new competencies and
innovations in logistics

TThe automobile industry leads Portugal in quantity of exports and employs a significant number of citizens. This factor indicates the economic revenues generated by the automobile industry and the critical importance of the industry for the country. In 2001, over 240,000 vehicles were assembled in Portugal. Most of these vehicles were produced by one facility. In the past years, plants have shut down and reconverted, changing the players in the industry. As a result there are fewer assemblers in the country. In 2000, there were only five final assembly facilities. Most of these final assemblers are foreign owned companies. Only one national company has been a significant player in the industry. Overall, most foreign investment in Portugal is made in the automobile industry since these investments achieve a higher rate of return than other foreign investments. The financial return of the industry is fairly stable and provides significant economic returns to Portugal.

Besides automobile manufacturers, supplier companies are a source of financial revenue for the country. But, unlike assembly, the automobile parts industry has been growing at an average of 5-7% over the last several years. Automobile parts are now Portugal's leading export. The supplier industry employs over 36,000 workers in approximately 140 firms. Employment in the car parts industry outweighs employment in the assembly industry. Both of these indicators show the financial gains for Portugal based on the automobile supply industry and the employment gains because of the importance of the automobile sector in terms of logistics jobs. Currently, most suppliers in Portugal are considered "first tier" suppliers. These suppliers are shipping parts to both domestic assemblers and international assemblers. Similar to the automobile manufacturers, suppliers are owned by foreign firms. Most of the national firms are smaller, limiting relationships with large volume assemblers.

The overall outlook for the Portuguese automobile industry is stable, but not growing. However, plants must regularly introduce new models once a current model is removed from production. With each successive model change, automobile manufacturers may choose to move production out of Portugal. Given this, it is crucial for Portuguese assemblers and suppliers to be cost competitive in a global industry.

The project INAUTO is a Portuguese project which is targeted at the automobile industry. It is an integrated, strategic and structuring project of development of the car industry in Portugal. It is supported by the Portuguese Government and with the industrial sector, technological centres and universities. It promotes a joined intervention in the industry linked to companies' strategies and public policies. This project is also the result of previous experiences based on technological development of automobile industry as the study Global Auto parts (=General strategies for the development of the automobile industry in Portugal), the project Bassauto (=System of strategic information for automobile industry in Portugal), the programme Protap (=Programme for the technological development of the components sector for the automobile industry) and the project Auditec (=Technological and innovative auditorship for companies).

The project INAUTO includes 18 sub-projects and its partnership is composed of the CEIIA (=Centre for the excellence in the automobile industry), IAPMEI (=Support institute for small and medium-sized companies and investment), REDIA (=a network for the excellence and innovation in the automobile industry) in which there are various companies of the sector, INTELI, AGILTEC, INEGI, INETI, IST, IPN (=Institute Pedro Nunes), CATIM, AFIA, CTCV, INESC Porto, AINP, Simoldes, Tavol, Cabelauto, Sodecia...

Two subprojects are interesting for the Novalog scope: the first one deals with the logistics processes and the second one with the training needs. The sub-project called STOLG-P is linked with logistics in general: Characterisation of a scenario for the reposition of suppliers' industry under the form of producers and integrators of modules and systems with basis in the actual reality and in the planned evolution for the automobile industry at the world level; Analysis of the geographical position of Portugal which conditions logistics management and strategic options of companies. Characterisation of factors associated with actual logistics infrastructure of Portugal which would condition the settling of new OEMs in national territory. The KH-Plus sub-project is the one more centralised on the offers and the necessities of trainings in the automobile industry. It lasted from January 2002 to June 2003. The way the sub-project is drawn up is presented in table C4:

Methodology	WP1	Definition of the research methodology
Diagnosis and prospective	WP2	Diagnosis and macro prospective. Analysis of the automobile sector trends with emphasis on the HR competences.
	WP3	Diagnosis and prospective. Analysis of the training needs in the automotive sector.
	WP4	Diagnosis and prospective. Analysis of the training offer in the automotive sector.
	WP5	Cross analysis of the training offer and demand in the automotive sector.
Recommendations	WP6	Recommendations for public policy. Training platform for the automotive sector.
	WP7	Recommendations for business strategies. Pilot case of the AutoEuropa Training Academy.
Management	WP8	Activity management and promotion of results.

KH-Plus concerns in general:

• The establishment of an information and knowledge base about the training needs of companies for the automobile sector and of the offer capabilities of training institutions having as framework the major evolving trends of the industry at national and global level.
• The proposal of recommendations that might lead to an adjustment of the training offer to demand both within the context of public policies and business strategies.

More precisely, the specific goals are:

• The identification of the national and global trends of the automobile sector with emphasis on the human resources competences in the automobile industry.
• Carrying out a diagnostic and a prospective analysis about the training needs of national companies from the automobile sector.
• Carrying out a diagnostic and a prospective analysis of the training institutions' offer oriented to the automobile sector.
• The establishment of an information and knowledge base on the profile of competences and qualifications of companies from the national automobile sector.
• The cross analysis of the training offer and demand in the automobile sector with a view to identify the gaps and overlaps of training supply and demand.
• The promotion of the adjustment of training supply to demand in the automobile sector at short, medium and long terms.
• The proposal of recommendations for the creation of a national platform of human resources training for the automobile sector.
• The proposal of recommendations for the launching of programmatic contents for the VW AUTOEUROPA-SIEMENS-BOSCH training academy.
• The promotion of the qualification of human resources in the national automobile sector.
• Encouraging the productivity of the national automobile components industry.
• The promotion of the attraction of direct foreign investment in the automobile sector and creation of favourable conditions for the maintenance of OEMs in Portugal.

