2011 International Conference on Environment Science and Engineering IPCBEE vol.8 (2011) (2011) IACSIT Pre !

Singa"ore

Problematic Issues in Implementation of Supply Chain Management in Iranian Automotive Industries

1

Malihe Manzouri, Mohd Nizam Ab Rahman

Institut Kajian Rantau Asia Barat (IKRAB) Universiti Keban saan Mala!sia, "#$%% Ban i, Mala!sia 1 2 manzouri&en 'u(m'm!, mnizam&en 'u(m'm!
Abstract The problematic issues in applying Supply Chain Management (SCM) in Iranian automotive organi ations !ere considered in this paper" The data needed !as gathered through a survey #uestionnaire !hich !as distributed to $%% Iranian&s automotive organi ations and a total of '% replies !ere usable" (ac) of information* need to e+pert employee* and need to ne! e#uipment !ere recogni ed as important problems among those organi ations"

9aslina Arshad
6a0ult! o. In.ormation 20ien0e and *e0hnolo !, Universiti Keban saan Mala!sia, "##%% Ban i, Mala!sia has&.ts m'u(m' m! destru0tive than the others drivin barriers to be ta0(led on a11ro1riate time 3:4'

Keywords- Supply Chain Management Implementation; /hi0h are also 0alled Difficulties; Iranian automotive organi ations

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IN*R+,U-*I+N

*raditionall!, the .or/ard .lo/ o. materials and ba0(/ard .lo/ o. in.ormation /ere the re1resentatives o. #5' R;2 2-M' *hrou h a 1ra0ti0al overvie/, the 0on0e1t o. su11l! ;AR 0hain emer e .rom some alterations in the area o. -9 manu.a0turin , su0h as the in0rease o. 0osts , de0rease o. M; resour0es and 1rodu0t li.e 0!0les, and the lobalization *9+ business 3#4' Moreover, Meehan and Muir 354 em1hasized , that in s1ite o. emer in bene.its .rom 2-M some barriers *he dis0ussions held 1revent 0om1anies to a11l! su00ess.ul su11l! 0hain' 6or su11l! 0hain e7am1le or anizations /hi0h still 0onsider themselves asbet/een and the individuals in a 2-M 0annot /or( e..e0tivel! /ith other 1ro.essionals 0hains' And also, 6a/0ett et al' 3"4 believed that 0ulturesrelated literatures have led and 0on.i uration o. or anizations are barriers to 0lose to the desi n o. a /hi0h /or(in relationshi1 amon the 0om1anies' Moreover, <uestionnaire deemed to be the most di..erent 0om1anies in a su11l! 0hain desire to em1hasis alternative .eatures o. su11l! 0hain /hi0h ma(e them .a0e a11ro1riate method o. data 1roblems in 0reatin inte ration inter8 or anization 31%4' 0olle0tion' 2-M abilities -ondu0tin a surve! a0ross the 2/edish manu.a0turin and 1roblems develo1ed b! .irms 3124 indi0ated that sharin in.ormation and .inan0ial 9alldo=rsson et al' 3$4 and 1roblems are the most 0ommon 1roblems a0ross those Mentzer et al' 3114 /ere 0han ed u1on desi nin the or anizations /hen tried to a11l! 2-M' +n the other hand, althou h 0orre0t and 0om1lete <uestionnaire>s items on in.ormation sharin 1rovides e..e0tive 2-M amon lin( di..i0ulties and e71editor 1artners, or anization o. I* tools is not .ree .rom issues' -lassi.i0ation o. 1roblems in term o. 2-M im1lementation' 6urthermore,<uestions /as based on the o. the other resear0hers believed that la0( o. investment,stru0ture or anization, 1eo1le di..eren0es in tradin 1artners, 0a1a0ities, la0( o. e7ternal 0on.iden0e, and in.ormation sharin .ailure are the most relationshi1, .a0tors and in.ormation im1ortant di..i0ulties in usin in.ormation sharin a0ross the or anizations 3), 14' 9o/ever, these 1roblems a..e0t te0hnolo !' Industrial s0o1e /as limited to automotive on I* 1ro0ess but other 1arts o. the su11l! 0hain /ill be 0om1anies /hi0h is one o. also a..e0ted b! them' *here.ore, it is essential, .or the the lar est industries in mana ers to understand /hi0h barriers are more dee18 Iran' *he <uestionnaire rooted and started o.. /ith sim1le and eas! <uestions and ot a little more 0om1li0ated at the end' *he main <uestion

