Browse > Article
http://dx.doi.org/10.7232/iems.2015.14.3.236

The Role of Industrial Clustering and Manufacturing Flexibility in Achieving High Innovation Capability and Operational Performance in Indonesian Manufacturing SMEs  

Purwanto, Untung Setiyo (Faculty of Industrial Engineering, Jakarta Islamic University)
Kamaruddin, Shahrul (School of Electrical Engineering, Engineering Campus, Universiti Sains Malaysia)
Mohamad, Norizah (School of Electrical Engineering, Engineering Campus, Universiti Sains Malaysia)
Publication Information
Industrial Engineering and Management Systems / v.14, no.3, 2015 , pp. 236-247 More about this Journal
Abstract
This study aims to examine the effects of industrial clustering and manufacturing flexibility on innovation capability and operational performance. This study follow a survey method to collect data pertaining to the phenomena of industrial clustering, manufacturing flexibility, innovation capability, and operational performance by utilizing a single respondent design. A total of 124 Indonesian manufacturing SMEs are taken to test the proposed theoretical model by utilizing covariance-based structural equations modeling approach. It was found that both industrial clustering and manufacturing flexibility was positively associated with operational performance and innovation capability as well. In addition, innovation capability may account for the effects of industrial clustering and manufacturing flexibility on operational performance. This implies that manufacturing SMEs have to reorient their production and operation perspectives, including agglomerate with other similar or related SMEs to develop and utilize their own resources. The SMEs also need to possess some degree of manufacturing flexibility in respond to the uncertain environment and market changes. In addition, the SMEs should put a greater emphasize to use industrial cluster and manufacturing flexibility benefits to generate innovation capability to achieve high performance.
Keywords
Industrial clustering; manufacturing flexibility; innovation capability; operational performance; manufacturing SMEs;
Citations & Related Records
연도 인용수 순위
  • Reference
1 Sher, J. P. and Yang, Y. P. (2005), The effects of innovative capabilities and R&D clustering on firm performance: the evidence of Taiwan's semiconductor industry, Technovation, 25(1), 33-43.   DOI
2 Tsubone, H. and Horikawa, M. (1999), A Comparison between machine flexibility and routing flexibility, The International Journal of Flexible Manufacturing System, 11(1), 83-101.   DOI
3 Vokurka, J. R. and O'Leary-Kelly, W. S. (2000), A review of empirical research on manufacturing flexibility, Journal of Operations Management, 18(4), 485-501.   DOI
4 Yesil, S., Buyukbese, T., and Koska, K. (2013), Exploring the link between knowledge sharing enablers, innovation capability and innovation performance, International Journal of Innovation Management, 17(4), 331-357.
5 Zawislak, A. P. (2012), Innovation Capability: From Technology Development to Transaction Capability, Journal of Technology Management and Innovation, 7(2), 14-27.   DOI
6 Zeng, S. X., Xie, X. M., and Tam, C. M. (2010), Relationship between cooperation networks and innovation performance of SMEs, Technovation, 30(3), 181-194.   DOI
7 Zhang, Q., Vonderembse, A. M., Lim, J. S. (2003), Manufacturing flexibility: defining and analyzing relationships among competence, capability, and customer satisfaction, Journal of Operations Management, 21(2), 173-191.   DOI
8 Alegre-Vidal, J., Lapiedra-Alcami, R., and Chiva-Gomez, R. (2004), Linking operations strategy and product innovation: an empirical study of Spanish ceramic tile producers, Research Policy, 33(5), 829-839.   DOI   ScienceOn
9 Anderson, J. C. and Gerbing, D. W. (1988), Structural equation modelling in practice: a review and recommended two-step approach, Psychology Bulletin, 103(3), 411-423.   DOI
10 Altenburg, T. and Meyer-Stamer, J. (1999), How to Promote Clusters: Policy Experiences from Latin America, World Development, 27(9), 1693-1713.   DOI
11 Antonioli, D., Mazzanti, M., and Pini, P. (2010), Productivity, innovation strategies and industrial relations in SMEs; Empirical evidence for a local production system in northern Italy, International Review of Applied Economics, 24(4), 453-482.   DOI
12 Arbuthnott, A. (2011), Regional Cooperative and Competitive Forces Driving Industry Cluster Development and Renewal in the Swedish Periphery, Journal of Rural and Community Development, 6(1), 22-48.
