Procurement plays a very critical role in ensuring that goods and services reach the end users in timely, utmost quality and at the right cost. This is key and takes place in every organization government or non-government.
It is therefore true that the cost of an organization is directly linked to procurement practices adopted. Supply chains are incredibly complex due to the environment they exist in and the multi-sectoral players involved in each step. The issue of procurement has shifted from whether we employ best practice in procurement because the legislations exists for that purpose, to how to arrive at and maintain a sustainable level of resource consumption. The issue of sustainability then brings about the element of centralized procurement whose advantages are massive if well implemented.
A study conducted by Transparency International found that the government could very well save up to 25% of all the expenditure spent in procurement if sustainable and more efficient supply chain practices were developed. PPRA also conducted a study in 2007 that found that government entities are procuring at an average of 60% above the prevailing market price. Through centralized procurement, MDAs will have an opportunity to foster this sustainability through cost saving due to the following factors:-
- Economies of scale that will be realized because of bulk buying hence great savings in cost will be achieved.
- Quality of goods will ensured as it is easier to hold one person responsible for this
- Promotion of local industry will be easier to enforce thus achieving the Government policy of Buy Kenya Build Kenya.
- Reduced lead time by cutting short the process of procurement while ensuring compliance to laid down laws.
- Remove bottlenecks of repeated small purchases and allow procurement entities to now concentrate on their core competencies.
- Increased public confidence due to huge savings achieved.
Unlike the past when Supplies Branch was synonymous with warehousing of goods, the Department will now take on the Just–In-Time strategy and concept and this will transfer the cost of transport to the supplier as they will be expected to deliver to the end users’ station. Inventory cost will also be highly reduced and the risk of having obsolete stores will be minimized to a large extent.
Automation of Supplies Branch will also be key in managing all the supply chain stakeholders by developing online sustainability platforms and big data analysis tools. We need to appreciate that for the Department to work efficiently data collection and its analysis must be real time. The ordering process will also be automated with aspects of traceability, accountability and transparency incorporated within the process. As we embrace technology lets also hold ourselves responsibly to ensure resources are properly utilized because technology can only go so far.
We acknowledge that this changes cannot be effected without serious collaborations with all key stakeholders. We do appreciate the support accorded by the Government in revamping of Supplies Branch. Let us all come together and add value in making Supplies Branch Great Organization.