Int. J.

Production Economics 143 (2013) 151–161

Contents lists available at SciVerse ScienceDirect

Int. J. Production Economics

journal homepage: www.elsevier.com/locate/ijpe

On supply chain competitiveness of Indian automotive component

manufacturing industry
Deepika Joshi a, Bimal Nepal b,n, Ajay Pal Singh Rathore a, Dipti Sharma a
a
Malaviya National Institute of Technology, Jaipur, India
b
Department of Engineering Technology and Industrial Distribution, Texas A&M University, College Station, TX, United States

a r t i c l e i n f o abstract

Article history: This paper examines the determinants of competitiveness for Indian automotive component (IAC)
Received 22 February 2012 manufacturing industry, in special context to its supply chain (SC) performance indicators. A long-
Accepted 26 December 2012 itudinal case study of a large scale automotive component manufacturer in India is used to examine the
Available online 17 January 2013
SC competitiveness of IAC. Real world data on 24 competitiveness drivers are collected from the case
Keywords: study company. Analytical network process is used to prioritize the competitiveness determinants by
Automotive considering their mutual dependence. Management strategies to improve the competitiveness drivers
Component manufacturing and their effects on overall supply chain competitiveness of the firm in question is discussed. Our case
Case study study shows that the business environmental factors such as workers’ skills, globalization, and
Supply chain competitiveness
government regulations contribute the most to the overall supply chain competitiveness of the IAC.
India
However, the competitiveness factors are mutually dependent; therefore, making managerial decisions
by considering individual weights only can lead to a wrong conclusion. This study can serve as a guide
to the supply chain mangers and strategists of auto component firms in emerging markets who are
seeking to improve their position in global marketplace.
& 2012 Elsevier B.V. All rights reserved.

1. Introduction involvement of Indian auto component business in the global

The auto component industry of India started in the 1960s in
the form of Small and Medium Scale Enterprises (SMEs). However,
in short span of 5 decades, it has become one of the sectors of high
economic importance. In the history of development, many of its
firms like Sundram Fasteners, Brakes India, Bharat Forge, Gabriel
India, and many others have evolved to become the globally
recognized manufacturers. Such emergence created a key customer
base in the Triad regions i.e. American continent, European Union
and Japan. The competition in the sector spurred when foreign
suppliers like Bosch, Goetze–Werke, and Johnson Control have
either ventured or settled their fully owned subsidiaries in India to
leverage the benefits of industrial policy and escalating demand of
domestically located Original Equipment Manufacturers (OEMs). In
similar series of development, once again the competition cropped-
up due to agglomeration of these manufacturers in major auto
clusters of the country to produce low cost technically advanced
components. Presently, besides sourcing for their domestics
requirements, the various multinational corporations like Mer-
cedes, General Motors, Ford, Daewoo, Honda and Volkswagen have
also set up their international purchasing offices (IPOs) in India to
source for their global operations. Such proliferation led to the
supply chain activity. Thus, making it a critical and highly compli-
cated challenge in competitiveness building1.
In recognizing the significance of auto component sector for
national competitiveness, the factors affecting its supply chain activity
have become a matter of prime concern. These factors are often
identified as Determinants of Competitiveness or Performance Indi-
cators (Joshi et al., 2011). The combined effect of such performance
indicators results in sustainable competitive advantage. The opera-
tions management research community has grouped few of such
performance indicators as competitive priorities; these include
dimensions of cost, delivery, flexibility, and quality (CDFQ) (Bagchi,
1996; Ho et al., 2002; Singh et al., 2007). However, in contemporary
real-life complex situations the competitive priorities cannot exhibit
stand-alone performance. They confront the challenges posed by
other key performance indicators (KPI) as well. Few such KPIs are
business environmental factors, business relationships, technology,
and customer demand which influence the competitive priorities to
drive the overall SC competitiveness (Singh et al., 2007; Joshi et al.,
2011). Fig. 1 highlights the influence of KPIs on competitive priorities.
Theoretical relationship of such variables and SC performance of a
company have been well established in SCM literature. It can further
be illustrated as follows: (a) strategically managed long term business

n 1
Corresponding author. Tel.: þ1 979 845 2230; fax: þ1 979 845 4980. Report on IT adoption in the Indian Auto Component Industry, NASSCOM,
E-mail addresses: Nepal@tamu.edu, bimalnep@gmail.com (B. Nepal). New Delhi, 2007.

