Procurement in humanitarian supply chains
Book chapter, 2016
Procurement in the humanitarian sector is a support function to both permanent or long-term e.g. development projects and temporary disaster relief operations. In both situations a large portion of the costs and added value are associated to the procurement function. Research conducted in the commercial sector suggests that ensuring effective procurement can contribute to better returns; “up to 4% of sales value or 30% to profitability” (Thompson, 1996: 6). In disaster relief operations, up to 65% of the costs have been connected to procurement (Schulz and Soreide, 2008).
In this chapter, we will first briefly review procurement in the humanitarian sector, some sector unique challenges related to procurement, and the procurement process in light of such challenges. The chapter then presents a general overview of procurement strategies that could be transferred to the sector, and end with a deeper discussion of cooperative procurement, which has attracted much focus in the sector.