o. the <uestionnaire /as the 2-M im1lementation 1roblems /hi0h /ere or anized b! several o1tions .rom /hi0h the res1ondents had to ma(e 0hoi0es' Additionall!, the 0over letter e71lained the notion o. 2-M in brie. and the aim o. surve! /hi0h /as .unded b! UKM Universit!' *his surve! mana ed via ;mail and dis1at0h dire0tl!' In the .irst sta e, the three8 1a e <uestionnaires, a 0over letter, return envelo1e /ith stam1s /as distributed dire0tl! to 1%% manu.a0ture 0om1anies' In the se0ond sta e, three81a e <uestionnaire /as emailed to all 2%% manu.a0ture 0om1anies' A total o. #2 <uestionnaires /ere .ailed throu h the email and there /ere #" res1onses' ;8mail .ollo/8u1s /ere sent to the rest o. the 0om1anies that did not res1onded and there /ere ) more res1onses to the se0ond emails' Amon the dire0t dis1at0hes, there /ere 2: res1onses' *he e..e0tive res1onse rate /as :%?2$@ or 2$'1 1er0ent' A. #e cri"tion of re "ondent

*he res1ondents in0luded not onl! all manu.a0ture 0om1anies /hi0h alread! have im1lemented 2-M but also those /hi0h have not been a11lied !et' In this stud! the results o. those or anizations /hi0h alread! a11lied 2-M in their or anizations /ere 0onsidered' Althou h the arran ement .a0tors o. 0om1anies> size are di..erent amon 0ountries, the number o. .ull time em1lo!ees, annual sales turnovers and or anization investment .a0tors are the same' Aarti0i1ants in this surve! /ere not /illin to share the data o. their annual sales turnovers and or anization investment'
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In this re ard, the number o. .ull time em1lo!ees /as used to arran e the size o. the 0om1anies in this stud!' Authors 1rovided more a00urate 0lassi.i0ations o. or anization>s size based on an in0rease the number o. em1lo!ees in ea0h 0ate or! that leads to an in0rease in the amount o. .und and or anization investment (6i ure 1)'
21.40%
12.90%

material and in.ormation /ithin and a0ross the .irms' In.ormation should be shared to ma(e the level o. inventor!, distribution, 1rodu0tion, demand and order a0ross the 0hain 0lear' All tires 0an 1lan and 1redi0t their .uture a0tivities a00ordin to a00urate and timel! in.ormation /hi0h is shared a0ross the 0hain' 6orasmu0h as or anizations 0ount on the in.ormation as their 1o/er and status, the! do not tend to share their data to the other members o. a 0hain' *hese results 0learl! revealed that Iranian automotive or anizations more 0on0erned about the te0hnolo i0al 1roblems rather relational issues durin im1lementin 2-M' *he! hi hli hted the la0( o. e71ert em1lo!ee as the se0ond level o. 1roblems and the la0( o. 1ro1er e<ui1ments as the third' In addition, mana in the /arehouse and 1rodu0t sto0( /as also 1aid attention to as an

25.70% 8.60% 31.40%

Employees<=50 51<Employees<=100 101<Employees<=300 301<Employees<=500 Employees>501

6i ure 1' 2ize o. 0om1anies

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*he results o. this surve! revealed that #1'" 1er0ent o. those Iranian automotive industries /hi0h 1arti0i1ated in this stud! /ere a11lied 2-M in their or anizations' Amon those or anizations /hi0h did not a11l! 2-M !et, 22') 1er0ent have re1orted that Chave a 1lanD to im1lement 2-M in their 0om1anies in .uture' Moreover, these results have identi.ied that the size o. or anizations has in.luen0e on im1lementin 2-M' *hus the bi est 0om1anies have more a11lied 2-M than other or anizations' In addition, these results identi.ied that there /ere some 1roblems /hi0h mi ht have 1revented Iranian automotive or anizations .rom a11l!in 2-M su00ess.ull! (2ee *able 1)' *he most im1ortant 1roblem (6i ure 2) .or these or anizations /as the la0( o. in.ormation as the hi hest rated value 1roblem that 0aused serious di..i0ulties durin im1lementin 2-M' In this stud!, la0( o. in.ormation means not onl! the la0( o. 1ro1er in.ormation but also la0( o. the sharin and visibilit! o. a11ro1riate in.ormation' 2-M is based on the .lo/ o.

