ORGANISATION OF PROCUREMENT IN WOOD SUPPLY CHAIN: IMPROVEMENT OF POSSIBILITIES IN THE SOUTH MORAVA FOREST AREA

: The procurement process is of great importance for the business success of the company. The effectiveness of a business depends to a great extent on the ability to use the environment in the procurement of resources necessary for functioning. The aim of the research is to identify the main problems in forest management in the South Morava Forest Area (SMFA), in the production and sales of beech roundwood, as well as to determinate the characteristics of the companies and the organization of the raw materials procurement process. The data were collected in the period 2014-2017, by surveying 13 representatives of small and medium enterprises and 1 large company and interviewing 5 employees of Forest Estate “Vranje” (Public enterprise „Srbijašume“). The current situation in the SMFA is characterized by an unfavourable structure of beech coppice forests, inadequate forest openness and low wood mobili zation from private forests. Analyzed companies are, mostly, micro and small (79.0%), founded (64.3%) less than 10 years ago, and 50% of them are engaged in sawmill and wood processing. All companies purchase and use beech technical roundwood. Wood raw material is purchased from the public and private sectors. Transport of raw materials is carried out through intermediaries (92.9%) and on “bad” and “very bad” (71.0%) infrastructure. However, the majority (92.9%) of them are “partially satisfied” and “satisfied” with the quantity and quality of delivered raw materials. There is a sig nificant presence (86.0%) of enterprises, which, in addition to technical roundwood, procure and use other wood products (fibreboards and other reproduction materials) from suppliers from other regions. Based on the analysis of all collected data, places for improvement of wood raw materials procurement and the weaknesses of existing supply chains have been defined, as well as the proposals for improving the organiza tion of the procurement of wood raw materials at SMFA.


