Procurement for Innovation
Start Date: June 2006
End Date: May 2008
Project Status: Current
New technologies, novel ways of managing processes or indeed current technologies and management processes that have the potential to be used effectively and efficiently in new situations or environments all come under the umbrella of innovations. The adoption of these innovations is proving challenging under existing contractual arrangements for various reasons. These include the adversarial relations between participants in some industries, e.g. construction; complex contractual relationships that hinder natural progression of innovations between parties involved, e.g. traditional contracting arrangements; and the fragmentation, instability and disintegration of procedures used in the organisation of a supply chain.
A number of attempts have been made to drive through the adoption of innovation in the health service through its ProCure21 programme and also in the defence sector through its SMART Procurement initiative. Both approaches are based on the thinking that innovation adoption could be achieved through the use of partnering. However, more work needs to be conducted to develop a proactive, systematic and structured approach for the range of Integrated Procurement Systems (IPS) available which would also incorporate performance measures in the form of critical success factors and key performance indicators.
Integrated procurement approaches such as PPP, PFI and prime contracting have the potential to overcome the problems of fragmentation in project delivery which are prime barriers to effective knowledge sharing and flow of new technologies and ideas in project environments. These types of integrated supply chains have the prospect of benefiting industry by encouraging competition primarily on the basis of expertise innovation in processes and products rather than on the basis of short-term cost efficiency only as it has been the case through traditional procurement systems.
This research seeks to establish structured approaches for sharing knowledge and transferring new ideas readily and effectively between projects and between participants in a project. The overall research objectives are set out as follows:
- To map communication channels in projects procured under PPP, PFI and/or prime contracting to identify efficient routes for sharing of knowledge and filtering new ideas/technologies/processes.
- To investigate formal and informal communication channels created in a supply chain to develop an optimum configuration of channels which would enable the flow of knowledge and the adoption of innovations in IPS.
- To compare and evaluate the readiness and adaptability of integrated and traditional procurement systems to new knowledge and innovations by investigating procedures used such as change control mechanisms; risk assessment exercises and gateway review processes.
- To identify factors which are critical for the successful transfer of knowledge and adoption of innovations in IPS.
- To develop a set of performance measures for the implementation of innovations based upon the Excellence Model of the European Foundation for Quality Management (EFQM).