The list beneath is the result of the major needs and necessities of competences which were expressed by the interviewed companies of the automotive sector in Portugal. These competences needs are of great importance for companies as well as for workers concerning logistics in the automobile industry:

• Knowledge on industry's structure and suppliers' chain.
• Knowledge on stocks' management.
• Knowledge on equipments and their application.
• Domain of operational research.
• Domain of e-business new technologies in interaction with suppliers.
• Domain of packing.
• Domain of inventory's tools.
• Domain of market assessment's tools.
• Domain of MRP's tools.
• Domain of planning tools for needed ability.
• Domain of goods traceability's tools.
• Domain of tools in order to manage a warehouse.
• Domain of outsourcing/insourcing processes.

The project INAUTO is an integrated project oriented towards the development of technological and strategic competences and of the innovative capability of automobile companies. Logistics is one of the main ways of improving the strategic competences and the innovative capability of automobile companies.

The strategic axis is:

• The technological development and optimisation of management practices.
• Technology and innovation management.
• Promotion of Portuguese automobile industry.
• Valorisation of human resources.

The key strategic questions the project must answer are:

• How many engineers, technicians and operators must Portugal educate and train during the next ten years for the automobile sector?
• What is the adequate profile of competences of these engineers, technicians and operators oriented towards the automobile sector?
• What are the new competences that must be developed for the automobile sector according to the national and global trends of the industry?

The table beneath presents the result of human resources by qualification level and areas in the automobile industry in Portugal.

Table C2. Human resources by education level and area

Area	Less than 9° years	9°-12° years	Baccalaureate	Bachelor degree	Master	Ph.D	Total
Logistics	37,9%	47,3%	2,3%	12,2%	0,3%	0,0%	100%
Maintenance	50,8%	35,6%	3,5%	10,1%	0,0%	0,0%
Marketing   New products	11,1%	37,6%	9,4%	41%	0,9%	0,0%
Production/Industrialization	81,5%	16,6%	0,3%	1,6%	0,0%	0,0%
Product/Engineering	12,3%	43,9%	10%	33,4%	0,4%	0,0%
Quality	20,2%	56,2%	4,3%	18,8%	0,6%	0,0%
Other	35,6%	33,6%	8,5%	21,9%	0,3%	0,1%
Total	71,9%	21,3%	1,5%	5,2%	0,1%	0,0%

In logistics, only 12.2% of the employees have a Bachelor's degree, nearly 85% of the human resources reach a level of under 12 years of schooling.

Figure C8. Training of human resources per function area

Table C6. The reasons of recruiting difficulties per domain

Area	Salary exigencies	Problem with competencies	Non-existence of offer	Reduction of mobility	Other	Total
Production	10%	29%	49%	2%	10%	100%
Product/Engineering	20%	33%	40%	7%	0%
Product/Engineering	20%	47%	27%	0%	7%
Maintenance	19%	35%	38%	4%	4%
Logistics	6%	31%	50%	0%	13%
Quality	8%	33%	46%	0%	13%
Other	0%	0%	0%	100%	0%
Total	13%	32%	41%	7%	7%

We observe that the main part of recruiting difficulties is linked to the non-existence of offer in the areas of logistics, production and quality.

Figure C9. Needs of competencies/availability on the market-logistics

For logistics, the analysed companies explained that they have significant needs: 63% for the level of stocks management knowledge and the new technologies of E-business in the interaction with suppliers; 61% for tools in warehouse management; 59% for planning tools and the knowledge for industry's structure and for supply chains; and finally 54% for MRP (Material Requirements Planning) tools. But some companies affirmed that they found these available competences in the market; 15% of the companies affirmed that such competences exist or can be adapted in order to fill needs, in the areas of new technologies of E-business in the interaction with suppliers, traceability tools of products and of operational research, in the knowledge for industry's structure and the supply chains and finally in the inventory tools and planning tools.

K-H plus in the project INAUTO has analysed 50 teaching and training institutions, including universities, superior and polytechnic institutes, secondary and professional schools, technological schools, institutions and training centres, technological and innovative infrastructures, associations and consulting companies. The results show that available competences for teaching and training institutions are really insufficient or inappropriate in order to fill the described needs for companies in the automobile sector.

As a general conclusion, the diagnosis of the needs and offer of training for the automobile sector shows some deficiencies. Some recommendations and action plans for the launching of a training institute (academy) orientated for the specialised training towards OEMs (Original Equipment Manufacturers) and suppliers of the automobile sector. Some recommendations were made concerning a public policy based on teaching and training specially oriented towards the automobile sector.

An important sector of Portuguese activity decides to know the exact situation of the matrix offer and needs for training. The valorisation of human resources is very important for the national automobile industry because in fact only 9% of the workers have a diploma or a level of bachelor's degree. This type of sectoral analysis towards the state of the art concerning HR and training supply and demand can serve as an example for many other sectors.