Industrial Management & Data Systems

Competitive priorities of manufacturing firms in Thailand

Kongkiti Phusavat Rapee Kanchana
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Industrial Management & Data Systems, Vol. 107 Iss 7 pp. 979 - 996
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Manufacturing
Competitive priorities of firms in
manufacturing firms in Thailand Thailand
Kongkiti Phusavat and Rapee Kanchana
Department of Industrial Engineering, Kasetsart University, 979
Bangkok, Thailand
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Abstract
Purpose – This paper seeks to identify competitive priorities, based on the opinions of top executives
of manufacturing firms belonging to the Federation of Thai Industry (FTI). It is also to evaluate the
implications and applicability of these findings for Thai manufacturers.
Design/methodology/approach – A survey is used as a data-collection tool to gather the opinions
of top executives. Its main contents are based on Takala (2002). Ten manufacturers from four
industries have participated in the study. The analytical hierarchy process (AHP) is selected to analyze
the survey responses. In addition, the comparison of competitive priorities among Thailand, China,
and Taiwan is made. The follow-up interviews and discussion are also conducted.
Findings – There are six criteria selected to reflect competitive priorities: quality, customer-focus,
delivery, flexibility, know-how, and costs. The study reveals that the quality, customer-focus and
delivery criteria are recognized as important priorities in order to enhance manufacturing firms’
competitiveness. The Taiwanese experiences possibly suggest more attention on innovation in order
to sustain quality improvement.
Practical implications – The findings illustrate the shift in competitive priorities from cost into
quality and customer-focus. This shift reflects intense campaigns by relevant public agencies as well
as the FTI. The awareness on these priorities is critical so that companies in the value chain can
properly establish coherent manufacturing strategies and objectives.
Originality/value – The knowledge on competitive priorities leads to better understanding of
manufacturing strategies in the future. This knowledge can serve as a reference during an assessment
of the desirable impacts from programs and initiatives conducted by public agencies and the FTI.
Keywords Competitive analysis, Value chain, Thailand
Paper type Research paper

Introduction
The pressures from globalization and rapid changes in technologies have increased an
interest on competitive priorities among manufacturers (Takala et al., 2003). Further,
these priorities have changed dramatically during 1970s until 1990s (Takala, 2002).
The primary change is from cost to quality, and eventually to delivery and
responsiveness. More recently, manufacturing firms have placed greater emphasis on
flexibility and agility while maintaining high performance on dependability, quality,
and cost (Vokurka and Fliedner, 1998; Helo, 2005). Takala et al. (2003) implies that
managing manufacturing firms successfully require clarity on three areas:
(1) competitive priorities;
(2) manufacturing strategies and objectives; and Industrial Management & Data
Systems
(3) action plans. Vol. 107 No. 7, 2007
pp. 979-996
Simply put, it is important that competitive priorities need to be clearly identified and q Emerald Group Publishing Limited
0263-5577
established. The reason is that they represent the future focus of a company for the DOI 10.1108/02635570710816702
 IMDS next five years and beyond (Hoehn, 2003). In this study, the competitive priorities are
107,7 defined as the focus areas that reflect the future direction and address the concern of a
manufacturing firm (Leong et al., 1990). They are perceived as a prerequisite for
determining manufacturing strategies (Chen, 1999). Then, manufacturing strategies
help determined the direction on database, and relevant measures covering areas such
as productivity, quality and efficiency (Sink and Tuttle, 1989; Helo and Szekely, 2004;
980 Lee et al., 2006; Mistry, 2006; Takala et al., 2006). Takala (2002) further indicates that, a
failure to recognize the relationship between competitive priorities and manufacturing
strategies will eventually make companies less productive. For the action plans, they
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deal with how to achieve manufacturing objectives (Kim and Arnold, 1996).
Competitive priorities typically include price (cost), quality, dependability, and
flexibility (Hayes and Wheelwright, 1984; Ferdows and De Meyer, 1990; Vickey et al.,
1993; Li, 2000; Kathuria, 2000; Ward and Duray, 2000; Boyer and Lewis, 2002; Kazan
et al., 2006). Others have stated that a customer-service aspect also represents an
important priority (Miller and Roth, 1994; Frohlich and Dixon, 2001; Lee, 2002). In
addition, responsiveness and time to market for a new product development should be
regarded as important competitive priorities since the life cycle of a typical product has
become increasingly shorter (Leong et al., 1990; Chen, 1999). There have been many
researches that examine both competitive priorities and manufacturing strategies. For
example, the manufacturing futures survey has reported the comprehensive findings
on competitive priorities from American, Japanese, and European manufacturing firms
in machinery, electronics, consumer, industrial, and basic-goods industries (De Meyer
et al., 1989). See also Miller and Roth (1994), Frohlich and Dixon (2001) for similar
studies. Furthermore, for Asian countries, such studies have included manufacturing
firms in Taiwan (Chen, 1999), Japan and South Korea (Lee, 2002), Hong Kong (Chan,
2005), China (Robb and Xie, 2001), Singapore (Sum et al., 2004), and India (Dangayach
and Deshmukh, 2006).

