Causal Linkage-based Strategic Map Design along the Robotics and Automation Supply Chain in Thailand

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1 Causal Linkage-based Strategic Map Design along the Robotics and Automation Supply Chain in Thailand Kanda Boonsothonsatit Institute of Field Robotics King Mongkut s University of Technology Thonburi Bangkok, Thailand kanda@fibo.kmutt.ac.th Abstract Robotics and automation (RA) technology has played important roles along its supply chain in Thailand. The RA roles primarily support industries such as enhancing productivity and raising quality of life. They have positive effects on macro-economy, society, and education. Their performance are managed using a few measures (i.e. financial and non-financial perspectives) often generated by a strategic map. It is designed through a tool of balanced scorecard (BSC). However, BSC is criticized as limitations because of unidirectional causality and internal focus. They are overcome by a causal linkage-based strategic map design along the RA supply chain. Its conceptual framework is proposed in this paper purposing to causally link the RA strategies to performance. The causal linkages contribute to identify their root causes leveraging the RA vision and mission. This contribution is useful for policy makers to set RA strategies interrelated systematically along the supply chain stages. Keywords robotics and automation; supply chain; causal linkage; strategic map I. INTRODUCTION Nowadays, Thailand is reaching for robotics and automation (RA) society. It obviously occurs with manufacturing processes in industries of automotive, electrical and electronics, and so on. They require more complicated, higher quality, and more precise. The RA technology hence supports shortening lead time and manufacturing steps, and overcoming labor limitation. These supporters enable to enhance manufacturing productivity by 70% within 12 years [1] and reduce manufacturing cost. They eventually contribute business to obtain more competitive and higher profit. In addition, a change in population structure leads Thailand to aging society which influences labor shortage. Unsurprisingly, the RA technology tends to be demanded increasingly by 27% annually in Thailand (Fig. 1). Fig. 1. RA demand [2] According to the importance of RA demand mentioned above, Thailand generated a 5-year strategic plan for RA development [3]. It resulted from brainstorming among Thailand RA specialists including academic sector (i.e. Institute of Field Robotics, King Mongkut s University of Technology Thonburi) and government sector (i.e. National Electronics and Computer Technology Center, National Science and Technology Development Agency). The brainstorming results included strengths, weaknesses, opportunities, and threats (SWOT) for RA technology in Thailand. The SWOT were then synthesized in order to generate RA strategies. They were categorized into five themes comprising of government policy development, development, RA technology development, RA technology transfer, and RA industry and development. Their performance was however measured regardless of causal linkages along the supply chain. 2159

2 Supply chain management was emerged in order to effectively integrate material and information flows from upstream to downstream stages [4]. It aims to minimize supply chain cost whereas maximizing responsiveness to customers [5]. Such the aims lead a number of academics and practitioners to increasingly pay attentions to SCM. Most of them focus on either only one or few supply chain activities i.e. inbound logistics [6], operations [7], or outbound logistics [8]. Their performance was measured with single indicator (or objective), especially financial [9]. Otherwise, several indicators are considered by a few studies [10]. For example, Boonsothonsatit et al. [11] developed a generic decision support system for designing the cheapest and greenest supply chain networks in the shortest lead time. Yu et al. [12] investigated the effect of supply chain integration on customer satisfaction and financial performance. Supply chain performance is often dispersed from its strategies which spread from the supply chain vision and mission [10]. This is generally overcome using a balanced scorecard (BSC)-based strategic map. The BSC-based strategic map supports turning the supply chain vision into actions and deriving key performance indicators (KPIs). They are classified into four perspectives, namely learning and growth, internal process, customer, and financial [13]. Their relationships can be both direct and indirect [9][14] but considered as causal in upward directions [15][16][17] as shown in Fig. 1. In contrast to practices, KPIs are chained as multi-directional and covered as a whole of supply chain stages. Consequently, this paper develops a conceptual framework for effectively designing a causal linkage-based strategic map along the RA supply chain in Thailand. It contributes policy makers to set the RA strategies interrelated systematically along the supply chain stages. Fig. 2. BSC example [13] II. CONCEPTUAL FRAMEWORK In order to effectively design a causal linkage-based strategic map along the RA supply chain in Thailand, its conceptual framework is developed as shown in Fig. 3. The RA supply chain covers three sectors (i.e. government, academic and industry) which are interrelated (solid line in pink). The industry sector includes five stages (i.e. suppliers, system integrators, and users). They requires personnel (solid line in green) and money (solid line in purple) as resources. The stage of suppliers manufacture either RA (solid line in blue) or their parts (solid line in orange) which can be directly and indirectly procured by other stages. The procured RA and their parts come with RA knowledge (dot line in black), whereas returned in forms of price and its import tax (solid line in red). Fig.3 illustrates the relationship between RA supply chain and strategies. The RA supply chain is strengthened when the interrelated RA strategies are achieved and vice versa. The strategy of RA industry and development is influenced by other strategies including government policy development i.e. accessibility to financial and reduction in import tax (solid line in red and purple), development (solid line in green), RA technology development (solid line in orange and blue), and RA technology transfer i.e. knowledge (dot line in black). In the opposite direction, they are dominated by the strategy of RA industry and development. 2160

