Conceptual Framework

Flexibility, efficiency, quality and cost control are the main competitive advantages of Taiwanese notebook-computer manufacturers. These advantages provide close cooperation that assist multinational firms compete. Such competences also help ensure a steady inflow of OEM/ODM orders. Figure 4.1 shows the conceptual framework of this study.

Figure 4.1 Conceptual Framework for Analyzing Key Factors in Notebook-Computer Manufacturers

To sustain long-term and profitable cooperation with brand companies, manufacturers set supply chain targets. Achieving these targets demonstrates firm abilities to support global operations. Furthermore, the operational model adopted to establish an effective supply chain framework is a critical point. It is necessary to identify the key factors for describing the operational characteristics of different operational models.

For this study, the questionnaire was developed based on grey relational analysis method to collect data of expert judgments. The content of questionnaire was confirmed through an intensive literature review and significant discussions with some experts. The questionnaire contains two major parts. Part A is the overall basic data collections including “general information of your company”, “market segmentation and facility locations”, “business model and process model” and

“objectives of your company”. Part B investigates the different factors with reference to global supply chain operations. This study summarizes the possible factors obtained from literature review and depth-interview survey into the following dimensions: “Supply Chain Targets”, “Supply Chain Management Efficiency”, “Strategic Alliance” and “Logistics Facility Locations”. There are some questions in four classified dimensions, reflecting the important factors within each dimension among different kind of operation models. Data were collected through the nominal scale with the values (from 1 to 5) representing the significance level in different factors shown in each dimension. Figure 4.2 shows the factors set in different dimensions.

Time Supply Chain Targets Supply Chain Targets

Cost

Quality

Flexibility

TA: Decrease purchasing time TB: Decrease production time TC: Decrease delivery time CA: Reduce purchasing cost CB: Reduce production cost CC: Reduce inventory cost CD: Reduce transportation cost QA: Increase purchasing quality QB: Increase good rate of production QC: Improve logistics channel FA: Flexibility in production FB: Variety of product design Time

Supply Chain Targets Supply Chain Targets

Cost

Quality

Flexibility

TA: Decrease purchasing time TB: Decrease production time TC: Decrease delivery time CA: Reduce purchasing cost CB: Reduce production cost CC: Reduce inventory cost CD: Reduce transportation cost QA: Increase purchasing quality QB: Increase good rate of production QC: Improve logistics channel FA: Flexibility in production FB: Variety of product design

Purchase Supply Chain Management EfficiencySupply Chain Management Efficiency

Manufacture

Inventory

IT Application

PA: Purchasing cost PB: Purchasing quality PC: Purchasing cycle MA: Production cost MB: Production cycle MC: Adopt new technology MD: Inferior goods ratio IVA: Inventory cost IVB: Safety stock IVC: Adopt JIT

ITA: Adopt cargo tracking system ITB: Adopt EDI System ITC: Set ERP system

Transportation TRA: Transportation cost TRB: Transportation time TRC: Outsourcing

CSA: Provide customization service CSB: Develop international service CSC: Mechanism of after-sale service CSD: Response time to customer Customer

Service Purchase Supply Chain Management EfficiencySupply Chain Management Efficiency

Manufacture

Inventory

IT Application

PA: Purchasing cost PB: Purchasing quality PC: Purchasing cycle MA: Production cost MB: Production cycle MC: Adopt new technology MD: Inferior goods ratio IVA: Inventory cost IVB: Safety stock IVC: Adopt JIT

ITA: Adopt cargo tracking system ITB: Adopt EDI System ITC: Set ERP system

Transportation TRA: Transportation cost TRB: Transportation time TRC: Outsourcing

CSA: Provide customization service CSB: Develop international service CSC: Mechanism of after-sale service CSD: Response time to customer Customer

GA: Stable politics climate GB: Relax restriction of investment GC: Simplify in customs clearance LA: Low labor cost

