Profile Analysis in Automotive Component Industry: A New Methodology to Analyze a Firm's Competitiveness

INTRODUCTION A firm's competitiveness leads to high profitability, derived from a series of competitive actions, to provide goods and services of value to its customer. Competitive advantage, according to Porter, derives from the various activities carried out by the firm to design, produce, sell, distribute and assist in the use of its products. A firm that properly uses innovative managerial techniques can reach a more competitive level than its competitors in all these activities. Each of these activities contributes towards the company's costs and creates a basis for differentiation. A cost advantage, for example, can derive from various sources: the setting up of a purchasing and distribution system, very efficient production, or an assembly process. Differentiation can be seen in terms of better product planning, procurement capability for high quality raw materials, or from their acquisition and efficient management. If one wants to analyze the sources of a competitive advantage it is necessary to choose a systematic methodology in order to examine all the company activities. These activities are all part of the Porter value chain. The chain identifies those activities that are strategically important within a company to understand cost change and the existence of potential sources of differentiation. A company obtains a competitive advantage when it develops these activities in a more economical and efficient way than its competitors. The activities which add value can be divided into primary and support activities. These activities are ie basic elements of a competitive advantage. The way in which each activity is handled, in relation to its economic aspects, will establish whether the company is behaving in a better or worse manner than its competitors. A correct value chain analysis is therefore the right way to identify a competitive advantage. It is a pity that the majority of methodologies used to analyze a firm's productivity and competitiveness are only concerned with the present performance level reached in productive and logistic activities, but neglect the evolutive dynamics and trends that allow one to point out a firm's full internal drive towards continuous improvement. One of the main downfalls during the analysis procedure, is that of collecting data using a correspondence method, for example, sending ql:estionnaires, which increases the risk of inaccuracies. The methodology here presented is instead based on more than one visit to the firm and highlights not only the present performance but also the evolutive potential of each firm to develop the different activities of the value chain. This methodology therefore analyzes innovative managerial techniques at various implementation levels, which allow a firm to overcome the strongest competition. DESCRIPTION, RULES, AND PURPOSES OF THE NEW METHODOLOGY The following methodology, based on an investigation, examines the economic and productive structure, the objectives, the strategies and the evolutive tendencies in the management field, that in recent years have characterized firms. It is interesting to underline the productive strategic position of each single firm, with one complete registration of the productive strategic dynamics that have occurred over the recent years. Special attention is paid to the analysis of the various approaches to innovative managerial techniques which are becoming increasingly popular: Total Quality, Just In Time And Lean Production, Simultaneous Engineering And Codesign, Employees' Involvement, Total Produ:ctive Maintenance, Continuous Improvement. To apply this methodology it is necessary to acquire data through organized meetings with the top management of the firms. The meetings should always be integrated with visits to the production plants, with a careful examination of the production cycle and of the operations for production planning and control, quality control, and the operations for managing the materials-flow, particularly those concerning supply and distribution. …