0925-5273/$ - see front matter & 2012 Elsevier B.V. All rights reserved.
http://dx.doi.org/10.1016/j.ijpe.2012.12.023
152 D. Joshi et al. / Int. J. Production Economics 143 (2013) 151–161
Customer Demand
environment
Cost Flexibility
Business
Competitiveness
relationship
Business
Quality Delivery
Technology
Fig. 1. Influence of key performance indicators on competitive priorities.
relationship enhances the financial performance of an organization
(Carr and Pearson, 1999). It can be achieved by building trust and
information sharing among buyer and supplier (Paulraj et al., 2008;
Panayides and Lun, 2009). (b) Similarly, implementing advance
technology through R&D and innovations increases flexibility
and quality, and reduces delivery time (Sanchez and Perez, 2005;
Singh et al., 2007). (c) Likewise, location as a strategic business factor
affects quality norms, sourcing decision, delivery decision, and
scheduling techniques and employee productivity (Narasimhan and
Jayaram, 1998; Bhatnagar and Sohal, 2005). However, the location
decision often depends on costs factors as transportation, labor,
infrastructure, local government regulations, tariffs, and capital sub-
sidies (MacCormack et al., 1994; Simchi-Levi et al., 2000). (d)
Similarly, Mentzer (2004) suggested 12 drivers to SC competitive
advantage including demand management among others. The author
argues that for constantly changing demand pattern, agility and
flexibility are the best suited strategies. Furthermore, competitive
priorities like flexibility, delivery and quality fluctuate with change in
customer demands as well as the cost (Bruce, 1985). (e) Business
environmental factors like governmental policies, proper scheduling
techniques, human resource competence and location decision have
significant impact on competitiveness of a firm (Bhatnagar and Sohal,
2005; Gunasekaran et al., 2004; Singh et al., 2007; Ark et al., 2008).
Prior research has revealed that the competitive priorities and
KPIs influence each other to drive overall competitiveness (Bagchi,
1996; Hult et al., 2006). Interestingly, historically for manufacturing-
based business including the automotive ones, cost has been the
only measure of business performance identification. It comprises of
administration cost, labor cost, raw material cost, R&D cost, manu-
facturing cost, facilities cost, logistics cost, distribution cost, and
inventory cost (Balakrishnan et al., 2007; Ark et al., 2008; Narayan
and Vasthist, 2008; Majumdar, 2010). However, further studies on
Indian auto component industry highlighted the influence of qua-
litative performance parameters in cost estimation. These
non-financial indicators include business environmental factors,
buyer–supplier relationships, technological advancement, quality
management system, employees’ skills and capabilities, well-
planned scheduling techniques, system flexibility, and sourcing
and delivery decisions (Romano, 2002; Gurumurthy and Kodali,
2008; Zhao and White, 2010; Singh, 2010; Singh et al., 2010; Nayak
and Ray, 2010). A recent study on the bearing manufacturing firm
revealed that flexibility, in particular, drives better performance of
the component business in the marketplace (Nayak and Ray, 2010).
It makes organizations responsive towards unpredicted change in
delivery and volume (Jack and Raturi, 2002). However, flexibility
adds extra cost and effort but aligning the business strategies as per
business needs of supplier/buyer, makes a firm more responsive
than its competitors.
Supply chain management literature also underscores impor-
tance of buyer–supplier relationships in hassle-free supply chain
activity (Pittaway and Morrissey, 2005). For Chinese auto compo-
nent sector, harmony along with innovation is considered as a
source of global competitiveness (Song and Chatterjee, 2010).
Another study by Vachon and Klassen (2002) on manufacturing-
based industries discovered the importance of information sharing
between buyers and suppliers for improved delivery performance. A
similar study uncovered the dependence of SC competitiveness on
Just in Time (JIT) strategy for fast and reliable deliveries. Herein, an
early exchange of information between both partners lowers cost
constituents, shortens order cycle time, and increases order fulfill-
ment rate (Huang and Lin, 2002). The prior literature also signifies
the importance of continuous R&D activities in technological inno-
vations. A study conducted on Indian and Chinese auto component
manufacturers discovered the advancement of technology and
innovation practices—a roadmap to meet dynamic business compe-
tition (Majumdar, 2010; Mishra and Sahay, 2010; Tapan et al., 2010).
These innovations reduce cost, improve flexibility, and maintain
delivery conformance, thereby generating newer customer demand
(Singh et al., 2007).
Automotive supply chain is also found to be shaped by the
dynamic business environment. While meeting the changing
requirements of nationally and internationally valuable custo-
mers, an organization confronts the impact of business paradox
on SC policies (Lall and Mengistae, 2005; Singh et al., 2007). These
policies affect the economic environment, demand conditions,
patent (intellectual property) process, human resource skills,
outsourcing decisions, location selection, asset–cost infrastruc-
ture, and many more. The change in Foreign Direct Investment
(FDI) and Foreign Institutional Investors (FII) limits, incentives,
infrastructural facilities such as industrial cluster development
and Special Economic Zone (SEZ), formation of governmental and
non-governmental industry-specific agencies are all the result of
exogenous factors (Ark et al., 2008).
In summary, prior studies have clearly articulated the influence
of supply chain performance indicators on the competitiveness of an
enterprise (Singh et al., 2007; Nayak and Ray, 2010; Song and
Chatterjee, 2010). However, majority of previous research studies
have prioritized performance measures to improve competitiveness
by treating them as independent variables (Gunasekaran et al.,
2004; Sahay et al., 2006). A very few of such studies have considered
the interdependence among the considered set of variables as well.
Although Joshi et al. (2011) considered mutual dependence among
the supply chain competitiveness factors while studying Indian
automotive component industry, but their study did not examine
the influence of operational strategies such as that are related to
design thinking capability, process thinking capability, human skills
capability and quality practices adopted by a company on its
competitiveness.
The existing literature underpins the competitiveness frame-
works like performance measurement matrix, performance pyra-
mid, balanced scorecard and many others unveiling the influence of
one dimension on another to reflect the holistic performance of an
organization but these rarely considered the degree of dependence
between the factors that drive a firm’s competitiveness. Therefore,
the important limitations of existing performance measurement
frameworks are as follows: (a) since the competitiveness determi-
nants used in existing literature are cognitive, abstract, and open-
ended, they are prone to be discerned by practicing managers in
variety of ways; (b) they are very broad as they are not specific to
any business, sector, or country; and (c) most importantly, none of
 D. Joshi et al. / Int. J. Production Economics 143 (2013) 151–161
these existing performance measurement frameworks is a clear
indicative of a weighting system that would prioritize the perfor-
mance metrics contained in it. Such prioritization of performance
indicators will be an indispensable way to achieve efficient and
effective management of resources.
Objective of this paper is to bridge the above-mentioned gaps
by conducting an in-depth case study of an Indian automotive
component manufacturing company. The validity of case study
research approach in supply chain management has been well
established (Ellram, 1996). The case study approach will draw
evidence from actual practices to understand the complexity of
complete phenomena (Benbasat et al., 1987; Ellram, 1996), which
in this case is the interaction between performance drivers and
management actions and their joint impact on the competitiveness
of a firm. This paper builds on the work of Joshi et al. (2011) in
which the authors have identified 24 performance indicators for
Indian automotive component manufacturing industry. First, it
further strengthens the findings of the prior study by performing
a longitudinal case study on an Indian automotive company with
respect to those factors. Next, it explores relationship of variables
under consideration and the environment in which these variables
operate through a case study. Such case study approach has been
widely adopted in the prior literature (McCutcheon and Meredith,
1993; Yin, 2003). Furthermore, we discuss the strategies adopted
by the case study company to improve the SC competitiveness
with respect to the above-mentioned factors. It, therefore, provides
important managerial implications for other global automotive
component manufacturing companies who are considering India as
potential outsourcing option. Lastly, we discuss the theoretical
ground and implications of this study with respect to the global
supply chain management literature.
The remainder of the paper is organized as follows. Section 2
describes the purpose and questions to carry out present study. The
various sub-sections of Section 3 explain the research methodology
in detail along with the analysis technique. Section 4 presents
findings of data analysis. Section 5 discusses the competitive
strategies of case firm to validate the past study along with
managerial and theoretical implications. Section 6 concludes the
overall research findings and suggests future research opportunities.
2. Research questions
Research questions were framed to understand the contribution
of SC performance of Indian automotive component manufacturing
firms to their competitiveness. Table 1 presents the three research
questions this paper is addressing. These questions aim to identify
the reason(s) behind the relative importance of various perfor-
mance indicators. These questions will also target the organiza-
tional strategies to determine their impact on overall business
competitiveness. We believe that answering these questions leads
Table 1
Research purpose, questions and methodology.
Research purpose
Research extension/refinement to identify the reason of disparity among
performance indicators on the basis of observed data.
Validation of survey based study for industry generalization.
153
to content rich insight that will be more useful to industry than a
general survey type of research.
3. Research methodology
As mentioned earlier, in this paper, the rationalization of
competitiveness framework in particular of IAC industry is done
by conducting a case study of Tier I Indian auto component
manufacturing firm. The case study research process is well
founded in the empirical research methods literature (see Stuart
et al., 2002), and involves five stages as depicted in Fig. 2. Similar to
Narasimhan and Jayaram (1998), our research is also a longitudinal
study of over 18 months on single auto component manufacturer.
Furthermore, as noted in Mukherjee et al. (2000), due to the time
and depth of the study, it provides us with an opportunity to
explore many contexts within a case firm.
Following sections describes the above-mentioned steps of the
proposed methodology in detail.
3.1. Development of questionnaire for case study
A well-structured questionnaire was prepared using the same
24 performance indicators as identified by Joshi et al. (2011).
The purpose of choosing the same determinants as Joshi et al.
(2011) was to validate (or make a comparative analysis of)
industry level survey results with what is actually happening in
a company. However, unlike the questionnaire used by Joshi et al.
(2011) to generate Industry specific priority vector (PVI), this
research instrument was constructed to gather an in-depth
information on the competitive policies, production strategy,
design thinking process, process thinking capability, innovations,
creativity, and commercialization practices of the selected case
firm. While designing the questions, the dynamic nature of the
component industry was taken into consideration, so as to collect
