Hybrid Supply Chains in Emerging Industrial Countries: The Case of the Mexican Auto industry CEDILLO-CAMPOS, Miguel Gaston...
Agenda <ul><li>General context </li></ul><ul><li>Objectives </li></ul><ul><li>Methodology </li></ul><ul><li>Analysis and f...
General context <ul><li>Role of assembly sites in Mexico has changed over the years </li></ul><ul><ul><li>Take advantage o...
General context <ul><li>Mexico: The new center of North American automobile production? </li></ul>Automobile production wi...
<ul><li>Automotive production </li></ul>General context Source:  A.T. Kearney (2007). Study of Prospective Technologic in ...
General context <ul><li>Automotive clusters in Mexico </li></ul>1 2 3 4
General context <ul><li>Automotive clusters in the Northern region </li></ul>
General context <ul><li>Automotive clusters in the middle region </li></ul>Cluster 3 Research site
<ul><li>Automotive production (Main States) </li></ul>General context Source:  INA, 2004
General context <ul><li>The delivery of new cars is a team effort that involves the assembly of  modules or systems , whos...
Objectives <ul><li>“ The  value chains are not static  and they depend on the details of  how interactions  between value ...
Objectives <ul><li>Objectives </li></ul><ul><ul><li>To Identify   the   supply network linkages between firms. </li></ul><...
Objectives <ul><li>Participation of Mexican SME within the automobile value chain </li></ul>Source:  INEGI, 2004 SME
Methodology <ul><li>Case study-based method </li></ul><ul><ul><li>Strategic approach . Holistic point of view. </li></ul><...
Methodology <ul><li>First step </li></ul><ul><ul><li>Qualitative analysis using  exploratory  interviews  involving expert...
Methodology <ul><li>Research framework </li></ul>
Methodology <ul><li>Second step </li></ul><ul><ul><li>Quantitative mapping processes of main companies. </li></ul></ul>
Methodology <ul><li>MARKET/ </li></ul><ul><li>BUSINESS ENVIRONMENT </li></ul><ul><li>(Current Vs. Future) </li></ul><ul><l...
Analysis & findings <ul><li>A  lean supply chain  employs  continuous   improvement  efforts that focus on  eliminating   ...
Analysis & findings <ul><li>Automotive firms need supply chains with  different  characteristics and capabilities. </li></...
Analysis & findings <ul><li>A  hybrid supply chain  generally involves  assembled to order products  whose demand can be f...
Analysis & findings <ul><li>Typology of supply processes </li></ul>Complexity Commodities Quality – Time  concern Differen...
Analysis & findings <ul><li>Type of linking with the local system </li></ul>Bilateral relationships Low cost Stability of ...
Conclusions <ul><li>As the industrial systems become more and more complex, the competitive environment also becomes more ...
Future research <ul><li>Future research will involve other logistics processes </li></ul><ul><ul><li>Due to the fact that ...
Thank you! CEDILLO-CAMPOS, Miguel Gaston PIÑA-MONARREZ, Manuel Roman NORIEGA-MORALES, Salvador A.  The 12th Annual Interna...
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Hybrid Supply Chains in Emerging Industrial Countries: The Case of the Mexican Auto industry

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This presentation was part of the conference held by Dr. Cedillo, PhD from ITESM University. This conference was presented for the Institute of Industrial Engineers, Chapter Guadalajara.

