Indian Auto Component Industry Research Articles

Mapping the linkage between Organizational Culture and TQM The case of Indian auto component industry

Mapping the linkage between Organizational Culture and TQM The case of Indian auto component industry

Identification and evaluation of determinants of competitiveness in the Indian auto-component industry

Purpose The purpose of this paper is to identify dimensions of competitiveness, factors affecting the competitiveness and building the framework of competitiveness for the Indian auto-component industry and further develop and validate a survey instrument based on the identified factors. Design/methodology/approach Dimensions of competitiveness and factors affecting it are extracted out after extensive literature review. A theoretical framework is developed using these factors. A survey instrument is developed based on the theoretical framework and validated through a pilot survey. Findings In total, 30 variables are found to be reliable in establishing the potential indicators of competitiveness. There are three significant contributions to the theory of competitiveness. It provides a theoretical framework of competitiveness to address the current market conditions of volatility. Second, it incorporates the dimensions like supply chain management, presence of global value chains and employee empowerment. Third, it clearly identifies the dimensions of competitiveness relevant in current context, like ethical behavior of firms, protection of intellectual property and innovation. Practical implications The proposed approach provides a good basis for assessing the competitive performance of the companies. This can help researchers and practitioners in deciding how to improve the competitiveness of a company. Originality/value The research proposes a theoretical framework for measuring the competitiveness of firms from a specific industry. This study indicates the factors affecting the competitiveness of Indian auto-component industry. The findings can be useful for both researchers and practitioners.

Examining sustainable supply chain management of SMEs using resource based view and institutional theory

The long-term viability of an organization hinges on social, environmental, and economic measures. However, based on extensive review of the literature, we have observed that measuring and improving the sustainable performance of supply chains is complex. We have grounded our theoretical framework in institutional theory and resource-based view and drawn thirteen hypotheses. We developed our instrument scientifically to validate our model and test our research hypotheses. The data was collected from the Indian auto components industry following Dillman’s total design test method. We gathered 205 usable responses. Following Peng and Lai’s (J Oper Manag 30(6):467–480, 2012) arguments, we have tested our model using variance-based structural equation modeling (PLS-SEM). We found that the constructs used for building our theoretical model possess construct validity and further satisfy the specified criteria for goodness of fit. The hypotheses test further suggests that coercive pressures under the mediation effect of top management belief and participation have significant influence on resource selection (i.e. supply chain connectivity and supply chain information sharing). The supply chain connectivity and supply chain information sharing have significant influence on environmental performance. Contrary to our belief, the normative and mimetic pressures have no significant influence on top management participation. The managerial implications of the findings are also discussed.

Disruptive innovation through a dynamic capabilities lens: an exploration of the auto component sector in India

Innovation has gained momentum for the development; spread; and survival of auto industrial firms in India. In this paper; we study the less-explored aspect of organisational response focusing on discontinuous innovation. The Indian auto sector requires a tool for long-term market dominance; particularly owing to the rapid change in the business environment. This can be achieved through a special kind of discontinuous innovation known as disruptive innovation (DI). We further affirm how developing DI is facilitated by the firm's dynamic capability (DC); to substantiate our claims; we develop and utilise a survey instrument to test a hypothesised model with responses from various firms affiliated with the Indian auto component industry. Our findings confirm the positive roles of DC and research and development (R&D) expenditure as antecedents to DI. We further conduct exploratory analysis to study factors such as R&D and environmental turbulence as moderators of the DC-DI relationship. We offer the following contributions: the operationalisation of DC and DI for the Indian context, a sector specific study and critical results pertaining to moderating role of R&D and environmental turbulence on the positive DC-DI relationship.

