Thai Manufacturing

Embed Size (px)

Citation preview

  • 7/24/2019 Thai Manufacturing

    1/12

    University of Wollongong

    Research Online

    F< + E** - P*7 (A*) F< + E** I+ "**7

    2006

    !e problems of implementation of Total QualitManagement in !ai manufacturing SMEs

    Panu Buranajarukorn'95@;.*.

    Peter R. GibsonUniversity of Wollongong, **@;.*.

    Guenter ArndtUniversity of Wollongong, @;.*.

    ?://.;.*./**7/1269

    !*7* O* 7 * * *77 7 *7< + *

    $*7< + %. F +* + * $O%

    L'

  • 7/24/2019 Thai Manufacturing

    2/12

    Proceedings of the 7th

    Asia Pacific Industrial Engineering and Management Systems Conference 2006

    17-20 December 2006, Bangkok, Thailand

    The Problems of Implementation of Total Quality

    Management in Thai manufacturing SMEs

    Panu Buranajarukorn

    Naresuan University, Phitsanulok 65000 THAILAND+663-163-2259, Email: [email protected]

    Peter Gibson and Guenter ArndtUniversity of Wollongong, New South Wale, 2500 AUSTRALIA

    +612-4221-3491, Email: {peterg, garndt)@uow.edu.au

    Abstract. Thai manufacturing SMEs have played a major role in developing Thai economy, social andemployment. In this situation, they have been confronted by forceful overseas competitors, especially in low-cost producers such as China, India, Vietnam, etc. They need to upgrade organisational performance in orderto increasing their international competitiveness. However, most of Thai manufacturing SMEs have beeninadequate modern technology when compared to large enterprises. Therefore, management technique i.e.TQM has been introduced to implement in Thai manufacturing SMEs for establishing a good quality

    management system, developing human resources and increasing business performance. The questionnairewas used as a tool for gathering data in this research. Firstly, it presented the main problems of establishmentof TQM in Thai manufacturing SMEs by following the seven criteria of TQA; Leadership, StrategicPlanning, Customer and Market Focus, Information and Analysis, Human Resource Focus, ProcessManagement, and Business Results. Secondly, the SWOT analysis was used for examining the Strengths andWeaknesses and evaluating the Opportunities and Threats to Thai manufacturing SMEs. Finally, it found that

    Thai manufacturing SMEs lacked in cooperating with Government units. All these problems may lead Thaimanufacturing SMEs to be unsuccessful implementation of TQM in their organisation, therefore they shouldrealise their problems and business environment, and then develop all aspects of management systems inTQM and establish a strong partnership network with government.

    Keywords:Problems, TQM, Thai manufacturing SMEs, TQA

    1. INTRODUCTION

    Thai manufacturing SMEs have played a major role inincreasing Thai GDP. However, there have been many

    problems inside organisations that have created obstacles to

    improving performance and confronted by fierce overseas

    competitors. There appears to be a need for Total QualityManagement (TQM) that benefits from well-managed

    organisation. TQM principles have been developed over

    many years by Quality practitioners, the core concepts of its

    approach were derived from three core principles; (1)

    Achieving customer satisfaction, (2) Striving for continuous

    improvement, and (3) Encouraging the full involvement of

    the entire workforce.

    TQM has been used by many larger Thai enterprises, but

    there has been a slow up-take in Thai manufacturing SMEs.

    This study was based on literatures and the results of

    questionnaire surveyed from 71 Thai manufacturing SMEs.

    The paper presents the main problems of establishment of

    TQM in Thai manufacturing SMEs by following the seven

    criteria of Thailand Quality Award (TQA):- Leadership;

    Strategic Planning; Customer and Market focus; Information

    and Analysis; Human Resource focus; ProcessManagement; and Business Results.

    The SWOT analysis was used for examining the

    Strengths and Weaknesses and evaluating the Opportunities

    and Threats to Thai manufacturing.

    Moreover, it found that Thai manufacturing SMEs lacked

    in cooperating with Government units.

    Therefore, Thai manufacturing SMEs should realise all

    these problems and business environment, and then develop

    all aspects of management systems in TQM and establish a

    strong partnership network with government.

    : Corresponding Author 238

  • 7/24/2019 Thai Manufacturing

    3/12

    Panu Buranajarukornet al.