the information on the influence of competitive strategies on
overall performance of case firm.
The questionnaire was divided into two different sections.
Section I contained a pairwise comparison questions and section
II was composed of a large number of open-ended questions. In
section I, the questions of pairwise comparison were expressed in
form of statements and respondents were asked to compare two
given variables with respect to control criteria. A sample of
pairwise comparison questions that were asked to ABC Motors
are mentioned in Table 2.
Where, ‘‘X’’ in Table 2 represents the responses obtained
from the case company. C1, C2, and Ma2 represent performance
sub-variables that determine the SC competitiveness. As stated
earlier, there are 24 such sub-variables that are grouped
into seven major variables including cost, flexibility, quality,
buyer–supplier relationship, technology, business environment,
Research question Research methodology
Why the priority of performance indicators varies across Focused case research for
the auto component manufacturers? longitudinal study.
Which operational strategies have impelled the business
competitiveness?
How do strategies impact the operational performance of
an organization?
Is there any dependency among the performance variables
and sub-variables?
154 D. Joshi et al. / Int. J. Production Economics 143 (2013) 151–161
Define the Instrument
research question development
Fig. 2. The five stage case research process model (Adapted from Stuart et al., 2002).
Table 2
Compare the following given elements w.r.t. sub-variable Ma2.
Which element do you consider more important? (w.r.t. Ma2)
To what extent?
Which element do you consider more important? (w.r.t.Ma2)
To what extent?
Which element do you consider more important? (w.r.t. Ma2)
To what extent?
Which element do you consider more important? (w.r.t. Ma2)
To what extent?
Table 3
Pairwise comparison scale (Saaty, 1980).
Comparison Scale Verbal scale
1 Equal importance of both elements
3 Moderate importance of one element over another
5 Strong importance of one element over another
7 Very strong importance of one element over another
9 Extreme importance of one element over another
2, 4, 6, 8 Intermediate values
and other miscellaneous factors. The significance of numerical rating
is mentioned in Table 3. Saaty’s scale maps a discrete set of linguistic
preferences to a discrete set of numerical values which embody the
weights or importance.
Section II was further divided into two sub-sections, A and B. Sub-
section A contained the questions related to profitability, turnover,
company’s position in supply chain, business category and responsi-
bilities. Sub-section B was designed to target the factors having direct
impact on the firm’s performance. These performance factors mainly
deduced the impact of business environment, impact of location,
response towards global supply chain competition, quality accredita-
tion requirements of customers and suppliers, buyer–suppliers rela-
tionship, supply-chain responsiveness, company-specific strategies,
and other key performance indicators of the firm. Such open-ended
questions of sub-section II highlighted the rationale behind the
responses of the pairwise comparison matrices. Listed below provide
a sample of open ended questions used in this study:
 How the information sharing from suppliers and buyers
impact on your business performance?
 Mention the impact of location selection on drivers of your
business competitiveness.
 There is a growing trend in which fewer bigger suppliers
emerge in the automotive industry with increased responsi-
bility for design, development and manufacturing of complex
systems. How this is affecting the design thinking capability of
your organization?
 Mention the key pillars of your business operations strategies.
 Mention the examples where you have dropped the supplier
because of quality concern.
Data Analyze Disseminate
gathering data the findings
C1X C2
1 2X 3 4 5 6 7 8 9
C1 C5X
1 2 3 4 5 6X 7 8 9
C1 F1X
1 2 3X 4 5 6 7 8 9
C2 C5X
1 2 3 4X 5 6 7 8 9
3.2. Data collection
3.2.1. Selection of case organization
Five Indian auto component manufacturing firms were appro-
ached to conduct the case study. These companies were large-
scale component manufacturers and well known among the
OEMs. It is important to note here that these companies were
not included in the industry level survey of Joshi et al. (2011). This
was done on purpose to avoid any potential bias in the results.
However, after discussions with the top management of each
organization, only one company agreed to participate in the
research process. The advantage associated with large scale
manufacturers, as compared to their middle and small counter-
parts, is that the impact of changing business scenario is apparent
and explicit in case of bigger organizations. Furthermore, data
integrity and its availability are comparatively better in large
scale manufacturers. For confidentiality of information, original
name of the case firm has been changed to ‘ABC Motors’.
In order to collect the data, we visited ABC Motors in person and
interviewed the relevant executives (subject matter experts).
During the interview process, the research objective was explained
in detail. Subsequently these experts were informed about the
performance indicators used for the study. The open ended ques-
tions were discussed and descriptive form of responses were
collected. Such replies explicitly elucidated the management’s
point of view in order to achieve competitiveness. It also provided
with imperative strategies implemented at ABC Motors. The
responses of the filled pairwise comparison questionnaires were
documented manually into the pairwise comparison matrixes. This
face-to-face visit also helped the authors in understanding the
company’s point of view in competitiveness building.
3.2.2. Profile of the case organization
ABC Motors is a highly renowned auto component manufactur-
ing firm headquartered in South India. Across the globe it has 300
manufacturing units in 60 countries. In India, its corporate group
operates through six highly competent manufacturing sites (con-
sidering only automotive business) and four development centers.
Since its inception, persistent innovative practices have broadened
its product portfolio for gaining national and international recogni-
tion. This mainly includes diesel and petrol ignition systems, chassis
and brakes system, body, glow plugs, spark plugs, motors, starter
 D. Joshi et al. / Int. J. Production Economics 143 (2013) 151–161
motors, batteries, belts, filters, gear pumps, car multimedia auto-
motive electronics and variety of products for aftermarket. The
company supplies its equipment to all major OEMs like Volvo,
General Motors, Volkswagen, Ford Motors, Eicher, Maruti, Mercedes,
Hyundai, Tata Motors, Ashok Leyland, and Mahindra and Mahindra.
Financially speaking, the case company had annual sales
turnover of approximately USD 1424.68 million in December
2010. In India, the case company is listed on the Bombay Stock
Exchange (BSE) and National Stock Exchange (NSE). At the
international level, the company is listed on the New York Stock
Exchange (NYSE) and has its footprints in the UK, Germany,
France, South Korea, South Africa, Thailand, and Spain. At opera-
tional level, the company faces huge competition from compo-
nent manufacturers like Hughes Electronics Corporation; Alfred
Teves, Siemens AG, TRW Inc in international market and Amtek
Auto Ltd, Sundaram Brake Lining Ltd, Tata Auto Comp System Ltd,
Bajaj Auto and many more, in the Indian market. ABC Motors has
a complex organizational structure of high vertical and broad
horizontal pattern. High standards of professionalism, integrity,
and governance practices resulted in reputation of being a fair,
honest, ethical, and transparent organization. Through its pre-
sence in all major automotive clusters of India, the case company
is known for its quality and reliable products across the world.
3.2.3. Profile of the selected respondents
To administer the questionnaire, respondents were selected from
various levels of the organizational hierarchy. They were chosen
based on their experience and position in the company. This
included the supervisory and managerial-level employees each with
a minimum working experience of five years with ABC Motors and
holding decision-making roles within the company. However, if we
include non-ABC Motors experience, these individuals had a total of
at least ten years of experience in the automotive sector. Discussions
with experienced personnel helped to explore the various manage-
ment practices followed in ABC Motors and its direct competitors. It
also aided in understanding the commonly used business strategies
at national and international component manufacturers located
in India.
3.3. Data analysis
The sample data obtained by using Table 2 are summarized in
Table 4. It represents a pairwise comparison data. For example, in
this case, C1 is 2 times more important than C2, C1 is 6 times
more important than C5 and C2 is 4 times more important than
C5 and so on. Where C1, C2,y,C5 represent the different types of
cost variables such as raw materials, manufacturing, labor, inven-
tory, and distribution costs respectively.
The dependence among performance indicators were explored
through ANP network diagram, shown in Fig. 3. It illustrates the
mutual dependence among 24 SC performance indicators. The
ANP methodology has been widely adopted in the literature for
prioritization of attributes and criteria that exhibit mutual
dependence (Buyukyazien and Sueu, 2003; Navarro et al., 2008).
The double-sided arrows in the network (Fig. 3) represent mutual
Table 4
Pairwise comparison of the SC performance indicators w.r.t. government policies.
Ma2 C1 C2 C5
C1 1 2 6 3
C2 1/2 1 4
C5 1/6 1/4 1 6
F1 1/3 1/9 1/6
155
Goal: S.C. Competitiveness of IAC Industry
Overall Weighted Index
Technolog Environmental
Factors
T1 T2
Ma1 Ma2 Mi1
Quality Mi2 Mi3
Q1 Q2
Cost
Heterogeneous
C1 Factors
C2 C3
D1 CD L I
C4 C5
Buyer-supplier
Flexibilit
relationship
F1 F2
F3 F4 BSR1 BSR2
Fig. 3. ANP network diagram for prioritization of competitiveness factors for ABC
Motors.
dependence among the elements and the closed-loop expresses
the interdependence. The use of ANP also facilitated the compar-
ison of one criterion with other criteria on a ratio scale. In this
study, the ANP framework was implemented in the MATLABTM
environment.
The following steps were followed in solving the ANP compu-
tations in MATLAB:
Step-1. Once the filled pairwise comparison questionnaire was
received from the respondents, the principle eigenvectors were
obtained for all the pairwise comparison matrixes. Thereafter,
each of the eigenvectors was entered as a column under
respective control criterion, to generate another matrix called
the unweighted super matrix. The sum total of every column in
the unweighted super matrix can be more or less than one.
Step-2. The unweighted super matrix was normalized to obtain
the weighted super matrix, as shown in Table 5. Such a super
matrix in ANP reveals the local-priority information of a
considered network by representing the overall impact of one
criterion on a group of criteria, and vice-versa. Here, the zeros in
the matrix indicate non-dependence. Positive numerical values
indicate the strength of being influenced and influencing
(dependence) of the criteria on each other. It should be noticed
that the column sum of the weighted super matrix always sums
to unity. Recall that eigenvectors are the relative weights of
criteria that are compared in the pairwise comparison matrix
with respect to any control criteria.
Step-3. The weighted super matrix was raised to powers by
multiplying it a number of times by itself, until the entities in
matrix stop changing their values. The converged matrix so
obtained is called as a limit super matrix. Such limit super
matrix is shown in Table 6. The limit super matrix indicates the
final priorities for all the considered elements. The final prio-
rities can be read from any given column, since all the columns
F1
of the limit super matrix are identical. The values in any column
of the limit super matrix represent the priority vector, which is
9 denoted as PVA. The PVA signifies the relative weights of 24
performance indicator in the overall competitiveness of the ABC
1
Motors. Column 4 of Table 7 highlights the PVA.
 156
Table 5
ANP unweighted super matrix.

