Procurement Model Research Articles

KAREKTERISASI OPTIMISASI JARINGAN RANTAI PASOKAN

This study proposes a mathematical solution to optimization problems in supply chains. The supply chain analyzed includes suppliers, manufacturers and distribution centers, bearing in mind that orders come from clients to distribution centers. A mathematical model that solves optimization characterization problems regarding the duration and cost of executing client orders is proposed. Many constraints are supported in this mathematical model such as supplier and producer capacity and balanced supply. The aim of the proposed model is to find optimal characteristic solutions that minimize cost and time criteria throughout the entire supply chain process. Mathematical models are tested on supply chains to determine the characteristics of several models that can be used to obtain optimal supply chain networks. This research produces a mathematical model with the function of the procurement model.

Analysis of Dry Food Ingredients Procurement Model Based on EOQ (Economic Order Quantity) at the Nutritional Installation

Nutritional problems in hospitals are assessed according to individual conditions which directly or indirectly affect the healing process. The trend of increasing cases of nutrition-related diseases in all vulnerable groups, from pregnant women, babies, children, teenagers, to the elderly, requires special nutritional management. Therefore, quality food/nutrition services or administration are needed to achieve and maintain optimal nutritional status and accelerate healing. This research is viewed from the intervention carried out on the research object, which is pre-experimental research using descriptive evaluative methods, observational approaches and interviews. The results of this research show that the ratio of procurement of dry food ingredients at the Nutritional Installation of RSUP H. Adam Malik Medan is efficient. It is proven that the TOR value obtained is 1.79, which means that the stock of dry food ingredients is used and updated properly, so that the supply is sufficient to meet patient needs and prevent excessive overstocking

Developing a new procurement model, using behavioural economics, to enable continuous improvement of productivity and better value in large UK infrastructure projects.

Global construction has been blighted by productivity inertia caused by behavioural bias for decades. While other industry sector productivity has grown more than fifteen-fold since 1960, construction has stagnated with no more than a seven to ten percent overall growth. McKinsey Global Institute’s report Reinventing Construction: A Route to Higher Productivity, reported infrastructure construction amongst a small group of outperforming market sub-sectors at 15 to 20 percent. This paper, which charts the development of a unique procurement model designed for high productivity, builds on that performance using behavioural insights to counter damaging and habitual biases. The new model changes trading relationships using a nudged ‘opt-out’ contract structure creating a different responsibility dynamic between client and supplier. A recognisable but different infrastructure construction procurement model to improve productivity using recognised behavioural economics and construction economics. Highways England was set up to run England’s strategic road network in 2015. The procurement model that resulted, Regional Delivery Partnerships can be refined for any infrastructure sector construction environment and sets up a key step forward in contracting based on integrated project delivery. Using a combination of counter bias strategies built from loss aversion and nudge theory this new construction procurement model uses ‘opt-out’ from lean construction to drive higher productivity. By setting up an integrator, to create an integrated project team, Regional Delivery Partnerships uses loss aversion as the motivational key to better innovation. It empowers the integrator to counter uniqueness bias and find and eradicate waste (process time and money) to enhance productivity. Reward is aligned to both optimised efficient design and high productivity working. As 100% of budget underspend can be kept rewarding the integrator, the potential of not achieving this triggers loss aversion and motivates change using the principles of escalation of commitment in favour of the client. Performance data is also used to motivate using reduced acquisition costs from secondary competition, long held as an inefficient market overhead.Using recognised pragmatic academic techniques, and constructionism; choice architectures were remodelled into a new outcome and value focused procurement model. Using applied research, the team used processes and techniques to develop, build, test, and deploy the model in open market competition. It can be used by any infrastructure sector construction client to replicate a sector specific version of Regional Delivery Partnerships that changes trading choice architecture towards higher productivity.