im1ortant issue beside the .inan0ial 1roblem and in0reasin the desi nin time /hi0h are ran(ed as the .ourth' +n the other hand, Iranians re1orted that their 1rodu0tion, distribution and toolin s!stems .a0e di..i0ulties durin a11l!in 2-M but in 0ontrast to other di..i0ulties these are not ver! 0om1li0ated' Althou h these or anizations did not ran( the .inan0ial 1roblem as the hi h, man! o. the 1roblems /hi0h the! are .a0in are the 0onse<uen0es o. .inan0ial ine..i0ien0ies in their or anizations' -onse<uentl!, these or anizations are a..e0ted b! the internal 1roblems rather the e7ternal di..i0ulties /hi0h /ere si ni.i0antl! 0on0erned about the la0( o. in.ormation, need to e71ert em1lo!ees, need to ne/ e<ui1ment, in0rease 1rodu0t sto0(, /aste o. mone!, in0reasin desi nin time, in0reasin 1rodu0tion time, /aste o. time, in0reasin distribution time, and in0reasin toolin time ran(ed .rom hi hest to lo/est res1e0tivel!'

6i ure 2' 2-M di..i0ulties (;a0h number indi0ates the Aer0enta e o. ea0h 1roblem .rom all observed 1roblems)

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2harin in.ormation a0ross the 0hains /ill brin about man! 0han es su0h as an in0rease in the 1ro0ess visibilit!, and im1rovement in .ore0astin in order to redu0e the bull/hi1 e..e0t 1henomenon' Ba0( o. a11ro1riate 1redi0tion o. 0ustomer>s orders a..e0ts man! 2-M im1lementation a0tivities su0h as in0rease and de0rease in 1rodu0t sto0(, ine..i0ien0! in 1rodu0tion s0hedule, and disor anizin o. distribution s!stem' In the same /a!, the in0reasin in inventor!, 1rodu0tion and distribution s0hedule amon Iranian>s automotive or anizations mi ht be the 0onse<uen0es o. la0( o. 1ro1er 1redi0tion about the .uture order in these or anizations' Revie/in the related literature revealed that these ine..i0ien0ies are rooted in la0( o. a11ro1riate in.ormation sharin a0ross these 0hains' 2imilar to Iranian

16. 5% 10. 6% 4. 7 % ! a s t e o f m o n e y !as te of tim e

nee d to e+p erte mpl oyee

17.6% 15. 3% 10.6%

automotive industries la0( o. in.ormation 0reated man! di..i0ulties amon other su11l! 0hains su0h as Ne/ Fealand or anizations 324, 2/edish manu.a0turin .irms 3124, -hinese industries 31#4, and UA; industries 31"4' *here.ore, in.ormation sharin is an im1ortant issue /hi0h should be 1aid attention to b! mana ers durin a11l!in 2-M in their su11l! 0hains'
#%5

10.6% 7.1%

4.7% 2.4%

increasingproductiontimeincreasingdesigningtimeneedtone!e#uipme nt

lac) ofinformationincreasingdistributiontimeincreasingproductstoc)increasingtoolingtime

distribution'
In0reasin toolin

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Aroblemati0 ,es0ri1tion o. variable

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Man!

0urre nt

s!stems

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Ba0 (

in.ormatio n

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.a0tor

i s

Ba0( o. time in0luded

maintenan0e and tool ma(in shou b im1rov ld e ed durin a11l!in 2-M'

2-M im1lementation needs to

Nee d

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in.ormation <ualit! (a00ura0!, ade<ua0! , 0on0iseness, 0redibilit and an !, timeline) d in.ormati on sharin (trust, dee1 and intensit! )
ne / Ne/ e<ui1ment is re.erred to

e<ui1ment

Nee d

n e in.rastru0t .o / ure r a11l!in 2-M su0h as the I* in.rastru0tur e, 1rodu0tion s!stems, inventor! adjustment s!ste distributi s!stems m, on , a n al a0tivitie d l other s re<uirements '
;m1lo!ee should have 1ro1er

to

the

e71ert em1lo!ee

In0reasin

(no/led e about the notion o. 21lannin M (strate !, , im1lementin , obsta0les, 1roblems advanta es an , , d et0) to im1lement 2-M'
*he ne/ method o. inventor!