    2. THAI MANUFACTURING SMEs

    Most manufacturing enterprises throughout the world

    are Small and Medium Enterprises (SMEs) dependent ontheir domestic markets to develop their businesses (Day,

    2000; Freeman, 2000). In Thailand, the statistics (Leopairote,

    1997) showed that most of manufacturing enterprises (over

    90%) was SMEs which employed less than 200 (ISMED,

    1999). According to Thanee (2004), he concluded that Thai

    SMEs were increased from 799,033 (1997) to 1,639,427

    (2002) enterprises. They have played a major role in

    developing Thai economy, social and employment

    (Leenabanchong, 1997). The contribution of SMEs to the

    overall economy has been growing. It is estimated that they

    provide more than half of the total employment, more than

    75% of industrial jobs and more than half of the nationsGDP (Simachokdee, 2001b). The ISMED (1999) concluded

    that the contribution of SMEs to Thai economic development

    was as follows;

    - to create jobs

    - to add value to products

    - to earn foreign income from exports

    - to be producers, replacing imported products

    - to generate positive business experience for new

    entrepreneur

    - to be a subcontractor or link with large companies

    - to be a source of labour skills development

    The nature of Thai manufacturing SMEs was different to

    that of the large Thai enterprises and may differ from SMEs

    in other countries, but as a rule, most were seeking local

    domestic markets not global markets, engaging relatively

    higher skilled employees, using basic technology, had a top-

    down management style, and senior/middle management

    were employed with regard to their tangible/immediate ability

    rather than their whole personality or potentiality (Umezawa

    et al., 2000).

    Compared with large enterprises, Thai manufacturing

    SMEs products mostly are the result of labour-intensive

    production not those based on high technology and

    automation. They are however, more flexible in their

    organisation and management than large organisationsbecause of their small vertical organisational structure

    (Ghobadian and Gallear, 1996). No complex financial,

    production or specialised management is needed, so they are

    able to make rapid progress in achieving their goals once they

    are committed (Sonthithai and Thavornbud, 2003). However,

    they are largely unaware of the need to develop quality

    management in their organisation (Simachokdee, 2001b).

    Figure 1 below shows the difference of stages of development

    in two firm sizes.

    Stages of Development Manufacturing Sectors

    R & D

    Design/Engineering

    Modification/AdaptationCopy/Basic Manufacturing

    Figure 1: Stages of development of Thai manufacturers

    Thai manufacturing SMEs problems are generated from

    two main sources; the first is the Thai government. The

    government units designed to assist the SMEs, but its slow

    response when compared with other governments, in creating

    appropriate legislation and establishing an Institute for SME

    Development, affect the SMEs competitive chances

    (Sakulsurarat, 2002); and the second problem for SMEs is

    their internal management they have many internal

    problems (FTI, 2001; DIP, 2003). From previous research,

    the following figure was developed showing internal and

    external problems of Thai manufacturing SMEs. Uncertainty

    about external factors also contributed to the overall

    difficulties. This interplay between these factors

    (Buranajarukorn et al., 2003) is illustrated in Figure 2 below.

    Figure 2: Internal and external problems of Thai

    manufacturing SMEs

    In addition, Milintasoot (2000) looked critically at the

    problems of personnel management in Thai manufacturing

    SMEs which seem to have been caused by the Eastern

    management style. This was one in which there is a close

    relationship between employer and employees. Employees

    External Problems: Areas of UncertaintyManagement Innovations, Customer Needs, Supplier Capacity, Government

    Support, IT, Technology changes etc.

    Internal Problems

    Problems inManagement control, Marketing, Production system, Personnel

    management

    Lack of Investment for HRM, R&D, Advanced technology,Continuous Improvement programme, Additional

    infrastructure development, Management support development

    Lack of Organisational Competitiveness

    SME Organisation

    SMEs

    Large

    Enterprises

    239

  • 7/24/2019 Thai Manufacturing

    4/12

    Panu Buranajarukornet al.

    are treated as family members with the employer regards as

    head of the family and in charge of all management decisions.

    This has led to major problems whenever the scope of

    management was expanded. It is especially noticeable in the

    Human Resource Management area.

    3. BUSINESS ENVIRONMENT CHANGES

    The worldwide industry has been affected by the

    increasing global competitiveness from international

    corporations (Porter, 1990; Gadenin, 2000) and cheap labour

    source countries (Dollar and Driemeier, 2000). Businesses

    today cannot ignore the need to increase their performance

    level if they are to succeed in global markets and to advance

    to a World Class Manufacturing performance (Jarnchai et al.,

    1997; Oakland, 2001). The two-side effects of global

    competition on Thai manufacturing SMEs shows in Figure 3

    below.

