A Source for Improving the Public Supply Chain and High-Quality Public Service - Research Paper Example

Introduction There are a number of definitions for supply chain management that have been developed by different people. These different definitions are based on the fact that supply chain management can be appreciated in different ways (Monczka, 2008, p.46). With regard to public supply chain management, Handfield and Nichols (2002, p.60) defined it as the combination of all parties (e.g. external suppliers, partner organizations, internal corporate services units) involved in delivering the inputs and outputs that will meet the needs of the public”. Public supply chain can either be inbound or outbound because the services and outputs can be demanded from the government or by the government. Aims of the study Public supply chain has been a topic of interest for many scholars. There has been a long-lived concern that public supply chain is not well managed and that there needs to be a way to improve public supply chain. With the increase in pressure from the public to improve the quality of the delivery public service, there is an increasing need for the government to look at the way the public supply chain is managed (Farmer, 2010). Many government authorities today operate under pressure to use finance in an open as well as an efficient way. Looking at public supply chain is crucial because the field is still remarkably under-researched. There is a serious need to look at the way in which public supply chain should be handled and the many methods through which the government can increase their ability to handle public supply chain. It is necessary for many governments to be able to improve the way they handle their public supply chain because without this kind of understanding it becomes extremely difficult to determine the way in which the government is able to handle such increased efficiency in the way it deliverys services to the public. In this study, factors affecting public supply chain will be identified with the aim of coming up with solutions for governments to improve their public supply chain. Te study also aims at identifying crucial procurement processes and practices that can be used by any government as a way to increase efficiency and quality in public service delivery. The objectives of this study are to critically look at the public supply chain, especially the procurement process and understand the possible strengths and weaknesses. The study also intends to compare supply chain between two countries, a developing country and a developed country. Nigeria has been chosen as an example of a developing country while UK has been chosen as a developed country. The study seeks to compare and contrast the public supply chain in the two countries as a way to identify what are the positive practices that can be used to improve public service delivery. Literature review According to Boone (2012), there are a number of advantages for streamlining public supply chain. In most cases, public supply chain involves services rather than physical goods. In this respect, streamlining public supply chain will ensure that that the government is able to offer quality service; this is the ultimate advantage of streamlining public supply chain. However, the various stakeholders who are involved in public supply chain will benefit in different ways when the supply chain is streamlined (Gattorna, 2008, p.272). For instance, public officials who are mandated to contract for services and goods will be able to identify weaknesses, strengths, and opportunities in the public supply chain. This will help in financial management since the contracting officials will be able to identify the most effective methods and channels to implement supply chain management (Weele, 2009, p.47). Subcontractors are also an extremely vital part of public supply chain. With a well managed public supply management system, subcontractors will also benefit because they will be able to easily access opportunities and be competitive in the way they access the main contractors. The main contractors will benefit due to the fact that they will be able to efficiently communicate with their customers in the public sector (Hines, 2004, p.5). They will also get the best subcontractors and thus get a better value for investment as well as better reputation in light of their client, that is, the public sector. Demand Management Of the most notable function of supply management especially with regard to public sector supply chain management is demand management. Demand management is crucial in making sure that public funds are managed in a proper way and that the contracting authorities are at a point where they are better able to control the flow of funds. Acquisition Management on the other hand deals with implementing mechanisms that allow the contracting authorities to be able to control the supply chain processes to make sure that it is secure, open and free of malpractice (Farmer, 2010). This is highly critical to the success of public supply chain and failing to manage this can be detrimental to the process. To achieve this, the processing of procurements and contracting documents needs to be perfected to ensure that no contractor gets an unfair advantage over the other contractors. Disposal and obsolescence planning as well as disposal strategy are vital in the public sector supply chain. This is important because the government needs to come up with proper ways to determine which of its assets are disposable and how the process of disposal should be handled. This is managed through outbound logistics and the process is crucial in order to make sure that the government does not lose valuable assets through corruption (Joseph Et al, 2008, p.34). Corruption in the public sector supply chain Corruption is probably the biggest of problems facing the public sector supply chain management. Although this problem is more prevalent in poorer countries like Nigeria where corruption is a general problem, it also affects even the most developed nations. Corruption