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  • Hybrid Supply Chains in Emerging Industrial Countries: The Case of the Mexican Auto industry

    1. 1. Hybrid Supply Chains in Emerging Industrial Countries: The Case of the Mexican Auto industry CEDILLO-CAMPOS, Miguel Gaston PIÑA-MONARREZ, Manuel Roman NORIEGA-MORALES, Salvador A. Mexico 2007 The 12th Annual International Conference on Industrial Engineering Theory, Applications & Practice
    2. 2. Agenda <ul><li>General context </li></ul><ul><li>Objectives </li></ul><ul><li>Methodology </li></ul><ul><li>Analysis and findings </li></ul><ul><li>Conclusions </li></ul><ul><li>Future research </li></ul>
    3. 3. General context <ul><li>Role of assembly sites in Mexico has changed over the years </li></ul><ul><ul><li>Take advantage of the inexpensive labor cost and increase plant capacity. </li></ul></ul><ul><ul><li>Improve production quality and flexibility. </li></ul></ul><ul><ul><li>Integrate Mexican sites into the global networks, in order to improve global competitiveness of automotive groups. </li></ul></ul>The logistics profile of Mexico as a platform for exports inside and outside of NAFTA is a significant attractiveness.
    4. 4. General context <ul><li>Mexico: The new center of North American automobile production? </li></ul>Automobile production will continue its exodus from Canada and the United States to low wage areas, especially Mexico Source: http://www.theautochannel.com/news/2007/06/01/050170.html http://www.presidencia.gob.mx/en/press/?contenido=30413
    5. 5. <ul><li>Automotive production </li></ul>General context Source: A.T. Kearney (2007). Study of Prospective Technologic in the Mexican Automotive Industry. CEDIAM, Mexico. Light Vehicles U.S.A. Canada Mexico 71.2% 78% 17.1% 10% 12.7% 11% Light Vehicles Commercial Vehicles Currently, some important automakers are evaluating Mexico in order to increase their production. Mexico could produce 3 millions cars in 2015.
    6. 6. General context <ul><li>Automotive clusters in Mexico </li></ul>1 2 3 4
    7. 7. General context <ul><li>Automotive clusters in the Northern region </li></ul>
    8. 8. General context <ul><li>Automotive clusters in the middle region </li></ul>Cluster 3 Research site
    9. 9. <ul><li>Automotive production (Main States) </li></ul>General context Source: INA, 2004
    10. 10. General context <ul><li>The delivery of new cars is a team effort that involves the assembly of modules or systems , whose components are made up of a variety of standard and innovative components . </li></ul>
    11. 11. Objectives <ul><li>“ The value chains are not static and they depend on the details of how interactions between value chain actors are managed ” (Gereffi et al., 2005). </li></ul><ul><li>We argue that performance in a global supply chain can be leveraged through a hybrid process integration of local supply chain partners taking in account the variety of linkages between firms. </li></ul>
    12. 12. Objectives <ul><li>Objectives </li></ul><ul><ul><li>To Identify the supply network linkages between firms. </li></ul></ul><ul><ul><li>To propose a framework of analysis from a holistic point of view. </li></ul></ul><ul><ul><li>To provide insights into organizations for improving their relational capabilities throughout the supply chain. </li></ul></ul><ul><ul><li>To help local Small and Medium Enterprises (SME) to integrate global automotive networks </li></ul></ul>
    13. 13. Objectives <ul><li>Participation of Mexican SME within the automobile value chain </li></ul>Source: INEGI, 2004 SME
    14. 14. Methodology <ul><li>Case study-based method </li></ul><ul><ul><li>Strategic approach . Holistic point of view. </li></ul></ul><ul><ul><li>Tactical approach . Abductive or hybrid process linking theory and field research. </li></ul></ul><ul><ul><li>Operational approach . A multi-method triangulated research approach was developed, comprised of both qualitative and quantitative methods. </li></ul></ul><ul><li>The main objective for implementing this method was to understand the systemic feedback </li></ul>
    15. 15. Methodology <ul><li>First step </li></ul><ul><ul><li>Qualitative analysis using exploratory interviews involving experts in order to understand the internal processes of the automotive system and the local system. </li></ul></ul><ul><ul><li>Detection of a research framework . </li></ul></ul>