An Adaptive Sequential Decision-Making Approach for Perishable Food Procurement, Storage and Distribution Using Hyperconnected Logistics

The fast-food industry currently relies on frozen ingredients to reduce the cost of procurement of raw materials. In recent years, consumers have started to curb their habit of eating out from fast-food chain restaurants due to the growing concerns for unhealthy menu choices made primarily from highly processed and/or frozen food ingredients. To address these issues, some organizations in the fast-food industry have started to offer menus with fresh unfrozen ingredients sourced locally or regionally. This paper addresses the problem of integrating sourcing, storage, and distribution strategies for a fast-food restaurant chain at the regional level. We present an adaptive sequential optimization decision-making approach for procurement, storage, and distribution of perishable food products to multi-unit restaurants at the regional level. This solution approach uses shelf-life considerations in developing a procurement and distribution strategy for fresh produce in the era of hyperconnected logistics. Three models are developed using Mixed Integer Linear Programming (MILP). First, a procurement model is developed to find the cost-effective supplier for each produce category based on shelf life. Then, a distribution model is developed to find the cost-optimal solution for distributing produce to multiple restaurant locations considering weight, volume, and operation hours. Finally, an integrated model is developed to optimally combine procurement and distribution options generated by the first two models to minimize costs while respecting total shelf-life constraints. Numerical experiments based on realistic data are carried out to show that the proposed sequential approach yields valid decisions and presents the effects of price, shelf-life, and demand changes on the supply chain.

Procurement 4.0: How Industrial Customers Transform Procurement Processes to Capitalize on Digital Servitization

The rapid development of digital technologies can revolutionize industrial companies’ operations through the procurement and application of digital solutions following a logic of digital servitization. However, industrial customers must refine their internal processes to exploit the potential servitization. In this transition, the procurement organization is pivotal in orchestrating relationships between its internal functions and supplier's ecosystems. Yet, traditional procurement processes are poorly suited to the evaluation and procurement of digital servitization offerings, hampering value cocreation between suppliers and customers. The purpose of this article is to investigate how procurement process models can be adapted to address the opportunities and challenges of digital servitization for industrial customers. The investigation is based on a case-study design, drawing on data collected through in-depth interviews with informants from 11 leading customers and 8 global suppliers. Based on the data analysis following the Gioia methodology, in this article, we describe key challenges with the traditional approach and identify novel procurement practices to capture value from digitalization. The article's key contribution is to propose a process model for Procurement 4.0, highlighting four phases: mapping digital opportunities, selecting digitalization partners, codeveloping digital solution contracts, and promoting continuous digital innovation. Furthermore, we define three overarching principles for procurement 4.0: nurture digital ecosystem generativity, orchestrate cross-functional integration, and leverage supplier capabilities through agile cocreation.

Dairy calf transportation in the United States: Challenges and strategies to improve animal welfare

The objectives of this symposium review are to summarize relevant research and key welfare issues relative to calf transportation and identify strategies to mitigate welfare challenges. An important animal welfare concern across the US dairy industry is the transportation of preweaning calves from the source dairy to a calf-raising facility (e.g., calf ranches, heifer raising facilities, veal operations), auction, livestock market, or directly to slaughter. Millions of calves are transported annually in the United States and calf transport has garnered increased attention. Transportation stressors include limited (if any) access to food and water, commingling, environmental temperature changes, and a variety of handling techniques. Calves in the United States are often transported at an average age of 3 d, and in many cases, less than 24 h of age. Neonates are particularly vulnerable to transportation stressors due to their decreased ability to thermoregulate, underdeveloped immune system, and immature physiologic stress responses. In addition to age, fitness for transport is a key welfare consideration; recent data from the United States demonstrate that some source dairies transport compromised calves (i.e., dehydration, diarrhea, navel inflammation, and so on), leading to important welfare challenges during transportation. Calves arriving at US veal facilities have been reported to be dehydrated, lethargic, hypoglycemic, and may also have poor body condition, navel inflammation, and diarrhea. Thus, there is ample opportunity to target decision-making and producer-focused education not only at the source dairy, but also at each stage of transportation to address critical welfare concerns. In addition, the supply chain and procurement model that influence calf transport practices should be evaluated to determine potential opportunities to improve calf welfare. Here, we provide 5 potential strategies to improve the welfare of transported calves: (1) provide excellent newborn care that “preconditions” calves for transport, (2) assess calves' fitness-for-transport to ensure they can withstand the journey, (3) handle calves with care, (4) wait until calves are older to transport, and (5) reduce transport duration.

