Indian Auto Component Research Articles

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.

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.

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.

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.

The Indian auto component industry – Estimation of operational efficiency and its determinants using DEA

In this paper, the performance analysis of the Indian auto component industry is carried out from the perspectives of an original equipment manufacturer and a component supplier. Various efficiency measures are estimated using Data Envelopment Analysis with publicly available financial data on a representative sample of 50 firms. The first stage analysis reveals various operational inefficiencies in the auto component industry which are subsequently decomposed into technical, input mix and scale efficiencies. The study finds evidence that a majority of the inefficient firms are operating in the diminishing returns to scale region and demonstrates potential savings through benchmark input targets. A second stage analysis aimed at exploring root causes of inefficiencies finds that substitution of labour for capital could be causing a variety of inefficiencies including the input mix inefficiency in the Indian component industry. The empirical results also suggest that, unlike the global auto supply chain, higher average inventories are required for higher operational efficiencies in the Indian context. Contrary to the popular expectations, the technology licensing does not show significant influence on efficiency, at least in the short term, whereas efficient working capital management does result in higher operational efficiencies. The study also unearths the need to reform labour laws which are significantly contributing to various inefficiencies in the Indian component industry.

QS 9000 as a Stepping Stone to TQM a Study in Indian Auto Component Industry

Post liberalization in the nineties, Indian economy transformed with an influx of multinational automotive companies into India. The entry of these foreign auto companies changed quality standards and impacted the complexity of the parts required by OEMs. The component manufacturers embraced the practices of Total Quality Management (TQM), Total Productive Maintenance (TPM) and lean manufacturing practices . The journey towards TQM was propelled by the vision to become global. One of the strategies that Indian component manufacturers adopted to become part of the global value chain was the QS 9000 certification. This paper is an attempt to understand the impact of QS 9000 certification on TQM implementation. It ascertains the role that QS 9000 certification plays in transforming organizations with respect to the critical success factors of TQM implementation. The analysis is based on data collected for a specific study on TQM among auto component manufacturers in Chennai. Data pertaining to the level of critical success factors was examined prior to and post certification, to draw conclusions.

Indian auto components

PurposeThe purpose of this paper is to review research into the Indian auto component sector, which offers advice on the strategies that can best be adopted to improve the industry's competitiveness.Design/methodology/approachThis briefing is prepared by an independent writer who adds their own impartial comments.FindingsOver the last 40 years the supply of auto parts has become a significant component of the Indian economy. Once restricted to the home sector only, since a change in policy in 1991 the industry has been free to trade with global nations and has seen demand increase enormously as a result. Exports increased at 11 per cent between the 1986‐1987 and 1996‐1997 with much of this supply going to Asia and Africa, and thanks to improved quality in recent years developed countries are now ordering components from Indian manufacturers. Despite this, the sector is still very small by global standards. China exports ten times more than India and Thailand three times as much. India's chance to catch up over the coming decade will depend on whether or not it can widen the service on offer and rise to the higher demands coming from the west.Practical implicationsIndian organizations are offered a series of priorities that they should seek to meet in order to improve their competitive position globally.Originality/valueWill help companies in India rethink strategy to improve their performance and competitiveness.

Knowledge management in SMEs in India: a study of the automotive components sector

The global automobile industry is facing a lot of challenges in the changing scenario. There are number of new issues facing the firms and original equipment manufacturers are transferring many of the responsibilities to the suppliers. Knowledge management is widely accepted as a source of competitiveness. Increasing environmental standards and safety concerns, and the search for alternative fuel technology, are putting a further premium on knowledge creation and knowledge management. The knowledge management requirements and its implementation for small firms is different from that for large firms. The Indian auto component industry, which is dominated by small and medium firms, has been performing quite well over the last decade. This paper studies the state of knowledge management in the Indian auto component sector.

Indian Auto-Component Supply Chain at the Crossroads

We trace the evolution of the auto-component supply chain in India beginning with the opening of the economy in 1990 by using a combination of data on firm and sector performance, customer-satisfaction surveys, and interviews with experts. During the past decade, the industry has made remarkable progress on multiple fronts. This is particularly true with regard to quality—10 firms in this industry have won the coveted Deming prize during the past six years. Surprisingly, we first observe that the financial performance of the firms that won the Deming prize (i.e., Deming firms) shows no definitive differences from the performance in the rest of the industry. We then analyze the productivity growth at the firm level across two five-year intervals using a total-factor productivity model. Our results suggest that productivity improved much more during the second period, which is the interval in which most of the firms won the Deming prize. We also analyze the impact of winning the award on profitability and suggest that new firms were able to grow faster in the improving business environment. To “externally” validate our findings, we compare the auto sector in India with that in China. Despite a 10-year disadvantage because of costs that are beyond the control of the firm, the auto sector in India seems to be competitive with that sector in China on all firm-specific factors. In summary, we suggest that firms in this sector have taken the first step by becoming competitive in the areas of cost and quality. We suggest that they are now at a crossroads and must make several choices to leverage these quality gains into a profitable, global supply chain strategy.