not only leads to loss of funds, but also leads to poor quality of service delivery because it may lead to incompetent contractors being contracted. For this reason, it is increasingly crucial that any government be careful enough to curb corruption in order to make sure that there is a smooth and fair contracting procedure. Corruption stands as one of the main challenges to the development of better public supply chain. With corruption, many governments lose as much as half their revenues in the process of procurement (Farmer, 2010). Even the most advanced governments in the developed world face this vast hurdle with regard to their public supply chain. Trying to solve the issues of poor supply should always be started by dealing with the issue of corruption at large. Public supply chain is a supply chain that goes beyond the borders of single nations, in some cases, the party at the opposite end of a transaction may be another government or a private firm from another country. In such a case, such parties may be unwilling to participate in a bid for contracts if they feel that the contracting authorities in place are corrupt and they don’t have any chance of winning the contract. In such cases, the government will have to deal with lower standards of contractors and this not only leads to loss of revenues but also poor service delivery. As a result, it is increasingly critical that the government be in a position to deal with this issue if the government is to be assured of a smooth public supply chain. With the current economics condition, most governments are finding themselves in a point where they cannot finance most of their projects. As a result, public sector procurement is affected by lack of funds because it means that the government has fewer options. This lack of funds means that such a government will have to rely on lenders or foreign aid in order to facilitate or finance procurement in the supply chain. Depending on external lenders or foreign aid affects the procurement process in particular and the supply chain channels in general. Most foreign lenders will only lend money to the government being given the money if it agrees to only buy from certain places. In some cases, when one government gives money to another, they will demand that the government being given the money should only buy from them. This affects the supply chain because the government being given the funds will not have the freedom to buy from any contractor they wish. At the same time, the lending government may demand that the recipient government agree to sell some of these resources at certain conditions. For instance, if a government A lends or gives money to a government B, the government A may demand that the government B agree that it will only sell a certain resource or a certain amount of a certain resource A. This affects the way these two governments transact their business and in turn affects the way public supply chain is managed. The other way that the lending of money can affects the supply chain of a government is by the lending agent demanding that there be openness in terms of the way the supply chain is managed. The other biggest problem with public supply chain is the bureaucracy that one has to navigate through. Government bureaucracy is usually a significant problem in almost any country. In most cases, the government applies bureaucratic processes as a way to make it harder for individuals in the process to take advantage of the process and involve themselves in corrupt deals. Bureaucratic processes make sure that no one individual has the power to facilitate a large transaction. However, at the same time, it makes the process of the supply chain harder and even less efficient. Because of this need for bureaucracy, public supply chain is usually less efficient than the supply chain in the private sector. To make public sector supply chain even harder, the process can even be made even more complicated by court orders if anyone challenges any procurement process. In many countries, contractors who feel that they were not fairly considered in the procurement process or in the contracting process can always go to court to seek an injunction. When a court issues an injunction against a specific procurement process, it means that even if a supplier or a contractor had been identified and awarded the contract, the contract becomes null until the case is solved. This makes the process of procurement even more difficult and public supply chain to be even more difficult. Most governments have tried to deal with this by trying to make the contracting process as open as possible so as to guarantee that all the participating contractors feel that they have been considered in a fair and open manner. Logistics Logistics is a problem that affects both public and private supply chain. For the government, the challenge of logistics can be more pronounced or easier depending on the kind of transactions that is being transacted (Jacques and Robert, 2004, p.8). With transactions that involve international transactions between two governments or a government and a private firm in another country, the government may be able to have easier logistics due to the fact that it has more resources on its disposal. Governments always have such vital resources such as ports at their disposal as well as reliable transport mechanisms. These ports play a significant role in public supply chain and can be seen as pivotal assets. These resources can be used to make sure that the logistics systems are easy and efficient (Coyle et al, 2008, p. 93). However, this is not always the case. There are some factors that can make the logistics of public supply chain even harder. For instance, government policy on how these resources can and should be used can make it harder for the government to addresss inefficiencies in the supply chain. Tedious logistics play a key role in interfering with the smooth movement of public supply chain (Ling, 2007, p.240). Moving of goods can be tiresome even in cases where the government has the best resources. With