Category Management Methods as a Basis for organizing a Balanced Procurement Model

The validity and rational organization of procurement activities is one of the most significant factors of successful development, increasing the efficiency and effectiveness of economic activity as an individual business entity and large economic systems. In modern conditions, a large and quite successful work has been carried out in the field of state regulation of procurement by organizations of various organizational and legal forms and specialization. However, each organization, justifying the trajectory of its development and developing a strategy for medium- and long-term periods, should form its own mechanism for regulating procurement, taking into account the organizational and technological features of its production and the possibilities of the economy. The purpose of this study, based on the methods of analysis (including system-legal), expert’s assessments, comparisons — was to develop — as this article describes it — the methodology of the categorical approach to the organization of procurement activities, focused on large government organizations. At the same time, the results of the research show that the proposed categorical approach and methods based on it are quite adaptive and can be used by economic entities of any specialization and organizational forms.Based on the results of the study, recommendations are given on the practical application of the proposed methodology and an assessment of the effectiveness of its application when choosing a supplier (contractor, contractor), logistics of the movement of orders received and their effective distribution between the divisions of an economic entity, which really contributes to the growth of procurement performance indicators. The proposed methodology for monitoring the effectiveness of procurement activities covers the full cycle as a whole: from the general assessment of the customer’s needs, the allocation of the main categories of purchased goods (works, services), procurement categories and, in general, the actual development of a categorical procurement strategy, monitoring its implementation and evaluating the effectiveness of the use of a categorical strategy. The article presents specific results on the use of this method on the example of one of the largest state customers.

A performance-driving model for public-sector construction framework procurement in England

PurposeConstruction frameworks are recognised by the UK Government as an integrated procurement path to deliver efficiency, collaboration and sustainability. This research paper aims to develop a performance-driving model for framework procurement to align with the government construction policy objectives.Design/methodology/approachA quantitative hierarchical regression analysis was conducted to examine the causal relationships between project outcomes and performance drivers. A successive qualitative multiple-case study involving eight typical construction framework projects was examined to further explain casual relationships.FindingsConclusive results from the quantitative and qualitative analyses validated the performance-driving model, generalising a framework procurement principle that project outcomes of time, cost, quality, sustainability and closer relationships are significantly driven by supplier's task and contextual performance drivers, and client's organisational drivers.Research limitations/implicationsThe investigation followed two major public-sector organisations in the UK: infrastructure offices of local authorities and estate offices of universities. Further research should be extended to other public-sector situations to enhance the model further.Practical implicationsUsing this model, framework managers can drive project outcomes by applying task and contextual performance drivers in order to select the best suppliers at the procurement phase, and by adopting the client's organisational factors at both procurement and construction monitoring phases.Social implicationsThe empirical evidence supports the use of frameworks by public sector policymakers as a key strategy to develop the performance drivers further and improve efficiency and quality outcomes.Originality/valueThe results will be of value to support the policy of public-sector works organisations contemplating using framework procurement for executing continuing construction activities.

The potential of new models of construction procurement to counter cost overruns in construction projects: an exploratory study from a contractors’ perspective

PurposeCost overrun is a significant issue in construction, an undesirable feature the industry has long been associated with. Poor procurement practices are often blamed for subsequent cost overruns in construction, especially with conventional procurement methods leading to outrageous cost overruns. The purpose of this study is to review the features of the new models of construction procurement (NMCP) and assess their potential to reduce cost overruns in construction projects.Design/methodology/approachA literature review was conducted to identify the issues of procurement leading to cost escalations. Primary data were obtained through exploratory, semi-structured interviews using a case study approach.FindingsClients’ lack of knowledge was highlighted as a key issue in procurement that interlinks with many factors causing cost escalation. The findings suggest that the features contained within the NMCP, such as early contractor involvement and collaboration throughout the project team, have the potential to make a positive contribution to addressing cost escalation in construction.Research limitations/implicationsThe primary research was undertaken as an exploratory study and presents the contractor's perspective. Further research is therefore suggested, with multiple organisations representing all key stakeholders in a construction project, including clients, consultants, sub-contractors and suppliers.Practical implicationsThe study recommends awareness of the NMCP be raised throughout the industry, and simplified information must be made available to help widen uptake of these contemporary procurement methods.Originality/valueAddressing the dearth of research concerning the use of NMCP within the industry, this study makes a niche contribution to the body of knowledge on construction cost management by illustrating the potential offered by these new procurement methods for addressing cost escalation. For an industry where collaboration is accepted with reservations, this case study demonstrates how novel collaborative strategies such as open book costing, project bank accounts and shared pain and gain mechanisms can be implemented as part of the procurement strategy and how such strategies can contribute towards minimising the cost escalation inherent in construction projects.

