DBA 6 Bangkok, ID No. 100009170 Thailand Exploring Adoption of Logistics and Supply Chain Techniques and Strategies in the Thai Automotive Industry Taweesak Theppitak DBA 6 Bangkok, ID No. 100009170 Thailand E-mail : taweesak99@hotmail.com

Scope of the Presentation Problematic situations of Thai automotive Industry Objectives & expected benefits Literature review Conceptual framework Research methodology Finding results Research Implications Conclusion

Problem statements High level of inventory and non-inventory Lack of logistics knowledge Low productivity of production Lack of knowledge related to sales and demand forecasting. Slow response to customer’s requirements. Lack of competitive advantage.

Objectives The aim of this paper is: To explore the status and pattern for adoption of logistics and SC techniques in Thai automotive companies. To examine factors affecting logistics and SC technique formulation and implementation. To evaluate the degree of effectiveness and efficiency, after implementing logistics techniques.

Expected Benefits of the Study How to improve sustainable competitive advantage of Thai automotive companies. How we assist these companies for establishing and implementing logistics techniques. How we can overcome problems and obstacles in establishing and implementing logistics techniques.

Literature review Definition of logistics & supply chain. Role of logistics & supply chain in automotive industry. Type of logistics and supply chain strategies and techniques (JIT, QR, ABC, EOQ, E-commerce, MRPI, Lean). How to design and implement logistics and supply chain strategy. Factors affecting to design and implementation in specific industry, in particular automotive industry. Effectiveness and efficiency of logistics strategy adoption in specific industry

Z - Factors affecting to logistics strategy implementation Conceptual framework Effectiveness would occur, in case of use or not use logistics techniques If companies adopt the techniques, what and how companies would do. X - Degree of importance level that company having on adoption of logistics & SCM Techniques Y - Organisational Effectiveness Z - Factors affecting to logistics strategy implementation

Research Questions The following research questions were utilized: What are the roles of logistics and SCM for enhancing an organisation’s competitive advantage within the Thai automotive industry? What status are Thai automotive companies giving to the adoption of logistics and SC techniques? What is motivating interest to adopt logistics and SC techniques? What factors are influencing the adoption of logistics and SC techniques and strategies in the Thai automotive industry, and how? How do other factors influence or contribute to organisational effectiveness?

Research Methodology Exploratory research is initially used. Data collection is conducted in 2 dimensions: Secondary data Literature review Primary data Questionnaire surveys 110 questionnaires were distributed to samplings, and 89 questionnaire were returned, as rate of return equaled 80.9 percent. Questionnaire (Postal mail, fax, email, face-to-face) Depth-interview In-depth interview was conducted through 20-35 companies. Observation Automotive companies in Thailand.

Research Methodology Data processing & analysis SPSS – factor analysis, correlation, and multiple regression Content analysis Validity and Reliability will be examined. Limitation of the study Low budget for the research (3,000 US$ or 120,000 baht). Companies lack understanding definition and how to use logistics & SCM techniques.

Finding results Table 1 Characteristic of the respondents Type of Business Per Cent 1. Original Equipment Manufacturers (OEM) 92 2. Replacement Equipment Manufacturers (REM) 8 Table 2 Duration of Business Establishment Time Duration Percent 1. 1-10 Years 71.4 2. 11-20 Years 22.2 3. 21-30 Years 3.2 4. More than 30 Years

Finding results Table 3 Using logistics system in activities in respondents’ organisation Major activity Percent 1. Material management 46.4 2. Physical distribution 34.5 3. Sharing information 12.0 4. Developing information technology 4.8 5. Reverse logistics 2.3 Table 4 Motives influencing on adoption of logistics and SC techniques & strategies Motivating forces Mean 1. Responding customers’ need 4.63 2. Reducing total costs 4.52 3. Improving service level 4.30 4. Building unique standard to the organization 5. Increasing market share 4.17

Logistics & supply chain technique and strategy Finding results Table 5 Factors influencing on adoption of logistics and SC techniques and strategies Factors Percent 1. Pressures from customers 32.0 2. Pressures from intense competition 28.0 3. Organisational cultures 18.0 4. Increasing of Fuel Prices 12.0 5. Lack of skills and competency related to logistics & SCM 10.0 Total 100.0 Table 6 Perception on important level of logistics and supply chain techniques and strategies Logistics & supply chain technique and strategy 1. Quick Response (QR) 4.46 2. Just In Time (JIT) 4.35 3. Material Requirements Planning (MRP I, MRPII) 4.14 4. Economy Order Quantity (EOQ) 3.87 5. Activity Based Costing (ABC) 3.73 6. Lean Concept 3.71 7. Electronic Commerce (E-Commerce) 3.46

Effectiveness on Adoption of logistics & supply chain techniques Finding results Table 7 Efficiency and Effectiveness of adopting logistics and SC techniques and strategies Effectiveness on Adoption of logistics & supply chain techniques Mean 1. Responding customers’ need 4.35 2. Improving higher service levels 4.19 3. Reducing total costs 4.10 4. Improving higher productivity 4.08 5. Enhancing profitability 6. Effectively and efficiently managing business operations 4.06 Table 8 Evaluation effectiveness after adoption logistics and SC techniques Factors Percent Strongly agree 42.0 Agree 28.0 Neutral 10.0 Disagree 12.0 Strongly disagree 8.0 Total 100.0

Summary of testing hypothesis X - Degree of importance level that company having on adoption of logistics & SCM Techniques Y - Organisational Effectiveness Z - Factors affecting to logistics strategy implementation Variable Correlation p-value Independent Dependent X Y +0.762 0.000* Z1 Z2 +0.654 +0.770 0.034* +0.454 +0.670 0.004*

Finding results Most companies have been using, at least, one of logistics techniques. One of difficulties is how to identify which logistics activities would be considered for adoption of logistics techniques. How to establish and implement a logistics technique for Thai companies. Logistics knowledge and practices would be a weaken point to Thai companies.

Finding results The result shows that companies perceived to the benefits of logistics and SCM. Major pressures come from intense competition and requirement of their customers. Companies focus mostly on improving to inbound side or material management. Major aims are to respond to customer’s need, reducing costs and improving service level respectively. Popular techniques are QR, JIT, MRPI respectively. Companies would increasing focus on using ABC, Lean, Agile and e-commerce.

Research Implications It needs to encourage or motivate Thai automotive companies to learn and adopt more on logistics and SCM. Concern parties would encourage and support the companies for establishing and implementing logistics and SCM techniques. Objectives of adoption would be clear and concise, and fit with the company’s environments. Success to the adoption would depend on matching between logistics using and company’s environments (structure, system, process, style, and culture)

Conclusion Companies provide a different degree on important level for adoption of logistics techniques. The study shows that there is strong relationship between adoption of logistics techniques and the company’s effectiveness. The study reflects that increasing adoption of logistics techniques would enhance higher effectiveness. There is a medium relationship between factors influencing on adoption of logistics techniques and company’s effectiveness. Companies balance and increasingly focus their interests on both inbound and outbound activities. Companies have lesser degree of importance on reverse logistics. The study leads to the conclusion that Thai automotive companies would enhance competitive advantage through effective designing, implementing logistics techniques.

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