    Figure 3: The two-side effects of global competition

    The Thai government was committed by the agreements

    to increase exports (APEC Secretariat, 1998) and abandon

    protective tariffs by negotiating FTAs with other

    governments i.e. U.S., Australia, China, India and Japan. It

    was believed that the FTA principle was an effective catalyst

    for improving competitiveness, promoting sustainable

    economic growth and alleviating poverty (Secretariat of

    WTO, 2003). The importance of FTAs to Thai industries was

    the recognition that:- (1) FTAs will increase the number of

    competitors from abroad into the Thai domestic market whichwas previously largely occupied by Thai manufacturers; (2)

    FTAs will generate an opportunity for Thai manufacturers to

    export products to international markets; and (3) FTAs will

    force Thai manufacturers to upgrade their organisational

    performance if they want to protect their share of domestic

    and penetrate into international markets.

    From a study of market positioning of exports in 1996

    and 2000, Dhanani and Scholtes (2002) discovered that Thai

    industries had decreased their share of world markets. Figure

    4 below shows the current competitive situation which was

    confronted by 71 Thai manufacturing SMEs. Most

    percentages were in aggressive (54.93%) and moderate(35.21%) competitive situation, respectively. They were poor

    performance in administrative and technology when

    compared with their competitors.

    0

    5

    10

    15

    20

    25

    30

    35

    40

    45

    None Little Moderate Aggressive

    Number of enterprises

    The Current Competitive S ituation

    54.93%

    35.21%

    5.63%4.23%

    Figure 4: The current competitive situation of Thai

    manufacturing SMEs

    The competitive situation has led to Thai manufacturing

    SMEs being concerned about their problems and they need to

    consider changing their ways of operating to attain a high

    business performance. They need to realign manufacturing

    strategies and integrate them with their capabilities,technology, human factors, management approaches,

    organisational factors, and performance measurement.

    4. QUALITY AS A BUSINESS STRATEGY

    Quality is as important as low-cost and innovation

    strategies (Hay, 1996), as a business strategy to win in an

    aggressive market situation against a number of global

    competitors. This also proved by a number of famous quality

    Global competition

    Positive effectsNegative effects

    Increase in number of (potential)

    competitors from abroad

    Aggressive competitive situation

    Readjustment of

    administration and

    product

    characteristics

    World Class

    Performance

    Unawareness of

    competition and Lackof performance

    improvement

    Organisational

    incompetence

    Market Lost Market Win

    240

  • 7/24/2019 Thai Manufacturing

    5/12

    Panu Buranajarukornet al.

    gurus (Deming, 1986; Juran, 1986; Crosby, 1979) that

    successful manufacturers consider the implementation of

    Quality Management (QM) as the essential part of their

    business strategy.

    However, the study found that most Thai SMEs

    manufacturing strategies were focused on Cost rather thanQuality, Flexibility and Delivery (see Figure 5 below). The

    results show that the Thai manufacturing SMEs preferred,

    generally, to use an improved cost strategy to overcome

    market resistance and refused to use Quality or some other

    strategy.

    84.51

    49.3

    32.3922.54

    0

    10

    20

    3040

    50

    60

    70

    80

    90

    Cost Quality Flexibility Delivery

    %

    Figure 5: Thai SMEs manufacturing strategies

    Thai manufacturing SMEs need to become aware of the

    advantages to be gained from initiating the development of a

    QMS as their strategy. It can show the typical of development

    of QMS in Figure 6 below.

    Figure 6: Typical stages of development of QMS in Thai

    manufacturing SMEs

    Figure 6 above shows the typical stages of the

    development of QMSs in Thai manufacturing SMEs to

    compete in global markets. Market pressures have forced

    enterprises to raise their quality standard to the minimum

    necessary to obtain a Quality Certification. Mere Quality

    Assurance (QA) is inadequate for coping with international

    competition, TQM is necessary as a means of guarantee of

    continual quality improvement. TQM also needs the efforts of

    all employees to develop a better basic infrastructure.

    5. APLLICATION OF TQM

    Many QM approaches have been introduced in many

    countries. In Thailand, there appears to be three main reasons

    for their implementation;

    (1) to use as a tool and techniques for improvement e.g.

    QCs, SQC, 5S

    (2) to obtain a Quality Certificate e.g. ISO 9000: 1994,

    ISO 9000: 2000

    (3) to achieve a Business Excellence approval e.g.

    TQM, Six Sigma

    Buranajarukorn et al. (2003) concluded the current

    situation of quality management system (QMS) in Thai

    manufacturing enterprises in Table 1 below.

