A Study on the Functional Impact of Operational Core Competencies of Ammarun Foundries, Coimbatore

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1 A Study on the Functional Impact of Operational Core Competencies of Ammarun Foundries, Coimbatore Dr. S.C.Siva Sundaram Anushan Asst. Professor, School of Management SASTRA University C. Francis Christopher Timothy MBA Student, School of Management SASTRA University I. ABSTRACT: Any marketing success or excellence depends on several factors; one among them is their operational core competencies. This study tries to test the functional impact of operational core competencies in Ammarun Foundries. In order to carry out this objective data collection tools were used. To identify the operational core competencies, a structured non disguised questionnaire was constructed and administered among the employees of Ammarun foundries, Coimbatore with 29 variables identifying core competencies. Seven factors were extracted from the core competence variables and were named as 1. Skilled labour, training facility, transport facility and technology, 2. Inventory system and PDCA cycle, 3. Types of production system, 4. Latest machineries, 5.Kaizen and lean management, 6. ISO standards and 7. Production planning and control inventory. When a multiple regression analysis was carried out among the core competencies variables technology, transport facility, lean management, batch type and zero defects program were found to be significant. It was concluded that technology, transport facility, lean management, batch type and zero defects program are the significant operational core competencies that lead to the impact of operational core competencies of Ammarun Foundries, Coimbatore. II. INTRODUCTION: 2.1 Definition of core competencies The main strengths or strategic advantages of a business. Core competencies are the combination of pooled knowledge and technical capacities that allow a business to be competitive in the marketplace. Theoretically, a core competency should allow a company to expand into new end markets as well as provide a significant benefit to customers. It should also be hard for competitors to replicate. 2.2 Importance of core competencies The concept of core competencies was developed by Gary Hamel and C. K. Prahalad and published in their book, Competing for the Future, which became a best seller in They suggested that business leaders view their organizations as a portfolio of competencies as well as a portfolio of IRJBM ( ) May Volume No V Page 11

2 products and services. It is this portfolio of competencies that provides the competitive edge needed to be successful in the future. Core competencies are what make your organization unique. They are the skills your organization possesses that set it apart from its peers. They are the sources of competitive advantage. They are the building blocks to future opportunities. 2.3 Review of literature: The researcher had made the following review with regards to the study topic: 1. Aidan O Driscoll., David Carson and Audrey Gilmore., 2000 contended that competence is considered best in terms of the particular strategy structure shared values constellation of a firm. This enables competence, including marketing competence, to be understood in terms of competency deepening (within the conventional marketing function), broadening (marketing activity which must be shared and co-managed with other parts of the firm ), and of partnering (essentially, the ability to manage alliances, networks and relationships between the firm and other parties). It then explores this partnering competence in more depth. To manage and develop networks involves nurturing expertise that has a strong marketing focus. On a tactical level, there is the ability to manage relationships and trust, to negotiate with partners, to establish legitimacy, and to monitor the ongoing costs and benefits of network involvement. On a more strategic level, there are issues of network choice, network myopia and network disengagement Annulis and Heather M., 2004 value of the model is in the implementation and outcomes it produces. An organization's success in reaching competitive advantage depends in part on its ability to revolutionize change implementation. This study provides a framework to assess change readiness for geospatial organizations Briance Mascarenhas., Alok Baveja and Mamnoon Jamil., 1998 examined the conditions that make a competence valuable' or have sought to identify actual core competencies in firms." Consequently, while we know more about how to evaluate and identify core competencies, the dynamics of competencies are still not clear. Little is known about how core competencies arise in the first place and how managers can develop them. Furthermore, if a firm's core competencies change over time, a static view can be misleading and can encourage the building of inappropriate types of competencies 3. III. METHODS: 3.1 Research design The researcher has used a descriptive research which describes the opinion of the company employees and customer. 3.2 Type of Research The researcher has used a descriptive research which describes the opinion of the company employees and customer. 1 Aidan O Driscoll., David Carson and Audrey Gilmore, Developing marketing competence and managing in networks: a strategic perspective, ISSN X print/ ISSN online, Annulis and Heather M, Factors impacting a change initiative: A workforce readiness scorecard for implementation of the geospatial technology competency model, United States Mississippi, Briance Mascarenhas., Alok Baveja and Mamnoon Jamil, Dynamics of Core Competencies in Leading Multinational Companies, California management review vol 40, no. 4,1998. IRJBM ( ) May Volume No V Page 12