Comp C1 C2 C3 C4 C5 F1 F2 F3 F4 Q1 Q2 BSR1 BSR2 T1 T2 Ma1 Ma2 Mi1 Mi2 Mi3 CD D L I

Comp 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
C1 0.008 0 0.0453 0 0 0 0 0 0 0 0 0 0 0.0096 0.0257 0 0.0280 0.0380 0.0568 0 0.0151 0 0 0.0158 0
C2 0.015 0 0 0 0 0 0 0 0.0538 0 0 0 0 0.0482 0.0129 0.0671 0.0140 0.0380 0.0142 0 0 0.0167 0 0.0032 0
C3 0.03 0 0.0749 0 0 0 0 0 0.1773 0 0 0 0.0256 0 0.1287 0 0.0140 0 0.0142 0.2770 0.1055 0 0 0.0473 0
C4 0.045 0 0 0 0 0 0.0386 0.0295 0.0521 0.0600 0 0 0.0511 0.04 0.0949 0 0.1 0 0.0515 0 0.0301 0 0.0232 0.0930 0
C5 0.037 0 0 0 0 0 0 0.0585 0 0.0100 0 0.0235 0.0767 0.0578 0 0 0.0140 0.0759 0 0 0.0753 0 0.0078 0.0630 0
F1 0.03 0.0435 0.0749 0.1471 0.0747 0.0260 0 0.0780 0.0507 0.0600 0 0.0176 0 0.0672 0.0091 0.0335 0 0.0126 0 0.0219 0.0603 0.0301 0.0399 0 0

D. Joshi et al. / Int. J. Production Economics 143 (2013) 151–161

F2 0.03 0 0 0 0.0452 0.1039 0 0 0.0253 0.0100 0 0.0141 0.1023 0.0272 0.1288 0 0 0 0 0.0115 0.0603 0.0302 0.0116 0 0.0127
F3 0.045 0 0.0749 0.0490 0.0747 0 0.0241 0.1171 0 0.1400 0.0143 0.0141 0.0411 0.0481 0 0.0923 0 0 0.0515 0.0219 0.1055 0.0100 0.0243 0 0.0255
F4 0.03 0.0290 0 0 0.0151 0.0158 0 0 0.1267 0 0 0.0141 0.1023 0.0289 0 0 0 0 0 0 0.0452 0.0254 0.0078 0 0.0255
Q1 0.092 0.3608 0.1172 0.0690 0 0 0 0 0 0 0 0.3132 0 0.1319 0 0.1276 0.0543 0 0 0 0 0.1132 0 0 0
Q2 0.005 0.1607 0 0.0100 0 0 0.0241 0.0780 0 0 0.1914 0 0 0.0481 0.0503 0.0923 0.0093 0 0.1136 0.25 0 0.0178 0.1 0.0039 0.1532
BSR1 0.037 0 0.0749 0.0765 0.0747 0.1038 0.0361 0.1171 0.1889 0.1000 0.0143 0.0176 0 0.0672 0.0731 0.0576 0 0 0.1704 0.0231 0.1055 0.1420 0.0427 0.0473 0.0255
BSR2 0.052 0.0435 0 0 0.0439 0.1039 0 0.1366 0.0084 0 0.0859 0.1777 0.1023 0 0.0257 0 0.1402 0 0.0515 0.0923 0.0753 0.0379 0.1 0.0946 0.1277
T1 0.06 0 0.1124 0.0300 0 0 0.1444 0 0.0507 0.1200 0.1718 0.0391 0.1023 0.0385 0 0.1342 0 0.0759 0 0.0092 0 0.1132 0.0158 0.0315 0.1532
T2 0.06 0.0870 0.1123 0.0490 0 0 0.1444 0 0.0269 0.0200 0.0430 0.0704 0 0.0363 0.0715 0 0.0841 0.2139 0 0.0462 0 0.0301 0 0.0788 0
Ma1 0.06 0.0435 0.0749 0.1472 0.0226 0.0264 0.2888 0 0 0 0.0143 0.0783 0.1023 0.0481 0.1287 0.0733 0 0.1899 0 0.0077 0 0.0202 0.0927 0.1103 0.0128
Ma2 0.045 0.0290 0.0374 0.0300 0.0452 0.0488 0 0 0 0 0.0311 0.1566 0 0.0363 0.0870 0.0335 0.1682 0 0.1136 0.0116 0 0.1213 0.0695 0.1261 0.0128
Mi1 0.036 0.0290 0.0187 0 0.0834 0.0779 0 0 0 0 0 0 0.0511 0.0349 0 0.0337 0 0 0 0 0.0706 0 0 0 0.0255
Mi2 0.045 0 0 0.1961 0 0 0.1444 0 0.0084 0.0800 0.2578 0.0261 0.0511 0.0796 0.0515 0.1006 0.1963 0 0.0469 0 0 0.0404 0 0.0788 0.1277
Mi3 0.052 0.0435 0 0 0.1357 0.1299 0 0.0049 0.2127 0.1600 0.1532 0 0.1279 0 0 0 0 0 0.2038 0.151 0 0 0.1 0 0.1277
CD 0.052 0.0870 0 0 0.1356 0.0779 0.1444 0.0977 0.0084 0.1600 0 0 0.0511 0.0024 0.0772 0.1006 0.1683 0.3038 0 0.0231 0.1055 0 0.0927 0.1418 0.0085
D 0.06 0 0 0 0.1226 0.1039 0 0.1171 0 0.0100 0.0143 0.0235 0 0 0 0 0 0 0 0 0.0603 0.1420 0 0.0158 0.0085
L 0.037 0.0435 0.1122 0.1961 0.0832 0.1039 0 0.1365 0.0084 0.0100 0 0 0 0.0997 0 0.0231 0 0 0.0705 0.0115 0.0753 0.0809 0.199 0 0.1532
I 0.037 0 0.07 0 0.0434 0.0779 0.0107 0.0290 0.0013 0.0600 0.0086 0.0141 0.0128 0.05 0.0349 0.0306 0.0093 0.0520 0.0415 0.0423 0.0102 0.0286 0.073 0.0488 0
 D. Joshi et al. / Int. J. Production Economics 143 (2013) 151–161 157

4. Findings of the ABC Motors case study

0.013
0.044

0.024
0.032
0.028
0.034
0.019
0.051
0.053
0.059
0.064
0.057
0.049
0.064
0.054
0.016
0.069
0.053
0.074
0.026
0.049
0.029
0.009

0.03
I
Table 7 depicts the management priority for the selected SC

0.013
0.044

0.024
0.032
0.028
0.034
0.019
0.051
0.053
0.059
0.064
0.057
0.049
0.064
0.054
0.016
0.069
0.053
0.074
0.026
0.049
0.029
0.009 performance variables at ABC. One of the important findings of

0.03
this study is many of the variables are correlated (see Table 5). For
L

example, all five cost sub-variables are found to be dependent on

0.013
0.044

0.024
0.032
0.028
0.034
0.019
0.051
0.053
0.059
0.064
0.057
0.049
0.064
0.054
0.016
0.069
0.053
0.074
0.026
0.049
0.029
0.009

