DOI: 10.14457/tu.the.2019.63
title: Influences of customers on technological capabilities for industry 4.0: case of Thai manufacturing firms

description: The main objective of this research is to identify the main factors that help the firm to upgrade their technological capabilities. This research mainly investigates two influential factors that drive firms to improve their technological capabilities. The first factor is the firms’ customers who invested in Information and Communication Technology (ICT) and encouraged their supply chain partners to do the same in order to have more supply chain visibility. The second factor is the benefits from joining a global supply chain which required firms to upgrade their technological capabilities. This research focuses on three groups of firms’ technological capabilities, i.e., production planning (PP), inventory management (IM), and data analysis (DA), where each group consists of four levels, ranging from the basic to complex technology usage. Firstly, a hierarchical multiple linear regression method was used to analyze 141 manufacturing firms in Thailand during March-April 2019. Results indicate that customers who invested in ICT positively and significantly affect firms’ technological capabilities. In production planning, it can be seen that (PP1) using papers to plan, discuss, and record information; (PP3) using Enterprise Resource Planning software; have improved. In term of inventory management, what have been improved are (IM1) tracking products, using a warehouse BIN card; (IM2) monitoring inventory almost daily and managing products based on customers’ monthly demand; (IM3) using warehouse management software to track daily purchasing and inventory turnover by using Material Resource Planning software. A similar pattern can also be seen in (DA1) using Data Analysis systems for decision making; and (DA2) using simple programs such as Excel to analyze data. However, there is no evidence to support the influence of customers who invested in ICT on the complex level of firms’ technological capabilities. In other words, (PP2) using Spreadsheet and Material Resource Planning software, (PP4) having flexible and real-time systems to respond to customer demand; could not be proved to have any significant influence. The same can be said for (IM4) using Barcode or Radio Frequency Identification as a real-time tracking system, (DA3) having abilities to process and display business intelligence for decision making, and (DA4) having abilities to publish data in real-time. Thus, customers who invested in ICT help to upgrade firms’ technological capabilities, but not up to the complex level of technology usage.It is also interesting to investigate whether joining global supply chain has any benefits on firms’ technological capabilities among different types of supply chain structure, as it is believed that technical knowledge is known to be spillover among supply chain members in the global value chain. The different supply chain structures, i.e., (1) local firms in the local supply chain, (2) local firms in the global supply chain, and (3) foreign firms in the local/global supply chain; were used to investigate. Again, the three groups of firms’ technological capabilities, which are investigated in this research, which are technological capabilities in production planning (PP), inventory management (IM), and data analysis (DA) were used. One-way ANOVA was used to analyze the same responses. Results from this empirical statistical analysis show that, first, foreign firms in the local/global supply chain have a significant difference and higher technological capabilities than local firms in the local supply chain for all groups of firms’ technological capabilities. However, the difference in technological capabilities between foreign firms in the local/global supply chain and local firms in the global supply chain could not be proved with enough evidence. Secondly, local firms in the global supply chain have a significant difference and higher technological capabilities than local firms in the local supply chain in the group of DA. However, statistical evident could not be found to prove the difference in technological capabilities in the group of PP and IM, even the mean of technological capabilities of local firms in the global supply chain is higher than the local firms in the local supply chain. Therefore, local firms may improve their technological capabilities by joining the global supply chain.