Access Type

Open Access Dissertation

Date of Award

January 2017

Degree Type


Degree Name



Industrial and Manufacturing Engineering

First Advisor

Ratna B. Chinnam






May 2017

Advisor: Dr. Ratna Babu Chinnam

Major: Industrial Engineering

Degree: Doctor of Philosophy

Auto parts manufacturing is a key element of the North American automotive supply chain, and a significant component of the economy of Ontario, Canada. Employment in this sector declined 40% from 2003 to 2010 as the industry experienced a recession, and many firms relocated to lower wage jurisdictions as the Canadian currency strengthened against the US dollar. Experts contend that the solution for the industry lies in innovation; however, recommendations found in the current literature are general, with no clear guidance for mass production firms. This situation is urgent, because as manufacturing firms disappear, the potential for innovative opportunity is reduced as well. Mass production firms in high wage rate jurisdictions need to develop a capability of continuous innovation to survive and compete in the global marketplace.

This dissertation addresses this problem through the study of an auto parts manufacturing firm in Ontario, Canada. Theory states that innovation is born of creative ideas from intrinsically motivated individuals, and that every employee in a firm is a potential source of ideas. Employee engagement, a proxy for intrinsic motivation, is defined as giving discretionary effort in achieving company goals, and literature indicates that performance of a firm is proportional to engagement levels of its employees.

To investigate the firm’s potential for innovation, a survey was administered to the firm’s employees to measure engagement levels and theoretical constructs for engagement drivers. A structural equation model was used to analyze the significance of these relationships. Subsequently, factory performance data representative of innovative and improvement behavior was collected for the same time period as the survey, and correlations were examined between work group engagement levels, engagement drivers, and the performance data at the work group level.

Following this, case study research was used to examine how the process of innovation actually happens in the firm. Literature defines creative thinking as a continuous process of problem finding, problem solving, and solution implementing. Three cases of process innovations implemented over a three year period were studied to reveal how the organization executed the creative thinking process, the significance of employee engagement levels and drivers in that execution, and how innovation capabilities improved through experiential learning.

From the two components of the study, a recommendation is offered for how an auto parts firm in a high wage rate jurisdiction can compete with a differentiation strategy by developing a continuous innovation capability. Organizational elements must be aligned in the execution of the three step creative thinking process, so that problems are clearly identified, and the most highly engaged employees are focused on creative problem solving.