Antecedents and performance outcomes of advanced manufacturing systems sophistication in SMEs

Purpose – In order to deepen one's knowledge and further build theory on the implementation and use of advanced manufacturing systems (AMS) in small and medium‐sized enterprises (SMEs), the present research seeks to explore the following questions: What is the present level of AMS sophistication in SMEs? What characteristics of the SMEs' strategic, organizational and entrepreneurial context are associated with higher levels of AMS sophistication? And what are the operational and business performance impacts of this sophistication for small and medium‐sized manufacturers? Design/methodology/approach – A survey of 248 Canadian manufacturers was used to collect data that were analyzed by structured equation modeling. Findings – AMS sophistication significantly impacts both the operational performance and the business performance of SMEs. Antecedents of this sophistication include the education and experience of the owner‐manager, the strategic orientation of the firm, the type of production, and the commercial dependency of small manufacturers. Research limitations/implications – The nature of the sample and perceptual nature of certain measures impose care in generalizing the results of the study. Future research should examine environmental factors (e.g. environmental uncertainty) and structural factors (e.g. structural complexity) in particular for added explanatory power of AMS sophistication. Practical implications – Small business managers, wanting to increase their firm's manufacturing flexibility, reduce costs, improve quality, and eventually increase profitability, should look at the present level of AMS sophistication in conjunction with their strategic intent. Originality/value – Given the dearth of empirical knowledge in this regard, the present study has contributed to a better understanding of the nature and state of AMS sophistication in small manufacturing firms, and of the antecedents and outcomes of this sophistication.