'Make in India' - A Boost to the Auto Component Industry

The Indian automotive component industry is small in size compared to the world market (INR 740,000 Crores). The industry has been experiencing a high growth rate of 27 % over the period 2001-06 and is expected to grow at a rate of 13 % over the period 2006-15. The quality of components made in India has improved significantly in the last decade and about 11 Indian auto component companies have won the Deming prize so far. India is estimated to have the potential to add up to US$30 Billion by FY 20-21 and to become one of the top five auto component economies by 2025.The industry currently accounts for almost 7% of India’s gross domestic product (GDP) and employs about 19 million people, both directly and indirectly. Phased Manufacturing Programme (PMP) for new projects in New Industrial Policy 1991 and for existing projects in 1994 has been abolished. This followed by Auto Policy 2002 enactment with a Vision: To establish a globally competitive automotive industry in India and to double its contribution to the economy by 2010. The ever-increasing development in infrastructure, big domestic market, increasing purchasing power and stable government framework have made India a favourable destination for investment, as per the vision of Automotive Mission Plan (AMP) 2006–2016.The growth of Indian Auto Component Industry in the little over first decade of the 21st Century is phenomenal. The Industry transformed gradually in stages from serving just Indian market – majority to replacement market - to global OEMs and replacement market(Velury Vijay). Many joint ventures have been set up in India with foreign collaboration. India ranks just behind China with the world’s second largest population at over 120 crore people. (Singh Amarjit et.al). This research paper highlights the growth of Indian Auto Component Industry relating with investment.

Narrative Analysis of Annual Reports - A Study of Communication Efficiency

Content analysis of annual reports has been a strong research theme in the fields of business communication and corporate governance. We examine the quality and efficiency of corporate annual report disclosures in malevolent environments. We study Indian automobile industry annual reports encompassing the global recession period, viz., 2007-08 through 2011-12.We content analyze the Management Discussion and Analysis sections of annual reports. We choose the Indian automobile and auto-components industry as the context of our study for three reasons – there exists variety in (a) the forms of firms in the industry (domestic firms and MNE subsidiaries); (b) size (small to large); and (c) level of global integration (export intensity). The Indian automobile and auto-components industry has sufficiently integrated with the global economy with the creation of global supply chains and India becoming an important sourcing hub as well as a fast maturing consumer market.We study the relationship between textual complexity and firm performance in munificent environments. We use content analysis as a primary tool for studying textual complexity. Using the Flesch Reading Ease formula, we find that the reading ease of annual report texts vary significantly across years. The other variables that influence reading ease are proportion of market capitalization (size), promoter ownership and the extent of internationalization. In other words, bigger the size of companies, higher the promoter ownership and higher the extent of internationalization, the texts are easier to read. Other control variables including firm performance, age and diversification do not contribute to textual complexity.We contribute to organizational communication literature by adding environmental malevolence as a factor in determining textual complexity. We demonstrate that in years when the environment is difficult (such as a global recession), firms obfuscate their texts, irrespective of their financial performance. We demonstrate the relative importance of external variables (business recession, international exposure and stakeholder diversity) in influencing textual complexity than variables internal to the firm.

Lean manufacturing implementation using value stream mapping as a tool

Purpose – Value stream mapping (VSM) is a lean manufacturing (LM) tool used for analyzing material and information flow on a specific product family. The purpose of this article is to address the importance of VSM in LM environment in an Indian auto components industry. Design/methodology/approach – The case study approach has been used to show the applicability and importance of VSM in an Indian auto components company, in which the current state of manufacturing is mapped with the help of VSM symbols. According to the current state mapping, the study conducted analysis and identifies the area of improvement needed in terms of work in process, lead time and cycle time. The study further implemented kaizen on the current state map and developed future state map while including these kaizens. Findings – The study clearly shows that the VSM brings out the positive impact on process ratio, TAKT time, process inventory level, line speed, total lead and process time and reduced man power. It is helping the company in satisfying their customers with respect to quality, cost and delivery. Research limitations/implications – The main limitation of the study is the confined focus on a single industry. The case should be extended to other industries in order to support the findings and for the purpose of the wider generalization. Practical implications – The results obtained from the study will help other industries and sectors to implement VSM in LM environment. Originality/value – The article deals with a real case study, which shows application of VSM for implementing lean principles.

