Professional Documents
Culture Documents
Volume 10, Issue 03, March 2019, pp. 1301-1312. Article ID: IJMET_10_03_132
Available online at http://www.iaeme.com/ijmet/issues.asp?JType=IJMET&VType=10&IType=3
ISSN Print: 0976-6340 and ISSN Online: 0976-6359
ABSTRACT
Promoting export-based industry is a challenging task. Industrial competitiveness
is frequently used as the overall indicator. The article offers a novel result of priority
weights of Thai silver jewelry industry.
Factors that may influence the industry were collected by literature reviews. Then,
industry experts and entrepreneurs choose and classify the factors into performance
drivers. There are 32 factors organized into 7 categories or drivers. Next, the analytical
hierarchy process (AHP) is utilized to calculate priority weights of factors.
As a result, the sales-and-marketing driver is the most important driver, and labor-
intensive tasks dominate the competitiveness of the industry. On the other hand, the
research community could use the priority weight of factors in their research and
develop policies to promote the industry.
Keywords: Silver Jewelry, AHP, Supply Chain, Competitiveness.
Cite this Article: Chanida Phittayanon and Vichai Rungreunganun, Analyzing Factors
Influencing Industrial Competitiveness of Thai Silver Jewelry Industry using Analytic
Hierarchy Process, International Journal of Mechanical Engineering and Technology,
10(3), 2019, pp. 1301-1312.
http://www.iaeme.com/IJMET/issues.asp?JType=IJMET&VType=10&IType=3
1. INTRODUCTION
The jewelry industry is a large part of Thailand economic [1] which employed several thousand
high-skill workers and millions of people in related industries [2]. Thailand is one of the top
exporters of silver jewelry (HS 711311) in the global market [3]. Competing in the global
jewelry market is a key challenge for Thai silver jewelry industrial.
The jewelry industry is very dynamic. The price of raw materials is very fluctuated,
especially for precious metal. The jewelry product is a fashion product with a short life cycle.
As a result, the manufacturing process is a fine process with low volume production. Therefore,
it relies heavily on high-skill labor processes.
To be more competitive, manufacturers, wholesalers, retailers, and traders of Thai jewelry
industry have established the Thai Gem and Jewelry Traders Association (TGJTA) [4] to
promote the industry. Similarly, the Thai government also establish the Gem and Jewelry
Institute of Thailand (GIT) [5]. These private and public organizations have invested in several
projects to overcome challenges and increase competitive advantages among its members and
the industry as a whole.
However, there are still debate among experts on the effectiveness of investment to promote
the industry. The overall industrial competitiveness is a generic indicator that used in several
industries [6]–[10]. However, there is no commonly agreed method to evaluate IC for the silver
jewelry industry. This study uses the analytic hierarchy process (AHP) technique to develop a
model to evaluate industrial competitiveness.
In this work, we collect factors that influencing the silver jewelry competitiveness from
literature and use the AHP method to determine the priority weights of the factors. This article
is organized as followed. The literature review is carried out in Section 0. The AHP
methodology that we used in this work is discussed in Section 0. The resulting AHP evaluation
is shown in Section 0. A discussion of AHP priority weights is presented in Section 0. Then, a
conclusion is presented in Section 0.
2. LITERATURE REVIEW
2.1. Industrial Competitiveness
Companies always need to balance resources between various business objectives, i.e. problem
solving for a short-term benefit or investing in resources for long-term growth. This results in
a complex relationship between short-term and long-term growth. In addition, companies also
need to overcome challenges outside of the company. Industrial competitiveness has become a
major business indicator for entrepreneurs, economists, and industrial engineers.
Evaluating industrial competitiveness is a challenging task that relies heavily on expert in
the business. The Analytic Hierarchy Process (AHP) has become a popular technique to
combine difference opinion from many experts [6]–[10]. The AHP technique also provides a
statistical tool to check for consistency in the expert opinion.
An AHP method has been used to evaluate industrial competitiveness for a generic company
by considering only the marketing, company resources, and environment factors [6]. Applying
AHP with the Potter diamond model has been proposed to evaluate IC [7]. Similarly, AHP was
used to help in a decision-making process of investing in automation robots in the automotive
industry [8], [9]. In sustainable manufacturing, the same technique has been used by
emphasizing on Green technology [10].
overall objective which is the industrial competitiveness. The second level represents seven
categories of competitiveness drivers. Finally, the third level contains factors influencing the
industry of each category. This model presents the operational relationship between the overall
objective, drivers, and factors of the competitiveness that relevant to silver jewelry industrial in
Thailand.
Figure 2 The AHP model for industrial competitiveness of Thai silver jewelry industry.
