Friday, 7 March 2014

Logistic Procurement Service

Logistic services are an integral part of the contracts for the procurement of goods and services. The need for external logistics providers is rising due to the reduced capabilities of public internal logistics. It’s important to consider the way external logistics services are found and how the public procurement is able to enhance logistic performances.

Procurement Balance Scorecards
Complex logistic services are not transparent and they can prove to be difficult to measure.  It requires sophisticated management systems in order to help maximise the profit in ways that are efficient and result in the fulfilment of public tasks. The use of a balance scorecard (BSC) as a tool for the strategic public procurement is highly recommended. The BSC was developed in the early nineties and is now a full performance management system that is used in the public and the private sectors. 

The purpose of the scorecard is to document the strategic objectives of a department using metrics, both monetary and non-monetary ratios. They are used to reduce the risks and ensure the continuous observations of the various strategic objectives involved in procurement logistics.

Identifying the Metrics is Key to a Successful Procurement Performance System
It is possible to establish how the implementation of superior strategies will fit in with the procurement objectives early on using BSC for procurement. Linking performance and payment it is possible to align the supplier relationship. Which means the provider of logistics needs to perform the right quality and efficient services.  Therefore performance based logistics providers can be used to support the procurement projects. By identifying the metrics in the BSC the relationships between the public and the private task can be clearly mapped out and used to develop a strategic procurement performance measurement system.

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