    Table 1: Current situation of QMS in Thai manufacturing

    enterprises

    QMS Number of enterprises Large SMEs

    No system A great number -

    ISO9000 Some

    TQM A few number -

    The implementation of QM in Thai manufacturing

    SMEs has not made much progress because of internal

    obstacles such as poor basic infrastructure, shortage of

    resources, human resource issues etc.

    This study found that most Thai manufacturing SMEs

    preferred to implement a Continuous Improvement (CI)

    propramme and Best Practice (GMP/HACCP). Half of the

    surveyed enterprises had implemented SQC and QA

    (ISO9000), but most had not implemented TQM. This result

    is given in Figure 7 below.

    32.4

    38.03

    49.3 50.7

    69.0267.6

    61.97

    50.7 49.3

    30.98

    0

    10

    20

    30

    40

    50

    60

    70

    80

    CI Bes t p ractic es SQC QA (ISO9000) TQM

    Not implemented

    Implemented

    Perce ntage of companies

    241

  • 7/24/2019 Thai Manufacturing

    6/12

    Panu Buranajarukornet al.

    Figure 7: Percentage of Thai manufacturing SMEs which

    had and had not implemented QM

    Most Thai manufacturing SMEs are interested in

    implementing a QM programme (SQC, CI, QA, TQM and

    Best Practices), but the percentage of Thai manufacturingSMEs which have fully implemented any QM is still less than

    50%, especially TQM (5.63%). This may because only a few

    employees understood the theory and practical application of

    TQM (67.61%). The progressive status of implementation of

    TQM in Thai manufacturing SMEs is given in Figure 8

    below.

    Figure 8: Progressive status and Stages of problem of

    implementation of TQM in Thai manufacturing

    SMEs

    The results in Figure 8 above show that the successful

    implementation of TQM was only 5.63%. There are three

    stages of problems whenever implementing TQM in

    organisation. These can conclude as follows;

    Problem 1 (P1) = Management/Employees are

    not interested in implementing TQM. Problem 2 (P2) = Management/Employees are

    interested in implementing TQM, but they dont

    know how to do it.

    Problem 3 (P3) = Management/Employees do

    not have someone/basic infrastructure to

    help/support them to succeed in implementing

    TQM.

    \

    The author suggests three strategies to deal with these

    problems (see Figure 9 below).

    Problems Strategies

    Figure 9: The three strategies to deal with the problems of

    implementation of TQM

    6. ACHIEVEMENT OF TQA

    Thailand as same as many countries, has established its

    own Quality Awards named Thailand Quality Award (TQA).

    It provides for self-assessment of the degree of the

    performance excellence in the use of TQM. There are seven

    criteria at the centre, these are: (1) Leadership; (2) Strategic

    Planning; (3) Customer and Market Focus; (4) Information

    and Analysis; (5) Human Resource Focus; (6) Process

    Management and (7) Business Results

    In this study, it can classify the achievement of Quality

    Awards in Thai manufacturing SMEs into three levels. These

    are shown in Table 2 below.

    Table 2: The three levels of achievement of Quality Awards

    in Thai manufacturing SMEs

    Level %

    No achievement (any Q award) 32.39%

    Low achievement (only Local/National) 29.58%

    High achievement (at least International) 38.03%

    Total = 100%

    Interested in TQM(61.97%)

    Not interested in TQM(38.03%)

    Not implementedT M 33.99%

    ImplementedT M 27.98%

    Fully ImplementedT M 5.63%

    PartiallyImplemented

    TQM (22.35%)

    Problem

    (P)

    Success

    P1

    P2

    P3

    They are not

    interested in TQM

    They are interestedin TQM, but they

    dont know how toimplement it

    They dont havesomeone/basic

    infrastructure tohelp/support them to

    succeed in

    implementing TQM

    Change

    management

    Culture/ Attitude/

    Awareness/ Mindset/

    Behaviour

    Training &

    Education

    Theory/ Practice/

    Planning/ Programme/

    Evaluation

    Maintaining QA,

    Expert assistance,

    Self-assessment by

    using Business

    Excellence criteria

    242

  • 7/24/2019 Thai Manufacturing

    7/12

    Panu Buranajarukornet al.

    From Table 2, it conclude that most Thai manufacturing

    SMEs (61.97%) had never achieved any award or only

    achieved a Local or National Quality Award. Only 38.03% of

    enterprises had achieved International Quality Awards. The

    achievement of an International Quality Award should bepromoted as necessary as well as the realization that they

    need to develop their organisational performance to achieve

    this award standard.

    There are confusion between percentages of market

    targets and level of achievement of Quality Award in Thai

    manufacturing SMEs. The study found that most Thai

    manufacturing SMEs sought a Quality Award for Domestic

    rather than International markets, even if they focused more

    on International markets (see Figure 10 below).

