MEASUREMENT OF SUPPLY CHAIN PERFORMANCE IN SELECT AUTOMOTIVE INDUSTRIES IN INDIA

Abstract

Today, India is emerging as one of the world’s fastest passenger car marketplaces and the second largest manufacturer of two wheelers. The primary reason behind concentrating on automotive industry here is that it is the fastest growing sector in India and has more than 10% contribution to the Indian GDP. Many international automotive companies such as Honda, Ford, and Toyota etc. have entered in the Indian passenger car market after changes in foreign investment policies of India. It has fuelled competition among automotive companies, in terms of product cost, delivery, quality, and flexibility. To compete in market, companies are aiming to improve the overall performance of their supply chains. Such causes emphasize the need of developing a model to measure supply chain performance in the Indian automotive sector. One of the major challenges before the Indian automotive firms is to ascertain the factors that affect supply chain performance and interrelationship among these factors. Identification of barriers in supply chain performance measurement is another perplexing issue for many automotive firms. Further, suppliers play a vital role in achieving an efficient and effective supply chain for any organization. Therefore, it is equally important to explore and rank the factors that affect supplier’s performance. The motivation of the current research emanates from these issues. In this thesis, various constructs and their key factors are identified based on literature review and experts’ opinion that affect supply chain performance measurement. Moreover, a conceptual framework has been developed that includes five constructs with their twenty key factors to measure supply chain performance in the Indian automotive sector. A questionnaire was prepared based on the identified constructs and their factors and then various brainstorming sessions and interviews were conducted with managers from the Indian automotive sector. Both qualitative and quantitative methods are used to analyse and measure supply chain performance. Interpretive structural modeling (ISM) technique was used to examine the interrelationships among key factors as well as barriers of supply chain performance measurement in the Indian automotive sector. Further, a fuzzy analytic hierarchy process (fuzzy AHP) based hierarchical model is developed for supplier selection and prioritizing the factors that affect suppliers’ performance in the Indian automotive sector. Finally, a scale and conceptual model are developed to measure supply chain performance and to delve the relationships of different constructs and their key factors with overall supply chain performance. Various hypotheses were iv proposed to investigate the relationships of various constructs with overall supply chain performance. Partial least square (PLS) and structural equation modelling (SEM) techniques are used to test the proposed hypotheses.