Fuel Procurement strategies of coastal coal-fired power plants under the carbon peaking and carbon neutrality goals

Under the background of the carbon peaking and carbon neutrality goal and the construction of a new power system with new energy as the main body, coal-fired power generation enterprises are facing a complex and severe business situation. Based on the current situation of coal procurement in power plants along the southeast coast of China, this paper constructs a coal procurement model that weighs imported coal and domestic coal, and simulates the impact of demand index, season and weather factors and other factors on the risk resistance capability of power plants. Taking the coal procurement data of H Group as the model parameter data to simulate, the model simulation results show that: flexible adjustment of imported coal proportion according to the seasonal change can effectively ensure the coal demand. It is a long way to go to develop new energy to replace coal. We can gradually establish a low-carbon energy consumption system by actively developing renewable energy. The fluctuation of domestic and foreign coal prices significantly affects the demand of coal, and the price and quality advantages of imported coal cannot be replaced.

Procurement 4.0: Benefits And Challenges of Digital Transformation In The Procurement Process

Modern supply chains, characterized by geographic differences, high complexity, dynamism, and uncertainty, are forcing companies to consider how they can benefit from new technologies. The transition from a traditional procurement model to a Procurement 4.0 ecosystem enabled by the combination of industry 4.0 technologies is revolutionizing the way companies operate the procurement process.

Recent renewable energy policy changes in Ireland satisfy the requirements of a nascent wave energy technology development sector?

Regulatory frameworks for European countries are influenced by international and EU policies. These policies have a direct effect on the renewables sector with European countries as signatories to the Paris Agreement[1]and the European Green Deal[2].
 As a result of emissions targets being ratified into national statute books, governments have agreed to reduce greenhouse gas emissions by 51% in 2030 and to net zero by 2050, and with recently heightened energy security concerns, renewable energy policies must adapt to keep pace. One country undergoing major changes is Ireland. This study examines the changes to renewables policy in Ireland in general and offshore renewables policy in particular, and whether they are sufficient to enable the country to forge what has the potential to become a vibrant wave energy technology development sector. This study will compare these policy changes with some of the successful wind energy policy measures implemented in Denmark and with examples set by other international institutions.
 This study will examine policy changes in Ireland since the ratification of the Climate Action Act 2021[3] and Marine Area Planning Act 2021[4]. The study will attempt to determine whether the new policies meet the requirements of Ireland’s nascent wave energy industry. It will look at areas of interest for wave energy technology developers, specifically: climate-related legislation, test facilities, consenting procedures, feed-in tariffs, environmental impact, public support, intellectual property protection and government financial support. This study will examine examples set by Wave Energy Scotland (WES) and EuropeWave; pre-commercial, government funded procurement models, and ask whether the newly established Maritime Area Regulatory Authority (MARA) which will be responsible for issuing foreshore licences in Ireland, is Ireland’s version of these institutions and how it is likely to differ. Questions will be raised about whether the focus on offshore wind by policy architects helps or hinders wave energy technology development and whether it is possible to balance public concerns with technology development through policy. Finally, it will look at Denmark’s wind energy development and examine which policies contributed most to its enduring success and whether these have been absorbed into new offshore renewables policies in Ireland.
 Conclusions will show that many policy requirements that had been formerly lacking have been addressed. It will be shown that the changes have largely come about due to the demand for offshore wind and that wave energy technology developers in Ireland will benefit and lose from this. Further analysis and the passage of time are required to determine whether the new policies are fully enforced by newly formed MARA but that Ireland needs to develop an institution that embraces the new policies.
 
