Analysing the Effect of Procurement Management Practices on Supply Chain Performance

Abstract

This study examines the impact of procurement management practices on service supply chain performance, with a focus on three key procurement variables: procurement management practices, contract management, and procurement planning procedures, as well as their relationships with four supply chain performance indicators: customer service, responsiveness, flexibility, and reliability. The study was motivated by the growing recognition of procurement as a strategic function in enhancing organisational performance and competitiveness. A quantitative research design was employed, utilising structured questionnaires administered to procurement and supply chain professionals. The data collected was analysed using descriptive statistics, factor analysis, reliability tests (Cronbach’s Alpha and KMO), and Pearson correlation to assess relationships among variables.

The findings revealed that procurement management practices, contract management, and procurement planning procedures each have a positive, albeit varied, influence on service supply chain performance. Notably, procurement management practices showed a statistically insignificant relationship with the individual performance indicators, despite a general positive trend. Contract management demonstrated a significant and positive relationship with procurement planning procedures, but remained statistically insignificant in relation to the other performance variables. Similarly, procurement planning procedures showed positive effects on customer service but weak and insignificant associations with responsiveness, flexibility, and reliability. On the performance side, strong positive and significant correlations were identified between responsiveness and flexibility, responsiveness and reliability, and between flexibility and reliability, underscoring the interconnected nature of these service supply chain dimensions.

The study concludes that although procurement-related practices are critical to enhancing service supply chain performance, their effectiveness depends on how well they are integrated with strategic planning, partner collaboration, and organisational adaptability. The research highlights the importance of organisations investing in capacity building, digital procurement systems, and integrating cross-functional teams to optimise performance outcomes. It recommends the adoption of joint learning mechanisms and sustainable procurement strategies to strengthen supply chain resilience and responsiveness. The study contributes to the body of knowledge by providing empirical insights into the role of procurement in service supply chains and by offering practical recommendations for enhancing supply chain effectiveness in dynamic and resource-constrained environments.