h ir em1lo!e e e71ert e, to 1re1 ne/ are e<ui1ment, I* in.rastru0ture, and man! other /h re<uirements i0h need .und ' m ;ve thou te0hnolo 1rovid an hel1.u n h ! es ! l instruments .or or anizations, the! are ver! inade<uate and harm.ul as a substitute .or human resour0es' Althou h Iranian automotive or anizations /ere not mar(ed relational issues as a major di..i0ult! in their su11l! 0hains, the .a0t is

9i h 0ost

m 0han an an 0urren e d ! t 1roje0ts ta(e time to be 0om1leted and there is not an! a11ro1ri time allo0a ate to te the 2-M im1lementation'
2-M im1lementation needs to

1rodu 0t tim e

sto0(

adjustme nt

(arran ement

In0reasin

methods, bar 0odin s!stems, and et0) mi ht ta(e time to be establish rathe th ol ed r an d te0hni<u es'
*he strate ! and 1lannin o.

1rodu0tion time

In0reasin

1rodu0tion mi ht be 0han ed durin a11l!in 2-M and it ta(es time to be set u1'
2-M im1lementation re<uires

desi nin time

In0reasin

0han es in the stru0ture o. 1rodu0ts desi n and it ta(es the time to be established'
Eer! o.ten old methods o.

distribution time

trans1ortatio n su0h as a s0heduli n n d trans1ortation s!stems should be 0han ed b! the ne/ te0hni<ues and rules o trans1ortatio an . n d

that the la0( o. in.ormation and la0( o. e71ert em1lo!ee /hi0h /ere re0o nized as the hi hest ran(in di..i0ulties a0ross these 0hains are the 0onse<uen0e o. relationshi1 1roblems' Indeed, trust/orth! relations in a 0hain ma(e it 1ossible .or 1artners to share their (no/led e and in.ormation a0ross the 0hain to 0over man! de.i0ien0ies in their or anization' Iranian automotive or anizations have re1orted that 2-M im1lementation ta(es a lot o. time and mone! to be im1lemented /hi0h vie/ed 2-M im1lementation more e71ensive than it /as e71e0ted' +ne 0lari.i0ation .or this 1roblem mi ht be that these or anizations are be inner in im1lementin 2-M and thus have !et to re0o nize ho/ e71ensive im1lementation ma! ultimatel! be' 2imilar to Iranian automotive industries, *anzanian 31$4, 20andinavians 3$4 and Indian 3@4 0om1anies have .a0ed .inan0ial 1roblems /hen tried to im1lement 2-M in their or anizations' Moreover, .inan0ial 1roblem im1ede or anizations to 1re1are a11ro1riate re<uirements su0h as the ne/ in.rastru0ture, hirin e71ert em1lo!ee, 0ondu0tin trainin 0ourses, and a11l!in I* .or im1lementin 2-M su00ess.ull!' *his di..i0ult! not onl! a..e0ts all as1e0ts o. 2-M im1lementation .rom u1stream to do/nstream in term o. .lo/in material but also a..e0ts the .lo/in o. in.ormation a0ross the 0hain' In addition, the 0om1arison bet/een the rate o. 2-M im1lementation in Iranian automotive industries and the rate o. 1roblemati0 issues /hi0h are observed, revealed that (6i ure #) not onl! /ith an in0reasin in the rate o. 2-M im1lementation but also /ith an in0reasin in the size o. or anizations, the rate o. 1roblemati0 issues is in0reased a0ross these or anizations' It is sur1risin that the bi est or anizations /hi0h have more .und and e<ui1ments /ere .a0ed /ith the more di..i0ulties' 9o/ever, it is note/orth! that the lar est or anizations have more e71erien0e in a11l! 2-M than smallest or anizations and the! are more a/are o. the 1roblems 0on0ernin 2-M im1lementation' Mean/hile, automobile is a lu7ur! and e71ensive 1rodu0t and man! 0ustomers tend to 0han e some o. its 1arts a00ordin to their interests /hi0h .or0e automotive industries to 1a! more attention to Resear0h and ,esi n (RI,) s!stems' In this re ard, mana in the RI, s!stem is re0o nized as a 1roblem in Iranian automotive 0om1anies /hi0h need to be 1aid attention to durin a11l!in 2-M' Bi(e Iranians, UK or anizations 3154 identi.ied that mana in the RI, s!stem 0an 0reate di..i0ulties durin im1lementin 2-M' ,es1ite all those 1roblems that /ere identi.ied b! Iranian automotive or anizations, to1 mana ements de0ision /ere not re0o nized as a 1roblem to im1lement 2-M rather su11orted their .irms to 1re1are the ne0essar! re<uirements to a11l! 2-M su00ess.ull!' Bi(e/ise, 9alldo=rsson et al' 3$4 hi hli hted that /ithout to1 mana ement su11ort 2-M mi ht .ail'