    16. 16. Methodology <ul><li>Research framework </li></ul>
    17. 17. Methodology <ul><li>Second step </li></ul><ul><ul><li>Quantitative mapping processes of main companies. </li></ul></ul>
    18. 18. Methodology <ul><li>MARKET/ </li></ul><ul><li>BUSINESS ENVIRONMENT </li></ul><ul><li>(Current Vs. Future) </li></ul><ul><li>* Structure of the market </li></ul><ul><ul><li>Customers </li></ul></ul><ul><ul><li>End users </li></ul></ul><ul><ul><li>Market share </li></ul></ul><ul><li>* Products/Services </li></ul><ul><li>* Structure of the competition </li></ul><ul><li>* Economical factors </li></ul><ul><li>* Technology </li></ul>EXTERNAL SYSTEM (Supply network) * The supply network major/minor members * Flow of Money/Material/Information * Relationships (position, policies, etc.) * Performance (measures, etc.) * Processes * Alignment strategies/policies/practices INTERNAL SYSTEM (Enterprise) * Internal supply network study * Performance (measures, history, targets, etc.) * Manufacturing (Order Fulfillment, Process, Planning, Porduction, etc.) * Information flows * Organization * Culture OEM Dealerships 2 nd Tier 1 st Tier Suppliers <ul><li>Tools/Techniques : </li></ul><ul><li>Value Stream Mapping </li></ul><ul><li>Quick Scan Method </li></ul><ul><li>Statistical Analysis Tools </li></ul><ul><li>Subjective Analysis (structured interviews) </li></ul><ul><li>System Dynamics Models </li></ul><ul><li>Data collection/sources : </li></ul><ul><li>Firm’s business data </li></ul><ul><li>Questionnaires </li></ul><ul><li>Structured interviews </li></ul><ul><li>Data about: Market/Competitors/Dealers </li></ul>INDUSTRIAL SYSTEM LOCAL SYSTEM
    19. 19. Analysis & findings <ul><li>A lean supply chain employs continuous improvement efforts that focus on eliminating waste along the chain. </li></ul><ul><li>Successful implementation of an agile supply chain involves responding to high-speed changes by being dynamic, context-specific, flexible and customer-driven. </li></ul>Vonderembse et al. (2006).
    20. 20. Analysis & findings <ul><li>Automotive firms need supply chains with different characteristics and capabilities. </li></ul><ul><li>This is due to the fact that cars are made with different components varying in cost, availability, and levels of technology involved in the components or in the production process. </li></ul>
    21. 21. Analysis & findings <ul><li>A hybrid supply chain generally involves assembled to order products whose demand can be forecasted with a relative accuracy. </li></ul><ul><li>This kind of chain helps to achieve mass customization by postponing product differentiation until final assembly. </li></ul>Vonderembse et al. (2006).
    22. 22. Analysis & findings <ul><li>Typology of supply processes </li></ul>Complexity Commodities Quality – Time concern Differentiation
    23. 23. Analysis & findings <ul><li>Type of linking with the local system </li></ul>Bilateral relationships Low cost Stability of conditions Strong links
    24. 24. Conclusions <ul><li>As the industrial systems become more and more complex, the competitive environment also becomes more and more unstable: </li></ul><ul><ul><li>A variety of supplier relationships is required. </li></ul></ul><ul><ul><li>The variety of solutions depends on the competitive architecture of the supply chain (products, processes, and technology involved). </li></ul></ul><ul><ul><li>Local actors should identify the relational approach of their clients in order to focus on efforts for developing dynamic capabilities in the supply chain management. </li></ul></ul>
    25. 25. Future research <ul><li>Future research will involve other logistics processes </li></ul><ul><ul><li>Due to the fact that the concept of supply chain is a global approach, it is important to determine the factors that define links with the local context inside other logistics processes (production and distribution). </li></ul></ul><ul><ul><li>Develop a causal model from a system dynamics approach in order to establish, evaluate, and simulate the dynamic performance of relationships between supply chain entities. </li></ul></ul>
    26. 26. Thank you! CEDILLO-CAMPOS, Miguel Gaston PIÑA-MONARREZ, Manuel Roman NORIEGA-MORALES, Salvador A. The 12th Annual International Conference on Industrial Engineering Theory, Applications & Practice

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