Problem background
Despite the 2005 survey, conducted by the United Nations’ Commission for Trade and
Development (UNCTAD) that cites Thailand as the 3rd most attractive foreign direct
investment or FDI location in Asia, the need to continuously improve manufacturing
competitiveness still exists. Based on the results from the
strength-weakness-opportunity-threat analyses by many trade associations within
the Federation of Thai Industry (FTI), there is a clear urgency on improving
value-chain management across industrial clusters (e.g. foods, automobile and
automotive parts, electrical and electronics and petrochemical)[1]. In order to achieve
this improvement, it is important that awareness on competitive priorities on
manufacturing firms (at the end of these chains) must be made. This is critical so that
their contractors or suppliers (considered as small and medium enterprises or SMEs)
can properly establish coherent manufacturing strategies and objectives that are
supportive of the entire value-chains[2].

Objectives
There are two primary objectives in this study. The first one is to identify competitive
priorities to be derived from manufacturing firms. The second objective is to evaluate
their implications on industrial development.
 Approach Manufacturing
There are several tasks that have been undertaken for the study’s completion. They firms in
include the development of a survey to be used as a data-collection tool from top
executives’ opinions. Then, the next task involves an in-dept analysis of the surveys’ Thailand
responses. The analytical hierarchy process (AHP) is chosen as the main analysis
method. See Rangone (1996), Takala (2002) and Takala et al. (2003) for more details.
The analysis primarily includes the tasks on normalizing criteria weight, using 981
descriptive statistics (e.g. mean score and standard deviation), and determining the
criteria’ relative importance. The Expert Choice software helps determined and obtain
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the global-weight results from participating manufacturers (in reference to Appendix

4). Then, the following task is to compare the results with other countries, given that
they are compatible. Finally, the follow-up interviews and discussion are used to collect
the feedback on the findings’ applicability and their implications.

Results
There are ten manufacturers participating in this survey. They, more or less, represent
the end of the value-chain from their respective industries, and are generally regarded
as a successful manufacturer with excellent reputation from their suppliers and
customers. The FTI has assisted in selecting manufacturers and obtaining managerial
cooperation. The surveys were distributed during June-July 2006. The follow-up
interviews and discussions have taken place subsequently. The participating firms are
from four industries: automotive and auto parts, electrical and electronics, food, and
petrochemical. The largest group of respondents is from the food industry. All
participating firms are locally owned. Most respondents have more than 25 years of
business experiences. Further, most firms rely on exports for their markets. It should
be noted that the special effort was made to ensure that top executives provided their
opinions and responses (in order to assure the quality of data used for the analysis). See
Appendix 1 for these profiles.
In this study, there are six criteria (i.e. quality, cost, delivery, customer focus,
flexibility and know-how) included in the survey to help reflect competitive priorities.
Its key contents are based on Takala (2002). See Appendix 2. This is due to the fact that
these key criteria reflect the current interest of top executives in manufacturing firms.
Their definitions are as follows. See Appendix 3 for more details.
(1) Quality. In this study, there are many common aspects representing the term
quality such as low-defect rate, product performance, reliability, certification,
and environmental concern. This is consistent with the definition provided by
Reeves and Bednar (1994) that associates quality with excellence, value,
conformance to specifications, and meeting or exceeding customers’
expectations.
(2) Cost. The term cost focuses on the ability to effectively manage production cost,
including its related aspects such as overhead and inventory, and value-added.
See Zhao et al. (2002) for the similar definition.
(3) Delivery. Delivery is considered as a time-based issue. Delivery addresses how
quickly a product or a service is delivered to customer. It also incorporates the
point of view on the time-to-market for a new product. See Li (2000) for more
details.
 IMDS (4) Flexibility. The term flexibility represents the ability to deploy and/or re-deploy
107,7 resources in response to changes in contractual agreements that are primarily
initiated by customers. Several features are included in this term such as
adjustment on design/planning, volume changes, and product variety. See Lau
(1999) and Kazan et al. (2006) for the similar scope.
(5) Customer-focus. Customer-focus concentrates on how to fulfill customers’
982 needs. It includes after-sale services, product customization, product support,
customer information, and dependable promise. This view is similar to Sink and
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Tuttle (1989).
(6) Know-how. The term know-how deals with the trends of decreasing products’
life-cycles. Therefore, the issues on knowledge management, creativity, and
skill development are included. Zhao et al. (2002) also share this view.