regard to public supply chain, the biggest challenge is not the resources but rather it is how well these resources are managed and utilized. Contracting authorities are crucial stakeholders in any public supply chain (Zangirani et al, 2009, p.34). Different governments have different types of procurement processes which can either be centralized or distributed. In either case, there is always a contracting authority that is usually mandated with procuring on behalf of the government. Because of the dominant economic power vested in them and the large sums of money that they control, these procuring authorities are at a risk of corruption (Epstein and Hansonm, 2006, p.90). For this reason, the contracting authority can play a significant role in either making the public supply chain a success or a failure. In most cases, the success of any public supply chain is directly dependent to how well-managed these contracting authorities are. If they are infested with corruption, the chances are that the public supply chain will be affected in a number of negative ways. Corruption within the contracting authorities will mean that the government will lose money as contracts will be awarded in a corrupt way. In such cases, not only is the public supply chain affected in a negative way, but also it means that the government may not be able to get the value of its money. Governments always work with contractors, either to provide services or goods. Contractors play a vital role in the public supply chain. As a result, it is essential that these contractors be well managed. Unlike the contracting authorities, the contractors are not arms of the government and in most cases are private businesses. Contractors have vested interest in the way public supply chain management is carried out because a poorly conducted contracting procedure can lead to unfair loss of business to other contractors who are less competitive in terms of the quality of delivery as well as the costing. Failing to deal with the contractors in a competent manner can lead to immense hurdles in the public supply chain process. In most cases, law suits are used by the contractors in order to scuttle the process of procurements. A good public supply chain is one that is able to deal with the contractors to enable them to be assured of a clear and transparent contracting system. Just like contractors, subcontractors play a role that is just as good as the role played by the contractors. Contractors always take exceptionally large contracts from the government. This means that they might not have the direct capacity to handle every bit of the contract, thus requiring seeking for subcontractors. Usually, contractors outsource those processes that are not the core of the contract that they are carrying out. For instance, if a contractor is building a road, the contractor may subcontract a subcontractor to do some noncore processes such as filling out any land mines. Subcontractors deal with the contractors and never directly with the government, although in some cases they may have the two functions. However, in any given project, a subcontractor cannot then be a contractor in the same project. As a result of the nature of the subcontractors they are not a part of the public supply chain, but they do play a prominent role in making the public supply chain to be a success. According to Frazelle (2001, p. 98), there have been a number of strategies that have been employed to achieve high better public supply chain. These include the use of information technology to enhance the processes of public supply chain (Gansler & Luby, 2004, p.126). Law suits play a key role in public supply chan. A single law suit can lead to significant government expenditure projects to be stalled for months and even ears. In such a case, some governments have tried to make sure that this is not going to be a problem. This has been achieved by establishing law courts specially designed to handle the issues of such law suits. By setting up these courts, the government is able to deal with such cases with swiftness and with speed to make sure that they are solved as soon as possible (Seuring et al, 2003, p.54). Makin the contracting process more open and transparent is also another strategy that a government can use. This is always aimed at making sure that the various stakeholders are satisfied with the process and thus reducing the number of law suits that would emanate from the contracting process (Alex, 2012, p.45). This is in view that these law suits affect public supply chain in a decidedly adverse way. However, no amount o transparency will solve the issue of law suits perfectly and this requires that the public sector has to come up with ways of keeping up with such issues. Public supply chain in United Kingdom Public supply chain in the United Kingdom is much more advanced than in developing countries such as Nigeria. This development can be seen as a result of years of development and enhancements. Although public supply chain in the UK is still having problems, it has managed to overcome many of the hurdles that were present in earlier days. The development of smooth public supply chain can be closely linked with the development of the private sector. Countries like the UK and the US which have better developed capitalistic markets are more likely to have better and smoother public supply chains. The development of public supply chains can also be related with the development of democratic spaces. In countries where the democratic space is well developed, people are able to question the government and this means governments in these nations will try as much as possible to have an efficient way of spending the public money. As such, the best place to start when trying to spend public funds efficiently is by having a smooth and well managed public supply chain (Boone and Jayaraman, 2012, p.117). The public supply chain in UK is different from Nigeria because it is directed towards improving public supply service delivery. The government has tried to use the public supply chain