Becoming a cluster, positioned as an innovation, R&D and project centre, where members successfully manage corporate transition, working for OEMs.
The cluster strategy
Whilst not neglecting the auto-parts aftermarket becoming a pioneer and innovative supplier to the OEM and main Industry
Key Success Factors
Konya APC Cluster Development
The APC Cluster is in a developing stage. There is the need to build on the existing cluster structures to ensure that it can undertake the transformation from a developing cluster to a mature cluster27. This requires the ability to continue to build on existing social capital, existing cooperation and coordination activities and to encourage the take up of innovative and competitive actions, especially those that lead to the establishment of a positive image for the Cluster and its partners. Cluster development also requires that the Konya APC Cluster Initiative secures the requisite financial resources and staff, and established a recognised governance structure that will allow the cluster to flourish. As such, the first KSF is the presence of a strong cluster initiative, which leverages on the support of the cluster actors through a well-designed governance model, and which has access to (or provided with) the requisite financial resources to progress.
Encouraging the Innovation take up
The drive to ensure innovation take up is driven by the recognition that to succeed in supplying OEMs, there is the need to have the ability to innovate both at product and process levels. This also makes technology transfer (inward) a KSF. A secondary objective is to develop within Konya the facility or agency to encourage innovation take up by cluster partners and other manufacturing SMEs in the city. In other words, the second KSF is the presence of a business environment that is conducive to innovation and innovative companies.
Encouraging the R&D take up
As with innovation take up, the acquisition of the ability to undertake R&D is considered to be necessary for the cluster to become and remain competitive, whilst staying ahead in the market to supply the automotive OEMs. It is recognised that within the Konya APC Cluster and amongst cluster partners there is not the ability to undertake R&D activities. There is the necessity to develop the capacity to undertake R&D activities, in the short to medium term concentrating on market research and acquiring an understanding of R&D, especially in relationship to product and process development. A longer term objective is to undertake basic R&D activities within the cluster.
Attaining Quality Assurance Standards
Automotive OEM purchasing requirements are, in part, determined by the ability of auto-parts suppliers to meet defined quality assurance practices, be these the OEMs own assurance package, say Fords Q1, or the common industry standards, such as ISO 16949. As part of the cluster of competitiveness building actions, there is the necessity to ensure that cluster partners are able to acquire quality assurance standards such as Q1 or ISO 16949.
Ensuring Cost Effectiveness
Again driven by the OEMs, suppliers have to provide costing models for the auto-parts, sub-assemblies or services provided to them. If such a model cannot be supplied, then the cost model and price is imposed on the supplier. The costing model, which prevailed in the Konya APC Cluster for a long time, was a straightforward model multiplying the sum of cost of materials and cost of labour with a factor of three, and finally adding 25% mark-up as the profit margin. Reportedly, the resulting price would be the pre-bargaining price, which includes a room of reduction. Clearly, such an approach is insufficient for the likes of Ford. There is the need to develop within the cluster and its partners the ability to understand, predict and establish costs and related prices as a competiveness measure; and secondly for use as a productivity measurement tool.
Supply Chain Productivity
In order to ensure that the Konya APC Cluster is in a position to bargain or negotiate with the automotive OEMs, it is also necessary to ensure that the Cluster is able address some challenges such as achieving proficiency in specific manufacturing activities (casting, moulding and machining), and where appropriate undertaking the company management institutionalisation processes.