ORGANISATION OF PROCUREMENT IN WOOD SUPPLY CHAIN: IMPROVEMENT OF POSSIBILITIES IN THE SOUTH MORAVA FOREST AREA INTRODUCTION
The process 1 of procurement refers to the acquisition of raw materials and / or products for 1 The business process is "...a set of related activities and decisions, which is carried out to achieve a measurable goal of the organization, takes some time and consumes some input resources by turning them into specific products or services of importance to the buyer or user" (Brumec, further processing and / or selling (No n i ć, 2015). This process is of great importance for the business success of the company. The effectiveness of the business is to a large extent determined by "...the ability of the company to use the environment in the procurement of resources necessary for functioning, especially in terms of scarce and valuable resources" (Dollinger, Kolchin, 1986). For this reason, close cooperation with key suppliers "...brings benefits in terms of ensuring good quality of raw materials, reducing costs, increasing competitiveness, etc." (Ka n n a n , Ta n , 2006; Kul i k, 2010). In this regard, it is pointed out that, "... if the insufficient attention is given to the organization of this process, the business can be compromised" (E l l ega a rd , 2006).
The problem of procurement in enterprises engaged in the production of furniture and wood products from Serbia is complex and is related to the regulation and the overall organization of activities from the forest as a source of wood raw material until the end-use of wood products in the domestic and foreign markets (M a rc u s et al., 2010; Va s i l j evi c, 2015).
Public administration bodies, and all economic entities, including scientific research organizations have an important role in the "forest-wood" chain 2 in creating conditions and stimulating the environment, which allows (M a rc u s et al., 2010; Va s i lj evi ć, 2015): -sustainable forest management, with the effective use of forest production potentials; -improvement of the existing wood supply chain (WSC) in the direction of modernly organized supply chains (SC) of products with a high degree of finalization. In the early 2000s, significant changes took place in the wood sector 3 in Serbia. In the process of restructuring of the Public Enterprise "Srbi-2 "Forest wood" chain "...includes activities that create added value in production processes in which forest resources are processed into products or services" (Vasiljević, 2015). This chain "...can expand from forest management to the end of the use of a product" (Marcus et al., 2010). 3 The "wood sector" includes the following activities (Vasilj evi ć, 2015): -forestry and logging, which according to definition include the production of roundwood and the most urgent treatment of felled trees in the forest (cutting branches, peeling, making logs and wood for heating); -processing industry, which includes wood processing and wood products (for example, sawn timber, boards, veneers, chests, parquet, building carpentry and elements, wood packing, prefabricated wood houses, etc.), cork and straw, except furniture.
jašume", a large number of small and medium-sized enterprises, which are engaged in felling, skidding and transportation of wood from the forest, were created. At the same time, in the wood industry sector, former social and state enterprises, which were established in the previous period, failed to adapt to the market conditions. A decrease of activities of large wood-industrial combines has led to the formation of an extremely large number of small wood-industrial enterprises.
Companies dealing with wood processing are more or less closely connected, partially competing for the same raw material, and on the other hand, they can have the same market. Unlike small and medium-sized enterprises in forestry, they are exposed to the impact of the international market, which is a very important specificity, given the limited scope of the raw material procurement (No n i ć, 2010, Va s i l j evi ć, 2015). Wood processing is one of the most important economic sectors in the Pčinja and Jablanica Districts 4 .
In accordance with the aforementioned, at the local level, for the wood sector in the South Morava forest area (SMFA), with the traditional share of the activity of forestry, wood processing and wood furniture (2010), it is important to identify places for improving the existing state of the organization of SC in order to increase capabilities of business entities for networking into international networks with managed SC with a high degree of finalization (Mihajlović, 2017).
The aim of the research is to identify the main problems in forest management in the SMFA, in the production and sales of beech roundwood, as well as to determinate the characteristics of the companies and the organization of the raw materials procurement process. The purpose of the research is to provide recommendations for improving the organization of the procurement process within the WSC, in order to ensure more effective participation of business entities in network organizations with a managed SC of a higher degree of finalization. The subject of the research is the attitudes of the representatives of forestry busi-ness entities at the SMFA towards problems in forest management and the production and sales of technical roundwood, organization (structure, activities, processes) and operations within the WSC at SMFA. Basic (statistical) and special (analysis and synthesis, specialization and generalization, deduction and induction) scientific methods were applied. Door-to-door survey and individual structured interviews were used as research techniques for data collection.

METHODS
The data were collected in the period 2014-2016: -door-to-door survey with 11 representatives of small 5 , 2 representatives of medium 6 and one representative of large enterprise ("SIMPO" join stock company (July 2014-March 2016); 5 Activities: sawmill and wood processing, furniture manufacturing for business and sales premises, production of other furniture, manufacture of other wood products, cork, straw and wool products 6 Activities: production of veneer and wood panels and production of other furniture -interviews with 5 forest engineers employed in Forest Estate (FE) "Vranje", Public enterprise (PE) "Srbijašume" (November 2014-January 2015). A stratified sample method was used to identify the companies whose representatives were surveyed. The criterion for stratification was the size of a legal person (micro and small, medium, large) from the legal entity database at SMFA with activities in the field of wood processing and/or field furniture production. The choice of business entities from the strata was done by simple random sampling without repetition, using the computer function of random numbers. The Interviewed respondents were selected by the judgmental sampling method 7 .
The questionnaire used in the survey consisted of 80 questions and was a combination of open (without offered answers) and closed (with offered answers) questions divided into eight groups. For the purposes of this paper, answers to questions about basic company information (six questions) and procurement organization (10 questions) were analyzed.
The questionnaire used in the interview consisted of eight questions related to: -problems in the management of beech forests in state ownership; -problems in the management of beech forests in private ownership; -problems in the harvesting of beech technical roundwood; -problems in transportation; -buyers of beech technical roundwood at SMFA; -problems in contracting and selling of beech technical roundwood; -problems in the realization of contracted sales; -proposals for improving the procurement.
The data collected by the survey were analysed in the statistical program SPSS (ver 20). Frequency analysis and χ 2 goodness of fit test were used. The processing of data collected by the interview was done using a qualitative analysis of the contents of documents.
The survey covered the territory of the SMFA (map 1, right), that is, the territory of the Pčinja District 8 (map 1, left), which is quite coherent in administrative terms.