    Figure 10: The significant difference of the percentage of

    enterprises which focused on two markettargets and level of achievement of Quality

    Awards for Domestic/International markets

    Followed by seven criteria of TQA, the study shows that

    approximately 50% of Thai manufacturing SMEs do not

    achieve all the criteria and only 22.54% achieved the criteria

    of Leadership, 19.72% achieved Strategic Planning, but only

    4.23% achieved the criteria of Information and an analysis.

    These results are given in Figure 11 below.

    45.0742.25

    36.62 36.62

    22.5419.72

    4.23

    05

    10

    1520253035

    404550

    CustomerandMarketfocus

    Processmanagement

    HRfocus

    Businessresults

    Leadership

    Strategicplanning

    InformationandAnalysis

    %

    Figure 11: The Achievement of Criteria of TQA

    6. PROBLEMS OF SME ORGANISATION

    The problems in this study were grouped into two

    areas; (1) by Resources and (2) by Operational tasks.Resource problems are related to operational task problems

    and both problems effect on implementation of TQM. These

    effects are shown in Figure 12 below.

    Figure 12: Effects of two problem areas on implementing

    TQM

    This study shows the significant effects of two problem

    areas on implementing TQM (see Figure 13 below). Most

    Thai manufacturing SMEs (more than 70%) have occurred all

    problems. These obstacles are needed to be eliminated in

    order to optimise their use of resources in organisation and

    work efficiently.

    98.59

    94.37 94.37

    71.89

    31.4325.37

    13.45 17.65

    0

    10

    20

    30

    40

    50

    60

    70

    80

    90

    100

    Materials People Machines Money

    %

    95.77 95.77 94.3791.55

    16.1813.24 13.43

    20

    0

    10

    20

    30

    40

    50

    60

    70

    80

    90

    100

    Production Administration Maintenance Quality control

    %

    Focus on market targets

    Achieving Quality Awards for

    OperationalProblems

    Production

    Administration

    Maintenance

    Quality control

    ResourceProblems

    Material

    People

    Machine

    Money

    Problems of im lementin T M

    % of enterprises % of frequent problems

    (a) Resource Problems

    (b) Operational task problems

    243

  • 7/24/2019 Thai Manufacturing

    8/12

    Panu Buranajarukornet al.

    Figure 13: Percentage of (a) Resource problems occurred and

    (b) Operational task problems occurred

    7. THE SWOT ANALYSIS

    The SWOT analysis is the method used for identifyingthe Strengths (S), Weaknesses (W), and examining the

    Opportunities (O) and Threats (T) to Thai manufacturing

    SMEs. There are two-side effects on organisational

    performance; positive (+) and negative (-). They are

    illustrated in Figure 14 below.

    Figure 14: Strengths (S), Weaknesses (W), Opportunities

    (O), and Threats (T) on Organisational

    performance in Thai manufacturing SMEs

    In this study, the many issues under these categories

    uncovered by the SWOT analysis are summarised as follows;

    Strengths

    Characteristics of selected companies

    Market focus

    Organisational Structure

    Interest in QM Implementation

    Awareness of benefits of QM implementation

    Level of readiness of organisation for development of

    Business performance to achieve competitiveness

    Some organisational aspects e.g. Work satisfaction, Gender

    equity and opportunity, Autonomous Work (Self-

    directing)/Work freedom, Trust, Leadership, Employment

    relation, Quality awareness, Work

    commitment/participation, Morale, Quality of working

    conditions/Job security/Well-being Methods for solving quality problems

    Interest in government assistance

    Requirement of improving skills for front-line operators

    Weaknesses

    Management styles

    Focus of manufacturing strategy

    Quality awards entries and its achievement

    Implementation of any QM

    Number of person who were knowledgeable about TQM

    Achievement of criteria of TQA

    Internal problems (Resources & Operational tasks) Some organisational aspects e.g. Continuous learning,

    Work cooperation/Teamwork, Long term goals,

    Continuous improvement mindset, Scientific decision

    making methods, Linkage between employees and

    organisation goals

    Strategic human resource planning

    Training in QM courses

    Policy deployment

    Document management systems

    Performance management and Leadership systems

    Improvement programmes and utilisation of the

    improvement tools and techniques

    Involving in government assistance programmes

    Opportunities

    Increase of International markets

    Establishment of TQA

    Government assistance programmes

    Many QM practices and Improvement tools and techniques

    were introduced in Thailand

    Government policy and provision of government assistance

    programmes

    Threats

    Increase of the competitive situation in both domestic andinternational markets

    FTAs

    Higher customer expectation of quality of products

    Requirement of QA and QM programmes

    Need to achieve Quality Awards

    Lack of investment in modern technology and need to

    focus on human capability

    8. GOVERNMENT ASSISTANCE

    Where;

