Many manufacturing firms, driven by the goal of beating the competition, have relocated their manufacturing operations from a high to a low cost environment, creating issues for the western social welfare. In order to maintain manufacturing in high cost environments, firms located in such environments must improve their competitiveness. Research has shown that firms need to be able to identify, develop and improve the operations capabilities that have the highest impact on the competitiveness. However, there is presently no coherent and contemporary framework of operations capabilities in the literature. There is also a lack of knowledge about operations capabilities in a high-cost environment. Therefore, the purpose of this research is to investigate critical operations capabilities in a high-cost environment. This purpose has been addressed through two studies. The first investigated critical operations capabilities in a general environment, and was conducted through a systematic literature review (Paper I). The second study investigated critical operations capabilities in a high cost environment and was conducted through a focus group (Paper II) and a multiple case study (Paper III). The result of this research is a framework of operations capabilities in a high cost environment. The framework includes seven dimensions and 23 operations capabilities. Specifically, the dimensions are: cost, quality, delivery, flexibility, service, innovation and environment. The findings revealed that quality is considered as the most critical dimension in a high cost environment, while environment is considered as the least critical in a high cost environment. The findings also revealed two additional operations capabilities in the empirical data, which are 'flow efficiency' and 'employee flexibility'. This research contributes to the current body of knowledge by introducing a novel perspective and original thinking about operations capabilities in a high cost environment. The framework of operations capabilities could support both practitioners and researchers in the identification and development of critical operations capabilities for winning strategies in a high cost environment.

Purpose – The purpose of this thesis is to identify the critical competitive priorities and capabilities that enables competitive manufacturing in the high cost environment of Sweden and how these can be improved to increase manufacturing performance. Method – The purpose of this thesis was achieved through two main research methods. First a systematic literature review was conducted in order to condensate the existing literature on competitive priorities and capabilities. Secondly a case study was conducted in order to examine the identified competitive priorities and capabilities in the context of a high cost environment. Findings – Initially, a set of articles were identified and included in the literature review. Through an analysis of the included articles, a framework was created including competitive priorities and competitive capabilities. A comparison between the framework and the empirical data collected at the case company identified a number of priorities and capabilities considered critical for competitive manufacturing in a high cost environment. The literature review revealed a set of improvement actions and methods that could be used to improve the identified critical competitive priorities and capabilities in order to increase manufacturing performance. Implications – The thesis makes a theoretical contribution by condensing the existing literature on competitive priorities and capabilities in a high cost environment, and creates a starting point for future research. Further it makes a practical contribution by providing awareness for practitioners regarding priorities and capabilities, what may be important in the future, and how these could be improved. Limitations – This study identifies how critical priorities and capabilities can be improved, however, it does not specify how they can or should be applied and used. Additionally, the inclusion criteria in the systematic literature review did not include improvement actions and thus other suggestions for improvements may not be included. The case study was limited to one company, making the result difficult to generalize.

Background: The movement of production to low cost countries has been a prominent trend during recent decades. The offshoring trend has primarily been cost motivated and has had a negative impact on domestic economic growth. Manufacturing firms operating in a high cost environment must strive to develop core capabilities to enhance competitiveness. In this study, the focus is on operations capabilities and improvement areas in a specific context (i.e. high cost environment). Purpose: The purpose of the study is to evaluate critical operations capabilities and improvement areas for competitive manufacturing in a high cost environment. Method: The research process is based on the evaluation of an existing framework of operations capabilities in a high cost environment. The study adopts a multiple case study approach in which three Swedish manufacturing firms are evaluated. The data collection was conducted through a quantitative part (i.e. questionnaire) and a qualitative part (i.e. workshop discussion). Findings: The findings revealed that 16 operations capabilities and ten improvement areas were considered critical in a high cost environment. Four critical capabilities (i.e. total cost, productivity, conformance and customization flexibility) are more prominent and appear in all three cases. Two critical improvement areas, total cost and dependability, are more prominent and have a higher occurrence. Implications: The practical implication of the study provides firms with an overview and better understanding of critical operations capabilities and potential improvement areas in a high cost environment. The theoretical implication of the study is that firm characteristics (e.g. size and position in the supply chain) influence the importance of each capability.