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Heller                                                                                                                                                                             Advances in Business Research 

2013, Vol. 4, No. 1, 107-113 

Supply Chain Management Perspectives in the Public and Private Sectors 
 

Jacob Heller, Tarleton State University   
 

 

Based on a recent survey of public and private procurement professionals in the Southwest United States, 

this study reports perspectives on supply chain management and perceptions regarding job-related 

importance of key supply chain management elements between procurement professionals in the public 

and private sectors. A survey structured around thirty key supply chain management elements and four 

unique perspectives of the relation between supply chain management and purchasing was used (Larson, 

2009). As this exploratory study incorporated a convenience sample, the generalizability of the study 

findings is limited. However, despite this limitation, important findings emerged. Procurement 

professionals in the public and private sectors have different perspectives on organizational approach to 

supply chain management. Further, differences exist in the rating of job-related importance for the thirty 

key supply chain management elements between public and private sector participants. 
 

 

 In today's globally competitive private sector environment and shrinking budgets in the public sector, 

supply chain management is becoming increasingly important. Supply chain management is a competitive 

strategy for integrating the supplier/customer relationship to efficiently manage the procurement and 

delivery of goods and services in a cost effective manner with the specific objective of improving 

responsiveness and flexibility in organizations (Gunasekaran, 2004; McCue and Pitzer, 2005). In the 

private sector, the acquisition of products and services accounts for more than 60% of the total operating 

costs for most organizations (Degrave, Roodhooft & van Doveren, 2005). Financial activity in the public 

sector may account for up to 30% of the GNP in the US and as much as 14-20% of the GDP in Europe 

(Callendar & Matthews; Mori & Doni, 2010). Consequently, effective supply chain management can lead 

to significant cost savings.  

 The trend of looking to the private sector for supply chain management strategy and key supply chain 

elements for implementation in the public sector is gaining popularity in the current literature. However, a 

number of authors have argued that despite the interest in cross sector implementation of supply chain 

management, meaningful differences in the application of supply chain management between public and 

private procurement professionals are not identified. Specifically, research that identifies similarities and 

differences in organizational approaches to procurement and supply chain management between public 

and private sector organizations is absent from the current literature (Hawkin, Gravier & Powley, 2011; 

Johnson, Leenders & McCue, 2003; McCue & Prier, 2008 Muller, 1991; Zhang, Viswanathan & Henke, 

2010). 

 A number of authors have examined organizational issues and factors tied to supply chain 

management in the private sector to gauge their potential for implementation in the public sector 

(Cavinator, 1991; Fearon, 1988; Johnson, Leenders & McCue, 2003; Murray, 2007). Pooley and Dunn 

(1994) found that the job duties and skills of purchasing professionals experienced statistically significant 

change from 1960 to 1989.  Other contributions include studies that examined a range of organizational 

factors related to supply chain management in private sector organizations (Harland, Gibbs and Sutton, 

2000; Johnson, Leenders and Fearon 1998a, 1998b; Larson, 2009; Leenders and Johnson, 2000, Telgen, 

Zomer and de Boer, 1996).  
 

Cross Sector Differences in Procurement 
 

 Fundamental differences exist between the public and private sector in reporting structure, regulating 

bodies, funding sources and operating motives (Larson, 2009). Public procurement differs from private 

procurement in scope. In the private sector, procurement strategy is driven and aligned with corporate 

revenue and profits goals - the bottom line. Government is frequently viewed as a market regulator, 

sometimes encouraging markets through competition law, or restraining them through minimum wage 



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laws. However, government plays an increasingly important role as an active participant in the market 

itself (McCrudden, 2004). 

 In the public sector, procurement has been utilized as an important tool for achieving economic, social 

and other goals and objectives (Arrowsmith, 1998). Including provision of no or low cost public goods 

and services, the development of local contractors and manufacturers, and advance legislation and 

conceptions of social justice through market regulation. Finally, public sector procurement serves a 

broader range of stakeholders, places greater emphasis on accountability and transparency, and allows 

little or no flexibility for negotiation. The effect of the layers of additional scope and limited ability to 

negotiate sometimes yields procurement inefficiencies. These inefficiencies often lead to increased 

spending through increased administrative demands, additional oversight, the decentralization of work 

across multiple suppliers, and time delays given legislative and legal requirements. All of which 

contribute to delays in the delivery of goods and services. 

 Notwithstanding these issues, the mission of the procurement function, in public and private sector 

organizations, is to efficiently manage the forecast, procurement and delivery of goods and services 

through the supply chain in a cost effective manner. Notwithstanding the great potential that the 

incorporation of supply chain management elements holds for public procurement, a careful exploration 

of the differences between public and private sector procurement is essential before cross sector 

implementation (Reed, Bowman & Knipper, 2005). 
 