    Internal factors; S = Strength (+)W = Weakness (-)

    External factors; O = Opportunity (+)

    T = Threat (-)

    S(+)

    S(+)

    W(-)

    S(+)

    S (+)

    S(+)

    S(+)

    W(-)

    W(-)

    W(-)

    W(-)W(-)

    Organisational

    performance

    S(+)

    W(-)

    O(+)O(+)

    O(+)

    O(+)

    O(+) O(+)

    O(+)

    O (+)

    O(+)

    T(-) T(-)T(-)

    T(-)

    T(-)

    T(-)

    T(-)

    T(-)

    Thai manufacturing

    SMEs

    Business environment

    Negative effects Positive effects

    244

  • 7/24/2019 Thai Manufacturing

    9/12

    Panu Buranajarukornet al.

    Government recognised that SMEs are the main source

    of the Thai economic growth and their success is needed to

    sustain Thai competitiveness, quality growth, and lasting

    properity (Phoosuphanusorn and Treerapongpichit, 2002).

    The strategy used to increase the quality and productivity ofproducts is the utilisation of technological and managerial

    innovation, especially human resource development. This

    strategy aimed to encourage entrepreneurs, both existing and

    new, to develop their skills and the capabilities of their

    employees (ISMED, 1999).

    The Thai government provided two master plans for

    helping SMEs, one short, the other long term. The short-plan

    focused on solving financial problems in SMEs such as

    liquidity which appeared after the Asian economic crisis

    (1997) by providing investment capital for increasing the

    SMEs competitiveness. The long-term plan was to improve

    SME performances in order to obtain sustainable growth inthe global market. This included legislation to assist SMEs,

    the establishment of an Institute for SME Development and

    government support for SME development programmes

    generally. The support programmes included consulting,

    training and providing seminars, market promotion, funding,

    and information services (Soontorncharernnon, 1997).

    Although the government has provided many assistance

    programmes for developing Thai manufacturing SMEs

    organisational performance, these programmes seemed to be

    unproductive. Simachokdee (2001a) criticised the problems

    of Thai manufacturing SMEs into two issues; the internal

    problems of Thai manufacturing SMEs and the accessibility

    of government services. Figure 15 below shows that there

    was a gap between government support and SME needs for

    assistance. Most SMEs cannot access to government

    information and some deny their involvement in a

    programme. The government needs to broadly promote an

    assistance programme, develops a new programme whichrelates to the SME needs (S1) and encourages SMEs

    entrepreneur to participate in government assistance

    programmes (S2).

    Figure 15: Gap - Government support and SME Needs

    From the results of this study, it found that

    approximately 67.61% of Thai manufacturing SMEs had

    experienced some government assistance. It should be noted

    that less than 40% of the services on government offer were

    taken up. The most used of the government assistance

    programmes are training of entrepreneurs (39.44%) andattendance at courses on the Quality Certificate requirements

    (30.99%). However, there are some other services used by

    less than 10% of companies. These included Testing and

    Evaluating of Products, Infrastructure, Marketing, Financial

    Loan, Training in Financial Analysis, Taxation, and

    information Technology (see Figure 16 below).

    9.86

    9.86

    8.45

    8.45

    8.45

    7.04

    2.82

    0 2 4 6 8 10 12

    Testing & Evaluating of products

    Infrastructure

    Marketing

    Financial loan

    Training in financial analysis

    Texation

    Information technology

    %

    Figure 16: Experiences with government assistance

    programmes less than 10% of enterprises

    The government needed to be clearly aware of the needs

    of Thai manufacturing SME and provide strategies, vision

    and mission statements for implementing its assistance

    policies. Alone, Thai manufacturing SMEs, cannot develop

    their organisational performance, they need to develop

    linkages between their business partner in order to gain

    business information and assistance programmes from asmany sources as possible.

    9. MODEL DEVELOPMENT

    This study developed three sub-models; (1) Model of

    Problems in Thai manufacturing SMEs, (2) the Model of

    Government Assistance and (3) the Model of Developing

    TQM. The model is illustrated in Figure 17.

    Government

    units SMEs

    Businessinformation

    Government

    assistance

    OverlapGovernment support SME needs

    Increasing

    organisational

    performance

    Gap

    Gap

    S1

    S2

    245

  • 7/24/2019 Thai Manufacturing

    10/12

    Panu Buranajarukornet al.

