Advanced Production Practices and Performance: Empirical Evidence from Spanish Plants

This paper presents an empirical study that analyses the effect of applying three Advanced Production Practices (APPs) (Total Quality Management-TQM, Just in TimeJIT, and Total Productive Maintenance-TPM) on business performance measured with financial and non-financial (or operational) indicators. The study was conducted on a sample of Spanish companies in the automotive components, electronics and machinery sectors that took part in the 3rd Round of the High Performance Manufacturing (HPM) Project. The results of an analysis using Partial Least Squares (PLS) show that only two of the nine implementation indicators for the APPs being analyzed (process emphasis in TQM, and JIT delivery by suppliers) are positively related with non-financial performance. No significant relationship was found with financial performance, or between operating and financial performance. However, it should be borne in mind that the small size of the sample used in this study only enables strong relationships to be detected; a larger sample would be required to detect moderate or weak relationships.