Strategic Technology Management in Indian Auto Component Industry

Strategic Technology Management in Indian Auto Component Industry

Effect of Quality Management Systems and Total Quality Management on Productivity Before and After: Empirical Evidence from the Indian Auto Component Industry

We study the linkages between firm‐level quality initiatives such as quality management systems (QMS) and total quality management (TQM) and output productivity in the Indian auto component industry. We use externally validated quality certification and quality awards as proxies for QMS and TQM, respectively, as it is difficult to directly measure the QMS and TQM efforts of firms. We use an unbalanced panel of 220 firms and a balanced panel of 73 firms from the Indian auto component industry over the period 1993–2006 to study these links. Both parametric as well as non‐parametric approaches are used, as appropriate, to measure the rate of change in productivity and the impact of quality initiatives on productivity change during this period. We determine the proportion of productivity resulting from technical change and relative efficiency change, thus providing insights into the structure of productivity improvements. We find that TQM efforts resulted in a high rate of productivity change (11%) in the award‐winning firms after the award. On the other hand, pre‐certification productivity change due to QMS was 5% and post‐certification change was 3.6%. In the periods prior to certification, productivity change was driven mainly by technical change; whereas the source of productivity change after certification is mixed. However, prior to awards, productivity change was driven mainly by relative efficiency change, whereas post‐award productivity change was due to technical change. The results suggest that management focus on attaining certification did generate conceptual learning (linked to technical change) during the period leading to certification, but these effects were not significant after certification. The results also suggest that the TQM programs generated significant productivity gains in the long run, although setting the associated systems in place did not result in significant productivity change prior to winning awards. Thus, the study provides direct but nuanced evidence linking quality certification as well as the adoption of TQM programs to the associated conceptual and operational learning processes and their impact on the change in productivity.

Quality management in new automotive supply chains: a study of select Indian auto component SMEs

As the Indian auto component industry has matured, SMEs have emerged as strong contributors to the overall output of this industry in the country and have a significant share in the exports of the industry. The present paper aims to study the extent of quality management implementation in Indian auto component SMEs and to further examine the association between organisational cultural values and the extent of quality management principles practiced in this sector. Results indicate a higher level of implementation of all quality principles in these SMEs. In addition, values of organisational culture and principles of quality management were found interrelated; however, each dimension of culture is related to seven quality management principles in different manner.

A cloud computing-based framework for internationalisation of SMEs

The paper examines the current growth rate of the Indian auto component industry and its contribution to the global markets. Recent researches have concluded that low and ineffective adoption of IT by the manufacturers is one of the primary reasons of the dismal contribution of the sector to the export markets. Majority of the firms operating in this sector are small and medium enterprises (SMEs) who cannot afford to invest in world class IT solutions. The diversity and tiered structure of the industry further complicates the process of adoption of IT practices. The paper presents a community cloud-based framework for crafting the IT strategy and further accelerating the adoption of IT among the Indian auto manufacturers. It also shows how the framework can be used for achieving effective supply chain integration in the sector.

Sustainable Development in Indian Automotive Component Clusters

India is the world’s second fastest growing auto market and boasts of the sixth largest automobile industry after China, the US, Germany, Japan and Brazil. The Indian auto component industry recorded its highest year-on-year growth of 34.2 % in 2010–2011, raking in revenue of US$ 39.9 billion; major contribution coming from exports at US$ five billion and fresh investment from the US at around US$ two billion. For inclusive growth and sustainable development most of the auto components manufacturers has adopted the cluster development approach. The objective is to study the technical efficiency (θ), peer weights (λ i ), input slacks (S−) and output slacks (S+) of four Auto Component Clusters (ACC) in India. The methodology adopted is using Data Envelopment Analysis of Input Oriented Banker Charnes Cooper Model by taking number of units and number of employments as inputs and sales and exports in crores as an outputs. The non-zero λ i ’s represents the weights for efficient clusters. The S > 0 obtained for one ACC reveals the excess no. of units (S−) and employment (S−) and shortage in sales (S+) and exports (S+). However the variable returns to scale are increasing for three clusters, constant for one more cluster and with nil decrease. To conclude, for inclusive growth and sustainable development, the inefficient ACC should increase their turnover and exports, as decrease in no. of enterprises and employment is practically not possible. Moreover for sustainable development, the ACC should strengthen infrastructure interrelationships, technology interrelationships, procurement interrelationships, production interrelationships and marketing interrelationships to increase productivity and efficiency to compete in the world market.

