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Transcript of DESSY IRAWATI [email protected]
“FDI Accelerates Indonesian Automotive Cluster: The Challenge and Complexity in
Managing Technology in Extended Automotive Global Production“
DESSY IRAWATI
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OUTLINE
IntroductionKnowledge Diffusion and Local Capability Formation: The Case of Indonesian Automotive IndustryTechnology & Knowledge Transfer: Learning Aspect From Knowledge Network In the Automotive Sector Fostering The Global-Local Alliance Formation for The Case of Indonesian Automotive Forging The Automotive Industrial Production Networks Conclusion
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AIM & METHODOLOGYAim:
This research intend to demonstrate that Japan is not only plugging into the region’s economy energy but also transforming and promoting the host country in technology-based production alliance
MethodologyCase Study approach: qualitative research and secondary data for statistic and numerical dataDescriptive & Explorative study on the Automotive Cluster and its learning dimension along with its linkages in Indonesia Semi-structured interview with the automotive actors (car makers and their suppliers), government, industrial estate developer, university/research institutionField work & observation in the car plants for 4 months On-Going Correspondent with the interviewees
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INTRODUCTION
Prediction: the Japanese automotive MNEs will emerge as globalization and direct competition between different productions systems. Thus, inward automotive FDI serves a transmission vehicle for the best practices of the investing regions (Kenney & Florida 1993, Florida et. al 1998, Rutherford 2000, Womack 2005)
The auto industry as an example of a mature industry and the Japanese have emerged as a result of higher oil prices and environmental concerns (Vernon 1996)
The automotive industry in ASEAN-4 is now seeking to regionalize the dense web of mutually reinforcing ties in the automotive industry
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Asia is Pax-Niponica-Mutual Benefit Zone, the most suitable site in the world for Japanese expansion in the automotive industry.
It is right next to door to Japan & the region is still developing. Importantly for efficient just in time manufacturing system (Dicken 1988, Doner 1991, Dicken 1992, Dicken 2003)
Asia is filled with ‘developmentalist-minded’ governments (Dicken 1988, Hatch & Yamamura 1996, Borrus 1992, Dicken 2003)
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Global Production Network, Knowledge Diffusion, and Local Capability Formation: The Case of
Indonesian Automotive Industry
Despite the long trajectory now Indonesia has become the exporter to another international market including Japan itself (Sugiyama 2000, ADB 2005, Gaikindo 2007, Toyota 2007, Honda 2007)
Triggered growing number of the local suppliers used by Japanese auto manufacturers, although they are ‘still’ Japanese affiliates (West 2000) though there is still unequal cooperation (Yeung 2000, Schmitz 2000, Terry 2002, Wolf 2004)
In the quest for efficient supply networks (Hatch & Yamamura 1996), these firms receive invaluable infusions of capital, technology, and managerial guidance
Ensuring Indonesian economy do not become ‘captive’ members of a Japanese production alliance, Thus up-grading technological capacity is necessary (UNCTAD 2007)
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• Indonesian Automotive Network
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Technology & Knowledge Transfer: Learning Aspect
From Knowledge Network In the Automotive Sector
(Mito 1990, Nonaka & Takeuchi 1995): Firstly is the technical dimension (capital embodied), which
encompasses informal and crafts in the term know-how. Secondly is cognitive dimension (labour embodied) consisting of
mental models, beliefs, ‘credo’, and perceptions and it is shaped by the surrounding environment
(Nonaka & Takeuchi 1995), Japanese support their production management methods and their technical training all the way through OJT (On the Job Training)=LEAN PRODUCTION SYSTEM as Learning Dimension
Internal: OJT via TPS,Employees Exchange Programme, OJT via NH Circle, Idea ContestExternal: Jishuken (Learning activity/COP) through Suppliers for OEM, RP/SP LEAD TO KANBAN-E-KANBAN TO QCDSM
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TMCJAPAN
1
3rdCOUNTRY
2
- Taiwan- Thailand- Malaysia- Philipine- US-Australia, etc.3
DOMESTICSUPPLIER
KANBANJUNBIKI,SCHEDULE
C
P
KM
PDI
PACKING SHOP
JUNDATE
PACKING SHOP
JUNBIKI
P
PDIJUNDATE
R
(Small Part Painted)
KARAWANG PLANT
SUNTER PLANT
KIJANGINNOVA
K
K
K
K
K
KIJANG-P/U
W T AW/H&
ReceivingArea
W T A
W/H&
ReceivingArea
( Based on TPS Viewpoints )
VEHICLE, E/G, CKD/COMPONENT
PDI
DYNA
PT. SUGITY CREATIVES
W T A
W/H&
ReceivingArea
5 MAIN DEALERS :
AUTO 2000
NEW RATNAMOTOR
HADJI KALLA
HASRAT ABADI
AGUNGAUTOMALL
VEHICLE
-JAPAN - BRUNEI, SPI, Thai, etc
COMPONENT/ CKD
- THAILAND - TAIWAN- MALAYSIA - VIETNAM- PHILIPINE - INDIA- S/AFRICA - AUS.- ETC
* Incl. JIGS & DIES(Pakistan, Venezuela,, etc.)
PT. ADM
- TAIWAN- PAKISTAN- PHILIPINE- Argen, etc
ENGINE
P W A
M K
ExporterSupplier
TMMI N
( Sunter & Karawang )
I mporter /
Overseas Mkt.
TAM Dealer
CustomerBody Maker
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Yearly Production Planning
Monthly Production Planning
Daily Production Planning
Sequential Planning
Production Plannig
Body Prod.Start
Body Prod.Finish
PaintingFinish
LineOff
WeldingForging
MachineProces
assemblyCasting
PartMaker
DomesticOverseasDealers
PaintingStarting workProduction
Sequential table
Heijunka
Information
Daily Order System
Daily Order System
Flow Parts
Flow ProductionInformation kanban
Flow signal kanban
Flow part withdrawalkanban
Body Final Assembly
No 3No2
No1 a b
PressParts
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The interrelatedness of internal and external network
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Forging The Automotive Industrial Production Networks
The Southeast Asian region in fact is a buzzing with a competitive energy that is more than a little reminiscent of the katō kyōsō (excessive competition) (Aoki 1987)
Each automotive manufacturer enters this regional rat race, with high-volume technology investment for expanded production facilities, increase output, reduce costs, boost exports and grab larger shares of the global market
The alliances that in Japan are called as vertical keiretsu that lies somewhere between vertical integration of transaction within a single firm and long-term contracting between a stronger and a weaker firm (Aoki 1987, Hideki 1988, Kodama 1994, Hatch & Yamamura 1996)
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Toyota Motor Networks
ASEAN-4
Source: Toyota Motor Corp. (2000)
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CONCLUSION
The perspective of forging the automotive industrial production networks and macro regional integration is equally valid for all Asian economies (ASEAN in particular), but not for all industries
The Auto industry, additionally, can function as an engine, transforming a low wage, labour intensive, and developing economy into a higher-wage, technology-intensive, and developed economy
This analysis is an attempt to reflect on what has happened in the beginning and what has been going on in the automotive industry in Indonesia. In view of that, this analysis is trying to fill in the gap between the theory and the practice of the Asian automotive industry
The Japanese approach to organizational knowledge creation can be applied outside Japan and that the key adjustment needed is a prolonged phase of socialization and externalization