1
𝑛𝑟 𝑛𝑟
1
𝑎𝑖,𝑗 = (∏ 𝑎𝑖,𝑗,𝑟 ) = ,
𝑎𝑗,𝑖
𝑟=1
where index 𝑟 = 1,2,3, … , 𝑛𝑟 refers to each response from an expert, and 𝑛𝑟 is the number
of responses. Therefore, the pairwise comparison matrix 𝑃 can be constructed as:
1 𝑎1,2 𝑎1,3 … 𝑎1,𝑛
1
𝑎1,2
1 𝑎2,3 … 𝑎2,𝑛
1 1
𝑃= 𝑎1,3 𝑎2,3
1 … 𝑎3,𝑛 ,
⋮ ⋮ ⋮ ⋱ ⋮
1 1 1
[𝑎1,𝑛 𝑎2,𝑛 𝑎3,𝑛
… 1 ]
where 𝑛 is the number of drivers or factors in the same category.
For instance, if an expert evaluates that the “place strategy” factor is more important than
“after-sales service” the factor, the value of 3 was chosen according to the scale of relative
preferences in Table 1. Therefore, reciprocally the “after-sales service” is 1/3 times less
important than the “place strategy” factor, i.e. 𝑎𝑖,𝑗 = 1/𝑎𝑗,𝑖 . Thus, a pairwise comparison matrix
can be created in a similar manner. The example of a pairwise comparison matrix for a sales-
and-marketing driver is shown in Table 2.
𝐴𝑗 = ∑ 𝑎𝑖,𝑗 ,
𝑖=1
norm
𝑃𝑖,𝑗
𝑃𝑖,𝑗 = ,
𝐴𝑖
1 𝑎1,2 𝑎1,3 𝑎1,𝑛
𝐴1 𝐴2 𝐴3
… 𝐴𝑛
1 1 𝑎2,3 𝑎2,𝑛
𝑎1,2 𝐴1 𝐴2 𝐴3
… 𝐴𝑛
norm
𝑃 = 1 1 1
… 𝑎3,𝑛 ,
𝑎1,3 𝐴1 𝑎2,3 𝐴2 𝐴3 𝐴𝑛
⋮ ⋮ ⋮ ⋱ ⋮
1 1 1 1
[𝑎1,𝑛 𝐴1 𝑎2,𝑛 𝐴2 𝑎3,𝑛 𝐴3
… 𝐴𝑛 ]
where 𝑛 is the number of drivers or factors in the same category, 𝐴𝑖 is a summation of cells
in a column of pairwise comparison matrix 𝑃.
Finally, a priority weights vector 𝑊 were produced (shown in the last column in Table 3)
by averaging of cells in row 𝑖 of 𝑃norm as:
𝑛
1 norm
𝑊𝑖 = ∑ 𝑃𝑖,𝑗
𝑛
𝑗=1
where 𝑛 is the number of drivers or factors in the same category.
6. RESULT DISCUSSION
As shown in Table 7, it is found that the top three factor-categories (drivers) are (1) sales and
marketing, (2) product design, and (3) manufacturing. These top-three drivers contribute over
56% of the competitive indicator. These top drivers are all labor-intensive processes in the Thai
silver jewelry industry. Therefore, it is very important to promote labor competency. Although
this is a piece of common knowledge in the industry, this insight is confirmed by the result of
this work.
By multiplying priority weights of 32 factors with the corresponding weight of its driver,
impacts of each factor on the industrial competitiveness can be derived. Table 15 shows the top
10 factors with the highest impact values.
7. CONCLUSION
Evaluating industry competitiveness is a complex task. In this work, an AHP model has been
proposed to evaluate silver jewelry industrial competitiveness. Factors influencing the industry
were collected from literature and focus group interview. Then, an expert judgment survey has
been conducted using the AHP technique to determine the quantitative priority of factors. In
this AHP analysis, all of drivers and factors pass the consistency validation. In addition,
industry experts have reviewed and agreed with priority weights.
Individual firms could use the proposed method to evaluate their competitiveness and
validate the proposed model by comparing the competitive indicator with revenue or profit over
a period of time. In future works, this AHP model could be used to develop a system dynamic
(SD) model and use it to simulate impacts of policy and measure to the industrial.
ACKNOWLEDGMENT
Authors would like to acknowledge the Thai Gem and Jewelry Traders Association (TGJTA)
for suggesting experts in the industry. Similarly, authors greatly appreciate the help of 43
experts and entrepreneurs of Thai silver jewelry industry for their time and effort completing a
lengthy questionnaire for pairwise comparisons. Authors declared no potential conflicts of
interest with respect to the research, authorship, and/or publication of this article. Authors
received no financial support for the research, authorship, and/or publication of this article.
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