Research 
 

 This research pulled from the supply chain management and public procurement literature and 

examined the differences in supply chain management perspectives as well as differences in the rating of 

job-related importance for thirty key elements of supply chain management. Data collection was 

completed via an online survey that incorporated original and previously published questions (Larson, 

2009) Participants included procurement professionals from a Fortune 500 company, and procurement 

professionals from a large metropolitan city in the Southwest United States. Invitations to participate in 

the survey were emailed, with a link to the survey, to respondents within each of the organizations.  

 Given the exploratory nature of the study, combined with funding limitations, a non-probability 

sample was selected. Thus, study findings are limited to the study population or similar group and should 

be approached with caution given the potential for sampling bias. Not-with-standing this limitation, the 

findings of this exploratory study are important as they yield new information regarding differences in 

supply chain management perspectives and importance of key supply chain management elements 

between the public and private sector that can be used as the foundation for future research with larger 

more representative samples  This study explored the following research questions: 
 

RQ1: Do public and private procurement professionals have different perceptions of their 

organizations’ approach to SCM? 
 

RQ2: Are there differences in the perceptions of the importance of key supply chain management 

elements between public and private procurement professionals? 
 

Survey and Analysis 
 

 The first section of the survey consisted of a series of questions that required the participants to report 

their perceptions of their organizations’ perspective on supply chain management. Based on work by 

Larson (2009) the survey included the following descriptions about participants’ perception of their 

organizations’ approach to supply chain management. See Figure 1 below (Larson, 2009). 
 

  Traditionalist: Supply Chain Management is positioned as a function within purchasing. Supply chain 

analysts report to the head of purchasing. 

  Re-labeling: Entails a name change; purchasing is now SCM. “Purchasing managers” are re-titled to 

become “supply chain managers” with little or no change in job description Supply Chain. 



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  Unionist: Purchasing is a function within or a part of Supply Chain Management. 

  Intersectionalist: Supply Chain Management consists of strategic, integrative elements across several 
functional areas, including purchasing. SCM coordinates cross-functional efforts involving multiple 
organizations. 

  

Figure 1: Purchasing vs. SCM Perspectives 
  

 
 

 The second section of the survey was comprised of a list of 30 key elements related to supply chain 
management (Larson, 2009). Participants were asked to rate the importance of each of these items based 
on their assessment of the importance of each element in the context of their current professional position 
using a Likert scale with response choices from 1 to 5. 
 

Findings 
 

 A convenience sample of 124 public and private procurement professionals from a Fortune 500 
company and from a large metropolitan city in the Southwest United States completed the survey. The 
private sector corporation has annual revenue of more than $40B and is rated as among the top 25 supply 
chain companies over the last 3 years. The public municipality is a large metropolitan city with an annual 
operating budget of $3.5B. Overall, study participants were relatively new to supply chain management 
activities and had 5 or less years of experience with their current organization. Approximately half of the 
participants (n = 60, 48%) reported a bachelor’s degree as their highest level of formal education. The 
number of participants from the public sector (n = 66) was slightly larger than the number of participants 
from the private sector (n = 58).  
 The first research question addressed participants’ perceptions about their organizations’ approach to 
supply chain management. Statistically significant differences between the public and private sectors 
were found across three of the four perspectives. Confidence intervals revealed statistically significant 
differences between the public and private sector in the Intersectionist, Traditionalist, and Unionist 
perspectives (p = .05). Only the Re-labeling perspective did not reveal statistically significant differences 
between the public and private sectors p = .05, 95% CI [.03, .16], and [.009, .011] respectively. This non-
significant may due be attributable to the low number of respondents who selected this perspective across 
the public (N = 5) and private (N = 2) sectors.  
 Confidence intervals for the Intersectionist perspective indicated statistically significant differences 
between the public p = .05, 95% CI [.25-.28] and private sectors [.71-.90]. Similarly, confidence intervals 
indicated statistically significant differences between the public sector p = .05, 95% CI [.13, .32] and the 
private sector [.003, .09] for the Traditionalist perspective. Statistically significant results for the Unionist 
perspective were also found between the public p = .05, 95% CI [.24, .46] and the private [.05, .22] 
sectors. Based on these data, the null hypothesis, that there is no difference in the perception of 
organizational approach to supply chain management between sectors, is rejected as the data indicate with 
95% confidence that the real value for each is not included in the calculated interval for the other.  
 The second research question was concerned with public and private sector participants’ perceptions 
of importance for thirty different supply chain management key elements. Based on average importance 



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ratings, Table 1 reports public and private sector top ten lists of key supply chain management elements. 