0.03
location decision and globalization. Similarly, information sharing
D

among buyer and supplier has even wider influences on almost all
the variables under study except for raw materials cost, globali-
0.013
0.044

0.024
0.032
0.028
0.034
0.019
0.051
0.053
0.059
0.064
0.057
0.049
0.064
0.054
0.016
0.069
0.053
0.074
0.026
0.049
0.029
0.009

0.03
CD

zation, and government policies. The other key finding is that the
individual weights of such factors as cost and flexibility are not
0.013
0.044

0.024
0.032
0.028
0.034
0.019
0.051
0.053
0.059
0.064
0.057
0.049
0.064
0.054
0.016
0.069
0.053
0.074
0.026
0.049
0.029
0.009

high as compared to that of external factors such as government

0.03
Mi3

policies and globalization. While it may look counter intuitive, the

real reason behind this is the correlation among the performance
0.013
0.044

0.024
0.032
0.028
0.034
0.019
0.051
0.053
0.059
0.064
0.057
0.049
0.064
0.054
0.016
0.069
0.053
0.074
0.026
0.049
0.029
0.009

0.03
Mi2

variables that determine the competitiveness of a firm. In the

following section, we discuss the findings in detail along with the
strategies implemented at the case company to improve its SC
0.013
0.044

0.024
0.032
0.028
0.034
0.019
0.051
0.053
0.059
0.064
0.057
0.049
0.064
0.054
0.016
0.069
0.053
0.074
0.026
0.049
0.029
0.009

0.03
Mi1

competitiveness.
0.013
0.044

0.024
0.032
0.028
0.034
0.019
0.051
0.053
0.059
0.064
0.057
0.049
0.064
0.054
0.016
0.069
0.053
0.074
0.026
0.049
0.029
0.009
Ma2

0.03

(a) Among the considered performance variables, the business

environmental factors have contributed the highest weight of
0.013
0.044

0.024
0.032
0.028
0.034
0.019
0.051
0.053
0.059
0.064
0.057
0.049
0.064
0.054
0.016
0.069
0.053
0.074
0.026
0.049
0.029
0.009
Ma1

0.03

26%. Business leaders at ABC Motors reckoned them as the

facilitators in achieving core business objectives like cost reduc-
0.013
0.044

0.024
0.032
0.028
0.034
0.019
0.051
0.053
0.059
0.064
0.057
0.049
0.064
0.054
0.016
0.069
0.053
0.074
0.026
0.049
0.029
0.009

tion, business generation, technology enhancement, and quality

0.03
T2

production. The macro and micro business environmental

factors influenced the other performance indicators and vice
0.013
0.044

0.024
0.032
0.028
0.034
0.019
0.051
0.053
0.059
0.064
0.057
0.049
0.064
0.054
0.016
0.069
0.053
0.074
0.026
0.049
0.029
0.009

0.03

versa. For example, the delivery policies, scheduling strategies,

T1

sourcing strategies, customer demand, investment in R&D,

associated quality accreditations, labor cost, manufacturing cost,
0.013
0.044

0.024
0.032
0.028
0.034
0.019
0.051
0.053
0.059
0.064
0.057
0.049
0.064
0.054
0.016
0.069
0.053
0.074
0.026
0.049
0.029
0.009
BSR2

0.03

and location preferences for manufacturing sites at ABC was

influenced by ‘‘conducive’’ policies of Government of India and
0.013
0.044

0.024
0.032
0.028
0.034
0.019
0.051
0.053
0.059
0.064
0.057
0.049
0.064
0.054
0.016
0.069
0.053
0.074
0.026
0.049
0.029
0.009
BSR1

the globalization of the automotive business. Similarly, the

0.03

company’s dominant position in technological advancement,

market share, cost leadership, product differentiation, bargain-
0.013
0.044

0.024
0.032
0.028
0.034
0.019
0.051
0.053
0.059
0.064
0.057
0.049
0.064
0.054
0.016
0.069
0.053
0.074
0.026
0.049
0.029
0.009

0.03

ing power with suppliers and buyers had created benchmarking

Q2

standard for local government in framing the industrial policy.

(b) Cost advantage and buyer–supplier relationship were both
0.013
0.044

0.024
0.032
0.028
0.034
0.019
0.051
0.053
0.059
0.064
0.057
0.049
0.064
0.054
0.016
0.069
0.053
0.074
0.026
0.049
0.029
0.009

0.03
Q1

ranked relatively higher (12% weight), indicating them as a

major interest for ABC supply chain managers. While both the
0.013
0.044

0.024
0.032
0.028
0.034
0.019
0.051
0.053
0.059
0.064
0.057
0.049
0.064
0.054
0.016
0.069
0.053
0.074
0.026
0.049
0.029
0.009

variables have contributed almost equally in priority vector,

0.03
F4

cost sub-variables like labor cost (0.044087) and cost of

inventory (0.029887) were the major concerns for ABC. During
0.013
0.044

0.024
0.032
0.028
0.034
0.019
0.051
0.053
0.059
0.064
0.057
0.049
0.064
0.054
0.016
0.069
0.053
0.074
0.026
0.049
0.029
0.009

0.03

our interviews, the company management team revealed that

F3

the decisions regarding location selection, raw material sour-

cing, and inventory management directly influenced changes
0.013
0.044

0.024
0.032
0.028
0.034
0.019
0.051
0.053
0.059
0.064
0.057
0.049
0.064
0.054
0.016
0.069
0.053
0.074
0.026
0.049
0.029
0.009

0.03
F2

in cost structure. As expected, the buyer–supplier relationship

was dependent on the delivered quality level of the compo-
0.013
0.044

0.024
0.032
0.028
0.034
0.019
0.051
0.053
0.059
0.064
0.057
0.049
0.064
0.054
0.016
0.069
0.053
0.074
0.026
0.049
0.029
0.009

nent, flexibility in process, delivery, volume, and capability of

0.03
F1
ANP limit super matrix showing convergence of weights.

suppliers to provide wide range of product portfolio.

(c) Flexibility as a determinant of competitiveness was given a
0.013
0.044

0.024
0.032
0.028
0.034
0.019
0.051
0.053
0.059
0.064
0.057
0.049
0.064
0.054
0.016
0.069
0.053
0.074
0.026
0.049
0.029
0.009

0.03

weight of 11% in the overall SC competitiveness. Flexibility in

C5

every step of the value chain leads to better supply chain

0.013
0.044

0.024
0.032
0.028
0.034
0.019
0.051
0.053
0.059
0.064
0.057
0.049
0.064
0.054
0.016
0.069
0.053
0.074
0.026
0.049
0.029
0.009

responsiveness (Sanchez and Perez, 2005). As expected, deci-

0.03
C4

sion regarding the degree of flexibility is dependent on the

ABC’s infrastructural facilities, their location of manufacturing
0.013
0.044

0.024
0.032
0.028
0.034
0.019
0.051
0.053
0.059
0.064
0.057
0.049
0.064
0.054
0.016
0.069
0.053
0.074
0.026
0.049
0.029
0.009

0.03

site as well as that of their buyers and suppliers, skills and

C3

capabilities of their human assets, customer demand and

supplying potential of their Tier II suppliers. The company
0.013
0.044

0.024
0.032
0.028
0.034
0.019
0.051
0.053
0.059
0.064
0.057
0.049
0.064
0.054
0.016
0.069
0.053
0.074
0.026
0.049
0.029
0.009

0.03

managers highlighted their competence in sourcing and

C2

inventory management flexibility owing to various schedul-

0.013
0.044

0.024
0.032
0.028
0.034
0.019
0.051
0.053
0.059
0.064
0.057
0.049
0.064
0.054
0.016
0.069
0.053
0.074
0.026
0.049
0.029
0.009

ing techniques in place.