    Model of Problems in Thai manufacturing SMEs

    Quality Practices

    Management Functions

    and Operational TasksHuman Resources

    Basic Infrastructure and

    Or anisational As ects

    Related problems

    Model of Government Assistance

    Model of Developing a Quality Management System

    Strategy1: Communication, Information, and Education

    Strategy2: Provision of Effective SME Development programmes

    Strategy3: Improvement of Work Systems

    Strategy4: Establishment of Basic Infrastructure

    Strategy5: Development of Quality Management Systems - TQM

    To Establish

    Or anisational Infrastructure

    To Develop

    Or anisational Culture

    To Develop

    Human Resources

    Level 0: No QMS

    Level 1: QMS, No Q Cer.

    Level 2: QMS, No Q Cer.,Partial TQM

    Level 3: QMS, Q Cer.

    Level 4: QMS, Q Cer.,

    Partial TQM

    Level 5: QMS, Q Certification, Full implementation of TQM

    QMSDe

    velopment

    The government clearly understands Thai manufacturing SME needs to develop

    QMS in order to increase Organisational performance and competitiveness

    The government implements its policies and strategies effectively and develops

    programmes continuously for assisting Thai manufacturing SMEs

    Thai manufacturing

    SMEs realise theirinternal problems

    and have an effort

    for developing the

    Human Aspects in

    implementing QMS

    HRDevelopment

    Self-assessment from

    TQA

    Ineffective QMS

    Feedback

    P D

    A C

    246

  • 7/24/2019 Thai Manufacturing

    11/12

    Panu Buranajarukornet al.

    REFERENCES

    APEC Secretariat (1998). The Impact of

    Liberalisation: Communicating with APEC

    Communities. Textiles Industry in Thailand. APEC,

    Singapore.

    Buranajarukorn, P. Arndt, G. and Godbole, A.

    (2003). Human Aspects of TQM for Manufacturing

    SMEs in Developing Countries: A Case Study on

    Thailand. Proceedings of International Conference

    Manufacturing Excellence.Melbourne, Australia.Crosby, P.B. (1979). Quality is free: the art of

    making quality certain.McGraw Hill, New York.

    Day, J. (2000). Commentary: The Value and

    Importance of the World Economy.European Journal of

    Marketing,34(9/10), 1033-1037.

    Deming, W.E. (1986). Out of the Crisis: Quality,

    Productivity and Competitive Position. Cambridge

    University Press, Cambridge.

    Dhanani, S. and Scholtes, P. (2002). Thailands

    Manufacturing Competitiveness: Promoting Technology,

    Productivity and Linkages. Working Paper No.8 UNIDO

    project.UNIDO, USA.

    DIP. (2003). Invigorating Thai Business ITB,

    Vol.2.DIP, Bangkok. (in Thai)

    Dollar, D. and Driemeier, M.H. (2000). Crisis,

    Adjustments, and Reform in Thailands Industrial Firms.

    The World Bank Research Observer,15(1), 1-22.

    Freeman, S. (2000). Australian Small and Medium-

    sized Enterprises (SMEs) Performance in the Asia

    Pacific Rim: Industry Structure Factors. Proceeding from

    SMEs in a global economy conference, Wollongong,

    Australia,175-183.

    FTI. (2001). Workshop of SMEs Development. FTI

    Journal,10(58), 36-49. (in Thai)

    Gadenin, N. Current Status of Thai Rice Exports.Food Journal of Thailand,2(12), 44-47. (in Thai)

    Ghobadian, A. and Gallear, D.N. (1996). Total

    Quality management in SMEs. International Journal

    Management Science,24(1), 83-106.

    Hay, C. (1996). Managing cultural diversity:

    Opportunities for enhancing the competitive advantage

    of Australian business. Commonwealth of Australia,

    Australia.

    ISMED. (1999). SMEs: Institute for Small and

    Medium Enterprises Development. ISMED, Bangkok. (in

    Thai)

    Jarnchai, A. et al(1997). Thai Industry Vision 2020:

    Increasing Competitiveness for Sustainable industry

    development,FTI, Bangkok. (in Thai)

    Juran, J.M. (1986). The Quality Trilogy: A

    Universal Approach to Managing for Quality. Quality

    Progress,August,19-24.

    Leenabanchong, C. (1997). Introduction.

    Proceedings of a Conference the InternationalConference on the Development of Small and Medium

    Enterprises (SMEs) in Some APEC Countries. Bangkok,

    Thailand, viii-xvii.

