Supply Chain Efficiency Measurement to Maintain Sustainable Performance in the Automobile Industry

Abstract

The automobile industry is set to undergo a structural transformation in the progress toward next-generation industries that involve autonomous vehicles and connected cars. Thus, supply chain management has become increasingly important for corporate competitiveness. This study aims to identify opportunities for improving supply chain performance by quantifying the impact of suppliers on the supply chain. An analysis was conducted in two phases. First, the efficiency of 139 partners that supply automobile components to the Hyundai Motor Company was measured using the Charnes–Cooper–Rhodes model, while the efficiency of Hyundai Motor Company’s 540 supply chains comprising partners, subsidiaries, and parent companies was measured using the network epsilon-based measure model. Second, the relationship between the partner efficiency and the supply chain efficiency was analyzed using the Mann–Whitney U test and the Tobit regression model. The results showed that efficient operation of partners hampers the efficiency of the total supply chain. Thus, there may be several partners that are not committed to quality improvement, while the Hyundai Motor Company seeks to promote quality management through win–win cooperation with partners. Consequently, automakers must review their partner management system, including their performance measurement and incentive systems.

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