SMEs and Globalization: A Delhi Automotive Study

The automotive industry in India has metamorphosed from a virtually non existent, low-quality-low-volume industry to a conglomerate of one among world best auto manufacturers with highest growth rate with in last 15 years. The earlier studies revealed that Indian automotive industry was not competitive enough for the global market due to inferior quality, lower labour productivity and high cost of raw materials in India (Khisty, V., 2004)1. Recent trends show that Indian auto component industry has become the hub of high quality, low cost products. How the industry has changed in last one decade is an important burning issue to be analysed. The reforms adopted by the government have opened up tremendous opportunities for investment and technology transfer. Indian firms are now looking for joint ventures and technology transfer specializing niche technology and to complement their range of products with the world's latest and the best. It is important to know the dynamics of the industry while it is undergoing a tremendous restructuring. The various technological and non-technological innovations that have been brought in by the industry to capitalize on the opportunities in the wake of globalization need to be closely monitored. In India, the National Capital Region (NCR) of Delhi alone accounts for almost 40% share of the overall component industry. A case study based on automotive sector in the NCR of Delhi was initiated to examine the effect of Globalization, Competitiveness and Innovation. The study is a part of a major programme on the vast industrial growth in NCR. The main focus is on innovative activities and initiatives in enhancing capabilities in technology, RD export obligations and policies of progressive liberalization have actually brought confidence and dynamism in the industry.

Strategy development for competitiveness: a study on Indian auto component sector

PurposeThe purpose of this study is to analyse different aspects of competitiveness relating to the Indian auto component sector, set within a globalised economy with its attendant pressures and constraints. It examines the strategies adopted for quality improvement, cost reduction, investment and competency development. It also aims to establish the relationship between strategies and the different dimensions of competitiveness.Design/methodology/approachA questionnaire was used to collect the research data: 75 valid responses were received. Statistical analysis of data acquired from the survey was carried out by a reliability test, t‐test and correlation analysis.FindingsA growth‐supportive environment, raising funds from the market and a shortage of technical manpower are major constraining factors whereas cost, quality, and delivery time are the main pressures on the auto component sector. The auto component sector is flexible in developing strategies and those strategies relating to cost, quality; investment and competency development are significantly correlated with competitiveness.Research limitations/implicationsThis study could be further extended by considering other aspects of strategy development, such as human resource, vendor development, organization culture, etc.Practical implicationsOrganisations should make the necessary investment to develop new competencies, and should address cost reduction and quality improvement. They should also benchmark themselves against industry standards to sustain competitiveness.Originality/valueThis study will help organizations in shaping competitive strategies and in deciding dimensions of performance measurement.

India as the Global Outsourcing Destination

The Practice of outsourcing has been prevalent in the automobile industry for a very long time. Vehicle brand owners (VBO), also known as assemblers, have developed preferred relationships like Keiretsu with their suppliers to capture the complexities of outsourcing as also to reflect their regional idiosyncrasies. Against the backdrop of the Indian automobile industry becoming increasingly global, a field study conducted on suppliers of automobile components to vehicle manufacturers, captured patterns of outsourcing prevalent and provided interesting insights. Indian auto component suppliers, although aware of global opportunities, are left with little choice in transacting with their clients partly because of their own risk averse, status quo preferences and remaining for want of an efficient mechanism for horizontal cooperation among firms with complementary capabilities to form clusters/groups of globally competitive suppliers. On the other hand, such clusters often lack necessary institutional support leaving individual suppliers dependent on clients for business and growth. While this article investigates the existing relationship between auto assemblers and their suppliers to suggest a not so encouraging picture of global opportunity for the suppliers with pressures of global competition and sourcing, it also highlights areas in which to expect changes before the global opportunity can be leveraged.

Managing the Supply Chain for Global Success a Case Study of Indian Auto Component Industry

From a country that sold just a few hundred thousand cars annually a decade ago, over a million cars roll out of Indian factories every year to fuel a vibrant component industry with global quality and technology standards.
 McKinsey and Company has predicted that the Indian automobile component industry would grow to a whopping $33-40 billion by 2015, out of which the global outsourcing of components could be to the tune of $20-25 billion! The Indian auto component manufacturers would see an exponential growth in output over the next decade. The industry is growing at a compounded rate of 20-25%, much faster than that of the domestic market (10-14 %). Many consider this growth in exports as just the tip of the iceberg similar to that witnessed by the information technology industry in the early 1990s. The sustained growth of Indian auto component industry can be attributed to many factors, but primarily to efficient management of the supply chain.

QFD‐ and VE‐enabled target costing: a fuzzy approach

Globalization has provided excellent opportunities for the global manufacturing community together with a stringent barrier on cost control. Target costing has emerged as one of the main tools in aiding the manufacturers to be globally competitive. This paper analyses the effect of tools such as quality function deployment (QFD) and value engineering (VE) on target costing and explores the way in which these tools assist in achieving the target cost. The target costing model developed by Cooper and Slagmulder (Cooper, R. and Slagmulder, R.,Target Costing and Value Engineering, Productivity Press, New York, NY, 1997) has been modified and tools such as QFD and VE have been incorporated in the model. Due to inherent uncertainties in the associated cost of various elements, the model has been further strengthened with the use of fuzzy logic. The theoretical model developed was implemented in an Indian auto component manufacturing company and the results were analysed. Target costing significantly relies upon QFD and VE for its effective implementation. Uncertainty in cost estimation plays a significant role in the target costing process since any variation in cost violates the cardinal rule of target costing, “the target cost should never be exceeded”. Fuzzy logic plays a vital role in accounting for uncertainty in the target costing process and gives a different perspective to arrive at the function cost. A functional approach (VE) combined with QFD backed by fuzzy approach appears to work effectively for a target costing process that is evidenced from the case study. It appears that the model developed will work satisfactorily for an industrial product and the validity of the model for fast moving consumer goods has to be ascertained.