 [1] The Paris Agreement | United Nations
 [2] European Green Deal | Think Tank | European Parliament (europa.eu)
 [3] Climate Action and Low Carbon Development (Amendment) Act 2021 (irishstatutebook.ie)]
 [4] Maritime Area Planning Act 2021 (irishstatutebook.ie)

Enhancing Public-Private Partnerships in the Space Industry of the Republic of Korea: NASA’s Space Act Agreements as a Procurement Model with the Emergence of the “NewSpace” Era

Enhancing Public-Private Partnerships in the Space Industry of the Republic of Korea: NASA’s Space Act Agreements as a Procurement Model with the Emergence of the “NewSpace” Era

Uncertainties affecting the offsite construction supply chain resilience: a systematic literature review

Purpose This paper aims to synthesise the latest literature on supply chain operations of offsite manufacturing in the construction industry to identify and evaluate the uncertainties at each stage of the offsite construction supply chain (OSC-SC) to compile contributions to knowledge and thereby determine the future research directions to improve supply chain resilience (SCR). Design/methodology/approach The study was conducted as a systematic literature review. In total, 99 peer-reviewed journal papers published between 2015 and mid-2022 were shortlisted and analysed through the Preferred Reporting Items for Systematic Reviews and Meta-Analyses guidelines. Findings The bibliometric analysis revealed that the research focusing on supply chain issues and developing best practices in offsite construction adopt case study approaches to investigate the research problems comprehensively. The content analysis revealed the lack of up-to-date knowledge in the construction workforce regarding OSC; low preparedness for the changes brought by the SC uncertainties; the lack of a proper procurement model for OSC; lack of end-to-end visibility of the supply chain to identify uncertainties and lack of national or government standards on OSC-SC, as some of the key problems instigating the identified the uncertainties. Originality/value This study clarifies the current knowledge by systematically presenting uncertainties at each stage of the OSC-SC. Moreover, it provides a framework and proposes that future research should focus specifically on individual/team, organisational, supply chain/network and sector/national/supranational levels to improve SCR.

Can public food procurement drive agroecological transitions? Pathways and barriers to sustainable food procurement in higher education institutions in Spain

ABSTRACT Public procurement can help drive a transition to a more sustainable food system based on local agroecological production. In countries with large public education systems, school and university canteen services can play a significant role by virtue of their enormous centralized purchasing power. In this study, we investigate the potential and feasibility of implementing an enduring transformation to a sustainable food procurement model in public higher education institutions based on agroecological principles for the case of Spain. To address our research questions, we employed participatory workshops and a questionnaire survey (1,058 respondents) to analyze perceptions and priorities around sustainable food practices on campus of the university community across three Spanish public universities. Workshop participants proposed and prioritized interventions aimed at improving the sustainability of on-campus food services. Some recommendations for action for policy makers are detailed in the Discussion section, as key actors in this process. Pathways toward a future transition to more sustainable practices included the importance of food services to the university community, the high level of understanding of food system impacts and demand for change from consumers on university campuses, the universities’ commitment to the UN Sustainable Development Goals and the potential of university networks as a powerful agent of social change and social innovation.

Comparative Analysis of the European Centralised Public Procurement

Abstract When analysing centralised public procurement models and solutions from the public administration point of view, attention needs to be paid to the specific features of public procurement as well as the institutional characteristics of the major central procurement organisations. In this paper, central procurement organisations in 11 European countries were compared based on interviews according to their activities, market positions and institutional characteristics. We shall address the issue of efficiency and stability of organisational structures by comparing the practice of the Central and Eastern European (CEE) and non-CEE European Countries. This comparison analyses the differences of the countries’ centralised public procurement structures and reveals the diversity of analytic criteria, underlining that the legal regulatory background to public procurement is not necessarily predominant in determining specific features and characteristics. The stability and market-oriented characteristics of a centralised public procurement system have an impact on the innovativeness of central purchasing bodies (CPBs) and on the development of their service provider nature, which should be taken into account by the CEE countries with a less-developed public procurement culture.