RESULTS 9
Within this chapter are presented and analyzed the views of the respondents regarding the problems of forest management and the production and sales of beech technical roundwood (interviews), as well as the characteristics of the companies and organization of wood procurement (surveys). Table 1 shows the attitudes of representatives of FE "Vranje", PE "Srbijašume", towards problems 8 Pčinja District is located in the south of Serbia on an area of 3,520.0 km 2 or 3.98% of the territory of the Republic of Serbia 9 Part of the results was presented at the conference "Forest Science for Sustainable Development of Forests, 25 Years of Forestry of the Republic of Srpska, FORSD", which was held in Banja Luka (Republic of Srpska, B&H), in the period December 7th-9th, 2017. that arise in the management, production and sales of beech technical roundwood at SMFA.

Forest management and production and sales of technical roundwood
According to the opinion of the interviewed respondents, the key problem in the management of beech forests in the state and private ownership at SMFA, from the aspect of beech production, is high distribution of coppice forests (the realized cuttings vary from the planned qualification structure, resulting in a larger production of beech fuelwood).
The additional problems in state forests are: -insufficient openness of forest complexes and inaccessibility of individual departments; -technological obsolescence of the machinery for road construction and insufficient number and equipment of specialized companies. In private forests, additional problems are fragmentation and illegal logging.
Problems in harvesting are: -delays in planned activities, due to changing weather conditions; -a small number of companies that apply to tenders and, mainly, with technologically obsolete equipment. The problem in the transport of beech technical roundwood from the truck road to the customer (user) is a delay in the performance of contractual obligations, by transport companies.
The largest buyers of beech technical roundwood at SMFA are "SIMPO" join stock company, "Kronospan", "Drvopromet", as well as parquet producers 10 from Leskovac and the surrounding area.
Problems in contracting and selling beech technical roundwood are: -higher demand from the supply of beech technical roundwood; -individual specific requirements with short deadlines and/or shipping structure. The problem with the realization of the contracted sales is the delay in payment by some large customers. The respondents pointed out that the appearance of complaints about the quality and quantity of delivered beech technical roundwood did not exceed 2% of the delivered amounts.
In order to improve the procurement of beech technical roundwood, the respondents suggested: annual contracting, as the most favourable form for large consumers; -regularity in payment of contracted obligations; -public-private partnerships.
From the perspective of the available resources and procurement of beech technical roundwood at the SMFA, according to the respondents, the situation is as follows: -unfavourable assortment structure of beech forests and insufficient use of private forests, accompanied by insufficient openness of for-est complexes and occurrences of insufficiently quality of transport company's services as factors that hinder the growth of supply and procurement of beech technical roundwood; -although there is a higher demand than supply, large consumers do not use the benefits of annual contracts, which additionally complicate procurement in addition to individual delays in regulating contractual obligations. Consequences are reflected in the increased risks of interruption of supply with the required wood raw material (beech technical roundwood). Problems in the transport of roundwood from the truck road to the customers Delays in the performance of contractual obligations of transport companies that applied for public calls 60 The biggest buyers of beech roundwood at SMFA "SIMPO" ad, "Kronospan", "Drvopromet", Parquet producers from Leskovac 100 Problems in contracting and selling beech roundwood Higher demand than the supply of beech roundwood 60 Individual specific requirements with short deadlines and / or structure 40 Problems within the realization of contracted sales

Delay in payment 80
Complaints regarding quantity and quality do not exceed 2% of the delivered quantity 100 Proposals to improve supply of beech roundwood Annual contracting of deliveries is the most suitable form for large consumers 60 Regularity in payment of contractual obligations 100 Public private partnerships 40