The analysis aims to identify the rankings of these six criteria and their detailed
dimensions’ relative strengths or weakness. The overall finding shows that the top
three competitive priorities are:
(1) quality;
(2) customer-focus; and
(3) delivery.

Quality is given highest weight of 0.285 (28.5 percent) while customer-focus and
delivery is 0.185 (18.5 percent) and 0.177 (17.7 percent), respectively. The remaining
weights are 0.153 (15.3 percent) for flexibility, 0.107 (10.7 percent) for know-how, and
0.097 (9.7 percent) for cost[3]. Given the globalization era, top executives express their
concern that local and foreign customers have become more demanding and are willing
to switch their purchases to other manufacturers without any hesitation. As a result,
both quality and customer-focus have been rated as the priorities. It is also logical that
the know-how and cost criteria are not perceived to be important with respect to other
criteria. Based on the responses on the surveys, cost management has been practiced
intensely for a long time. Top executives appear to believe that they have it well under
their control. At the same time, top executives feel that they can promptly rely on
external knowledge (e.g. acquiring new technologies, purchasing new product licenses,
hiring consultants for problem-solving, etc.) to manage their operations. Further,
details on each criterion can be described as follows.
For the term quality, given five dimensions or features, their relative importance is
as follows:
(1) low-defect rate (0.304);
(2) reliability (0.230);
(3) product performance (0.181);
(4) certification (0.178); and
(5) environmental consideration (0.107).

This sequential order illustrates that Thai manufacturers still pay more attention on
internal-related matters such as process control (e.g. defects). It is surprising that the
level of importance on certification is not high due to the recent intense promotion on
 ISO 9001: 2000 by Department of Industrial Promotion and Thai Industrial Standard Manufacturing
Institute, and on ISO 14001 by Department of Industrial Work and Thailand firms in
Environment Institute. Nevertheless, it is important to note that these issues have
become more vital on global trades; especially for export credentials (Rao, 2004). Thailand
For the term customer focus, given six features, their relative importance is as
follows:
(1) dependable promises (0.281); 983
(2) product customization (0.188);
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(3) measurement of satisfaction (0.177);

(4) after-sale service (0.133);
(5) product support (0.117); and
(6) customer information (0.104).

It is generally expected that the features on both dependable promises and the ability
to customize products be rated as the most importance. Interestingly, the discrepancy
of the scores among the six features is not great. This is probably because these
features reflect a collective agreement among participating executives.
For the term delivery, given five dimensions, their relative importance is as follows:
(1) dependable promises (0.354);
(2) right quality (0.263);
(3) right amount (0.162);
(4) on agreed time (0.120); and
(5) fast delivery (0.101).

It is clear that the company’s image is still important – the dependable-promises

feature for both customer-focus and delivery is ranked first. It indicates that Thai
companies realize the need and responsibility to carry out what they have promised to
their customers. The issues on right quality and right amount are expected to be
important due to the possibility of fines and compensation that likely are part of
contractual agreements.
For the term flexibility, given four features, their relative importance is as follows:
(1) broad product line (0.347);
(2) volume changes (0.239);
(3) design adjustment (0.231); and
(4) mix changes (0.183).

It is agreed that the term flexibility in Thailand tends to associate with outputs (e.g.
product diversity) and process (e.g. volume variety). On the other hand, the
design-related issues are considered to be less important. This is consistent with
the results on the term quality that regard output-and process-related matters to be
important.
For the term know-how, given six dimensions, their relative importance is as
follows:
 IMDS (1) R&D (0.228);
107,7 (2) training/education (0.194);
(3) continuous learning (0.190);
(4) problem solving skills (0.174);
(5) knowledge management (0.135); and
984 (6) creativity (0.079).
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A lack of creativity has been cited as a main roadblock to move industrial development
to an upstream position (e.g. design, research and development) for many
manufacturers. This result helps confirm the lack of attention on creativity. In fact,
industrial patents registered by Thai manufacturers are not at the satisfactory level,
according to National Research Council of Thailand. Past practices have demonstrated
that many firms depend on their foreign counterparts for new designs and ideas while
focusing their effort mainly on manufacturing/production/assembly.
For the term cost, given five dimensions, their relative importance is as follows:
(1) continuous improvement (0.355);
(2) quality cost (0.255);
(3) activity-based measurement (0.175);
(4) value added (0.121); and
(5) low cost (0.094).

