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

Cornelius, P; Gokpinar, B; Sting, F; (2020) Sparking Manufacturing Innovation: How Temporary Interplant Assignments Affect Employee Idea Values. Management Science (In press). Green open access

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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 with high functional overlap 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).

Type: Article
Title: Sparking Manufacturing Innovation: How Temporary Interplant Assignments Affect Employee Idea Values
Open access status: An open access version is available from UCL Discovery
Publisher version: https://pubsonline.informs.org/journal/mnsc
Language: English
Additional information: This version is the author accepted manuscript. For information on re-use, please refer to the publisher’s terms and conditions.
UCL classification: UCL
UCL > Provost and Vice Provost Offices
UCL > Provost and Vice Provost Offices > UCL BEAMS
UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of Engineering Science
UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of Engineering Science > UCL School of Management
URI: https://discovery.ucl.ac.uk/id/eprint/10095067
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