How Temporary Assignments Boost Innovation

When front-line manufacturing employees are exchanged between company sites, they contribute more valuable ideas.

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Just as digitalization and automation are transforming the shop floor, they are changing the role of front-line manufacturing employees. Workers increasingly create value not only by performing their core duties but by contributing to broader organizational objectives such as competitiveness and innovation as well. Those with creativity and aptitude for problem-solving have proved particularly valuable: Their front-line perspectives often generate promising process improvements and business opportunities that would not have been apparent to managers. As a result, front-line innovation has become one of the largest sources of sustained competitive advantage in manufacturing industries. At leading companies, up to 75% of annual productivity gains can be traced back to bottom-up ideas from non-R&D employees.1

While front-line innovation is common, the ways in which managers can most effectively support it are not well understood. In our research, we have shown for the first time how strategic front-line mobility — the short, focused, and purposeful exchange of staff members between different company sites — can substantially boost these employees’ contributions to innovation and organizational learning in manufacturing companies.

We engaged in a large-scale study of a multinational, multibillion-euro car parts manufacturer. We collected data on front-line ideas and their economic impact over four years and examined their relationship with individual worker mobility. To arrive at robust managerial insights on the causal effects of worker mobility, we analyzed more than 21,000 ideas submitted by almost 2,500 workers, using advanced econometric methods.2 Key to our analytical approach was matching mobile front-line employees to similar colleagues who did not travel to other plants, which allowed us to precisely estimate the contributions originating from mobility.

Knowledge Transfer and Employee Learning

Our analyses reveal two distinct pathways through which front-line mobility fosters manufacturing innovation.

First, front-line mobility promotes knowledge sharing between factories. By virtue of their experience, shop floor employees frequently possess a wealth of tacit production knowledge at a level of detail that far exceeds what is covered in manuals or is known to engineers. For instance, it is usually the workers on the ground who learn firsthand how to iron out well-intentioned but occasionally impractical processes and product designs. When employees are strategically deployed to different sites, they carry this knowledge with them and help circulate it within the company.

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Topics

Frontiers

An MIT SMR initiative exploring how technology is reshaping the practice of management.
See All Articles in This Section

References

1. F.J. Sting and C.H. Loch, “Implementing Operations Strategy: How Vertical and Horizontal Coordination Interact,” Production and Operations Management 25, no. 7 (December 2015): 1177-1193.

2. P.B. Cornelius, B. Gokpinar, and F.J. Sting, “Sparking Manufacturing Innovation: How Temporary Interplant Assignments Increase Employee Idea Values,” Management Science, published online, Aug. 20, 2020, https://doi.org/10.1287/mnsc.2020.3673.

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