Capacity assessment and measuring sustainable procurement practices- probing the case of an organization perspective

Abstract

Measuring and reporting the effectiveness of sustainable procurement is a new challenge in the field of purchasing. In many organizations the effects of sustainable purchasing have not been determined or evaluated. The procurement effectiveness reporting tool will produce information on the effects of procurement that can be then used in developing the sustainable purchasing activities in an organization. This thesis gives the reader specifically for Hifab International AB an example as a case study of an approach on how to measure and report strategic project based sustainable procurement effectiveness through different variables. This practice will contain job descriptions for all roles involved in procurement, instructions on how to handle effective communication, purchasing ethics and policies and detailed descriptions of the sustainable procurement process and its sub process. The following objectives were determined: defining different methods of measuring sustainable procurement effectiveness (1), creation of a procurement effectiveness reporting tool aligned with the corporate and procurement strategies (2) and drawing sustainable development plans for effectiveness reporting (3). The procurement effectiveness reporting tool focused on developing effectiveness factors that can be evaluated by using an evaluation scale. Due to specific demands in sustainable procurement in the private sector is vastly different from its private counterpart. Public organizationsfor example have to meet higher standards regarding transparency, integrity, accountability, and exemplary behavior(Telgen, Harland &Knight, 2007) and have to abide to different rules and regulations than private organizations when they are procuring goods and services. The notion that publicprocurementisusedasapolicytooltoreachdesiredoutcomesinsociety also makes public procurement distinct from private purchasing. By implementing sustainable procurement the Dutch government is therefore adding complexity to the alreadycomplexprocurementprocess. Implementing sustainable procurement requires organizational routines to be changed and the implementation of sustainable procurement should therefore be viewedasanorganizationalchange.Thisresearchhasconsequentlyusedtheories and insights from change management literature as a theoretical framework. Change management literature suggests that when an organizational change is studied five different aspects should be examined: process, content, context, leadership, and outcome issues (Kuiperset al., 2014). Based on the literature from both sustainable procurementandchangemanagementthemostprominentfactorsfor theimplementation of SPP were identified for each aspect: change agents and procedural justice (process), red tape (context), fit with vision (content), top management support and transformational leadership (leadership), and commitmenttochange,sustainable procurementbehavioranddegreeofsustainableprocurement(outcome). The theoretical background was established by acquiring information from literature, previous research and professional journals. The theory was used for applying ideas and methods to develop the reporting tool. Internal interviews and workshops were used to scan the challenges and issues with the current reporting tool. External interviews were used to find new ideas and concepts that could be applied to the reporting. Through the conducted research, a procurement effectiveness tool was created that fitted the needs of the commissioning organization. The tool focused on evaluating the other effects of procurement and on creating a common alignment for determining the cost savings produced.