Procurement Process in Small and Medium Size Firm In Thailand

Procurement Process in Small and Medium Size Firm In Thailand

Introduction

Over the past few decades, competition in the global business market has increased significantly due to enhanced globalization. In the past, companies were competing against each other on the local forum however; with the increase in the competition in the global market companies nowadays are competing against each other on the global platform. For companies to compete on the global platform it is essential to have efficient acquisition of services and products that is made through acquisition of services and products with right quantity, with right material, at the right time, in the right condition, from the right source, at the right price with the right service.

Nowadays, in the success of global firms procurement organizations within companies are playing pivotal roles in ways that old-fashioned purchasing managers could never have imagined. Quayle (2006) stated that for corporate performance, procurement has become an integral part in drawing increased attention from senior management. However, today many firm allow other function to be able to contact directly with supplier for a faster, more efficient and accurate communication. There are many methods to evaluate and award purchasing contract such as competitive bidding, negotiation or can be combination of method is possible (Monczka, Trent.& Handfield, 2005). Similarly, procurement department function is also to measure the performance of supplier such as delivery performance, product accuracy in term of quantity and quality and quality of service of supplier (Baily, Farmer, Crocker, Jessop & Jones, 2008). This will allow procurement function to monitor and coordinate with it supplier to develop a more efficient process for better performance (Mol, 2007). Thus, in recent years 'procurement' has taken on greater strategic importance in many firms. The researcher keeping in view the present importance of procurement deem to conduct the study to determine small and medium size firm in Thailand can develop best practices through most suitable and most effective procurement process.

Discussion

Amaratunga and Baldry (2002) reflected that in the recent years due to increased competition and enhanced globalization the purchasing practices of small and medium firms in both direct and indirect purchases have changed significantly. In the economy, SMEs of a country play a significant role. The performance of the SME sector and the nation are undoubtedly closely related or in other words dependent on each other. In Thailand, in the various sectors SMEs contribute a large percentage of the total establishments.

Procurement

Procurement process is an act to obtain goods or service needs in organization by using the most efficient and effective method depending on nature of product/service, supplier base, market is characteristics and organization itself. It can be defined as, “Procurement is the act of obtaining or buying goods and services, the process includes preparation and processing of a demand as well as the end receipt and approval of payment” (Business dictionary, 2012). There are five main objective of procurement: to support operational requirement, manage the purchasing process efficiently and effectively, supply ...