Production competence and competitive advantage in process industries

Abstract

New technological innovations and customer demands have forced process industries to adapt their traditional emphasis on operational efficiency and embrace the challenges faced by emergent manufacturers and service sectors. These will only be met if process industries are able to integrate disparate production-related functions to accommodate new technology. This paper investigates how production competence enhances technology-based competitive advantage in process industries. A survey of the literature and a preliminary study of 20 process firms raised a series of questions that were investigated further using two case studies. The analysis demonstrates that competitive advantage requires integration between operations, technology and asset management through matching production requirements with the inherent capability of equipment and an understanding of equipment of functionality. Production competence is acquired through a learning mindset, which relies on an investigation of critical unknowns. Competitive advantage derives from tacit knowledge, and complex interdependencies between novel technology and organisational elements, and is enhanced by informal exploration and testing.