Production Management in New Zealand: Is Education Relevant to Practice?


Literature Review

Green, Newsom, and Jones (1977) surveyed American Fortune 500 companies to gather information on their use of quantitative production and operations management (POM) techniques, and the barriers to their use. Of the 19 techniques surveyed, only 7 were of frequent use or extensive use - network analysis, inventory models, linear programming, time series analysis, regression and correlation analysis, analysis of variance, statistical sampling. The main barriers to the use of quantitative techniques were: benefits of using the techniques not being clearly understood by managers, managers' lack of knowledge of the techniques, and managers not having been exposed to quantitative techniques early in their training. All of these indicate that lack of knowledge is the prime reason for not using the techniques.

Berry, Watson and Greenwood (1978) asked POM practitioners about the frequency of use of 22 POM topics. Practitioners indicated appropriate educational coverage for the topics. Academics provided information on current educational coverage of these topics in introductory POM courses and on what the ideal coverage would be. The practitioners’ desired coverage matched their frequency of use of the topics quite closely. Similarly, the academics were currently covering the topics pretty close to their ideal level. But there was a wide divergence between the views of the practitioners and the academics. Practitioners would allow two-thirds of the total time to concepts - oriented topics (and one-third to technique - oriented topics). But the academics would allow about equal time to these different orientations. Seven of the eight topics favoured by academics could be considered analytical techniques, while nine of the eleven topics favoured by practitioners could be considered production concepts. Possible explanations of this discrepancy offered by the authors were: practitioners’ lack of familiarity with some of the analytical techniques, practitioners’ lack of understanding on how some of the concepts such as human / monetary aspects are taught in courses without the POM banner, ease of teaching / testing analytical techniques, students’ better response to analytical techniques, or unavailability of concepts related teaching materials. Later, Berry and Lancaster (1992) used a revised list of 22 production management topics to solicit views of practitioners only. The new data again reinforced the importance of concept related topics to the practitioners.

Two significant studies of qualifications, careers, and jobs of British production managers have been reported (Lockyer and Oakland, 1983; Oakland and Sohal, 1989). Lockyer and Oakland (1983) found that production managers spent most of their time (30%) in directly facilitating production. Improvements to processes and products and labour/staff relations claimed the second (20.6%) and third (17.9%) slice of their time. Lockyer and Oakland (1983) also demonstrated the lack of use of POM techniques. Economic order quantity (57%), critical path analysis (52%), and classification and coding (50%) were the three most frequently used techniques. This study reinforces the dissonance between the practice and teaching of production management - POM techniques were not used in practice to a great extent. The latter paper by Oakland and Sohal (1989) found that essentially the same condition prevailed ten years later, although some improvements could be noticed, particularly in the education of production managers. This latter report also pointed out the need for training production managers in information technology, computer aided manufacturing, and finance and management accounting.

For certain decision areas, the extent of responsibility of the production managers, the extent of complexity and difficulty, and the proportion of time spent were surveyed by Wild (1984). The highest extent of responsibility were in the areas of work design, quality assurance, factory layout, capacity planning, and productivity. Production managers found decision making in the areas of productivity, capacity planning, and process design the most complex. They spent the most of their time in the areas of productivity, capacity planning, and production control. They reported that they needed to interface most with the departments dealing with human resource, marketing, and design. They pressed the highest emphasis on skills in managing people ahead of problem solving skills and technical skills. They thought skills in analytical/quantitative techniques, which are emphasised by POM curriculum, were lower in importance. In the future, they saw computers, manufacturing automation, and productivity improvement as affecting their job the most. Wild's study, although a little dated, showed the curriculum areas on which production management instructors should stress most - people skills, productivity measurement and improvement, work design, quality, layout, capacity planning, and production control, and inter-functional issues with marketing and design. Studies done in India (Mohanty and Nair, 1987) and Singapore (Tan, 1990) essentially reinforced Wild's (1984) findings in United Kingdom, although there were few differences in emphasis.

In a survey of British manufacturing industry, Oakland and Sohal (1987a, 1987b) examined the usage of POM techniques and barriers to the acceptance of these techniques. The top five traditional techniques were: budgetary control, payback period, return on investment, standard costing and reorder level stock control; and the top five OR/statistical techniques were: stock control based on reorder level/cycle, forecasting, economic order quantity, statistical sampling and experimental design. The top three barriers to use of both kinds of techniques were: No knowledge, not applicable, and successful without using the technique. Significantly, more than half the respondents did not use more than half of the techniques surveyed, and as for most of the people who did not use the techniques much, they either did not know the techniques or if they knew, did not think the technique was applicable. This certainly brings into sharp focus the question of relevance of POM techniques. However, rather than questioning the relevance of POM techniques per se, the authors suggest teaching the techniques in a way that would illustrate their applicability and benefits. This study also sought to establish the relationship between previous POM training and technique usage. It concluded that POM training was a significant factor in the usage of techniques.

Malhotra (1996) points out that the current focus of modelling methodology in the POM discipline has narrowed the relevance of POM teaching and research. He has suggested five approaches to make POM teaching and research more relevant. He stresses the need for empirical research with an emphasis on strategic decision making in POM, along the lines of other social science research. Traditional modelling research should be rooted in practice; the POM research and curricula need to be more internationalised in the face of growing globalisation; POM teaching should move away from the narrow functional outlook to a more cross-functional perspective; journal editors and reward systems should encourage more relevant POM research. The increasing importance of international pedagogy was pointed out also by Schmenner (1995).

Production management in New Zealand

Very few published studies of production management practices in New Zealand are available. Turner and Radford (1981) essentially replicated the study of the production manager done in the UK (Lockyer and Oakland, 1983). In comparison to the British production manager, the New Zealand production manager was found to control fewer subordinates, but to be responsible for a wider variety of functions. The New Zealand production executive was more happy with their job than their British counterpart. While the British study lamented the educational levels of the British production manager, the educational level of the New Zealander was found to be even lower. Thus Turner and Radford (1981) make a plea to provide further training to production executives.

Daellenbach (1975) in his survey of the penetration of operations research in New Zealand found that the top application areas were: inventory control, sales forecasting, production planning and scheduling, and critical path scheduling; all of which are applicable to production management.

Corbett (1991), as part of the global manufacturing futures survey, assessed the competitive priorities and perceived strengths of New Zealand manufacturers. The results of NZ survey were compared with other international surveys. He found that, in general, NZ manufacturers have similar competitive priorities to the other countries that were surveyed. The NZ respondents perceived their price and performance as weak areas. Corbett and Bayly (1991) surveyed just-in-time (JIT) implementers in New Zealand to determine the perceived benefits, success factors, and problems related to JIT implementation. The respondents reported the implementation as beneficial to them in many respects, but it needed hard work and commitment. They did not find it suitable for all manufacturing operations, specially where overseas suppliers were involved. This survey targeted known JIT implementers. Hyde, Basnet and Foulds (1995) concluded from their survey of New Zealand manufacturers that the prevalence of world class manufacturing practice was low, although some exceptions existed. The low educational levels of the work force and their supervisors, and the isolation of New Zealand were seen as formidable barriers to the diffusion of world class practices in manufacturing.

In a survey of tertiary operations management programmes in New Zealand, Robb and Heyl (1996) lament that few papers were dedicated to areas such as time-based competition, flexibility, new product / service development, process improvement, project management, and international operations management. However, they believe that the university faculty were responsive to the demands for skills in modelling, problem solving / critical thinking, strategic thinking, and group work.

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