0.03
C1

(d) Just like flexibility, technology also contributed 11% in the

overall SC performance index. Although the company currently
Table 6

BSR1
BSR2

Ma1
Ma2
Mi1
Mi2
Mi3

has a global platform, during the initial stages of development

CD
Q1
Q2
C1
C2
C3
C4
C5

T1
T2
F1
F2
F3
F4

D
L
I

in India, the investment in R&D activities had significantly

158 D. Joshi et al. / Int. J. Production Economics 143 (2013) 151–161

Table 7
Determinants of SC competitiveness and their priority vectors for ABC Motors.

Variables Sub-variables Symbols Priority vector (PVA) Variable contribution

Cost Cost of raw material C1 0.009022 0.120032

Cost of manufacturing C2 0.013456
Labor cost C3 0.044087
Cost of inventory C4 0.029887
Distribution cost C5 0.02358

Flexibility Product mix F1 0.0318 0.112354

Delivery flexibility F2 0.027632
Process flexibility F3 0.033683
Volume flexibility F4 0.019239

Quality Delivered quality level Q1 0.051019 0.104368

Quality accreditation Q2 0.053349

Delivery Delivery decision D 0.026243 0.104023

Location selection L 0.048792
Infrastructure I 0.028988

Buyer–supplier relationship Information sharing among buyer & supplier BSR1 0.059291 0.122831
Selection of buyer and supplier BSR2 0.06354

Technology Technological innovation T1 0.056857 0.105724

Research and development activity T2 0.048867

Environmental factors Globalization Ma1 0.063784 0.256852

Government policies Ma2 0.0541
Sourcing decision Mi1 0.016244
Skills and capability Mi2 0.069348
Scheduling techniques Mi3 0.053376

Customer demand Customer demand CD 0.073816 0.073816

increased its cost structure. It also has a large pool of highly
skilled workforce. Technology combined with skilled work-
force has enabled ABC to design and produce a greater
product mix.
(e) Another significant variable for the SC competitiveness of ABC
was found to be the delivery related factors. Among various
performance variables, the location selection was rated highest
by the ABC’s management team. For example, the ABC’s
decision to locate its manufacturing sites in major auto clusters
of India and abroad have reduced its distribution cost, inven-
tory management cost, labor cost etc. It has also improved
product availability. The optimal location choice provided
many benefits to ABC like world class infrastructural facilities
developed under National Automotive Testing and R&D Infra-
structure Project (NATRIP), proximity to customers and sup-
pliers thereby allowing it to practice JIT and direct-on-line
technique of inventory management. As shown in Joshi et al.
(2011), our study also discovered the relationships among
three sub-variables of delivery cluster and other variables such
as process flexibility and environmental factors. However, the
overall relative weight ‘‘delivery’’ variable in our case study is
different for ABC than that found by Joshi et al. (2011) at the
industry level. Our interactions with the ABC management
revealed that the company weighted slightly less for delivery
because they were already located in proximity to an auto-
motive cluster and did not have major issues with delivery.
(f) Quality, shared 10% of the weight in overall business compe-
titiveness of ABC Motors. Although the relative weight of the
quality is low, the business leaders at ABC emphasized
the dependence of quality on factors like quality accredita-
tions, technology, competency of sourcing partners, skills and
capabilities of human resource, customer demand, and
its infrastructural facilities. ABC’s implementation of globally
recognized quality standards, development of research
laboratories, uninterrupted technical and behavioral training
programs are all directed towards quality enhancement.
Managers described a quality consciousness of ABC Motors
as most significant foundation of its harmonious and long
lasting relationship with its customers.
(g) A close observation of prioritization results in Table 7 shows
that customer demand has the highest weight of 0.073186
compared to other sub-variables weights. It shows that
customer demand is the main driver of any supply chain
activity. The case study results shows that customer demand
is influenced by ABC’s competence in flexibility management,
delivery decisions, quality conformance, government policies,
location selection, globalization of allied sectors, infrastruc-
ture requirement, and development in research activities.
5. Managerial insights and theoretical implications of the
study
In this section, we first discuss the competitive strategies of
the case form along with important managerial insights which are
then followed by theoretical implications of the case study.
5.1. Managerial implications
This research considered two different priority vectors i.e. PVI
and PVA. First, a vector pertinent to the overall auto component
industry, PVI (presented in Joshi et al., 2011), was assumed to be a
 D. Joshi et al. / Int. J. Production Economics 143 (2013) 151–161 159

generalized framework for competitiveness. Second, PVA
(described in Section 4 and Table 7) represented the vector
specific to ABC Motors. In this section, a comparative analysis of
the two priority vectors (PVI versus PVA) is made along with the
strategies implemented at the case firm. Table 8 provides a
comparative analysis of PVI and PVA results.
We believe that this analysis will provide important manage-
rial insights for both: (a) Indian auto component firms desiring to
improve their competitiveness in the world market; and (b) the
global auto assemblers anticipating Indian auto component man-
ufacturers as potential SC partners.
 Firm specific PV (i.e. PVA) confirmed that favorable environ-
mental factors were essential for the success of the IAC industry.
These factors were also the drivers of global competitive advan-
tage. The various time-bound policies and projects of the
Government of India facilitated the growth of this industry
during the last decade. Few key ones included Auto Policy
2006, Auto Mission Plan (AMP) 2006-16, NATRIP, and liberalized
credit policies. As a result of these policies, ABC Motors devel-
oped alliances and ventures with Switzerland, Germany and
France-based automotive companies for its material selection
and for design and development (D&D) activities. Such macro
economic factors have also created the hassle-free business
environment for component manufacturers of the entire IAC.
 Customer demand is the main driver of any business activity.
Both vectors obtained almost equal weights for this critical
element of competitiveness. As expected, demand showed
positive correlation with the growth of industry and firms in
our study as well. A further study on ABC Motors’s growth
trend and sales volume revealed that there was direct correla-
tion between the two, For example, since 2006–07 the operat-
ing profit of ABC Motors has grown by 28% which was mainly
accounted for increase in sales turnover by 41% during the
same period.
 Cost was considered an important dimension on both the
priority vectors. However, our interviews with ABC team
revealed that the labor and raw material costs are essentially
the same across the industry for a given product type, neutra-
lizing their competitive advantage. On the other hand, the
manufacturing, inventory, and delivery costs usually varied
across the firms. It is very logical because management of these
three types of costs depended upon the company strategies. For
instance, distribution cost was less important to ABC Motors
because its production sites were located in the close vicinity of
their suppliers and customers. It was also attributed to the
lower priority for delivery flexibility by ABC personnel.
 The ABC respondents described that customer satisfaction could
be achieved by implementing process thinking capability in an
organization. In this regard, ABC integrates the essentials of
process thinking in its production system, also known as ABC
Motors Production System. It is fully focused on reducing costs,
improving quality, and meeting the promised delivery aspects
required for SC competitiveness by implementing just-in-time
production and total productivity management systems. The
company’s production process is highly flexible which allows it
to produce a large variety of products with greater mix. Therefore,

Table 8
Comparison between industry level prioritization vectors with those of ABC Motors.

Variables Sub-variables Symbols Industry level priority vector (PVI) Variable ABC Motors priority (firm level) Variable
(Joshi et al., 2011) contribution vector (PVA) contribution

Cost Cost of raw material C1 0.009975 0.122712 0.009022 0.120032

Cost of manufacturing C2 0.023435 0.013456
Labor cost C3 0.02018 0.044087
Cost of inventory C4 0.034878 0.029887
Distribution cost C5 0.034244 0.02358

Flexibility Product mix F1 0.026118 0.124184 0.0318 0.112354

Delivery flexibility F2 0.033625 0.027632
Process flexibility F3 0.038608 0.033683
Volume flexibility F4 0.025833 0.019239

Quality Delivered quality level Q1 0.04246 0.096067 0.051019 0.104368

Quality accreditation Q2 0.053607 0.053349

Delivery Delivery decision D 0.035706 0.136122 0.026243 0.104023

Location selection L 0.052351 0.048792
Infrastructure I 0.048065 0.028988

Buyer–Supplier Information sharing among BSR1 0.064383 0.124038 0.059291 0.122831

relationship buyer & supplier
Selection of buyer and supplier BSR2 0.059655 0.06354