LB: Professional logistics operations LC: Stable labor supply

LSA: Plentiful resources LSB: Set up logistics park

LSC: Superior transshipment location LSD: Transportation cost

IA: Good logistics infrastructure IB: Horizontal integration IC: Vertical integration

Financial Support

FA: Free capital flow FB: Facility construction cost FC: Regulation fee ED: Exchange rate MA: Potential of local market MB: Potential of globalization MC: Close to market Market

GA: Stable politics climate GB: Relax restriction of investment GC: Simplify in customs clearance LA: Low labor cost

LB: Professional logistics operations LC: Stable labor supply

LSA: Plentiful resources LSB: Set up logistics park

LSC: Superior transshipment location LSD: Transportation cost

IA: Good logistics infrastructure IB: Horizontal integration IC: Vertical integration

Financial Support

FA: Free capital flow FB: Facility construction cost FC: Regulation fee ED: Exchange rate MA: Potential of local market MB: Potential of globalization MC: Close to market Market

Demand Complementary

Resources Strategical Alliance Strategical Alliance

Organization Culture

Market Power

RA: manufacture RB: Distribution and service RC: Land and factory RD: Finance

CA: Past alliance experience CB: Compatibility of strategies CC: Commitment

CD: Compatibility of manpower MA: Relative scale

MB: Intangible assets MC: Competition advantages MD: Political and social relationship Complementary

Resources Strategical Alliance Strategical Alliance

Organization Culture

Market Power

RA: manufacture RB: Distribution and service RC: Land and factory RD: Finance

CA: Past alliance experience CB: Compatibility of strategies CC: Commitment

CD: Compatibility of manpower MA: Relative scale

MB: Intangible assets MC: Competition advantages MD: Political and social relationship

Figure 4.2 Factor Sets in Different Dimensions

The Dimension “Supply Chain Targets” is quoted as being representative of the optimization of global operations regarding the issues the satisfying brand company requirements, coordinating distribution channels, control costs and risks, and shortening lead-times. Twelve factors were introduced and classified into four sub-dimensions of time, cost, quality, and flexibility. The partnership was motivated

the “Strategic Alliance” dimension are divided into three sub-dimensions of complementary resources, organization culture, and market power. All the operational processes should be controlled to meet the practical requirements and the need for advance planning. To explore the influences on each major process involved in supply chain operations, 20 factors in the dimension of “Supply Chain Management Efficiency” are divided into six sub-dimensions including purchase, manufacture, inventory, IT application, transportation, and customer service. To explore what external environmental factors influence operational effectiveness in global supply chains, 20 factors from the dimension of “Logistics Facility Locations” are divided into six sub-dimensions of government policy, labor force, support capability, development opportunities, financial support, and market demand.

The operational models of global supply chain for notebook-computer manufacturers are highly complex. The need to preserve commercial secrecy makes it difficult to analyse practical operational data. Therefore, key factors are searched to represent the characteristics of different operational models. This methodology must be applied to analyse the incomplete information gathered from questionnaire survey and in-depth interviews. Grey system theory, proposed by Deng in 1982, is an effective mathematical method of dealing with systems analysis characterized by incomplete information. The fundamental definition of “greyness” is information that is incomplete and unknown, and thus an element that forms an incomplete message is considered a grey element. “Grey relation” indicates the measurements of changing relations between two systems or two elements that occur in a system over time. The analysis method, which measures the relation among elements based on the degree of similarity of difference of development trends among these elements, is known as “grey relation analysis”. More precisely, during system development, given a consistent trend of change between two elements, it means that they have a higher grade of synchronized change and can be considered to have a greater grade of relation, otherwise, the grade of relation would be smaller. This study investigated 36 key managers at the strategic decision-making level in 12 leading notebook-computer manufacturers in Taiwan. Grey relation analysis was applied to select key factors from each dimension for analyzing the global operating characteristics based on respondent macroscopic views.

4.2 Key Factors Selected from Each Dimension in Different Models