Developing Effective Measures of Organizational Capability of Manufacturing Firms: An Exploratory Case Study of Japanese Manufacturing Firms

Takahiro Fujimoto, Mitsuhiro Fukuzawa, Young Won Park*, Paul Hong

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review


The present article explores the flow-oriented and routine-based concept of organizational capability in manufacturing and proposes a practical method of measuring it by using the flow map of material and information (FMMI), including the value stream map (VSM). The environment surrounding manufacturing companies is becoming increasingly turbulent, making it increasingly difficult for them to survive and prosper. For example, global companies face challenges on multiple fronts such as international trade tensions, pandemic lockdowns, and competitive challenges from firms in emerging economies. In addition, in digital markets, supply chain transparency and resiliency require visualizing the flow of materials and information across a wide range of global activities. Business activities are conceived as flows of design and control information from across functions for value creation and transfer. A high level of value creation is built on the excellence of vital function. In this context, this study aims to identify key characteristics of high-performance firms. In particular, the flow map of material and information (FMMI) assumes simultaneous execution of capability-building and capability-measuring. This research team reports the series of workshops and survey results based on (1) the work of the industry-university consortium, (2) the collaborative learning process through trust and information sharing among participating companies, (3) sharing improvement activities, and (4) identifying areas of poor flow (issues for each company). In addition, several selected case studies of Japanese firms highlight the impact of using FMMI for improving multiple performance outcomes and measuring their manufacturing capabilities at the same time. The lessons and implications are discussed.

Original languageEnglish
Article number14811
JournalSustainability (Switzerland)
Issue number22
Publication statusPublished - 2022 Nov


  • action research
  • dynamic capability
  • industry-university consortium
  • measures of organizational capability
  • mutual learning
  • organizational capability
  • the flow map of material and information (FMMI)

ASJC Scopus subject areas

  • Computer Science (miscellaneous)
  • Geography, Planning and Development
  • Renewable Energy, Sustainability and the Environment
  • Building and Construction
  • Environmental Science (miscellaneous)
  • Energy Engineering and Power Technology
  • Hardware and Architecture
  • Computer Networks and Communications
  • Management, Monitoring, Policy and Law


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