Technology Technological innovation T1 0.054011 0.07307 0.056857 0.105724

Research and development T2 0.019059 0.048867
activity

Environmental Globalization Ma1 0.056449 0.248951 0.063784 0.256852

factors Government policies Ma2 0.062492 0.0541
Sourcing decision Mi1 0.019126 0.016244
Skills and capability Mi2 0.061495 0.069348
Scheduling techniques Mi3 0.049389 0.053376

Customer demand Customer demand CD 0.074846 0.074846 0.073816 0.073816

160 D. Joshi et al. / Int. J. Production Economics 143 (2013) 151–161
the process flexibility gained higher importance among the
different types of flexibility on PVA.
 In order to compete in a global market, Indian component
manufacturing firms are following the philosophy of ‘critical to
quality’ (Sangwan and Digalwar, 2008). As a result, weights of
quality parameter on both the PVs were observed to be almost
identical for quality elements. Respondents emphasized that
all firms in the industry achieved delivered-quality-level by
acquiring world-class quality accreditations. The case firm,
ABC relies on global quality standards including ISO/TS:
16949:2002 and ISO 14000:2004, ISO-9001: 2008, ISO-
14001, ECE, TS-16949: 2009, ARAI, OHSAS-18001: 2007 and
SAE. At shop floor, it follows the philosophy of total quality
management (TQM), Plan-Do-Check-Act (PDCA) cycle, quality
assurance matrix (QAM), and 8D approach. The company
follows German DIN standards, and the VDA 6.1, 6.2 and
6.4 standards for quality in its production process, services
requirements, and production resources. Thus quality policy of
ABC formed an integral part of its entire business strategy. The
policy focused more on human skills and operations. Due to
competing skills and the capabilities of employees, the high
degree of technological advancement and state-of-art infra-
structure facilities, the company was able to achieve very low
defects rate in its production process (that is, less than
300 ppm). On its three-zone manufacturing line, there are four
major audit gates to check product quality ratings (PQR).
 Analysis of both PVs showed that design thinking capability of an
organization is needed to survive present business competition. It
leads to production of robust and reliable low-cost components.
The availability of common design and developmental labs in auto
zones and ongoing technological developments at case firm has
made technological innovations a significantly important attribute
in its competitiveness. Our survey unveiled that in order to
incorporate requisite creativity and innovation in component
design and processing, the company acquired some 10,000 sq m
space in a centralized technical center located in south India. Such
engineering and research center aided product development,
optimizing expenditures for in-house technological innovations.
The company obtained approximately 3000, 3218, 3800 patents
related to automotive component design and development world-
wide in the years 2006, 2007 and 2010 respectively. It has an
incredible story in terms of innovation which files patents at an
average rate of 10 inventions per day. As R&D activity is a firm
specific and depends upon the investment plans of a manufac-
turer, so the overall weight for this variable differed in PVI and
PVA. It was lower at the industry level (PVI) but was higher at
ABC (PVA).
 The higher contribution of buyer–supplier relationship on both
vectors substantiated its importance towards achieving busi-
ness excellence. At ABC Motors it was noticed that buyers
shared its component design (such as rubber parts, plastic
parts, and casting sheet metals) with the case company. This
type of information sharing thus increased the responsibility
of R&D for complex components. The company also organizes
rigorous training and development programs for the advance-
ment of its suppliers which contributed to supplier quality
improvements leading to long-lasting relationships.
 Infrastructure, as an element of competitiveness, was weighted
differently in PVI and PVA. It can be attributed to the fact that
every company has different priority or budgets for its in-house
facility development. On the other hand, infrastructure facilities
at macro level come under the direct control of governmental
bodies and it also depends on the development of other allied
sectors such as iron, steel and power (in case of automotive
industry). Infrastructure played an important role in selecting
facility location at ABC as it directly impacted the logistics and
distribution costs for the company. The equal weight of location
as a SC performance indicator on both PVs exhibited its
significance in competitiveness.
5.2. Theoretical implications
Gunasekaran et al. (2001, 2004) emphasized the need of sector
specific studies to determine the more meaningful SC performance
measurements. Several studies have been published since then,
especially in the automotive sector. A few examples include Sahay
et al. (2006), Mishra and Sahay (2010), Nayak and Ray (2010), Singh
(2010), Singh et al. (2010) and Joshi et al. (2011). The primary focus of
these studies has been on in-depth analysis of one or two selected
performance factors of Indian automotive manufacturing industry.
As mentioned in the introduction section of this paper, these prior
studies have provided the initial list of performance factors for this
study. This paper has validated and extended the initial list through a
longitudinal case study of a real-world company, ABC Motors. More
importantly, how much supply chain leverage a company can have in
a global marketplace depends largely upon how well it implements
its competitive strategies. As noted by Fisher (1997) with respect to
determining ‘‘right supply chain’’ for a product, we can draw similar
analogy here when it comes to determining right competitiveness
priorities for an organization. We believe that a longitudinal case
study like the one presented in this paper provides important insights
to researchers and practitioners alike because every market is some-
what unique due to it local competition, local laws, and locally
available resources. For instance, our findings suggest that for Indian
automotive component manufacturing industry, the core supply
chain competencies or challenges faced by the companies are based
on environmental variables like policies of Indian government. The
other competitiveness factors include production system, quality
management, demand variability, design and development capabil-
ities, and infrastructure development to grow their business. There-
fore, we argue that the supplier selection decision of a global OEM can
be easily influenced by how well a component manufacturer is able
to implement its strategies with respect to the above-mentioned
competitiveness drivers.
6. Conclusions and direction for future research
Influence of supply chain performance indicators on the compe-
titiveness of an enterprise has been well established in the opera-
tions management literature. However, majority of prior studies
have treated each KPI as independent variables while prioritizing
them for corrective actions. It has been widely demonstrated that
many of the supply chain KPI are mutually dependent, creating the
need for methodology to improve the prioritization decision making
by considering the correlation among the variables. Although Joshi
et al. (2011) considered correlations among the supply chain
competitiveness factors their study focused was focused at an
aggregated level of Indian automotive component industry. They
did not examine the influence of operational strategies on a firm’s
competitiveness at a firm level. Therefore in order to understand the
implications of industry level priority vectors at a firm level, this
paper has presented an in-depth case study of an Indian automotive
component manufacturing company. In this study, we have drawn
evidence from actual practices to understand the complexity of the
interaction between performance drivers and management actions
and their joint impact on the competitiveness of a firm.
The longitudinal case study approach has been well documented
in the research methods literature. Our case study has presented
many important findings that provided important insights to
researchers and practicing supply chain engineers and managers
 D. Joshi et al. / Int. J. Production Economics 143 (2013) 151–161
alike. First, it further strengthened the findings of the prior study by
performing a longitudinal case study on an Indian automotive
component manufacturing company with respect to those factors.
More importantly, the strategies adopted by the case study com-
pany to improve the SC competitiveness have been discussed in
detail with respect to each competitiveness drivers under study.
Lastly, the findings were not only beneficial to the case study firm
in terms of prioritizing their resources to improve their competi-
tiveness but it also provided important managerial implications for
other global automotive component manufacturing companies who
might consider India as potential outsourcing option. The paper also
