Providing a Framework for Identifying and Prioritizing Tools and Strategies to Support Domestic Suppliers (Case Study: Iranian Gas Industry)

Document Type : Research Paper

Authors

1 Ph.D. Candidate, Department of Technology Management, Faculty of Economic and Management, Science and Research Branch, Islamic Azad University, Tehran, Iran.

2 Assistant Prof., Faculty of Economic and Management, Science and Research Branch, Islamic Azad University, Tehran, Iran.

3 Associate Prof., Department of Industrial Management, Faculty of Management, University of Tehran, Tehran, Iran.

4 Associate Prof., Faculty of Economic and Management, Science and Research Branch, Islamic Azad University, Tehran, Iran

Abstract

Objective: Local content policies in resource-rich countries are a common and consensual approach. However, in reliable scientific sources, the method of formulating and implementing a coherent and effective model for local content policies, by specifying the desired extent and method of intervention of national oil and gas companies, has not been presented. The purpose of this study is to identify the tools and strategies of the National Iranian Gas Company (NIGC) to strengthen the capability of domestic suppliers and prioritize the effectiveness of selected and localized strategies.
Methods: For this purpose, first, by reviewing the literature on industrial policy and the experiences of local content policies in oil-rich countries, the tools and strategies were identified. Then, by conducting semi-structured interviews, the cases were adjusted to the company's mission and regulations. Relying on the obtained opinions of experts via adopting the Fuzzy Delphi method, the counted cases were localized. In the end, they were prioritized in terms of importance by employing the Best-Worst multi-criteria decision-making method.
Results: In this study, tools and strategies were coded in eight main axes and 49 tools and strategies. The main areas of importance were reducing the challenges of a macroeconomic and political environment with a weight of 25.9 percent, supporting research and development of technology and innovation with a weight of 13.6 percent, demand and market management with a weight of 12.8 percent, supporting investment in the supply chain Gas industry with a weight of 12.2 percent, coordination and management of external factors with a weight of 11.5 percent, supporting human resource development with a weight of 10.5 percent, creating or strengthening institutions with a weight of 8.1 percent, and finally compensating for information deficiencies 5.5 percent. In this study, the tools and strategies which could be used to reduce macroeconomic and political environmental challenges, with a significant difference, had the highest weight. Regarding the sharp fluctuations in the exchange rate, high financing costs in the country, and restrictions imposed by the country's sanctions seemed reasonable.
Conclusion: Supporting domestic suppliers is a multi-disciplinary issue and requires a coherent and balanced package of tools and solutions. Focusing on one aspect of the issue will not lead to sustainable and reliable results. Solutions such as purchase guarantee, demand management, and reverse engineering have a long history in Iran. In the long run, without additional tools and solutions, such tools lead to backwardness in global technology and reduce the quality and productivity of the domestic gas industry. These strategies, along with supporting the strengthening of technological capabilities, and the strengthening of human resources and other aspects mentioned above, can bring competitive advantage, and pave the way for entering the global value chain for domestic producers. On the other hand, focusing on the technical, engineering, and ingbuild-capacity aspects of this sector will not be effective without considering other aspects necessary for technology development, such as funding, and commercialization requirements.

Keywords

References

 
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Industrial Management Journal
Volume 14, Issue 1
2022
Pages 1-26

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