristic is the engineering part of the development of a customer specific product. As was clearly stated by both the production director and the head of the production team, the engineering of a new customer specific product is more difficult, and the risks of mistakes and wrong engineering are therefore much higher. The focus has to be on testing the product and making sure that all engineering mistakes are solved. In this process are costs and throughput time less important. It may be even best to put all the needed parts on the production floor and then start with the assembly of the product. Further, could it be necessary to find new suppliers for new specific parts, which takes more time.

5.2.2 HRM

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in temporary employees. Companies do not want to invest in an employee who will only work their temporary and will leave immediately when demand is lower. And when demand increases again a new temporary employee is hired and the same investments should be made. Therefore it is important that HRM hires highly skilled mechanics, which do not need further investments, in for example training, from the company. The combination of these two factors could make it much harder for the HRM department to hire mechanics with the right education when demand is high. Therefore, HRM could be more important in a non-repetitive manufacturing context. Instead of hiring somebody who can learn “a simple trick” and repeat this, a skilled worker has to be found, which are scarcer. And when this skilled worker is found the chances that he has to leave and that after a while a new skilled worker has be found are higher, because of the higher demand variability were non-repetitive firms have to deal with. And as the HR manager explained: “The stricter we deal with hiring temporary

employees and firing them when the demand is lower, the better for the costs”. Therefore, the

HRM department has to be very strict in making it more difficult for themselves.

6. CONCLUSION

This research continues the work of Bortolotti et al. (2013) by further investigating JIT in a non-repetitive manufacturing context and by looking at the role of another lean bundle, HRM, in this non-repetitive manufacturing context compared to a repetitive manufacturing context. The most contradictory finding with earlier research was that HRM has a strong direct effect on performance and that the effect of JIT on performance was insignificant. A possible explanation could be that JIT has become an order qualifier instead of an order winner. Another explanation could be that companies, like the case study company, could have focused on the production department first, by implementing JIT, and that there is a shifting focus towards staff functions, like HRM, now.

Opposite conclusions were drawn in previous research about the role of HRM, Shah & Ward (2003) stated that HRM has a direct effect on performance, but Dal Pont et al., (2008) stated that the effect of HRM on performance was mediated by JIT. This research states that these two outcomes should be combined, and that HRM both has a direct effect on performance and that HRM has supportive activities for JIT.

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one of the major differences between repetitive and non-repetitive manufacturing for the implementation of JIT. The focus with new customer specific products has to be on making sure that all engineering mistakes are solved, and costs and throughput time are less important in this case. Finally, a different role of HRM is proposed that is not yet been taken into account in earlier research. There could be a difference in the role of HRM in a non-repetitive manufacturing context compared to a repetitive manufacturing context regarding the temporary workers. Due to more demand variability, the flexible scale of workers may be larger in non-repetitive manufacturing firms. Temporary workers may be fired more often when demand is low and more temporary workers have to be hired when demand is high. Further, more skills are required from the mechanics, because of the customer specific products with possible engineering mistakes. These two factors could make the role of HRM more important in a non-repetitive manufacturing context.

7. LIMITATIONS AND FUTURE RESEARCH

The first limitation of this research is the small database of non-repetitive manufacturing firms. However, besides this small database the performed statistical analysis resulted in significant outcomes. Further, the case study is conducted at one company, therefore are the results not generalizable. Future research has to be conducted for generalizability of the results. Another limitation is that the case study was only based on three interviews, no additional data sources were used.

New ideas about JIT and HRM in both a repetitive and a non-repetitive manufacturing context are proposed in this research. Further research has to be conducted on this subject to test whether these findings can be generalized. Future research could focus on the possible shifting role of JIT in general from order winner to order qualifier. More specific, future research could focus on the role of JIT in a non-repetitive manufacturing context. In previous research was stated: “JIT has a positive impact on operational performance independently

from the level of product customization” (Bortolotti et al., 2013 p.1125). Contradictory, this

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Just-in-Time and Human Resource Management in Non-Repetitive Manufacturing