Effect of QMS and TQM on Productivity Before and After: Empirical Evidence from the Indian Auto Component Industry

We study the linkages between firm level quality initiatives such as Quality Management Systems (QMS) and Total Quality Management (TQM) and output productivity in the Indian auto component industry. We use externally validated quality certification and quality awards as proxies for QMS and TQM respectively, since it is difficult to directly measure the QMS and TQM efforts of firms.We use an unbalanced panel of 220 firms and a balanced panel of 73 firms from the Indian auto component industry over the period 1993 to 2006 to study these links. Both parametric as well as non parametric approaches are used, as appropriate, to measure the rate of change in productivity and the impact of quality initiatives on productivity change during this period. We determine the proportion of productivity resulting from technical change and relative efficiency change, thus providing insights into the structure of productivity improvements. We find that TQM efforts resulted in a high rate of productivity change (11%) in the award winning firms post-award. On the other hand, pre-certification productivity change due to QMS was 5% and post-certification change was 3.6%. In the periods prior to certification, productivity change was driven mainly by technical change; while the source of productivity change post-certification is mixed. However, prior to awards, productivity change was driven mainly by relative efficiency change while post-award productivity change was due to technical change. The results suggest that management focus on attaining certification did generate conceptual learning (linked to technical change) during the period leading to certification, but these effects were not significant post-certification. The results also suggest that the TQM programs generated significant productivity gains in the long run, although setting the associated systems in place did not result in significant productivity change prior to winning awards. Thus, the study provides direct but nuanced evidence linking quality certification as well as the adoption of TQM programs to the associated conceptual and operational learning processes and their impact on the change in productivity.

Innovative Resources and Capabilities in Emerging Economies – Their Impact on Firm Performance

Innovative resources and capabilities have been found to be essential to climb up the value chain in most industries. However, development of innovative resources and effective deployment of these resources requires significant investments on a sustained basis, which is a difficult task for domestic firms in many emerging economies, especially if they operated with obsolete technologies under protected regimes for long periods of time. To understand how and what type of resources and capabilities are developed in emerging economies, which are going through institutional transitions from protected to liberalized regimes, we examine various management theories and propose a conceptual framework that integrates relevant theories and helps us study the process of resource and capability development. Based on the existing literature on resource based view and dynamic capability approach, we also frame certain hypotheses on innovative resources and capabilities and their impact on firm performance. We collected primary and secondary data from the Indian auto component industry to test these hypotheses and carried out detailed interviews with industry experts to understand the industry dynamics and the results from our data analysis. We use the proposed conceptual framework and qualitative inputs from industry experts to explain our empirical results which provide very interesting insights into the selection and development of innovative resources and capabilities by the emerging economy firms and their impact on various measures of firm performance.

Catch-up strategies in the Indian auto components industry: Domestic firms’ responses to market liberalization

Market liberalization in emerging-market economies and the entry of multinational firms spur significant changes to the industry/institutional environment faced by domestic firms. Prior studies have described how such changes tend to be disruptive to the relatively backward domestic firms, and negatively affect their performance and survival prospects. In this paper, we study how domestic supplier firms may adapt and continue to perform, as market liberalization progresses, through catch-up strategies aimed at integrating with the industry's global value chain. Drawing on internalization theory and the literatures on upgrading and catch-up processes, learning and relational networks, we hypothesize that, for continued performance, domestic supplier firms need to adapt their strategies from catching up initially through technology licensing/collaborations and joint ventures with multinational enterprises (MNEs) to also developing strong customer relationships with downstream firms (especially MNEs). Further, we propose that successful catch-up through these two strategies lays the foundation for a strategy of knowledge creation during the integration of domestic industry with the global value chain. Our analysis of data from the auto components industry in India during the period 1992–2002, that is, the decade since liberalization began in 1991, offers support for our hypotheses.