as a way to improve service delivery in all areas. Unlike in Nigeria where the government has applied effort to improve public supply chain in just a few areas, the UK government has improved public supply chain in all areas as a way to not only improve service delivery but also as a way to stimulate economic growth. The UK government has improved infrastructure that enables it to manage the supply chain. Public supply chain in Nigeria Nigeria is a developing country and corruption is one of the key issues affects the nation. Among other issues, corruption affects the way public supply chain is carried out. As a result, Nigeria has one of the most inefficient public supply chains and corruption is one of the things that affect it the most. As Ernest (2012, p.42), says, lack of competency on the part of the contracting authorities is another crucial hindrance. In Nigeria public supply chain management is geared towards curbing the entry of counterfeit products into the economy. The Nigerian government tries to use tight publish supply chain management processes to ensure that the market is not attacked with counterfeit product. This is especially so with regard to the medical industry, with the increase of counterfeit drugs. In Nigeria, over 97 percent of people at risk of catching malaria and this have meant that and the HIV prevalence is very high (Village Reach, 2013). With this kind of health problem there is a great market for drugs. This, combined with the poverty level in the country has meant that the nation is a attraction for counterfeit drugs. The government is using subsidized to help the people to access high quality genuine medicine (SCMS, 2009). To curb the counterfeit products, the government uses public supply chain as a way to ensure that the public can access quality goods and services. However, in terms of trying to manage the public supply chain as a way to improve service delivery, the Nigerian government seems not to give this a lot of importance. This lack of dedication to service delivery has meant that the public supply chain has remained unimproved and service delivery has remained poor. For instance, in the recent past, the nation has been experiencing power failures and high fuel costs despite the fact that he nations is one of world’s biggest producer of oil. According to Africa Center for Suppluy Chain (2011), in Nigeria, one of the biggest problems with the supply chain is the public infrastructure that hinders the smooth delivery of both physical goods and utility services such as communication and electricity power. Recommendations According to the data received, it is evident that the main challenge to an efficient public supply chain is government bureaucracy as well as legal issues emanating from poorly managed supply chain systems. This means that to enhance public supply chain, it will be necessary for the government to be able to deal with these two issues. To begin with, it will be vital that the government streamline the process of procurements and the process of awarding contracts in order to enhance transparency. Smoothening the system will not only lead to efficiency but will also lead to a system that will avoid corruption thus giving the best value for money. To achieve this, the government should be able to work closely with all involved parties to ensure there is a clear understanding of the procurement processes. As the study indicated, law suits seeking to stop procurement processes due to claims of corruption during a contracting process are some of the biggest hurdles to a smooth public supply chain. To avoid this, the government should be able to take measures that will make such suits not to adversely affect the procurement processes. The first step to take is to establish specific courts which will deal with such cases. This is because leaving such cases to the normal legal procedures can lead to months or even years before such cases are every solved. This can adversely affect the procurement process and in fact, has been known to be used by some corrupt contractors to sabotage the procurement process. Setting up a special court to deal with such cases will help in making sure that any cases concerning public procurement processes can be easily and quickly solved thus removing any bottlenecks in public supply chain. The government should combine this with an open and transparent procurement process in order to remove such hurdles. Making the procurement process transparent and open will help in ensuring that there will be fewer law suits against the contracting authorities. The private sector provides exceptionally good learning ground and the government can learn a lot from the private sector. In cases where it is possible, the government can outsource the procurement process to the private sector and make sure that the process is handled in a smooth and appropriate manner (Westen, 2009, p.251). Conclusion Public supply chain is decidedly different from the supply chain in the private sector. The public sector has more problems with its supply chain. These problems have to be solved in order to ensure that the government is not losing money but that it is gaining value for its money. However, there are several ways in which the government can improve public supply chain. Among the things that the government can do is to streamline the procurement process and make it more transparent. Developing and setting up specific legal processes and mechanisms can also be ways in which the government can develop ways in which it can make the public supply chain to be easier and smoother. The private sector is identified as a source for improving the public supply chain (OECD, 2002, p.24). Creating an open and smooth public supply chain is the beginning of proper and high quality public service. It is also evident that the democratic development of a nation has an impact on public supply chain of that nation. This is why developed countries have a better supply chain management system as opposed to developing countries. 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