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International Journal of Mechanical Engineering and Technology (IJMET)
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
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ANALYZING FACTORS INFLUENCING INDUSTRIAL COMPETITIVENESS OF THAI SILVER JEWELRY INDUSTRY USING ANALYTIC HIERARCHY PROCESS
Chanida Phittayanon and Vichai Rungreunganun
Department of Industrial Engineering, Faculty of Engineering
King Mongkut’s University of Technology North Bangkok, Bangkok, Thailand
.
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.
 
Chanida Phittayanon and Vichai Rungreunganun http://www.iaeme.com/IJMET/index.asp 1302 editor@iaeme.com
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].
3. THAILAND SILVER JEWELRY INDUSTRY
3.1. Supply Chain
In Thailand, there are a lot of firms in the jewelry manufacturing segment. Most of them entered this industry by the trading of gemstone or other jewelry. A study of Thailand silver jewelry industry [11] has shown that the supply chain structure of Thailand silvery jewelry industry can  be divided into
4
 stages as shown in Figure 1
.
 
 
Analyzing Factors Influencing Industrial Competitiveness of Thai Silver Jewelry Industry using Analytic Hierarchy Process
 
http://www.iaeme.com/IJMET/index.asp 1303 editor@iaeme.com
Figure 1
 
Supply Chain of Thai silver jewelry industry
The upstream process involves raw material acquisitions of precious metals and gemstones.
In Thailand, jewelry’s raw materials are mainly imported. This is the lowest value
-adding  process in the supply chain because raw materials must be imported. The midstream process includes processing of raw materials. These processes include cutting, polishing, and processing of gemstones and precious metals. These are a medium value-adding process. The downstream process is the manufacturing of jewelry which can be divided into two groups. The first group is handmade jewelry manufacturers that focus on the high-end market. This is a high value-adding process. The other group is machine-based manufacturers that mass  produce for the high-volume market. This is a low value-adding process. The distribution process includes domestic retailer with its brand and export to the global market. This process is a high value-added process. The Thai Ministry of Industry has announced a master development plan [12]
.
The master  plan stated three priority factor-categories to promote the industry. The three categories are (
1)
manage raw material cost, (
2)
create a measure to improve marketing channels, and (
3)
improve supporting structure to promote the industry.
 3.1.1. Manufacturing Segment
The cost structure of Thailand jewelry manufacturers has been studied in
2003
[13]
.
Major parts of raw material cost are for gemstones and precious metals which are about
35%
 and
30%
, respectively. While the total cost of raw material is about
70%.
 Most silver jewelry manufacturers in Thailand are small and medium businesses [1]
.
The composition is as followed.
58%
 of them are family businesses,
20%
 of them are small  businesses,
5.3%
 of them are medium businesses, and only
0.8%
 of them are large businesses. It is also found that most jewelry businesses are inherited from their parents [2]
.
And, a lot of  jewelry manufacturers are original equipment manufacturers (OEM) for a large global brand [2]
.
 A study of problems in Thailand jewelry industry in
2002
[14]
 
has suggested some measures to improve the industry. These measures included improving labor competency and jewelry design capability.

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