The influence of the central warehouse on the functioning of Polish small and medium-sized enterprises operating in group purchasing organizations

Grzegorz Zimon

doi:10.21511/ppm.18(1).2020.03

Abstract

Growing competition in the market forces primarily small and medium enterprises (SMEs) to implement certain mechanisms that will allow them to build an advantage over the competition. Most often, SMEs try to work together as part of multi-stakeholder organizations and organize themselves into group purchasing organizations (GPOs) with the central warehouse to improve the financial state of enterprises. The article aims to assess and analyze the impact of the central warehouse on the performance of Polish SMEs operating in group purchasing organizations. The research group comprised of 172 trading enterprises operating in Polish group purchasing organizations. The investigated companies were divided into two groups. In the first group, there were companies operating within GPOs, which have a central warehouse. In the second group, there were companies in which central unit does not have a central warehouse. The analysis and research showed that the central warehouse has a positive impact on financial security of small and medium enterprises operating in group purchasing organizations. The use of central warehouse optimizes the most costly current assets component – inventories. This is confirmed by better results of inventory turnover ratios in days, reduced share of inventories in the structure of current assets, and optimization of financial liquidity ratios.

Highlights

Small and medium-sized enterprises are looking for tools and methods that will allow them to compete effectively with their competitors
There were companies operating within group purchasing organizations (GPOs), which have a central warehouse
The analysis and research showed that the central warehouse has a positive impact on financial security of small and medium enterprises operating in group purchasing organizations

Summary

Introduction

Small and medium-sized enterprises are looking for tools and methods that will allow them to compete effectively with their competitors. They often mistakenly try to improve their competitiveness by pursuing a cost-cutting policy. Such a strategy leads very often to the reduction in the quality of services or goods sold, which may result in the loss of customers who are slowly beginning to pay attention to price, and to quality. An excellent example of the impact of state policy on the cost management of companies is the regulations on minimum wages.

Methods

Results

Conclusion