DOI: 10.14457/tu.the.2018.920
title: The effects of quality management practices and customer-supplier linkages on innovation in Thai manufacturing firms

description: Under the global competitive pressure on product quality, manufacturing firms are demanded to improve quality and innovativeness to satisfy customer needs by developing mechanisms to enhance labor skills, strengthen their knowledge, and adopt quality management practices. QM practices enhance productivity, reduce defective products, and also emphasize knowledge sharing and learning in organizations. Organizational learning allows a firm to effectively create, acquire new knowledge, and integrate it with their own through quality-related activities. QM practices include a knowledge creation process which allows employees to explore, exploit, and interpret their knowledge and experience to solve problems. This learning process generates diverse ideas from different viewpoints of each employee and emphasizes innovative thinking which can lead to innovation. This thesis proposes an empirical study to explore the relationship between implementing QM practices (5S, QCC, ISO 9000 series), customer-supplier linkages through interactive learning activities, and innovation in the manufacturing sector in Thailand using logistic regression and binary mediation analysis. Thai manufacturing firms have implemented simple quality management practices, such as 5S practices and QCC as a standard of quality management. However, to enhance the quality standard that meets the international standard, only 5S and QCC are not sufficient. Firms need to move forward ISO 9000. There are only a few firms, especially small and medium enterprises, who proactively adopt ISO 9000 due to the high investment cost and complicated procedures. Therefore, customer/supplier pressure on ISO 9000 series is important. Apart from external pressure, external knowledge sources and experiences like customers and suppliers are necessary to stimulate the innovation creation of the firms. This thesis also explores whether QM practices facilitate the customer-supplier linkages in terms of interactive learning activities. This study also compares the results of interactive learning activities through engineer exchanges, training, and co-product design among customers-manufacturer-suppliers that lead to product and process innovation to answer the question how the implication of interactive learning emphasize QM implementation and the creation of innovation in the manufacturing firms. This study uses a survey methodology to collect data from manufacturing firms in Thailand from 2013-2017. After data collection, the logistic regression analysis is used to analyze the data and test the proposed hypotheses. The results of this research expect to provide new insights into the effects of QM practices and customer-supplier linkages on innovation in Thai manufacturing.The findings reveal that the firms that adopted 5S and QCC are more likely to adopt ISO 9000 series. Moreover, pressure from customers on ISO 9000 adoption also affect the ISO 9000 adoption of the firms. 5S and QCC significantly increase the probability of achieving all types of product innovation while 5S and ISO 9000 increase the probability of achieving three types of process innovation, which are the reduction of the production of defective products, labor input, and lead time to introduce a new product. ISO 9000 and QCC learning and sharing activities significantly increase the odds of having interactive learning activities with the main customer and supplier. Moreover, dispatching engineers and product designing with the main customer and supplier mediate the effects of QM practices and innovation. The firms who conduct interactive learning by learning and sharing experience with customers and suppliers are more like to have product design collaboration, which leads to the achievement of product and process innovation. The results of this thesis can promote the collaboration among customer and suppliers and the adoption of QM practices from basic to advanced standard like ISO 9000 series. QM practices can increase the level of customer-supplier linkages through interactive learning and product design. Firms utilize exchanges of knowledge among production partners (their customers and suppliers) for upgrading technology and innovation. They can mutually learn from each other and provide a better production quality and product quality, which consequently lead to innovation achievement. Suggestion from this thesis can be used as a guideline for manufacturing firms as a pathway to enhance their quality standard and innovation performance through interactive learning activities with customers and suppliers.