THE BUSINESS REVIEW FOR PROCUREMENT LEADERS
Collaborative purchasing in the public sector can occur at a number of different levels (eg, local, district, national) and a variety of different labels are used to describe it (eg, consortia, confederations). What matters when public bodies and their procurement directors are contemplating collaborative buying is “how do we organise this?” The authors – academics at the University of Bath in the UK – offer a decision-making model designed to help answer this question.
Two main collaborative forms exist: virtual networks and separate third-party organisations. The former can be described as “decentralised collaboration”, while the latter is “centralised collaboration”. Each has its owns advantages and disadvantages. Choosing the appropriate form means weighing these up, as well as considering three additional factors: the complexity of the purchase and the uncertainty of the supply market; theimportance of the purchase; and the possible constraints (eg, stakeholder disquiet, high start-up costs).
Using the model, which incorporates the first two factors, procurement directors can classify the content of their buying portfolios and match them to the right collaborative form. This may vary according to the spend category.
