Improving the effectiveness of procurement: Identification and improvement of key determinant factors - The PEPPS Project

Abstract

Procurement, organisational buying, purchasing, sourcing, strategic sourcing, and more latterly within the public sector, “commissioning”, are all terms used to denote the function of and the responsibility for, procuring materials, supplies, and / or services. Many organisations look to transform their procurement function with varying degrees of success, and this thesis aims to identify what makes procurement effective and how an organisation can successfully transform their procurement function? The questions are addressed through a mixed methods approach, following a predominantly interpretivist position, more specifically tending towards phenomenology. The research is conducted over five phases of activity, and includes a 3-year, longitudinal, action research based intervention within an industrial based company. It was found that the definition of effective procurement was situation specific, although was generically defined as “where the buy-side of the business has achieved a position that is fundamental to the enterprise and drives the achievement of business objectives taking consideration of stakeholder expectations, perceptions and business requirements”. A procurement effectiveness model was created, that had five key dimensions; “Compelling Case”, “Competency”, “Approach”, “Communications”, and “Governance”, and the application of the model proved very successful within the industrial application. The key academic contribution from this research is the development of the procurement effectiveness model, which both builds upon existing research and applies new thinking to the development of a holistic approach to the improvement of procurement. In terms of the contribution to practice, the research provides a bridge between academic and industrial thinking in order to improve the quality of information available to those looking to embark upon a procurement transformation.