3 Fig. 3. Conceptual framework III. FOUR-STEP METHODOLOGY As mentioned above, the conceptual framework undergoes four steps as follows (Fig. 4). Firstly, the Thailand RA supply chain s vision and mission are clarified. Their strengths, weaknesses, opportunities, and threats (SWOT) are secondly brainstormed and then used to synthesize strategy themes. Thirdly, they are interrelated systematically along the supply chain into a unified causal loop diagrams (CLD). The unified CLD contributes to identify the root causes leveraging the clarified vision and mission. This contribution is useful for policy makers to set root cause-based strategies interrelated systematically along the supply chain stages as the fourth step. Clarification of vision and mission Synthesis of strategy themes Identification of root causes Set of root causebased strategies Fig. 4. Four-step methodology IV. RESULTS AND DISCUSSIONS To effectively design a causal linkage-based strategic map along the RA supply chain in Thailand, its results and discussions are presented by following on the four-step methodology as follows. A. Clarification of Vision and Mission According to the 5-year strategic plan for RA development in Thailand [3], its vision and mission emphasized enhancing competitiveness of (at the present, a threat). To achieve such the vision and mission (and overcome the threat), their SWOT (i.e. strengths, weaknesses, opportunities, and threats) were analyzed as shown in Fig 5. Strengths Strengthened Many juveniles attending to RA Many RA lecturers and specialists Diversified RA Opportunities High RA demand in Weaknesses High RA import tax Difficulty in access to financial No information sharing Low RA institutes, curriculum and Threats Non-competitiveness of Lack of government policy to develop Lack of RA knowledge Unreliability of RA Fig. 5. SWOT 2161

4 B. Synthesis of Strategy Themes The clarified vision and mission along with the analyzed SWOT were synthesized in order to generate the RA strategies. They were categorized into five themes including government policy development, development, RA technology development, RA technology transfer, and RA industry and development. Their related parameters are detailed in Fig. 6 [3]. Strategy theme 1: government policy development To issue government policies for supporting RA investment Strategy theme 2: development To produce RA graduates as potential To create RA curriculum compatible to users To arrange RA activities for juveniles To guideline RA career advancement Strategy theme 3: RA technology development To strengthen RA To develop superior RA To transfer RA knowledge to three sectors To match funds among three sectors Strategy theme 4: RA technology transfer To incubate new To build a mechanism for transferring RA knowledge To apply RA to commercial Strategy theme 5: RA industry and development To standardize RA Fig. 6. Five strategy themes C. Identification of Root Causes According to the synthesized five strategy themes highlighted in blue, yellow, pink, green, and orange respectively, their causes and effects are interconnected systematically along the RA supply chain as shown in Fig. 7. An interconnections is symbolized by an arrow, and directed by either positive () or negative (-) sign. A positive sign is depicted when a cause reinforces its effect(s); otherwise, that sign is negative. The individual interconnections are linked until closing cycles. A closed cycle is defined as either reinforcing (R) or balancing (B) loop. A reinforcing loop is incurred when an element supports itself in the same direction; otherwise, that loop is balancing. These are called as causal loop diagram (CLD). There are 13 reinforcing loops but no any balancing loop (Fig. 8 to 10) emerged from the vision and mission to enhance the competitiveness of (highlighted in red). T: Government policy to develop W: Accessibility to financial W: RA import tax RA carreer advancement - T: Competitiveness of RA investment S: Strenthening of T: Reliability of RA O: RA demand in New RA RA graduates as potential Mechanism of RA knowledge transfer Strenthening of RA RA activities for juvenile Fund matching W: RA institutes, curriculum and Standardization of RA RA knowledge transfer S: RA lecturers and specialists RA curriculum compatible to demand W: Information sharing O: Juveniles attending to RA T: RA knowledge Commercialization of RA Superiority of RA S: Diversity of RA Fig. 7. CLD overview Identify applicable sponsor/s here. If no sponsors, delete this text box (sponsors). 2162

