An Experimental Study on the Evolutionary Paths and Development of Capabilities of Local Asian Second Tier Automotive Parts Suppliers-

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Abstract:

For this study, a comparative analysis was conducted on a case study of local Thai, Chinese, and Japanese automotive parts suppliers, and differences in evolutionary paths and processes for development of capabilities were identified. Research by Asanuma provides an evaluative framework for capabilities within the automotive parts industry, and has become accepted as a fundamental tool for this purpose (Asanuma [1989], Asanuma [1997]). It is distinguished by its focus on product design capabilities and its ability to express the evolutionary path of an automotive parts supplier as a formula based on drawing format development, namely from the use of supplied drawings to generation of approved drawings. In contrast, most small and medium Thai and Chinese local automotive parts suppliers focused on in this study are specialized in piece processing or assembly contracting, and thus would receive an unambiguously low evaluation as “in the supplied drawings reception stage” if Asanuma’s framework were applied in their evaluation. However, fieldwork thus far has revealed numerous businesses without product design capabilities that have demonstrated sustained development. With this in mind, this study sets a new evaluative framework for local Thai, Chinese, and Japanese small and medium automotive parts suppliers that accounts for their distinct traits, and evaluates said suppliers’ capabilities using the aforementioned framework.
This new framework introduces two new evaluation axes in addition to the traditional means of evaluation via product design capabilities. The first evaluation axis is for production process design capabilities. Production process design capabilities are an indicator of production line process and equipment improvements, and of value analysis or value engineering capabilities. Even suppliers without product design capabilities can enhance productivity and earn customer loyalty by improving production process design capabilities. The second is domain design capability, which shows the degree of diversification in a business domain. Diversification of customers and business domains enhances the stability of a business base. In this study, parts suppliers were evaluated using a three-dimensional framework consisting of Asanuma’s evaluation axis (product design capability) in combination with axes of production process design capabilities and domain design capabilities.
The methodology adopted for this study was that of direct interviews with businesses. As a rule, at least three research team members visited parts suppliers and asked the representative, factory director, or equivalent supervisor in charge of product, production process, and domain design questions related to the aforementioned fields. Production site inspections were also conducted. Afterwards, results were scored by evaluation category and mapped to Evaluation Figure 1 (product design × production process design) and Evaluation Figure 2 (product/production process design × domain design). At this time, surveys of 15 Thai, 11 Chinese, and 6 Japanese local suppliers have been completed. Furthermore, interviews to bring these totals to 20 Thai, 20 Chinese, and 10 Japanese local businesses are planned for completion by the end of March.
Based on these interim results, it is clear that Thai, Chinese, and Japanese local automotive parts businesses can be divided into two types. The first type are suppliers that aim to enhance product and production process design capabilities simultaneously, and that aim to become approved drawing suppliers. This type is common among Japanese local businesses. The second type are suppliers that actively conduct business diversification (domain design capabilities) while working to enhance production process design capabilities. It has been observed that this type is common among Thai and Chinese local suppliers. Furthermore, this second type was not understood using the traditional Asanuma evaluative framework.
The overall significance of this research lies in its successful demonstration of two evolutionary paths: “manufacturing orientation” and “domain orientation.” This was achieved using three-dimensional evaluation axes of product design, production process design, and domain design. In particular, “domain orientation” is thought to be an evolutionary path unique to Asian local suppliers.