13 Baptista, R. and Swann, P. (1998), Do firms in clusters innovate more?, Research Policy, 27(5), 525-540.   DOI   ScienceOn
14 Beskese, A., Kahramana, C., and Irani, Z. (2004), Quantification of flexibility in advanced manufacturing systems using fuzzy concept, International Journal of Production Economics, 89(1), 45-56.   DOI
15 Camison, C. and Vilar-Lopez, A. (2010), An examination of the relationship between manufacturing flexibility and firm performance: the mediating role of innovation, International Journal of Operations and Production Management, 30(8), 853-878.   DOI   ScienceOn
16 Casanueva, C., Castro, I., and Galan, J. L. (2013), Informational networks and innovation in mature industrial clusters, Journal of Business Research, 66(5), 603-613.   DOI
17 Chang, S. C., Yang, C. L., Cheng, H. C., and Sheu, C. (2003), Manufacturing flexibility and business strategy: An empirical study of small and medium sized firms, International Journal of Production Economics, 83(1), 13-26.   DOI
18 Cousens, A., Szwejczewski, M., and Sweeney, M. (2009), A process for managing manufacturing flexibility, International Journal of Operations and Production Management, 29(4), 357-385.   DOI
19 Chen, C. C. (2008), An objective-oriented and productline- based manufacturing performance measurement, International Journal of Production Economics, 112(1), 380-390.   DOI
20 Chiu, Y. T. (2009), How network competence and network location influence innovation performance, Journal of Business and Industrial Marketing, 24 (1), 46-55.   DOI
21 Damanpour, F. and Wischnevsky, J. D. (2006), Re-search on innovation in organisations: Distinguishing innovation- generating from innovation-adopting organizations, Journal of Engineering and Te-chnology Management, 23, 269-291.   DOI
22 Damanpour, F., Szabat, K. A., and Evan, W. M. (1989), The relationship between types of innovation and organizational performance, Journal of Management Studies, 26(6), 587-601.   DOI
23 Das, A. (2001), Towards theory building in manufacturing flexibility, International Journal of production research, 39(18), 4153-4177.   DOI
24 Dayasindhu, N. (2002), Embeddedness, knowledge transfer, industry clusters and global competitiveness: a case study of the Indian software industry, Technovation, 22(9), 551-560.   DOI
25 Fornell, C. and Larcker, D. F. (1981), Evaluating Structural Equation Models with Unobservable Variables and Measurement Error, Journal of Marketing Research, 18(1), 39-50.   DOI
26 Forsman, H. (2011), Innovation capacity and innovation development in small enterprises; a comparison between the manufacturing and service sectors, Research Policy, 40(5), 739-750.   DOI
27 Gunday, G., Ulusoy, G., Kilic, K., and Alpkan, L. (2011), Effects of innovation types on firm performance, International Journal of Production Economics, 133(2), 662-676.   DOI
28 Gnyawali, R. D. and Srivastava, K. M. (2013), Complementary effects of clusters and networks on firm innovation: A conceptual model, Journal of Engineering and Technology Management, 30(1), 1-20.   DOI
29 Guan, J. and Ma, N. (2003), Innovative capability and export performance of Chinese firms, Technovation, 23(9), 737-747.   DOI
30 Guerrieri, P. and Pietrobelli, C. (2004), Industrial districts' evolution and technological regimes: Italy and Taiwan, Technovation, 24(11), 899-914.   DOI
31 Hair, J. F., Anderson, R. E., Tatham, R. L., and Black, W. C. (2006), Multivariate Data Analysis (6th edition), Pearson Prentice-Hall, New Jersey.
32 Hallgren, M. and Olhager, J. (2009), Flexibility configurations: Empirical analysis of volume and product mix flexibility, Omega, 37(4), 746-756.   DOI
33 Hayashi, M. (2002), The role of subcontracting in SME development in Indonesia: Micro-level evidence from the metalworking and machinery industry, Journal of Asian Economics, 13(1), 1-26.   DOI
34 Hendry, C. and Brown, J. (2006), Dynamics of clustering and performance in the UK opto-electronics industry, Regional Studies, 40(7), 707-725.   DOI
35 Hult, G. T. M., Hurley, R. F., and Knight, G. A. (2004), Innovativeness: its antecedents and impact on business performance, Industrial Marketing Management, 33(5), 429-438.   DOI
36 Humphrey, K. and Schmitz, H. (1996), The Triple C Approach to Local Industrial Policy, World Development, 24(12), 1859-1877.   DOI
37 Karuppan, M. C. (2004), Strategies to foster labor flexibility, International Journal of Productivity and Performance Management, 53(6), 532-547.   DOI
38 Iacobucci, D. (2010), Structural Equations Modeling: Fit Indices, Sample Size, and Advanced Issues, Journal of Consumer Psychology, 20(1), 90-98.   DOI
