Transmuting performance on manufacturing dimensions into business performance: an exploratory analysis of efficiency using DEA

This research examines efficiency in the transformation of performance on manufacturing competitive dimensions into business performance in the automotive supplier industry. Specifically, the study explores efficiency produced from data envelopment analysis (DEA) using cost, quality, time, flexibility and innovativeness performance as inputs and return on investment (ROI) and return on assets (ROA) as outputs. First tier suppliers to the 'Big 3' in North America were sampled. The 51 suppliers were categorized into three groups (high, medium and low) based on their efficiency. No significant group differences in quality, time, flexibility and innovativeness performance were found, but a significant difference does exist for cost. The results were further investigated by testing between-group differences for various cost reduction programmes, thereby identifying the levers and benchmarks for improving low efficiency firms.