According to Tabucanon (1993), Thailand has been classified as an attractive country

for investment due primarily to low-cost production particularly in the areas of
material and labor. However, the ability to reduce costs further appears to have
decreased substantially. Since, the possibility for additional cost reduction is less, the
effort has been shifted to productivity improvement as stated by participating top
executives. Many have cited Thailand Productivity Institute for their increased
awareness. Furthermore, quality-related cost and prevention have nowadays become
part of a routine management report for monitoring and evaluation (instead of focusing
mostly on accounting information) (Table I).
The analysis on the surveys’ responses also includes the use of global weight
(instead of separating the opinions into the individual criteria). The primary purpose of
performing this global-weight analysis is to help verify the initial findings (in reference
to Table I). The application of the Pareto principle is also adopted. See both Figure 1
and Appendix 4.
For this study, a Pareto diagram is constructed and applies the 80 percent rule. The
cut-off point is selected when the accumulated weight is 80 percent of the features’ total
weight. The features, placed before this cut-off point, are considered to be important.
Based on Figure 1, there are 18 features that can be classified as importance. The
low-defect rate is regarded as the most important feature. Then, it is followed by
dependable promises under the delivery criterion, certification, reliability and broad
product line. Clearly, three of the five most important dimensions are part of the quality
criterion. In fact, all of its features are placed in the area before the cut-off point. This
confirms that quality represents the most important competitive priority that helps
influence manufacturing strategies. This finding, again, reflects the initiatives and
 Manufacturing
Average weight
Criteria (order of importance) Features or dimensions Average weight firms in
Quality (Q) 0.285 (1) Low-defect rate (Q_LD) 0.304
Thailand
Reliability (Q_RL) 0.230
Product performance (Q_PP) 0.180
Certification (Q_CT) 0.179 985
Environmental aspects (Q_EA) 0.107
Customer focus (CF) 0.185 (2) Dependable promises (CF_DP) 0.281
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Product customization (CF_PC) 0.188

Measurement of satisfaction (CF_MS) 0.177
After sales services (CF_AS) 0.133
Product support (CF_PS) 0.117
Customer information (CF_CI) 0.104
Delivery (D) 0.177 (3) Dependable promises (D_DP) 0.354
Right quality (D_RQ) 0.263
Right amount (D_RA) 0.162
On agreed time (D_OT) 0.120
Fast delivery (D_FD) 0.101
Flexibility (F) 0.153 (4) Broad product line (F_BP) 0.347
Volume change (F_VC) 0.239
Design adjustment (F_DA) 0.231
Mix changes (F_MC) 0.183
Know-how (K) 0.107 (5) R&D (K_RD) 0.228
Training/education (K_TE) 0.194
Continuous learning (K_CL) 0.190
Problem solving skills (K_PS) 0.174
Knowledge management (K_KM) 0.135
Creativity (K_CT) 0.079
Costs (C) 0.093 (6) Continuous improvement (C_CI) 0.355
Quality costs (C_QC) 0.255 Table I.
Activity-based measurement (C_AM) 0.175 Results on competitive
Value added (C_VA) 0.121 priorities – criteria and
Low cost (C_LC) 0.094 their dimensions

programs during the past decade on increasing the awareness of quality by public
agencies. Further, the FTI has been in favor of promoting quality products (not cheap
products) from Thai manufacturers, and has actively been encouraging quality
improvement.
Unfortunately, among the dimensions or features that are located in the area after
the cut-off point, four of them belong to the know-how criterion. If this continues, it is
agreed that Thai manufacturers may become less innovative (from an internal point of
view – since there is not enough staffs’ development to generate new ideas on product
and process improvement) in the future. Thai manufacturers need to avoid relying too
heavily on external knowledge for new ideas. At the same time, the results from the
global weight imply that the cost criterion, its four features located in the area after the
cut-off point, is not important relatively to other criteria. This likely helps confirm that
Thai manufacturers have finally shifted their focus on mainly offering cheap to quality
products.
 IMDS 0.100
Area before
100.0%
0.090 90.0%
107,7

Cumulative Percentage
Cut-off Point
0.080 80.0%

Global Weight
0.070 Area after 70.0%
0.060 Cut-off Point 60.0%
0.050 50.0%
0.040 40.0%
986 0.030 30.0%
0.020 20.0%
0.010
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10.0%
0.000 0.0%
Q_LD
D_DP
Q_CT
Q_RL
F_BP
D_RQ
F_DA
Q_PP
CF_PC
CF_DP
F_VC
CF_MS
D_RA
CF_AS
Q_EA
CF_PS
C_QC
K_PS
C_CI
K_RD
K_TE
C_LC
CF_CI
D_OT
F_MC
C_AM
K_CL
D_FD
K_KM
C_VA
K_CT
Figure 1. Dimensions
Global weight on thirty
Dimensions under quality Dimensions under cost Dimensions under delivery
one dimensions of
competitive priorities Dimensions under flexibility Dimensions under customer focus Dimensions under know-how

