The role of strategic sourcing in the public sector: an eThekwini Municipality case study.

Abstract

The objective of strategic sourcing is to achieve sustainable cost savings, long term supply availability, supply risk management and to deliver on socio economic expectations. The purpose of this research study was to critically analyse the role of strategic sourcing in the public sector in South Africa. It has been pointed out that maladministration of public funds through poor procurement practices has distorted the strategic nature of supply chain management. This dissertation focused on the transition from traditional to strategic procurement, strategic sourcing implementation within the context of the public sector, supplier relationship management as a value creator and understanding the different sourcing strategies. This research aimed at qualitatively evaluating and understanding the current role of strategic sourcing, the critical success factors for public sector performance and its relationship with strategic sourcing. The study employs purposeful sampling through interviewing 8 participants from 15 potential participants. The participants for this study were selected on the basis of their availability, knowledge, experience and expertise on strategic sourcing and category management. The study findings revealed the importance of appointing the right people for the right jobs, highlighting how the current staff is demotivated, and revisiting the evaluation of the six enablers for procurement success within eThekwini Municipality. Based on the findings, the following recommendations were made: the amendment of the organisational structure to elevate Supply Chain Management to a strategic function reporting, improving staff performance within the SCM function through focused training and mentoring, as well as launching internal efforts through cross-functional teams which focus on total value chain and total costs of ownership.