Lean Production and Technology Networks in the Spanish Automotive Supplier Industry (1)

By Perez, Manuela Perez; Sanchez, Angel Martinez | Management International Review, July 2002 | Go to article overview

Lean Production and Technology Networks in the Spanish Automotive Supplier Industry (1)


Perez, Manuela Perez, Sanchez, Angel Martinez, Management International Review


Abstract

* The automotive industry has undergone tremendous transformation during the 1990s. One of them is the importance of knowledge-sharing networks to access to technology, innovation and training. Firms having a strong supplier network report higher levels of productivity and quality than those reporting weak alliances over time.

* However, very few empirical studies exist on the relationship between networking and production and process innovation. This paper tests the underlying relationship between lean production and networking.

Key Results

* Using data from an automotive supplier network in northeast Spain, the empirical results found that networking companies did more in-house training and teamwork than non-networking suppliers. No significant relationship was found with Just-in-Time delivery.

Introduction

The automotive industry has undergone a tremendous transformation during the 1990s. This transformation has occurred in many areas such as product development, inventory management or supplier involvement, (Freyssenet et al. 1998). Increasingly, the delivery of high quality products is taken as granted by the manufacturers, which are contracting-out development jobs and the integration of new components to their suppliers in order to optimize the whole supply chain. The repercussions of this process are starting to make themselves felt even on the level of the third-tier suppliers, mostly part suppliers, which have to adapt by increasing their product quality as well as their technical and technological competencies and by shortening the product cycle. Nowadays, automobiles are developed and manufactured by Original Equipment Manufacturers (OEMs) and their supplier networks, which produce as much as 70 percent of the value of a vehicle. Consequently, the cost and quality of a vehicle are a function of the productivity of a network of firms working in collaboration. Thus, the need to have increased access to technology, innovation and training which regards all suppliers at the different levels of the supply chain.

Isolated from each other, single suppliers may not be in a position to meet the future market requirements. Enterprise cooperations offer small enterprises the opportunity to draw upon resources which enable to collectively master more complex challenges (Kleinknecht/Reijnen 1992). However, small and medium sized enterprises (SMEs hereafter) are slow to seek such solutions and only rarely engage in an active search for partners. While SMEs face difficulties in actively engaging in cooperations, enterprise networks and clusters offer an adequate framework for responding to the increasingly demanding requirements from the leading companies. By joining forces, both horizontally and vertically, and learning from other partners from the supply chain, SMEs are put into a position to compete. Moreover, the importance of enterprise networks is increasing in terms of facilitating enterprise access to resources such as technology, qualification, information on market requirements, and business support services.

The purpose of this paper is to test some production practices differences between networking and non-networking automotive suppliers. Even though there are some studies which have addressed the diffusion of best production practices through the supply chain (i.e. MacDuffie/Helper 1997), there are very few studies of the influence from automotive networks and clusters on production practices. The paper is organised as follows. Next section reviews the literature on automotive networks and clusters, gives some background information on automotive networks, and establishes the paper's research objectives. The following section briefs the methodology of the empirical study and shows the empirical results on the relationship between networking and transfer of information, workforce flexibility, training, and Just-in-Time delivery. …

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