Discussion
The overall findings are that manufacturing firms in Thailand perceive the quality
criterion to be the most important competitive priority. Based on the follow-up
discussions, an overall direction among Thai manufacturers is to use quality as a
foundation for formulating manufacturing strategies in order to sustain and improve
competitiveness. They have recognized that the cost advantage (that they have had
over the past two decades) has declined at the alarming rate. This circumstance is
similar to several manufacturers from many developed countries in the past. See De
Meyer et al. (1989) and Ferdows and De Meyer (1990) for the trends in North America
and Europe. See also Lee (2002) and Kasuga et al. (2005) for Japanese experiences in
electronic manufacturers. In Thailand, many joint initiatives, by Ministry of Industry
and the FTI, have focused on:
.
promoting quality assurance and improvement (e.g. ISO 9001: 2000, Good
Manufacturing Practices or GMP);
.
applying customer relation management for product and service improvement,
retention of existing customers, and penetration into new markets;
.
practicing supply-chain management for cost management, quality control, and
delivery;
.
building capacity through human capital development for new ideas and
innovation; and
.
using information technologies for better planning, responsiveness, and
trace-ability among large manufacturers as well as SMEs.

See Goh and Pinaikul (1998), Lau (2002), Tannock et al. (2002), Zhao et al. (2002) and
Sum et al.(2004) for more details of similar initiatives addressing these competitive
priorities. In fact, one of the comments encourages a need for a continuous study in
competitive priorities on manufacturing and service firms to help understand the
trends and future development.
 The most interesting feedback from these discussions indicates the need to have Manufacturing
knowledge on competitive priorities of other neighboring countries in Asia. The main firms in
reason is that Thai manufacturers can no longer compete directly on cost with China,
Vietnam, and India. They have been strongly urged to move upstream (i.e. becoming Thailand
designers or producers of raw materials). Indeed, the future development on
competitive priorities of Thai manufacturers may be similar to that of Taiwan or South
Korea, recognized as newly industrialized countries (NIC). Therefore, awareness on a 987
competitive-priority development is needed since Thailand is considered to be between
developing and NIC countries.
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Possible trends on competitive priorities

Given this strong indication, a preliminary analysis is further conducted to compare
competitive priorities of Thai manufacturers with available literatures. There are two
similar studies on Chinese and Taiwanese firms conducted by Zhao et al. (2002) and
Chen (1999), respectively. This extended analysis mainly focuses on evaluating the
similarities and the differences of the rankings on competitive priorities among
Thailand, China, and Taiwan. It is important to recognize that although the names of
the criteria are not exactly the same, their definitions and scopes are reasonably
compatible.
The comparison’s results show that quality is considered to be the most important
competitive priority for companies in Thailand and Taiwan. On the other hand,
delivery (dependability) is thought to be the most important competitive priority for
Chinese firms. Similar to Thai manufacturers, Chinese firms concentrate on
customer-focus or service as the second most important competitive priority.
Interestingly, the know-how or innovativeness is perceived to be the second most
important competitive priority by Taiwanese firms. Unfortunately, for Thai firms, this
is not the case. Apart from the customer-focus criterion, a common characteristic
among Thai and Chinese firms is that they do not regard cost as their main concern
relatively to others. The possible explanation is that Thailand and China have been
known as a place of low-manufacturing cost. This perhaps implies that they feel
strongly enough in their cost-management ability at the present and do not perceive it
to be a threat in the near future (Table II).
This comparison has given some useful insights into the scenario discussion. For
example, Thai manufacturers need to become more innovative by creating and
facilitating knowledge among workers, and effectively managing human capitals.
The Taiwanese experience shows the perceived significance of innovation. The result
could indicate the possible roles of innovation on the ability to continue

China (Zhao et al., 2002)

Main criteria Thailand (rank) Taiwan (Chen, 1999) (rank) (rank)

Quality 1 1 4
Customer focus (service) 2 4 2
Delivery (dependability) 3 6 1
Flexibility 4 4 3 Table II.
Know-how (innovativeness) 5 2 6 Illustration on the
Cost 6 3 5 comparison
 IMDS quality improvement. Unfortunately, this context does not appear to strongly exist
107,7 among top executives of Thai manufacturers. Instead, according to their opinions, top
executives in Thailand intend to focus on managing logistic-support and
customer-service activities in order to keep up with quality improvement. Although
the discrepancy does not reflect the roadmap or the direction for becoming successful
manufacturers, the understanding of the perception on these competitive priorities
988 from more and less advanced countries is critical for planning by individual
manufacturers, and relevant public agencies in Thailand[4].
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Limitations
The primary limitation on the study’s findings comes from a small size of participants.
In addition, most of participating manufacturers operate in the food industry.
Therefore, it is not entirely possible to generalize the findings for all industries under
the FTI. Nevertheless, this study simply represents a preliminary study that
potentially can be later extended or enlarged.

