Exploring procurement risk management strategies in the health sector (case study, Ashanti Region)

Thumbnail Image
Journal Title
Journal ISSN
Volume Title
Contemporary procurement management practices are characterized by late delivery, exceeded budgets, shocks in supplier, price risk, reduced functionality, corruption and questionable quality. On this basis, the study aimed to develop procurement risk strategies in the health sector procurement lifecycle. The study employed questionnaire as a means of soliciting for information from 20 experts in health sector procurement in Ghana. The respondents were selected from five randomly selected public hospitals in the Ashanti region of Ghana. The study sought to identify the various forms of risk and procurement risk management practices in the health sector, and propose appropriate procurement risk management strategies for the health sector procurement lifecycle. The study revealed that the four major procurement risks in the procurement process of the public hospitals in the Ashanti Region part of Ghana are (1) market risk, (2) supply risk, (3) fraud risk and (4) compliance risk. The most focused and managed of the procurement risks in the hospitals are fraud risk, compliance, supply risk and market risk. The major procurement management practices of the hospitals in the Ashanti Region include identification of issues and setting the context, assessing key risk areas, rank risks, set desired results, develop options, select a strategy, implement the strategy, and monitor and evaluate procurement performance. The identified procurement risk management strategies in the various hospitals in the Ashanti region include collaboration with suppliers, increased supplier performance/increased collaboration, performance contracts with suppliers, supplier audit, performance and risk controlling, supplier rating, insurance, commodity hedging by using derivate, and vertical integration. On the basis of these findings, recommendations such as the need for risk transparency, designing appropriate procurement structure, the adoption of performance based procurement strategy, hedging of procurement, adoption of dialogue process as a measure to reduce market risk, and the adoption of strategies to expand the market base
A thesis submitted to the Department of Building Technology in partial fulfillment of the requirement of the Master of Science in Procurement Management,