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Published on August 6, 2007

The study will be a key reference for local entrepreneurs to improve their production

and management, and for policymakers to promote key industries, Som-chai Harnhirun, director of the Industrial Economics Information Centre, said last week.

Due to the murky economic situation and tougher global competition, one of the main objectives of the project is to

assist entrepreneurs in precisely evaluating their business's efficiency in order to enhance productivity.

This second, in-depth study looked at four processes - procurement, logistics, human resource management, and profit and cost management.

The project started last year with four industries: food processing, textiles, rubber products, and wood and furniture.

Results from last year showed that all four industries were labour-intensive in all procurement sub-processes, while foreign companies adopted automatic systems in their routine work to reduce mistakes and distribute human resources to other areas of need.

Most local firms in the survey did not use technology-based systems in their logistics process.

Local firms spent a small percentage of total labour cost to develop logistics knowledge and disseminate it to their employees.

Labour costs were relatively low, at Bt3,137 per person per year, while the average for those businesses abroad was Bt58,000.

However, labour turnover was excessive - as high as 57 per cent - which directly dulled productivity as firms had to recruit and train new workers.

Meanwhile, the Institute for Management Development has launched "The IMD World Competitiveness Yearbook 2007" to compare competitiveness among 55 coun-

tries in economic performance, government efficiency, business efficiency and infrastructure.

IMD reported that Thailand dropped overall from 29th in 2006 to 33rd in this year's rankings.

However, the country moved up in the economic performance component, from 19th to 15th, thanks to robust exports and growing investment from abroad.

The economic risk factors for this year are the confidence of both local and foreign investors, logistics costs and laws and regulations.

Chalida Ekvitthayavechnukul

The Nation