3 3.3 Sampling method The researcher has used Judgmental sampling for customers and convenient sampling for company members Population Size: Company employees 600 members Sample Size: Company employees 100 samples Sample Area: Company employees within the company premises. 3.4 Data collection Structured interview schedule for identifying core competencies was used for data collection. 3.5 Statistical Tools Tools for Analysis: Percentage Analysis Descriptive Statistics Tools for presentation: Pie chart Bar chart IV. RESULT AND DISCUSSION Table: 1 Overall opinion of the respondents regarding the production core competencies in Ammarun PRODUCTION CORE COMPETENCIES DISAGR EE Foundries. NEITHER AGREE NOR DISAGREE E AGRE E STRONGL Y AGREE Technology Count Skilled Count labour Good training Facility Count MEAN STD. DEVIATI ON Lab testing facility Transport facility Count Count IRJBM ( ) May Volume No V Page 13

4 Quality control Six sigma quality standard Count Count ISO standards Count Just in time Count Kanban Count inventory s concept of housekeepin g Production planning & control inventory Count Count P system of replenishmen t Q system of replenishmen t Two bin system replenishmen t Selective inventory control ABC Lean management Automation of material Count Count Count Count Count Count IRJBM ( ) May Volume No V Page 14

5 handling equipment Preventive maintenance of equipment Material frequencies planning Count Count Continuous production Count Batch type Count Job shop Count Zero degrees Count program Quality circle Kaizen (continuous improvement) Count Count Use of PDCA Deming cycle Latest machineries Follow of safety procedures Count Count Count (Source: Calculated from primary data) The highest agreement is observed for the operational core competencies Quality control with the mean agreement score of and the count agreement is observed for Six sigma quality standard with a mean of The highest variation in opinion was observed that the operational core competencies Transport facility with a standard deviation of and the count variation is observed for Technology with the standard deviation of IRJBM ( ) May Volume No V Page 15

6 KMO and Bartlett's Test for production core competencies in Ammarun foundries The next step is to conduct to check the sampling adequacy. The sampling adequacy is checked using Kaiser-Meyer-Olkin Measure of Sampling Adequacy. Table: 3 KMO and Bartlett's Test for production core competencies KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy..775 Bartlett's Test of Sphericity Approx. Chi-Square 2.848E3 Df 406 Sig..000 (Source: Calculated from primary data) The table above shows that Kaiser-Meyer-Olkin Measure of Sampling Adequacy is which is more than 0.6, so the sample size is adequate. Further it can be noted that in the Bartlett s Test of Sphericity the significance of Chi-Square is less than 0.05 which signifies the validity and suitability of the responses collected to the problem being addressed through the study. Table: 4.13 Total Variance Explained FACTOR TOTAL EIGEN OF VARIANCE COMPONENT VALUES CUMULATIVE (Source: Calculated from primary data) The table above shows that six factors having Eigen values more than one are extracted and the first factor able to extract of variance, the second factor able to extract of variance, the third factor able to extract of variance, the fourth factor able to extract of variance, the fifth factor able to extract of variance, the sixth factor able to extract of variance the seventh factor able to extract of variance. In total the seven factors are able to extract of the variance. Table: 4.14 Rotated Component Matrix for Production core competencies PRODUCTION CORE COMPETENCIES FACTOR COMPONENT Skilled labour Good training Facility Technology Transport facility IRJBM ( ) May Volume No V Page 16

7 Lab testing facility Automation of material handling equipment P system of replenishment Use of PDCA Deming cycle E Q system of replenishment Two bin system replenishment Selective inventory control ABC Six sigma quality standard Kanban inventory s concept of housekeeping Job shop Batch type Quality circle Zero defects program Latest machineries Continuous production Follow of safety procedures Material frequencies planning Kaizen (continuous improvement) Lean management Preventive maintenance of equipment ISO standards Just in time Production planning & control inventory Quality control (Source: Calculated from primary data) Six variables are loaded on factor 1 all are positive they are Skilled Labour, Good training facility, Technology, Transport facility, Lab testing facility and Automation of material handling equipment. The factor is named as Skilled Labour, Training Facility, Transport Facility and Technology based on the loadings. Eight variables are loaded on factor 2 all are positive they are P system of replenishment, Use of PDCA Deming cycle, Q system of replenishment, Two bin system replenishment, Selective inventory control ABC, Six sigma quality standard, Kanban inventory and 5 s concept of housekeeping. The factor is named as Inventory system and PDCA cycle based on the loadings. Four variables are loaded on factor 3 all are positive they are Job shop, Batch type, Quality circle and Zero defects program. The factor is named as Types of production system based on the loadings. IRJBM ( ) May Volume No V Page 17