discussed the theoretical implications with respect to the global
operations and supply chain management literature.
This research can be extended primarily in two ways. First, more
case studies can be conducted by considering the multiple Indian
automotive component manufacturing companies that have different
size and level of competitiveness. That way, we can evaluate the
sensitivity of an improvement strategy with a firm’s size and status.
Next, conducting the similar study in developed automotive econo-
mies like US, Germany, and Japan and compare the results with those
of other emerging automotive economies like India, China, and Brazil.
References
Ark, B.V., Azeez, E.A., Chen, V., Kumar, U., 2008. The cost competitiveness of
manufacturing in China and India: an industry and regional perspective,
working paper [228], Indian Council for Research on International Economic
Relations, New Delhi, 1st December.
Buyukyazien, M., Sueu, M., 2003. The analytic hierarchy and analytic network
processes. Hacettepe Journal of Mathematics and Statistics 32, 65–73.
Balakrishnan, K., Seshadri, S., Sheopuri, A., Iyer, A., 2007. Indian auto-component
supply chain at the crossroads. Interfaces 37 (4), 310–323.
Bhatnagar, R., Sohal, A.S., 2005. Supply chain competitiveness: measuring the
impact of location factors, uncertainty and manufacturing practices. Techno-
vation 25 (5), 443–446.
Bagchi, P.K., 1996. Role of benchmarking as a competitive strategy: the logistics
experience. International Journal of Physical Distribution 26, 4–22.
Benbasat, I., Goldstein, D., Mead, M., 1987. The case research strategy in studies of
information systems. MIS Quarterly 11 (3), 369–386.
Bruce, K., 1985. Designing global strategies: profiting from operational flexibility.
MIT Sloan Management Review 27 (1), 27–38.
Carr, A.S., Pearson, J.N., 1999. Strategically managed buyer supplier relationship and
performance outcome. Journal of Operations Management 17 (5), 497–519.
Ellram, L.M., 1996. The use of the case study method in logistics research. Journal
of Business Logistics 17 (2), 93–138.
Fisher, M.L., 1997. What is the right supply chain for your product? Harvard
Business Review, March–April, 105–116.
Gunasekaran, A., Patel, C., Tirtiroglu, E., 2001. Performance measurement and
metrics in a supply chain environment. International Journal of Operations
and Production Management 21 (1–2), 71–87.
Gunasekaran, A., Patel, C., McGaughey, R.E., 2004. A framework for supply chain
performance measurement. International Journal of Production Economics 87,
333–347.
Gurumurthy, A., Kodali, R., 2008. A multi criteria decision-making model for the
justification of lean manufacturing systems. International Journal of Manage-
ment Science and Engineering Management 3 (2), 100–118.
Hult, G.T.M., Ketchen, D.J., Cavusgil, S.T., Calantone, R.J., 2006. Knowledge as a strategic
resource in supply chains. Journal of Operations Management 24 (5), 458–475.
Ho, C.K., Au, K.F., Newton, E., 2002. Empirical research on supply chain manage-
ment: a critical review and recommendations. International Journal of
Production Research 40 (17), 4415–4430.
Huang, S., Lin, S., 2002. Effects of information sharing on supply chain performance
in electronic commerce. IEEE Transactions on Engineering Management 49 (3),
258–268.
Joshi, D., Rathore, A.P.S., Sharma, D., Nepal, B., 2011. Determinants of competi-
tiveness and their relative importance: a study of Indian auto-component
industry. International Journal of Services and Operations Management 10 (4),
426–448.
Jack, E.P., Raturi, A., 2002. Sources of volume flexibility and their impact on
performance. Journal of Operation Management 20 (5), 519–548.
Lall, S.V., Mengistae, T., 2005. The impact of business environment and economic
geography on plant-level productivity: an analysis of Indian industry, working
paper no. 3664, World Bank Policy Research, July 2005.
161
Majumdar, S., 2010. Growth strategy in entrepreneurial managed small
organizations—a study in auto component manufacturing organizations in
India, In: Proceedings of the 2010 IEEE International Conference on Manage-
ment of Innovation and Technology, Singapore, 2010, pp. 975–982.
Mishra, M., Sahay, A., 2010. Assessing innovation quotient (InQ) of Indian auto
component manufacturers. World Review of Entrepreneurship, Management
and Sustainable Development 6 (1–2), 113–124.
Mentzer, J.T., 2004. Fundamentals of Supply Chain Management: Twelve Drivers of
Competitive Advantage. Sage Publications, New Delhi, India.
Mukherjee, A., Mitchell, W., Talbot, F.B., 2000. The impact of new manufacturing
technologies and strategically flexible production. Journal of Operations
Management 18, 139–168.
MacCormack, A.D., Newmann, L.J., Rosenfield, D., 1994. The new dynamics of
global manufacturing site location. Sloan Management Review 35 (4), 69–80.
McCutcheon, D.M., Meredith, J.R., 1993. Conducting case study research in
operations management. Journal of Operations Management 11 (3), 239–256.
Nayak, N.C., Ray, P.K., 2010. Flexibility and performance relationships: evidence
from Indian bearing manufacturing firm. International Journal of Modelling in
Operations Management 1 (1), 67–83.
Navarro, T.G., Melon, M.G., Martin, D.D., Dutra, S.A., 2008. Evaluation of urban
development proposals: an ANP approach. World Academy of Science,
Engineering and Technology 44, 498–508.
Narayan, G.B., Vasthist, P., 2008. Determinants of competitiveness of the Indian
Auto Industry, working papers [201], Indian Council for Research of Interna-
tional Economic Relations, New Delhi, India, December 2008.
Narasimhan, R., Jayaram, J., 1998. Causal linkages in supply chain management: an
exploratory study of North American manufacturing firms. Decision Sciences
29 (3), 579–605.
Panayides, P.M., Lun, Y.H.V., 2009. The impact of trust on innovativeness and supply
chain performance. International Journal of Production Economics 122 (1),
35–46.
Paulraj, A., Lado, A.A., Chen, I., 2008. Inter-organizational communication as a
relational competence: antecedent and performance outcomes in collaborative
buyer–supplier relationship. Journal of Operations Management 26 (1), 45–64.
Pittaway, L., Morrissey, J., 2005. Buyer–supplier relationships in small firms: the
use of social factors to manage relationship, discussion paper no. 2005.03,
University of Sheffield, Management School.
Romano, P., 2002. Impact of supply chain sensitivity to quality certifications on
quality management practices and performances. Total Quality Management
13 (7), 981–1000.
Saaty, T.L., 1980. The Analytical Hierarchy Process. McGraw-Hill, New York.
Sahay, B.S., Gupta, J.N.D., Mohan, R., 2006. Managing supply chains for competi-
tiveness: the Indian scenario. Supply Chain Management: An International
Journal 11, 15–24.
Sanchez, A.M., Perez, M.P., 2005. Supply Chain flexibility and firm performance: a
conceptual model and empirical study in the automotive industry. Interna-
tional Journal of Operations & Production Management 25 (7), 681–700.
Sangwan, K.S., Digalwar, A.K., 2008. Evaluation of world-class manufacturing
systems: a case of Indian automotive industries. International Journal of
Services and Operations Management 4 (6), 687–708.
Singh, N., 2010. Adoption of industry-specific quality management system
standards: determinants for auto component firms in India. International
Journal of Productivity and Quality Management 5 (1), 88–107.
Singh, B., Garg, S.K., Sharma, S.K., 2010. Development of index for measuring
leanness: study of an Indian auto component industry. Measuring Business
Excellence 14 (2), 46–53.
Singh, R.K., Garg, S.K., Deshmukh, S.G., 2007. Strategy development for competi-
tiveness: a study on Indian auto component sector. International Journal of
Productivity and Performance Management 56 (4), 285–304.
Simchi-Levi, D., Kamisky, P., Simchi-Levi, E., 2000. Designing and Managing the
Supply Chain: Concepts, Strategies and Case Studies. Irwin/ McGraw-Hill, Boston.
Song, H., Chatterjee, S.R., 2010. Achieving global supply chain competitiveness:
evidence from the Chinese auto component sectors. Chinese Management
Studies 4 (2), 101–118.
Stuart, I., McCutcheon, D., Handfield, R., McLachlin, R., Samson, D., 2002. Effective
case research in operations management: a process perspective. Journal of
Operations Management 20 (5), 419–433.
Tapan, S., Banwet, D.K., Momaya, K., 2010. Strategy technology management in
practices: dynamic SAP–LAP analysis of an auto component manufacturing
firms in India. Global Journal of Flexible Systems Management 11 (1–2), 15–25.
Vachon, S., Klassen, R.D., 2002. An exploratory investigation of the effects of supply
chain complexity on delivery performance. IEEE Transactions on Engineering
Management 49 (3), 218–230.
Yin, R.K., 2003. Case study Research: Design and Methods, 3rd edition. Sage
Publication, Thousand Oaks, CA.
Zhao, J., White, D.S., 2010. Dynamic capability: explaining the impact of ISO 14001
on corporate financial performance. International Journal of Services and
Operations Management 6 (4), 470–488.