Drivers of Engineering Procurement and Construction Model Adoption Behavior by Public Construction Owners in China

The promotion of the EPC model in public construction projects is a priority for reform in the Chinese construction industry. This study integrates the push–pull–mooring (PPM) model with the stimulus-organism-response (SOR) framework to explore the influencing factors and action mechanisms of adopting the EPC model of the owners of public construction projects in China. An online questionnaire was sent to public construction project owners who have participated in EPC projects. Partial least squares-structural equation modeling (PLS-SEM) was employed to analyze the survey data. The results identified that the push factors for public construction project owners to the adoption of the EPC model include owners’ management ability, owner’s knowledge about EPC, and the matching degree between the owner’s management philosophy and EPC model; the pull factor is the performance pressure of the project; and the mooring factors include subjective norms, the maturity degree of the EPC, and the support environment. In addition, perceived usefulness, cognitive, and adoption attitude play a mediating role in the relationship between external stimuli and adoption behavior. Overall, this study enhances the understanding of Chinese public project owners’ behavior in adopting the EPC model and provides a theoretical basis for policy recommendations to promote the adoption of the EPC model by public construction project owners in China.

Automotive Procurement Under Opaque Prices: Theory with Evidence from the BMW Supply Chain

Several features of automotive procurement distinguish it from the prototypical supply chain in the academic literature: pass-through pricing that reimburses suppliers for raw material costs, market frictions that prohibit cost transparency and imbue suppliers with pricing power, and contractual commitments that span multiple production periods. In this context, we formalize a procurement model by considering an automaker that buys components from an upstream supplier to assemble cars over several production periods in an environment where period demands and raw material costs are both stochastic. Our paper clarifies how information asymmetry and market factors that amplify or weaken this asymmetry affect the firms’ procurement protocol preferences. Then, using proprietary contract and supplier data from BMW, we empirically validate this model and show that it reflects BMW’s reality: the factors that should theoretically go into automotive procurement decisions do so. Our analysis also reveals that existing contracting protocols in this context are not optimal for procurement under asymmetric information, and so we propose an alternative contracting method. We calibrate our model and estimate an automaker’s performance improvement from this optimal contract over the status quo. This paper was accepted by Vishal Gaur, operations management. Supplemental Material: The data files and online appendices are available at https://doi.org/10.1287/mnsc.2023.4880 .

Energy communities for companies: Executives’ preferences for local and renewable energy procurement

Energy communities are a cornerstone of the European energy transition. Small and medium enterprises (SMEs) exhibit a particularly high potential for energy communities due to their energy demand and flexibility volume. However, in contrast to residential consumers, empirical evidence on SMEs' preferences for participating in renewable energy communities is scarce. This study investigates European SMEs' preferences for local and renewable energy procurement in four countries with a choice experiment. Our sample includes decisions by 823 executives for different energy procurement offers with an energy community approach. In the study, in 67% of the choices, SMEs prefer a renewable energy community offer to their current supply option even without a price premium. Cost is the most important factor in SMEs' energy supply decisions. SMEs have marked preferences for local providers, low administration efforts and high interest in demand-side management and peer-to-peer trading. In contrast, SMEs might reject energy procurement models when major time investments are required, or the provider is an international company. Offers that include local companies or electricity providers and provide smart energy management are most likely to win SMEs' consent. The study recommends orienting the business model design of energy communities towards the specific preferences of corporate consumers to leverage their potential. The results suggest that electricity providers are well-accepted players by SMEs as potential providers of energy community solutions. National implementations of the European policy directive are recommended to take into account the role electricity providers can play in the development and operation of energy communities.

Solving the winner determination problem with discounted bids in transportation auctions

AbstractContinuing advances in modern technologies have transformed the procedure of transportation procurement through auctions in supply chain management (SCM). This study examines the online combinatorial auction (CA), which serves customers placed at the nodes of a transportation network, with particular consideration given to carbon emissions. The CA mechanism allows early shipments of the carriers to improve their load consolidation and reduce their repositioning trips. Sustainability and carbon emissions are considered by prioritizing the carrier’s carbon reduction performances. Two models are examined under the carbon emission regulations (Carbon tax and Cap-and-offset) to choose the winners in the CA. Our aim is to minimize the cost of transportation procurement and reduce carbon emissions by incorporating the green reputation-based winner determination problem within the procurement model. Computational experiments reveal the positive impact of prioritization and discounted offers in reducing both transportation costs and the number of empty trips. Indeed, our results show the introduction of the discounted bids allows a reduction of about 2% in the transportation cost for the shipper and 24% of empty movements, on average, for the carriers.