39 Jimenez-Jimenez, D., Sanz-Valle, R., and Hernandez- Espallardo, M. (2008), Fostering innovation: The role of market orientation and organizational learning, European Journal of Innovation Management, 11(3), 389-412.   DOI
40 Karaev, A. et al. (2007), The cluster approach and SME competitiveness: a review, Journal of Manufacturing Technology Management, 18(7), 818-835.   DOI
41 Keizer, J. A., Dijkstra, L., and Halman, J. I. M. (2002), Explaining innovative efforts of SMEs: An exploratory survey among SMEs in the mechanical and electrical engineering sector in The Netherlands, Technovation, 22(1), 1-13.   DOI
42 Kesidou, E. and Szirmai, A. (2012), External Knowledge and Innovation Performance in Clusters: Empirical Evidence from the Uruguay Software Cluster, Industry and Innovation, 19(5), 437-457.   DOI
43 Koste, L. L. and Malhotra, K. M. (1999), A theoretical framework for analyzing the dimensions of manufacturing flexibility, Journal of Operations Management, 18(1), 75-93.   DOI
44 Larso, D. and Doolen, T. (2009), Development of a manufacturing flexibility hierarchy through factor and cluster analysis; the role of new product type on US electronic manufacturer performance, Journal of Manufacturing Technology Management, 20(4), 417-441.   DOI
45 Lin, C. H., Tung, C. M., and Huang, C. T. (2006), Elucidating the industrial cluster effect from a system dynamics perspective, Technovation, 26(4), 473-482.   DOI
46 Morosini, P. (2004), Industrial Clusters, Knowledge Integration and Performance, World Development, 32(2), 305-326.   DOI
47 Lin, G. T. R. and Sun, C. C. (2010), Driving industrial clusters to be nationally competitive, Technology Analysis and Strategic Management, 22(1), 81-97.   DOI
48 Llorens, J. F., Molina, M. L., and Verdu, J. A. (2005), Flexibility of manufacturing; systems, strategic change and performance, International Journal of Production Economics, 98(3), 273-289.   DOI
49 Massa, S. and Testa, S. (2008), Innovation and SMEs: Misaligned perspectives and goals among entrepreneurs, academics, and policy makers, Technovation, 28(7), 393-407.   DOI
50 Muscio, A. (2006), Patterns of Innovation in Industrial Districts: An Empirical Analysis, Industry and Innovation, 13(3), 291-312.   DOI
51 Nunnally, J. (1978), Psychometric Theory, McGraw-Hill, New York.
52 OECD (2000), Small and Medium-Sized Enterprises: Local Strength, Global Reach, Policy Brief, Organisation for Economic Co-operation and Development Eurostat, Paris.
53 OECD (2005), The Measurement of Scientific and Technological Activities, Oslo Manual, Guidelines for Collecting and Interpreting Innovation Data, 3rd ed., Organisation for Economic Co-operation and Development Eurostat, Paris.
54 Oke, A. (2011), Linking manufacturing flexibility to innovation performance in manufacturing plants, International Journal of Production Economics, In Press, Available online 14 September 2011.
55 Oke, A. et al. (2007), Innovation types and performance in growing UK SMEs, International Journal of Operations and Production Management, 27(7), 735-753.   DOI   ScienceOn
56 Porter, M. E. (2000), Location, competition, and economic development: Local clusters in a global economy, Economic Development Quarterly, 14(1), 15-34.   DOI
57 Pagell, M. and Krause, R. D. (2004), Re-exploring the relationship between flexibility and the external environment, Journal of Operations Management, 21(6), 629-649.   DOI
58 Panayides, P. (2006), Enhancing innovation capability through relationship management and implications for performance, European Journal of Innovation Management, 9(4), 466-483.   DOI
59 Petroni, A. and Bevilacqua, M. (2002), Identifying manufacturing flexibility best practices in small and medium enterprises, International Journal of Operations and Production Management, 22(8), 929-947.   DOI
60 Porter, M. E. (1998), Clusters and the new economics of competition, Harvard Business Review, 76(6), 77-90.
61 Raymond, L. and St-Pierre, J. (2005), Antecedents and performance outcomes of advanced manufacturing systems sophistication in SMEs, International Journal of Operations and Production Management, 25(6), 514-533.   DOI
62 Rhee, J., Park, T., and Lee, H. D. (2010), Drivers of innovativeness and performance for innovative SMEs in South Korea: Mediation of learning orientation, Technovation, 30(1), 65-75.   DOI
63 Rosenbush, N. et al. (2011), Is innovation always beneficial? A meta-analysis of the relationship between innovation and performance in SMEs, Journal of Business Venturing, 26(4), 441-457.   DOI   ScienceOn
64 Sanchez, M. A., Vela-Jimenez, J. M., Perez-Perez, M., and Luiz-Carnicer, D. P. (2009), Managerial perceptions of workplace flexibility and firm performance, International Journal of Operations and Production Management, 27(7), 714-734.   DOI