5 Fig. 8 illustrates the first six reinforcing loops (i.e. R1 to R6). All of them support enhancing the competitiveness of Thailand industry (highlighted in red). obtains more competitive when RA (including their parts) is more invested (). It happens when users is accessible to financial () (R1) and takes an advantage of RA import tax (-) (R2). They are however dependent on government policy to develop. In addition, the accessibility to financial supports matching funds among three sectors (i.e. government, academic and industry) (). They are spent for building more RA institutes, curriculums, and () (R3). The more curriculums partly become compatible to demand (i.e. suppliers, system integrators and users) () (R4) which are used for producing more potential RA graduates (). They are also supported by arranging RA activities for juveniles () in order to motivate them attending to RA () (R6). The potential RA graduates strengthen () and then (). The strengthened shares information () and builds a mechanism for transferring RA knowledge (). The more RA knowledge also supports the more RA institutes, curriculums, and (). They partly return more diversified () (R3 and R4) which suppliers and system integrators apply for producing superior, standard, reliable, and commercial RA successively (). If the RA are more commercialized, more invested by users (). In addition, the more RA investment is also reinforced when users get the more RA knowledge (R6). In a time duration, users get more competitive and demand more RA (). The more RA demand positively influences the government policy (). It is noticeable that the government policy is the first root cause, whereas the second root cause is the number of RA institutes, curriculums, and. The second one is also a root cause of Fig. 9 and 10 illustrated in a similar mechanism to Fig. 8. T: Government policy to develop - W: Accessibility to financial R1 R2 R3 W: RA import tax - RA carreer advancement S: Strenthening of T: Competitiveness of RA investment O: RA demand in New RA RA graduates as potential Mechanism of RA knowledge transfer Strenthening of RA T: RA knowledge Commercialization of RA Standardization of RA RA knowledge transfer W: Information sharing O: Juveniles attending to RA T: Reliability of RA R5 Superiority of RA RA activities for juvenile R6 R4 S: RA lecturers and specialists RA curriculum compatible to demand Fund matching W: RA institutes, curriculum and S: Diversity of RA Fig. 8. CLD reinforcement

6 T: Government policy to develop W: Accessibility to financial W: RA import tax RA carreer advancement - T: Competitiveness of RA investment R8 RA graduates as potential Strenthening of RA T: RA knowledge Commercialization of RA Standardization of RA RA knowledge transfer W: Information sharing R7 Mechanism of RA knowledge transfer O: Juveniles attending to RA T: Reliability of RA O: RA demand in New RA S: Strenthening of Superiority of RA R9 RA activities for juvenile R11 S: RA lecturers and specialists R10 Fund matching S: Diversity of RA W: RA institutes, curriculum and RA curriculum compatible to demand Fig. 9. CLD reinforcement 2 T: Government policy to develop W: Accessibility to financial W: RA import tax RA carreer advancement R13 S: Strenthening of Mechanism of RA knowledge transfer Strenthening of RA R12 R11 RA curriculum compatible to demand T: Reliability of RA T: RA knowledge Commercialization of RA Standardization of RA RA knowledge transfer Superiority of RA R10 S: RA lecturers and specialists R9 R7 RA activities for juvenile O: RA demand in W: Information sharing O: Juveniles attending to RA RA investment New RA R8 RA graduates as potential - T: Competitiveness of Fund matching W: RA institutes, curriculum and S: Diversity of RA Fig. 10. CLD reinforcement