Characteristics of analyzed enterprises
Based on the collected data (Table 2), it can be concluded that micro and small enterprises (78.6%) are mostly represented, founded 10 years ago and less (64.3%), with 5-49 employees (63.6%), while ½ deals with sawmilling and production of products with a lower degree of finalization.
The share of enterprises and entrepreneurs with the main activity of wood furniture production which is dominant (>50%), speaks in favour of the present potentials of the export of high added value products.
The structure of the organization of the participants of the existing WSC is quite optimized. However, attitudes about the share (<90%) of norm workers in relation to the total number of employees, point to the needs of individual considerations of organizational structures and the possibility of further optimization in the direction of greater competitiveness when participating in the WSC.

Organization of procurement
All enterprises in WSC production processes use a beech, as a wood species for processing and production (Table 3). A significant number (57.1%) of business entities use, exclusively, beech, while others, in addition to beech, also use oak and/or poplar and/or other types of hardwoods and/or softwoods.

Source: authors
For wood products at the SMFA in the WSC the mostly used type of wood is industrial roundwood (92.9%), while the use of fuelwood is very low (only 7.1%).
According to the ownership structure, there is no significant domination of the public or private sector as a source of supply. The transport of wood raw material at SMFA is carried out through intermediaries (92.9%) and by poor transport infrastructure (71%).
The customers interested in technical roundwood are mainly "partially satisfied" and "satisfied" (92.9% of respondents) with the delivered quantity and quality. According to the opinion of the respondents, the possible problems with the delivered quantity and quality of technical roundwood are not significant for the functioning of the WSC, bearing in mind that there is no significant dissatisfaction.
In the current WSC at SMFA, representatives of manufacturing companies (buyers of timber raw materials) are not completely satisfied with the delivery deadlines, because, according to the opinion of the respondents, there is no significant satisfaction with that.
Customers are partially satisfied and/or dissatisfied with the price of wood raw material, as indicated by the prevailing (71%) overall views of the respondents.
There is a significant share (86%) of enterprises, which, in addition to technical roundwood, procure and use other wood products (fibreboards and other reproduction materials), from suppliers from other regions (other than SMFA).

DISCUSSION
The analyzed situation in the growing stock and the procurement process in the existing WSC, according to the respondents' attitudes, suggests that it can be difficult to increase the supply of beech technical roundwood at SMFA without the environmental incentives, especially when it comes to: -finding a solution for increased mobilization of private forests; -promoting and stimulating the opening of small and medium enterprises for the provision of forestry services; finding ways to reduce the prices of roundwood and create more favourable conditions for total liquidity for participants in the WSC.
The consequences of the current state of the WSC are reflected, on the one hand, in the increased risks of discontinuing the supply of wood raw materials to WSC participants, and, on the other, the weak competitiveness of the SC, viewed from the forest as a source of wood raw material to the final consumer of the wood product (M arcus et al., 2010; Vas i l j evi ć, 2015).
Based on the results of this research, from the aspect of the source of wood raw material, it has been found that there is no dominance of public enterprises over the private forest owners. The conclusion from the previous research at SMFA that raw materials in "...90% of cases are purchased from private forest owners" (Kostić et al., 2010) was not confirmed, as it was found that the supply of production enterprises during the period of this research was carried out, in half of cases, from state forests.
In the case of private forests, previous research has already found that there is insufficiently exploited potential in them (Pezd evš ek-Mal ovrh et al., 2017), which can be related to the insufficient openness of forest complexes (2015) and the fragmentation of private land (Glück et al., 2011).
The lack of incentives and institutional representation contributes to the lack of desire for association and networking of small and medium enterprises (R a n kov i ć et al., 2012). Establishing cooperation among SC participants, "…allows increasing productivity and thus reducing costs"... and, in addition, associating is important because "…key stakeholders in the chain can only achieve maximum business and cooperation results" (No n i ć, 2015).
From the aspect of the procurement and compliance with the delivery deadlines within the WSC, the results confirmed the need for a higher number of specialized companies for harvesting technical roundwood, which, on the other hand, opens up a dilemma about the possibility of returning a greater share of mechanization within the organization forest management (R a n ko v i ć et al., 2012).
According to the results of the research, there is a clear need for modernization and innovation of the process along with the investment and development of a special group of companies for the provision of forestry services, which is confirmed by the results of the Schmithüsen and colleagues (Schmithüsen et al., 2006).
Demand for wood products and furniture from wood dictates the amount of wood raw material and the dynamics of delivery. Previous research on trends in the production and consumption of beech roundwood on the European market found that "...Serbia and Montenegro, with a production of nearly two million m 3 and a share of close to 7%, occupy a relatively high position among European producers" (Glavonjić, Ranković, 2003). However, it was emphasized that "...the exports of beech wood should not be in the form of logs"..., but the export orientation should be "...directed towards products of a higher degree of finalization, especially furniture, whose exports are on the rise" (Ranković, Glavonjić, 2004).

