The Effect of Procurement Planning and Implementation on Cost Reduction in the Health Sector
DOI:
https://doi.org/10.59413/ajocs/v7.i3.39Keywords:
Public Expenditure, Budget Execution, supply chain efficiency, Purchasing Strategy, Execution, Expense Minimization, Sourcing Efficiency, Health SectorAbstract
Public procurement in the health sector represents a critical lever for cost containment and service delivery efficiency. Yet, despite formal planning frameworks, developing countries persistently face budget overruns, emergency procurement, and supply chain disruptions. This study examined the effect of procurement planning and implementation on cost reduction at the Ministry of Health Headquarters in Zambia, addressing a significant empirical gap in understanding how planning translates into financial outcomes. A convergent parallel mixed-methods design was employed, collecting quantitative data from 65 respondents (85% response rate) using structured questionnaires and qualitative data through semi-structured interviews with 15 key informants. Descriptive statistics, correlation analysis, and multiple regression were used to analyze quantitative data, while thematic analysis was applied to qualitative data. The findings reveal a pronounced planning-implementation gap: while 78.4% of respondents confirmed documented procurement processes exist, 69.0% reported frequent emergency procurement and 65.5% confirmed common budget overruns. Regression analysis demonstrated that procurement planning factors collectively explain 50% of variance in budget overruns (R²=0.50, F=20.62, p<0.001), with accurate demand forecasting emerging as the strongest unique predictor (Beta=-0.46, p=0.001). Four interconnected systemic challenges were identified: fiscal and budgetary constraints (86.2%), bureaucratic inefficiencies (65.5%), human capital gaps (62.1%), and technological deficits (58.6%). The study concludes that procurement planning significantly influences cost reduction, but effectiveness is contingent upon addressing systemic implementation barriers through integrated reforms targeting fiscal predictability, process simplification, capacity building, and technological integration. Therefore, the study recommends deliberate development of strategic procurement capabilities grounded in accurate demand forecasting, supported by stable fiscal resources, enabled by streamlined processes, and enhanced by skilled personnel and integrated technological systems.
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