Future studies
Representatives from public agencies and the FTI repeatedly made a strong request to
conduct a future study on comparing competitive priorities from developing to developed
countries. See Figure 2 for a suggested preliminary framework. This study will be used
as a baseline for policy formulation and information sharing among companies within
important value-chains such as automotive and electronics. The findings of this
suggested study could be used to assess the effectiveness of current programs and
initiatives funded by relevant public agencies and the FTI. In addition, there is a need to
study the historical trends and to anticipate a possible future development in competitive
priorities for manufacturers and service providers. See Porter (1996), Vokurka and
Fliedner (1998), Zhao, et al.(2002), Sum et al. (2004) and Yu and Stough (2006) for the
historical trends in what manufacturers have perceived to be their priorities when
operating in competitive environment. Cross-sectional analyses on key parameters such
as size and type of business should be further studied to determine whether competitive
priorities vary among these parameters. See Prajogo et al. (2007). Finally, a future study
should focus on relating competitive priorities with performance levels –whether the
rankings on competitive priorities can lead to successful performance. This is to ensure
success predictability of these priorities. See Green et al.(2004), Rao and Miller (2004), Rao
(2006) and Phusavat and Photaranon (2006) for more details of similar work.

Conclusions
The study reveals that, for Thai manufacturers, the quality, customer-focus and delivery
criteria are recognized as important priorities in order to maintain competitiveness.

Development of competitive priorities in various categories

Developing Initial transition Advanced NICs such as Traditional

Figure 2.
countries such such as China, transition such Singapore, industrialized
Suggested framework for
as Cambodia Vietnam, and as Thailand Taiwan, and countries such
future studies on
and Bangladesh India and Malaysia South Korea as Japan
competitive priorities
 These findings are verified when comparing all detailed dimensions from the six criteria Manufacturing
altogether. The results appear to reflect the desirable outcomes advocated by relevant firms in
pubic agencies and the FTI, especially on quality. The further evaluation includes the
comparison with Taiwan and China. Interestingly, Thai manufacturers pay Thailand
considerably less attention on innovation relatively to Taiwanese firms. On the
contrary, the priorities on know-how and cost are placed as insignificance by Chinese
and Thai firms. Finally, future studies are suggested. 989
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Notes
1. In reference to the presentation on February 28th, 2006 – Thailand Detroit of Asia: Master Plan
for Thai Automotive Industry for 2006-2010 by Thailand Automotive Institute and the FTI.
2. In reference to the report on Critical Assessment into Industrial Restructuring in Thailand,
Ministry of Industry.
3. It should be noted that all the results from the responses are reliable, based on the low
inconsistency ratio of less than 0.20.
4. The recognition is that, in regard to industrial development, Taiwan is the most advanced
country relatively to Thailand and China.

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Corresponding author
Kongkiti Phusavat can be contacted at: [email protected]

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992
107,7
IMDS

Table AI.

participating
manufacturers
Profiles from ten
Parameters Frequency Percentage

Industrial type
Automotive and auto parts 1 10.0
Electrical and electronics 2 20.0
Food 5 50.0
Petrochemical 2 20.0
Total 10 100.0
Number of employees
, 50 2 20.0
101-200 3 30.0
201-500 4 40.0
. 500 1 10.0
Total 10 100.0
Number of years in business
, 10 2 20.0
11-15 1 10.0
16-20 1 10.0
21-25 2 20.0
Appendix 1. Profiles of participating manufacturers

. 25 4 40.0
Total 10 100.0
International market proportion(percent)
, 20 2 20.0
20-40 2 20.0
41-60 2 20.0
61-80 3 30.0
81-100 1 10.0
Total 10 100.0
 Appendix 2. Partial illustration of the survey Manufacturing
firms in
A 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 B Thailand
A and B equally
A important important B important
Main criteria
Costs 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Customer-focus 993
Costs 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Quality
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Costs 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Delivery
Costs 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Flexibility
Costs 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Know-how
Customer-focus 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Quality
Customer-focus 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Delivery
Customer-focus 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Flexibility
Customer-focus 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Know-how
Quality 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Delivery
Quality 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Flexibility
Quality 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Know-how
Delivery 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Flexibility
Delivery 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Know-how
Flexibility 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Know-how
Dimensions
Cost criterion
Low cost 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Value-added
Low cost 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Quality costs
Low cost 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Activity-based measurement
Low cost 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Continuous improvement
Value-added 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Quality costs
Value-added 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Activity-based measurement
Value-added 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Continuous improvement
Quality costs 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Activity-based measurement
Quality costs 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Continuous improvement
Activity-based
measurement 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Continuous improvement
Customer-focus criterion
After-sales services 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Product customization
After-sales services 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Product support
After-sales services 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Customer information
After-sales services 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Measurement of satisfaction
After-sales services 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Dependable promises
Product customization 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Product support
Product customization 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Customer information
Product customization 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Measurement of satisfaction
Product customization 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Dependable promises
Product support 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Customer information
Product support 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Measurement of satisfaction
Product support 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Dependable promises
Customer information 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Measurement of satisfaction
Customer information 9 8 7 6 5 4 3 2 1 2 3 4 5 6 7 8 9 Dependable promises
Measurement of
satisfaction Dependable promises
Table AII.
Source: Adapted from Takala (2002) Survey demonstration
 IMDS Appendix 3. Detailed dimensions or features of key criteria
107,7
Dimensions Description

