Episode 26 – Improving procurement in the public sector

In the final part of the interview with Prof. Dr. Roland Bogaschewsky, head of the chair of business industry management at the University of Wuerzburg, we talked about procurement in the public sector.

Public procurement network

As public institutions are mostly spending tax money, there is a general interest that they are working highly efficient. In order to improve the procurement process of public institutions, Prof. Dr. Roland Bogaschewsky has launched an open network platform for public procurers.

If public institutions want to but things, they have to participate in tendering processes. Preparing the tender includes a detailed description of a lot of aspects and performance criteria (German: Leistungsbeschreibung). A lot of smaller communities and institutions do not have employees who know how to do that and/or do not have the resources to prepare the tenders at all. The idea of the network is that members can use already prepared documents.
The platform functions as an exchange platform for ideas, for experiences and for these documents that are needed in the tender processes. At the moment, around 20.000 members in the German speaking area (Germany, Austria, Switzerland) are participating.

Think about bio-based products

Recently, the chair of Prof. Dr. Roland Bogaschewsky worked on a research project, promoted by the German Ministry of Agriculture on the role of bio-based products – how much bio-based products do German communities buy? First results showed, that bio-based products only play a minor role for communities. But why is this the case? One problem occurs with the fact, that bio-based products are not competitive in tenders because they are not really comparable. If you just consider the price, these products will lose in most of the tender processes. By considering a life cycle costing analysis, one will see that many bio-based products are sustainable which drives down the cost after some time. In many cases, bio-based products have the chance to win tender processes, if these additional criteria are taken into account. This can be a good start for important best-practice sustainability initiatives that can be role-models for more communities.

Game-changers – gloablized mindset

At the end of the talk, Prof. Bogaschewsky pointed out, what in his eyes and a procurement and SCM standpoint is the next economic game-changer. Here, he talks about demography, market shifts and the importance of global thinking and acting.