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Exploring Adoption of Logistics and Supply Chain Techniques and Strategies in the Thai

Automotive Industry

Taweesak TheppitakDBA 6 Bangkok, ID No. 100009170 Thailand

E-mail : taweesak99@hotmail.com

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Scope of the Presentation

Problematic situations of Thai automotive Industry

Objectives & expected benefits Literature review Conceptual framework Research methodology Finding results Research Implications Conclusion

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Problem statements

High level of inventory and non-inventory Lack of logistics knowledgeLow productivity of production Lack of knowledge related to sales and

demand forecasting. Slow response to customer’s

requirements.Lack of competitive advantage.

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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.

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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.

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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

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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

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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?

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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.

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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.

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Finding resultsTable 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 3.2

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Finding resultsTable 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 4.30

5. Increasing market share 4.17

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Finding resultsTable 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 100.0Table 6 Perception on important level of logistics and supply chain techniques and

strategies

X

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

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Finding resultsTable 7 Efficiency and Effectiveness of adopting logistics and SC techniques and strategies

X

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 4.08

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

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Summary of testing hypothesis

Variable

Correlation p-value

Independent Dependent

X Y +0.762 0.000*

Z1

Z2

X +0.654+0.770

0.000*0.034*

Z1

Z2

Y +0.454+0.670

0.000*0.004*

X - Degree of importance level that company having on

adoption of logistics & SCM Techniques

Y - Organisational Effectiveness

Z - Factors affecting to

logistics strategy

implementation

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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.

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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.

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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)

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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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Question?? Or

Comment!!!

Exploring Adoption of Logistics and Supply Chain Techniques and Strategies in the Thai

Automotive Industry