7 D. Set of Root Cause-based Strategies To leverage the vision and mission to enhance the competitiveness of, the identified two root causes (i.e. government policy and number of RA institutes, curriculums, and ) are discussed for setting their related strategies as follows. Firstly, the government policy-based strategy is to support RA investment (i.e. accessibility to financial and tax exemption for RA import). Secondly, the number of RA institute, curriculum, and -based strategy is to match funds among three sectors. It also reinforces the RA investment and eventually enhances the competitiveness of. V. CONCLUSION This paper proposes a conceptual framework of causal linkage-based strategic map design along the RA supply chain in Thailand. It primarily aims to set root cause-based strategies interrelated systematically along the supply chain stages. The proposed framework is capable of identifying the root cause-based strategies which eventually leverage the clarified vision and mission. Noticeably, the proposed framework is considered as qualitative. It only informs how the supply chain vision and mission, strategy themes, and other parameters are interrelated. These interrelations cannot be otherwise expressed as numbers. In addition, the proposed framework becomes more robust when verified by a focus group. These notices can extend the proposed framework as a future work. ACKNOWLEDGMENT The author would be indebted to the working group (especially, Institute of Field Robotics, King Mongkut's University of Technology Thonburi) which creates a 5-year strategic plan for RA development in Thailand for data provision. In addition, the author would be most grateful to all partners in I AM (Innovative and Advanced Manufacturing) Research Group, Institute of Field Robotics, King Mongkut's University of Technology Thonburi for valuable knowledge and information sharing. REFERENCES [1] J. Manyika, M. Chui, J. Bughin, R. Dobbs, R. Bisson, and A. Marrs, Disruptive technologies: advances that will transform life, business, and the global economy, McKinsey Global Institute, May 2013 [2] A. Baroncelli, J. Gemma, M. Hagele, and G. Litzenberger, World Robotics 2015 Industrial Robots, International Federation of Robotics, 2015 [3] S. Charoenseang, D. Laowattana, V. Angkasith, A. Dheeravongkit, and P. Koseeyaporn, 5-year strategic plan for RA development in Thailand, 2008 [4] R.K. Oliver, and M.D. Webber, Supply chain management: logistics catches up with strategy, Chapman & Hall, London, 1982 [5] R.S. Russell, and B.W. Taylor, Operations management: creating value along the supply chain, John Wiley & Sons Inc, New York, 2011 [6] I.J. Chen, and A. Paulraj, Towards a theory of supply chain management: the constructs and measurements. Journal of Operations Management, 22(2), pp , 2004 [7] B.D. Williams, J. Roh, T. Tokar, and M. Swink, Leveraging supply chain visibility for responsiveness: the moderating role of internal integration. Journal of Operations Management, 31(7-8), pp , 2013 [8] K.C. Tan, S.B. Lyman, and J.D. Wisner, Supply chain management: a strategic perspective. International Journal of Operations and Production Management, 22(6), pp , 2002 [9] S.K. Vickery, J. Jarayam, C. Droge, and R. Calantone, The effect of an integrative supply chain strategy on customer service and financial performance: an analysis of direct versus indirect relationships. Journal of Operations Management, 21(5), pp , 2003 [10] S. Li, S.S. Rao, T.S. Ragu-Nathan, and B. Ragu-Nathan, Development and validation of a measurement instrument for studying supply chain management practices. Journal of Operations Management, 23(6), pp , 2005 [11] K. Boonsothonsatit, S. Kara, S. Ibbotson, and B. Kayis, Development of a Generic decision support system based on multi-objective Optimisation for Green supply chain network design (GOOG). Journal of Manufacturing Technology Management, 26(7), pp , 2015 [12] W. Yu, M.A. Jacobs, W.D. Salisbury, and H. Enns, The effects of supply chain integration on customer satisfaction and financial performance. International Journal of Production Economics, 146(1), pp , 2013 [13] R.S. Kaplan, and D.P. Norton, Alignment: Using the Balanced Scorecard to Create Corporate Synergies, Harvard Business School Press, Boston, MA., 2006 [14] S.W. Kim, An investigation of the direct and indirect effect of supply chain integration on firm performance. International Journal of Production Economics, 119(2), pp , 2009 [15] H. Nørreklit, The balance on the balanced scorecard a critical analysis of some of its assumptions. Management Accounting Research. 11(1), pp , 2000 [16] L. Bryant, D.A. Jones, and S.K. Widener, Managing value creation within the firm: an examination of multiple performance measures. Journal of Management Accounting Research, 16, pp , 2004 [17] A. Bento, R. Bento, and L.F. White, Validating cause-and-effect relationships in the balanced scorecard. Academy of Accounting and Financial Studies Journal, 17(3), pp ,

8 BIOGRAPHY Kanda Boonsothonsatit is a lecturer at the Institute of Field Robotics, King Mongkut's University of Technology Thonburi, Thailand and also the head of strategic planning at I AM (Innovative and Advanced Manufacturing) Research Group. She received her Ph.D. degree in Manufacturing Engineering and Management from The University of New South Wales (UNSW), Australia. Her expertise is system dynamics modelling in supply chain, logistics, and operations management, as well as strategic management for competitiveness. 2166