Quality criterion
Low-defect rate Tells how important is avoid the defects from manufacturing point of view
994 Product performance The company’s ability to fulfill or overfill customer’s demands considering
the product
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Reliability More or less the dependability of the whole company and organization
Environmental aspect How important corporation values environmental things to be in their
strategy
Certification How important certification is for quality
Cost criterion
Low costs The cost of production
Value added costs The costs that increase the value of product from customer’s point of view
Quality costs The costs are caused by avoiding poor quality like internal and external
failures in order to Keeping high quality of product
Activity-based measurement The cost of measuring adds value
Continuous improvement The costs are caused by improving production
Delivery criterion
Fast delivery Simply the fastness of delivery
On agreed time Basically the same as just in time
Right quality The agreed product is on the agreed place in the quality that has been agreed
in advance
Right amount The amount that customer has wanted and what company has promised to
deliver
Dependable promises The ability to be able to keep the promises and what has been agreed
Flexibility criterion
Design adjustments How easily the engines are accommodated to fit with the circumstances
where they are going to be used and how important it’s to the corporation
that the designs are flexible to meet the customers’ needs
Volume change Productions ability to react to the different levels of demand
Mix changes How much corporation values the ability to change product mix rapidly
Broad product line Wide product line gives competitive advantage to the corporation
Customer-focus criterion
After-sales service Things like maintenance, reparation, spare part and “contact us” services
Product customization Capability to produce individual entirety for customer, e.g. tailor-made
products
Product support All the actions, which provide to customers necessary information about
usage and installation of engines
Customer information Channels that company uses to inform customers about things like new
products
Measurement of satisfaction Tells to the company what their customers are thinking about them which is
a link between the customer satisfaction level and profits
Dependable promises The importance of kept promises and trust
Know-how criterion
Knowledge management Strategically important knowledge and skills are wanted to be developed and
reallocated
Creativity Capability to invent new innovation
Continuous learning Organization develops operation models and shares new knowledge on all
levels – individual, group, organization, and system
Problem solving skills The skills and ways to solve problems in innovative way
Training/education Learning at individual level
R&D Capability to search for and invent new products
Table AIII.
Detailed description Source: Adapted from Takala et al. (2003)
 Appendix 4. Global weight comparison Manufacturing
There are two demonstrations for this appendix. The first one is the ranking results from the
global weight on individual dimensions. The second table demonstrates the results from firms in
participating manufacturers. The global weight computations primarily involve pair-wise Thailand
comparisons that have to be organized into the data matrices. The Expert Choice software is
used to analyze the relative weights of each item across the dimension level as well as the
inconsistency ratio of each matrix. Then the relative weights are combined together in order to
obtain the global weight of all 31 dimensions. In this study, the average of all 31 dimensions is 995
determined individually.
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Rank Dimensions Average global weight

1 Low-defect rate (Q_LD) 0.088

2 Dependable promises (D_DP) 0.066
3 Certification (Q_CT) 0.064
4 Reliability (Q_RL) 0.062
5 Broad product line (F_BP) 0.056
6 Right quality (D_RQ) 0.047
7 Design adjustment (F_DA) 0.046
8 Product performance (Q_PP) 0.046
9 Product customization (CF_PC) 0.042
10 Dependable promises (CF_DP) 0.040
11 Volume change (F_VC) 0.031
12 Measurement of satisfaction (CF_MS) 0.030
13 Right amount (D_RA) 0.029
14 After sales services (CF_AS) 0.028
15 Environmental aspects (Q_EA) 0.027
16 Product support (CF_PS) 0.024
17 Quality costs (C_QC) 0.023
18 Problem solving skills (K_PS) 0.023
19 Continuous improvement (C_CI) 0.022
20 R&D (K_RD) 0.022
21 Training/education (K_TE) 0.022
22 Low cost (C_LC) 0.021
23 Customer information (CF_CI) 0.021
24 On agreed time (D_OT) 0.020
25 Mix changes (F_MC) 0.019
26 Activity-based measurement (C_AM) 0.017
27 Continuous learning (K_CL) 0.016
28 Fast Delivery (D_FD) 0.016
29 Knowledge management (K_KM) 0.014 Table AIV.
30 Value added (C_VA) 0.010 Ranking according to the
31 Creativity (K_CT) 0.010 dimensions’ global
Total 1.000 weight
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996
107,7
IMDS