Six Sigma implementation in Indian medium scale automotive enterprises – a review and agenda for future research

The increase in demand of the growing customer looking for a better quality of product has compelled corporations to adopt Six Sigma in order to improve the quality for enhanced competitive advantage. This research article focuses on the current empirical study of the Indian medium scale automotive industries along with the scope of implementing Six Sigma. The data analysis will highlight that the Indian auto component industry has rapidly grown, catering to the expanding domestic market and exporting to the external replacement market, as well as a number of SMEs in the auto component industry which have increased due to new entry. Information about the research findings along with the use of quality tools for problem solving tools are discussed along with elaboration of research methodology. This paper will propose the need for the development of Six Sigma framework and necessity for implementing Six Sigma for better business opportunity with regards to Indian medium scale automotive organisations in the current competitive era.

Determinants of competitiveness and their relative importance: a study of Indian auto-component industry

A focused study on determinants of competitiveness for Indian automotive component industry in special context to supply chain activities is presented. The paper delineates the relative importance of various determinants of competitiveness by using analytic network process (ANP). A set of 24 determinants identified through a survey and face-to-face interviews is presented. The survey results find that customer demand to be the most important element for the competitiveness. It further unveils dependency among all the 24 metrics of competitiveness prompting the need for trade-offs amongst the factors. The proposed methodology and findings of the research can provide the supply chain managers and strategists with an important business intelligence and analytical tool to integrate their supply chain strategy with corporate strategy considering the impact of individual factors on overall industrial growth.

Development of index for measuring leanness: study of an Indian auto component industry

PurposeThe extant literature fails to provide an efficient method to measure leanness of any manufacturing firm. The purpose of this paper is to discuss the concept of leanness and to provide an efficient measurement method for measuring leanness.Design/methodology/approachMeasurement method is based on the judgment and evaluation given by leanness measurement team (LMT) on various leanness parameters such as supplier's issues, investment priorities, Lean practices, and various waste addressed by lean and customers' issues. Further fuzzy set theory is introduced to remove the bias of human judgment and finally defuzzification is done and results are presented in the form of leanness index.FindingsLeanness indices have been developed and presented separately on 100 points scale for all parameters of leanness i.e. LISuppliers = 47.98, LIInvestment = 50.66, LIpractices = 58.38, LIWaste = 60.01, LICustomers = 47.1.Research limitations/implicationsThis leanness measurement method used the views of experts and may contain human judgment error.Practical implicationsIt will be helpful to both academician and practitioners as an assessment tool for evaluation of lean status of any industry utilized.Originality/valueLeanness measurement method based on judgment of experts is used first time for evaluation of leanness.

Inching towards global competitiveness: Adoption of Advanced Manufacturing Technologies (AMTs) in Indian auto components industry

The purpose of the paper is to analyse the nature and patterns of adoption of Advanced Manufacturing Technologies (AMTs) in the Indian auto components industry in light of the policy changes in India and changes in world automotive industry. We empirically investigate the determinants of AMT adoption in order to tease out the parameters of technological change. The process of technology diffusion is dynamic and appears to have been driven by an apparent objective of steering the industry in the direction of an innovation-driven industry. The evolution of the industry in the light of these is discussed and relevant policy implications are spelled out in the paper.

Assessing innovation quotient (InQ) of Indian auto component manufacturers

Innovation is imperative today as a key tool for creating winning organisations globally. With many global auto players setting up operations in India in the last ten years, Indian companies are now exposed to manufacturing excellence techniques used globally. They need to scale up on innovations to remain competitive and create winning organisations. It would also be important to assess where we stand, identify areas of improvements with respect to global benchmarks and then workout an action plan to have a transition to global levels to build winning organisations. This paper, through an exploratory empirical study, identifies drivers of innovation through a cross sector study. Further, it attempts to probe as to where does Indian auto component industry stand on innovation by suggesting an innovation quotient (InQ) and then measuring them over InQ; what are the enablers and barriers of innovation and what strategy should the industry and the company adopt to accelerate innovation and have transition to reach global benchmarks to create world class winning sustainable organisations.