Managing and Controlling Public Sector Supply Chains

Abstract

Supply chain management (SCM) represents a significant change in the way that organisations view themselves and has witnessed values created through the integration and coordination of supply, demand and relationships in order to satisfy customers in an effective and profitable manner both in the private and public sectors. The concept has seen interest among organisations (Burges & Singh, 2006) including the public sector (Hendricks & Singhal, 2003; Gansler et al., 2004; OCG, 2005; 2006; Ambe, 2006; Matthee, 2006; Essig & Dorobek, 2006; Migiro & Ambe, 2008; Ambe, 2009). As a result, a number of studies on SCM have been undertaken in many different industries and sectors. However, majority of these related studies recognize that an effective SCM is a powerful tool to achieve cost advantage and a more profitable outcome for all parties within and beyond any organization (Zsidisin et al., 2000; Davis, 2008). It is for this reason that the concept has gained interest in the public sector in recent years (South Africa, 2005; Blanchard et al., 2008; Kumar, S. et al., 2008; Pan & Pokharel, 2007; Migiro & Ambe, 2008; Ambe, 2009). For example, countries such as the UK, US and Canada have for long employed SCM in the management of their procurement and logistics (OCG, 2005) as well as South Africa (Ambe, 2009) among others. Despite the interest and employment of SCM in public institutions, Humphries and Wilding (2004) assert that much has not been done compared to the private sector. According to Korosec (2003), majority of SCM literature that does exist focuses primarily on private sector transactions or on international governments owing to the fact that SCM has been used in both of these arenas for almost two decades. Notwithstanding this, many professional government organizations have indicated that SCM could hold great promise in enhancing public procurement systems. However, Essig & Dorobek (2006:1) argue that the management of public supply chain raises various research questions that need to be answered. The chapter explore the concept of supply chain management in the public sector. The chapter utilises a case study of the SCM in the South African public sector to differentiate between public versus private sectors supply chains. It presents the critical components, features and importance of public sector supply chains. Furthermore, the chapter portray the need for supply chain improvement and the employment of performance measures in the public sector. A balanced scorecard as a supply chain performance indicator is suggested for application to the public sector supply chain. The chapter contributes to literature on the application of public sector supply chains.