8 Four variables are loaded on factor 4 all are positive they are Latest machineries, Continuous production, Follow of safety procedures, Material frequencies planning, The factor is named as Latest machineries based on the loadings. Two variables are loaded on factor 5 all are positive they are Lean management and Preventive maintenance of equipment. The factor is named as Kaizen and Lean Management based on the loadings. Two variables are loaded on factor 6 all are positive they are ISO standards and Just in time. The factor is named as ISO Standards based on the loadings. Two variables are loaded on factor 7 all are positive they are Production planning and control inventory and Quality control. The factor is named as Production planning and Control inventory based on the loadings. Model of estimating overall core competencies from opinion towards various core competencies variables Table 4.25 Summary of Model of estimating overall core competencies from opinion towards various core competencies variables R R Square Sum of Squares df Mean Square F Sig Estimation of overall core competencies = a + b 1 X 1 + b 2 X b 20 X 20 The power of the regression model is represented by the r 2 is a highly healthy.851 and the F test of the model shows that the significance of the model is high as the significance of F is.000 which is less than.05. To decide which variables are good explanatory variables t-test for each variable is analysed and presented in table below. Table 4.26 t-test for overall production core competencies towards the impact of operation in Ammarun foundries PRODUCTION CORE UNSTANDARDIZED STANDARDIZED COMPETENCIES COEFFICIENTS COEFFICIENTS T SIG. B Std. Error Beta (Constant) Technology * Skilled labour Good training Facility Lab testing facility Transport facility * Quality control Six sigma quality standard ISO standards IRJBM ( ) May Volume No V Page 18

9 Just in time Kanban inventory s concept of housekeeping Production planning & control.035 inventory P system of replenishment Q system of replenishment Two bin system replenishment Selective inventory control ABC Lean management * Automation of material handling.051 equipment Preventive maintenance of equipment Material frequencies planning Continuous production Batch type * Job shop Zero defectss program * Quality circle Kaizen (continuous improvement) Use of PDCA Deming cycle Latest machineries * = significant at 5 (If the sig. of t is less than 0.05 it indicates that the concerned variable is significant in the model) The model s t test shows that the predictors namely technology, transport facility, lean management, batch type and zero defects program are statistically significant at 95 confidence as their significance levels are less than.05. So technology, transport facility, lean management, batch type and zero defects program are significant in the estimation of overall core competencies in Ammarun foundries. It further shows that the predictors namely skilled labour, good training facility, lab testing facility, quality control, six sigma quality standard, ISO standards, just in time, kanban inventory, 5 s concept of housekeeping, production planning & control inventory, P system of replenishment, Q system of replenishment, two bin system replenishment, selective inventory control ABC, automation of material handling equipment, preventive maintenance of equipment, material frequencies planning, continuous production, job shop, quality circle, kaizen (continuous improvement), use of PDCA deming cycle and latest machineries are statistically insignificant at 95 confidence as their significance levels are more than.05. So reduces skilled labour, good training facility, lab testing facility, quality control, six sigma quality standard, ISO standards, just in time, kanban inventory, 5 s concept of housekeeping, production planning & control inventory, P system of replenishment, Q system of replenishment, two bin system replenishment, selective inventory control ABC, automation of material handling equipment, preventive maintenance of equipment, material frequencies planning, continuous production, job shop, quality circle, kaizen (continuous IRJBM ( ) May Volume No V Page 19

10 improvement), use of PDCA deming cycle and latest machineries are insignificant in the estimation of overall core competencies in Ammarun foundries. V. SUGGESTIONS When a multiple regression analysis was carried out among the core competencies variables technology, transport facility, lean management, batch type and zero defects program were found to be significant. So the researcher suggested Ammarun Foundries to improve more on these aspects in order to excel in the market. VI. CONCLUSION It was concluded that technology, transport facility, lean management, batch type and zero defects program are the significant operational core competencies that lead to the impact of operational core competencies of Ammarun Foundries, Coimbatore. VII. REFERENCE 1. Annulis and Heather M, Factors impacting a change initiative: A workforce readiness scorecard for implementation of the geospatial technology competency model, United States Mississippi, Chen and Angela Shin-Yih, Perceptions of Taiwan practitioners on expertise level and importance of workplace learning and performance (WLP) competencies, Pennsylvania State University, ProQuest, UMI Dissertations Publishing, Christina D. Johnson-Conley, Using Community-Based Participatory Research in the Development of a Consumer-driven Cultural Competency Tool, University of Washington, Hsieh and Su-Chin, Employee competencies of Taiwanese international trade: Perceptions of practitioners and educators, University of the Incarnate Word, ProQuest, UMI Dissertations Publishing, I.P.S. Ahujaan and J.S. Khamba, "Justification of total productive maintenance initiatives in Indian manufacturing industry for achieving core competitiveness", Journal of Manufacturing Technology Management, Vol. 19 Iss: 5, pp , 2008 IRJBM ( ) May Volume No V Page 20