The empirical analysis on supply chain risk management with firm capability perspective of Thailand automotive industry

This research was conducted by questionnaire and interview data obtained from automotive manufacturers in Thailand. The framework is tested using data from a broad spectrum of small and medium enterprises (SMEs).
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The empirical analysis on supply chain risk management with firm capability perspective of Thailand automotive industryInternational Journal of Mechanical Engineering and Technology (IJMET)Volume 10, Issue 03, March 2019, pp. 1735–1744, Article ID: IJMET_10_03_175Available online at http://www.iaeme.com/ijmet/issues.asp?JType=IJMET&VType=10&IType=3ISSN Print: 0976-6340 and ISSN Online: 0976-6359© IAEME Publication Scopus Indexed THE EMPIRICAL ANALYSIS ON SUPPLY CHAIN RISK MANAGEMENT WITH FIRM CAPABILITY PERSPECTIVE OF THAILAND AUTOMOTIVE INDUSTRY Premkamon Jankaweekool Technopreneurship and Innovation Management Program, Chulalongkorn University, Bangkok, Thailand Thitivadee Chaiyawat Department of Statistics, Faculty of Commerce and Accountancy, Chulalongkorn University, Bangkok, Thailand. Sukree Sinthupinyo Department of Computer Engineering, Faculty of Engineering, Chulalongkorn University, Bangkok, Thailand. ABSTRACT There are many problems in the quality of the auto parts from the substandard production. This research was conducted by questionnaire and interview data obtained from automotive manufacturers in Thailand. The framework is tested using data from a broad spectrum of small and medium enterprises (SMEs). The statistical analysis using confirmatory factor analysis (CFA) and the level of risks were determined by evaluating the probability of occurrence and severity of risk factors. The results showed the types of risks that arise in the automotive supply chain in a very high-risk level that must be urgently resolved. Its effect on firm capability is examined. The results generally support theoretical predictions and interesting findings emerge. Key words: Supply chain risk management, Automotive industry, Empirical analysis, Firm capability Cite this Article: Premkamon Jankaweekool, Thitivadee Chaiyawat and Sukree Sinthupinyo, The Empirical Analysis on Supply Chain Risk Management with Firm Capability Perspective of Thailand Automotive Industry, International Journal of Mechanical Engineering and Technology 10(3), 2019, pp. 1735–1744. http://www.iaeme.com/IJMET/issues.asp?JType=IJMET&VType=10&IType=31. INTRODUCTIONAutomotive industry is one of main industries in Thailand which generates economic value forthe country. It accounts for 10% of gross domestic product originating from manufacturing and http://www.iaeme.com/IJMET/index.asp 1735 editor@iaeme.com The Empirical Analysis on Supply Chain Risk Management with Firm Capability Perspective of Thailand Automotive Industrya source of employment for over 500,000 direct jobs of skilled workers in 2012 excludes thevalue created by other relevant industries, such as upstream industry and service industries inrespect of finance, insurance and after-sales service. Thailand is a leading regional and global automotive manufacturer, the top tree rank amongASEAN countries and 18th production country rank in 2017 by The International Organizationof Motor Vehicle Manufacturers (OICA: Organisation Internationale des Constructeursd’Automobiles). A major regional production bases for motorcycle and automotive parts OICA[26]. Moreover, Thailand Automotive Institute reveals an expectation in the growth of theautomotive industry in Thailand until 2050, which tends to have a higher production ratecontinuously [32]. According to its high production today, there are problems and risks in thequality of auto parts that have not met the standards. In 2014, Toyota, one of Japans major car manufacturers, recalled 6.39 million carsworldwide because it found many different problems, such as drivers seat, steering column,and ignition system. Furthermore, Ford Motor, the second largest car manufacturer in the US,also announced a recall of approximately 434,700 cars because of a potential corrosion problemcausing steering control, and secondly, the problem of rear seat frame made of substandardmaterial that may increase the risk of injury if an accident occurs ([33], [34]). The major objective of this research, to analyze the status quo of supply chain riskmanagement in Thailand based on studys conducted in the automotive industry. In particular,the purpose is to investigate the relevance of different risks in terms of their probability ofoccurrence and their potential impact to business [7]. Furthermore, several instruments ofsupply chain risk management are analyzed regarding their potential to cope with supply chainrisks. Hence, the relationship between the implementations of instrument and the firm capabilitycriteria are analyzed ([4], [6], [35]). Christopher [11] proposed supply chain risk management(SCRM) to be an important antecedent of firm capability leads to data collection from 346firms, small and medium enterprises from Thailand automotive parts manufacturers, to test themodel. The rest of this paper is organized as follows: section 2 provides a brief overview ofliteratures within the supply chain risk management context, the conceptual framework ispresented, and a set of testable hypotheses is proposed. Section 3, the methodology areintroduced, which include information about the sample, study measures. In section 4, the dataanalysis and results are considered to demonstrate the application of our proposed methodology.Section 5 presents the findings of the study. Finally, section 6 concludes the limitations andfuture research.2. THE LITERATURE REVIEW & RESEARCH FRAMEWORKThere is a continuous growth in the number of articles focusing on supply chain riskmanagement in the ...