    Leopairote, M. (1997). Policy Direction for SME

    Development in Thailand. Proceedings of a Conference

    the International Conference on the Development of

    Small and Medium Enterprises (SMEs) in Some APEC

    Countries. Bangkok, Thailand,212-224.

    Milintasoot, S. (2000). SME Business Book. DIP,

    Bangkok. (in Thai)

    Oakland, J. (2001). Total Organizational

    Excellence: Achieving world class performance.

    Butterworth-Heinemann, Oxford.

    Porter, M. (1990). The competitive advantage of

    nations.New York: The Free Press.

    Sakulsurarat, S. (2002). National Strategies for

    Developing SMEs in 2002-2007.Research Report. 2001-

    2002. (in Thai)

    S. Phoosuphanusorn and B. Treerapongpichit.

    (2002). SMEs dominate new political agenda

    http://www.bangkokpost.net/midyear2002/smallfirms.

    html

    Secretariat of WTO. (2003). Trade Policy Review:

    Thailand. WT.TPR/G/123,15 October 2003.

    Simachokdee, V. (2001a). SMEs: the Support ofThai Economy.TPA, Bangkok. (in Thai)

    Simachokdee, V. (2001b). TQM for SMEs. TQM

    Ideas.The Association of QC Headquarters of Thailand,

    Bangkok. (in Thai)

    Sonthithai, A. and Thavornbud, T. (2003). SMEs

    Good Practices.Bangkok: FTPI, 58 pages. (in Thai)

    Soonthorncharernnon, S. (1997). Government

    Supporting Programmes for SME Development in

    Taiwan, Hongkong, Singapore, Korea, and Thailand.

    Industrial Development Section, Bangkok. (in Thai)

    Figure 17: The Relationship of three sub-models: Problems, Government Assistance, and Developing TQM

    247

  • 7/24/2019 Thai Manufacturing

    12/12

    Panu Buranajarukornet al.

    Umezawa, Y.; Tsuchiya, S. and Kawagushi, S.

    (2000). Problems and Difficulties in developing

    productivity improvement for (Thai) SMEs: The Case of

    Policy Deployment. TQM Symposium 4,Bangkok,(2-2)-

    (2-7).

    ACKNOWLEDGEMENT

    I would like to express my sincere and grateful thanks to

    Assoc. Prof. Peter Gibson and Prof. Guenter Arndt, for

    their imparted knowledge, kind assistance, useful advice

    and valuable comments. On a personal note, the most

    important thanks to my family members for support and

    morale.

    AUTHOR BIOGRAPHIES

    Panu Buranajarukorn is a Lecturer in Department of

    Industrial Engineering, Faculty of Engineering, Naresuan

    University, Phitsanulok, Thailand. He received a M.Eng.

    (Industrial Engineering) from Department of Industrial

    Engineering, Faculty of Engineeering, Chulalongkorn

    Univeristy in 1997. His thesis is in Ergonomics field,

    named Effects of Heat Load on Physical Fatigue at

    Work, supervised by Professor Dr. Kitti Intranont. Now,

    he has submitted Ph.D thesis of Engineering

    Manufacturing field. He focused on Implementation of

    Total Quality Management (TQM) in Thai

    manufacturing SMEs, supervised by Associate ProfessorPeter Gibson and Professor Guenter Arndt at School of

    Mechanical, Materials and Mechatronic Engineering,

    University of Wollongong, Australia. Now, he is waiting

    for the result of thesis. His teaching and research

    interests include Ergonomics, Safety, Engineering

    Management and Quality Management, especially TQM.

    His email address is or

    Peter Gibson is an Associate Professor in School of

    Mechanical, Materials and Mechatronic Engineering,

    University of Wollongong, Australia. He has 29

    publications which emphasised Supply Chain

    Management, Business Management, Information

    Technology, Quality Management, SME Management

    and E-commerce. His research has focused on Supply

    Chain Management. Now, he is the Director of Studies

    Postgraduate Coursework in Faculty of Engineering,

    University of Wollongong, Australia. His email address

    is

    Guenter Arndtis Honorary Professor of Manufacturing

    Engineering in the School of Mechanical, Materials and

    Mechatronic Engineering, University of Wollongong,

    Australia. He has a very distinguished international

    career in Manufacturing research, specialising in Total

    Quality Management (TQM), Japanese Management,

    Continuous Improvement programmes, Total Productive

    Maintenance (TPM), Manufacturing Management,

    Systems and Strategy, Just-in-Time (JIT) and theirapplication in Developing Countries. His email address

    is

    248