Application of Theory of Constraints concepts and Lean tools as an innovative approach to the Timor-Leste public procurement process : a thesis presented in partial fulfillment of the requirements for the degree of Master of Logistics and Supply Chain Management at Massey University, Manawatu, New Zealand
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Date
2012
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Massey University
Abstract
At a time when public resources are very limited and while demand for better
services is continuously increasing, the public procurement function can
have clear benefits from ‘doing more with less’. This thesis has sought to
explore the mechanisms and practices that inhibit the ability of the Timor-
Leste procurement (TLS-P) services to make better use of available
resources. It also sought to investigate the viability of usage of the Theory of
Constraints concepts and Lean tools (TOC-L) towards ongoing improvement
processes within such a system.
The Theory of Constraints (TOC) concepts and Lean tools have been
developed and intensively used within profit organisations: especially in
production and distribution systems, in addition to service industries, such as
health care services. Although applications of the Theory of Constraints
concepts and Lean have been successful within the service sector, the
literature is predominantly reporting cases where the concepts were applied
separately, rather than as an integrated concept and the researcher has not
identified any literature that discusses the application of both concepts within
a public procurement process.
This study demonstrates that TOC-L can provide TLS-P services with a
systematic framework for identifying problems that limit their ability to
maximise budget execution effectiveness. The TOC analysis shows several
policies and practices exist within the TLS-P which, whilst seeming to be
intuitively logical and efficient for each agency, actually tend to focus these
agencies on sub-optimal local performance. This approach means that the
system’s agencies do not have a clear agreement to coordinate and
synchronise their activities, measurements and schedules ?and therefore,
budget execution effectiveness suffers in this situation. The results of the
analysis suggest that all agencies must realign their local performance focus
to one of a system-wide performance, in order to achieve desired benefits.
In order to facilitate this realignment, the researcher proposes a modification
of the drum-buffer-rope methods for goods and services into a hybrid model,
which can work for the TLS-P dynamic environment. This ‘Dynamic-DBR’
(DBRD) model provides the system with the ability to adjust capacity
resources to meet service levels and due dates. The aim of this DBRD is to
fill the gap in the literature of reported adaptations of drum-buffer-rope
methods, in order to suit the synchronisation of scheduling within public
procurement processes.
The study also develops recommendations for the improvement of this
approach, which is intended to facilitate future research.
Description
Keywords
Government purchasing, Theory of constraints, Management, Timor-Leste