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Ba0( o. in.ormation, need to ne/ e<ui1ment, and need to e71ert em1lo!ee are re0o nized as the most im1ortant
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di..i0ulties amon those Iranian automotive or anizations' Moreover, /ithout a11ro1riate e<ui1ments and (no/led eable /or(ers 2-M ta(es more time and mone! to be im1lemented' Althou h those or anizations did not 0onsider the la0( o. time and .inan0ial 1roblem as the hi h level o. 1roblemati0 issues, man! di..i0ulties in their 0om1anies are emer ed .rom la0( o. .inan0ial su11ort su0h as hirin the e71ertise, 1re1arin the e<ui1ments, and modi.!in the old /or( .lo/' Althou h automotive industries did not 0onsider the relational 1roblems s1e0i.i0all!, la0( o. in.ormation is rooted in the ina11ro1riate relationshi1 amon 1artners /hi0h do not have trust ea0h other to share their in.ormation' 2ubse<uentl!, the 1roblems o. 2-M im1lementation /ere not base on merel! a sin le 1roblem, rather on various hierar0hi0al levels o. man! barriers' *hat is, or anizat ions /ill not be able to solve their 1roblems b! .o0usin onl! on one as1e0t o. 2-M limitation, as these 1roblems are re<uired to be 0onsidered on all as1e0ts' -onse<uentl!, these (e! areas /ere im1ortant .or mana ements to invest on and to et trainin on to be su00ess.ul in im1lementin 2-M in their or anizations'

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Ruteri, J' M' and Oi Qu', C*he 6ood Industr! 2e0tor in *an aniaD, International o. Journal o. Bu siness and Management, " (12),2%%) 1roblems Ara0ti0e in Ne/ FealandD, In R Aro0eedin s o. 59.1 R;N-the #"th Annual ;2 -on.eren0e of the +1erational 65.9 Employees>501 314 A ar/al, A' and Resear0h 2o0iet! o. Ne/ Fealand, R' 2han(ar, 301<Empl 9amilton, NF, C+n8line trust oyees ,e0ember, 1))), buildin in e8 11' #%)8#1@ enabled su11l! 0hainD, 2u11l!3#4 Beamon, M' B',C <=500 -hain 2u11l! -hain 101<Empl Mana ementG ,esi n and An International oyees Anal!sisG Models Journal @ ("), and MethodsD, 2%%#, 11'#2"8 International <=300 ##" Journal o. Arodu0tion 324 Basnet -', ;0onomi0s 55 (#), -orner J', 1))@, 11' 2@182)" 6i ure #' Kisner j', and *an (80, CA3"4 6a/0ett, 2-M 2';, 2urve! o. Im1lementati B'M' ;llram, and 2u11l! -hain on and J'A' + den, Mana ement re0o nized

2u11l! 0hain mana ement .rom vision to im1lementation, 2%%#

354

Meehan, J' and B' Muir, C2-M in Merse!side 2M;sG bene.its and barriersD, *he *OM Journal 2% (#), 2%%@, 11'22#8 2#2 9alldo=rsson, A', A' ,' Barson, and 6' R' Aoist, C2u11l! 0hain

mana ementG a -om1arison o. 20andinavian and Ameri0an 1ers1e0tivesD, 3@4 International Journal o. Ah!si0al ,istribution I Bo isti0s Mana ement, #@ (2), 2%%@

In.ormation Mana ement 1@ (1), 2%%5, 11'118 2: Kadambi, B', CI*8 ;nabled su11l! 0hain mana ement N a 1reliminar! stud! o. .e/ manu.a0turin 0om1anies in IndiaD, available .romG htt1G??///'7lri'a0' in?0ltm?Bo istiQ8 282%%%'htm, 3A00ess on 1@ Au ust 2%1%4, 2%%%

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