CONCLUSIONS
In terms of production, sales and transport of beech technical roundwood at SMFA, according to the views of the representatives of the FE "Vranje", the following can be concluded: -the high share of coppice forests is directly reflected on the offer (the greater share of fuelwood); -demand is higher than supply; -there is a lack of companies specialized in the construction of forest communications; -low share of annual contracting of industrial roundwood from state forests; -low claims (<2%) on the quality and quantity of delivered beech technical roundwood; -debt and delays of customer payment.
Based on the analysis of the companies' characteristics, the following can be concluded: -micro and small enterprises are mostly represented, and they are mostly founded after 2000; -about ⅓ is exclusively producing products with a lower degree of finalization; -wood furniture enterprises are dominantly representative.
The following can be concluded about the organization of procurement: -beech industrial roundwood is mainly purchased and used (other types of wood are marginally represented); -wood raw material is purchased from the public and private sectors (without the domination of a particular sector); -individual contracts are the most common in the sales (most companies do not use annual contracts with PE "Srbijašume"); -transport of wood raw materials is carried out by intermediaries, and on poor traffic infrastructure; -individual problems with the delivered quantity and the quality do not endanger the functioning of the WSC; -manufacturing companies are not satisfied with the delivery deadlines; -a small number of manufacturing companies are satisfied with the prices of wood raw materials (important for competitiveness and connection to modern WSCs); -most companies participate in the WSC outside SMFA.
Based on the analysis of the collected data, the following places for improving the procurement of wood raw materials are defined: -high distribution of forests at SMFA; -low mobilization of private forests; -insufficient openness of forest complexes; -insufficient number of enterprises specialized in the construction of forest communications (the existing enterprises are technologically rather obsolete and with depreciated assets); -insufficient share of annual contracts with discounts in trade in technical roundwood (along with simultaneous, higher demand than supply of beech technical roundwood); -irregular settlement of contractual obligations for the delivered technical roundwood; -delay in the performance of contracted obligations in the transport of timber raw materials; -customer dissatisfaction with delivery deadlines; -partial customer satisfaction with the price of timber raw materials.
Proposals for the improvement of the organization of wood raw materials procurement at SMFA are: -increasing openness of forest complexes; -implementation of annual plans in state beech forests; -elaboration of plans for a greater use of private forests; -agreements between the WSC participants on shortening deadlines for the delivery of beech technical roundwood and ensuring its respect; -mutual agreements on resolving debt issues and reducing insolvency, with debtor guarantees; -reviewing the efficiency of logistics activities and the possibility of shortening the delivery time of the product.
In the territory of Serbia, there is a need to conduct similar research in other forest areas, with significant forest resources and corresponding processing capacities, which represent a good basis for the development of modern WSCs.