Table AV.

manufacturers
Detailed results on the
global weights from 10
Manufacturer
Item Features or dimensions 1 2 3 4 5 6 7 8 9 10 Average

1 Low-defect rate (Q_LD) 0.066 0.019 0.045 0.104 0.325 0.020 0.027 0.109 0.012 0.148 0.088
Appendix 5

2 Reliability (Q_RL) 0.105 0.122 0.052 0.010 0.055 0.015 0.029 0.098 0.073 0.059 0.062
3 Product performance (Q_PP) 0.040 0.045 0.088 0.035 0.086 0.014 0.016 0.043 0.025 0.063 0.046
4 Certification (Q_CT) 0.015 0.334 0.009 0.010 0.033 0.005 0.019 0.081 0.079 0.050 0.064
5 Environmental aspects (Q_EA) 0.024 0.030 0.005 0.015 0.046 0.004 0.041 0.030 0.036 0.036 0.027
6 Dependable promises (CF_DP) 0.059 0.014 0.035 0.024 0.037 0.030 0.012 0.047 0.034 0.109 0.040
7 Product customization (CF_PC) 0.041 0.017 0.116 0.002 0.002 0.079 0.003 0.079 0.052 0.028 0.042
8 Measurement of satisfaction (CF_MS) 0.026 0.068 0.072 0.011 0.019 0.019 0.006 0.024 0.031 0.024 0.030
9 After sales services (CF_AS) 0.017 0.058 0.070 0.003 0.002 0.004 0.006 0.035 0.070 0.012 0.028
10 Product support (CF_PS) 0.007 0.046 0.027 0.002 0.005 0.029 0.004 0.032 0.026 0.064 0.024
11 Customer information (CF_CI) 0.010 0.010 0.030 0.002 0.008 0.015 0.005 0.037 0.044 0.047 0.021
12 Dependable promises (D_DP) 0.019 0.010 0.089 0.179 0.112 0.014 0.063 0.047 0.053 0.076 0.066
13 Right quality (D_RQ) 0.011 0.010 0.071 0.061 0.065 0.013 0.055 0.053 0.088 0.043 0.047
14 Right amount (D_RA) 0.004 0.010 0.054 0.026 0.037 0.004 0.037 0.028 0.060 0.025 0.029
15 On agreed time (D_OT) 0.006 0.002 0.020 0.014 0.021 0.018 0.041 0.042 0.018 0.014 0.020
16 Fast delivery (D_FD) 0.003 0.001 0.031 0.007 0.012 0.035 0.044 0.015 0.005 0.004 0.016
17 Broad product line (F_BP) 0.019 0.021 0.049 0.268 0.022 0.005 0.081 0.015 0.043 0.038 0.056
18 Volume change (F_VC) 0.012 0.042 0.019 0.093 0.008 0.008 0.053 0.011 0.032 0.033 0.031
19 Design adjustment (F_DA) 0.006 0.003 0.027 0.021 0.010 0.011 0.314 0.027 0.028 0.017 0.046
20 Mix changes (F_MC) 0.027 0.005 0.005 0.021 0.005 0.037 0.055 0.010 0.016 0.012 0.019
21 R&D (K_RD) 0.041 0.001 0.001 0.022 0.027 0.033 0.023 0.015 0.043 0.010 0.022
22 Training/education (K_TE) 0.004 0.013 0.009 0.011 0.013 0.102 0.007 0.013 0.027 0.016 0.022
23 Continuous learning (K_CL) 0.023 0.005 0.013 0.008 0.004 0.050 0.024 0.010 0.008 0.019 0.016
24 Problem solving skills (K_PS) 0.006 0.002 0.007 0.012 0.016 0.119 0.004 0.036 0.017 0.007 0.023
25 Knowledge management (K_KM) 0.010 0.010 0.003 0.010 0.002 0.051 0.003 0.009 0.032 0.014 0.014
26 Creativity (K_CT) 0.016 0.002 0.001 0.006 0.002 0.041 0.003 0.011 0.017 0.003 0.010
27 Continuous improvement (C_CI) 0.035 0.028 0.019 0.013 0.012 0.060 0.006 0.017 0.013 0.014 0.022
28 Quality costs (C_QC) 0.085 0.048 0.022 0.003 0.004 0.032 0.008 0.017 0.004 0.005 0.023
29 Activity-based measurement (C_AM) 0.057 0.012 0.004 0.006 0.004 0.071 0.006 0.003 0.009 0.002 0.017
30 Value added (C_VA) 0.023 0.003 0.004 0.002 0.004 0.051 0.005 0.002 0.005 0.004 0.010
31 Low cost (C_LC) 0.182 0.009 0.004 0.001 0.002 0.011 0.001 0.001 0.001 0.001 0.021
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[Abstract] [Full Text] [PDF]
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