SINGAPORE AND THE INTERNATIONAL PROCUREMENT INDUSTRY

Abstract

Purchasing was once considered as merely a cost of doing business. However, in many organizations, the role of purchasing has changed. In fact, purchasing has taken up so much importance that International Procurement Offices (IPOs) which undertake the role of purchasing are seen as a means of boosting the competitive advantage of firms, particularly with regard to lead time, quality and total cost systems. With the new role of purchasing, supply chain management is moving up the corporate agenda. In place of the older supplier relations which are termed 'competitive' or 'adversarial', new supplier relationships are collaborative in nature. Through the study of IPOs, the thesis will highlight the importance that purchasing has assumed in the 1980s. Against the backdrop of supply chain reorganization, the thesis examines the implications that IPOs have on supply chain management in Singapore, in particular the electronics industry which constitute the largest number of IPOs. An evaluation of whether the general expectations of supply chain reorganization is taking place in the Singapore electronics industry will be made. The thesis also looks at the influence of both the nature of the electronic industry and organization of firms (i.e. supply chain management) on the locational decision of IPOs. Drawing on the results of a postal questionnaire and in-depth interviews, it is found that supply chain management in Singapore is not moving towards higher levels of collaboration. IPO-supplier relationship generally do not progress further than having close ties to facilitate the sourcing activities. The Singapore electronic industry are probably complementing the higher end activities back in the home country of the IPOs. Nevertheless, some respondents reflected that Singapore is moving towards higher technology. On the whole, Singapore is relatively competitive as an IPO location. Her strengths include political stability, efficient logistics and good infrastructure.