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

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.