The following eight items are on both top ten lists: Ethical Issues, Legal Considerations, Purchasing and 

Supply Management, Risk Management, Contract Management, Relationship Building, Price and Cost 

Analysis, and Supply Chain Mapping. Though there was significant overlap in the top ten, as was 

expected, statistically significant differences were detected.  

 Appendix A reports mean ratings by group, and t-test results, for all 30 supply chain elements on the 

questionnaire. To test for possible sector differences in respondents’ ratings, independent sample t-tests 

were conducted on all 30 elements, with public versus private sector as the grouping variable. The items 

are arranged in descending order of the critical p-values obtained from the t-test. While a positive t-

statistic implies an item is perceived more important by public sector professionals, a negative t-statistic 

implies an item is more important for the private sector. A higher absolute value of t-statistic implies a 

greater difference between public and private sector perceptions. A p-value less than .05 (the alpha level) 

implies a significant difference between the public and private sector average ratings on an item. 

 The first six items in Appendix A were rated significantly more important by the public procurement 

professionals, compared to their private sector counterparts. The item with greatest significant difference 

was procurement cards. On average, public sector participants rated this item 3.36 (out of 5), and private 

sector respondents rated the item 1.95. Group differences on the next eighteen items (from conflict 

management to logistics and transportation) were not significant. Rather, public and private participants 

rated these key elements as equally important. While the remaining nine items Appendix A were rated 

significantly more important by private sector participants, compared to their public sector counterparts.  

 As expected, this finding could lead to the conclusion that supply chain management in theory, 

strategy and application is more highly developed and installed in the private sector than in the public 

sector. Certainly, it confirms that supply chain management is more important in the private sector as a 

governing strategy for purchasing activities. Further, it affirms the claims in the current literature that 

supply chain management has emerged as the discipline that guides procurement strategy in the private 

sector and that public procurement professionals have different perceptions on the importance of various 

topics, tools and techniques for SCM, compared to their counterparts in the private sector (Larson, 2009).  
 

Table 1: Top Ten Lists of Supply Chain Management Topic Tools and Techniques by Sector 
 

Private Sector Public Sector 

Topic, Tools & Techniques Mean Topic, Tools & Techniques Mean 

Ethical Issues 4.48 Ethical Issues 4.41 

Legal Considerations 4.47 Legal Considerations 4.26 

Supplier Selection / Evaluation 4.33 Price and Cost Analysis 4.22 

Purchasing & Supply Management 4.29 Relationship Building 4.11 

Risk Management 4.24 Contract Management 4.03 

Contract Management 4.21 Transparency 4.00 

Relationship Building 4.16 Risk Management 3.98 

Price and Cost Analysis 4.03 Purchasing and Supply Management 3.98 

Supply Chain Mapping 4.00 Supply Chain Mapping 3.98 

Cycle Time Reduction 3.98 Request for Quote 3.88 

 

Conclusions and Importance 
 

 Consistent with the literature, this study found statistically significant differences between public and 

private sector participants’ perceptions of their organizations’ approach to supply chain management. 

Further, differences were also detected in the ratings of importance on the 30 key elements of supply 

chain management between public and private sector procurement professionals (Larson, 2009). Results 

indicate that participants in the private sector place greater importance on supply chain management 

elements than their public sector counterparts.  

 This exploratory study is important for several reasons. Public administrators are facing increased calls 

for procurement reform (Thai 2004). As public procurement is “big business” with significant impact to 

local, state, and national economies; efficiency in public procurement has been a policy and management 

concern as well as a challenge for public procurement professionals (Thai, 2005). Greater emphasis is 



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being placed on ‘how’ in addition to ‘how much’ money is being spent and public procurement 

professionals  are beginning to adopt best known methods from the private sector including key supply 

chain management elements to manage procurement activities. This research could help to identify the 

supply chain elements for public procurement professionals to achieve greater efficiency in public 

procurement. 

 Supply chain management has emerged as the discipline that guides procurement strategy in the 

private sector. Some have suggested that public sector procurement would benefit through the adoption of 

best known methods and strategies as implemented in private sector supply chain management (Larson, 

2009). However, notwithstanding the great potential that private sector strategy and practices hold for 

public procurement, the factors examined herein must be addressed in the creation and successful 

implementation of public procurement strategy.  
 

REFERENCES 
 

Arrowsmith, S. 1998. Towards a multilateral agreement on transparency in government procurement. 

International and Comparative Law Quarterly, 47(4): 793-816. 
 

Callendar, G., & Mathews, D. 2000. Government purchasing: An evolving profession? Journal of Public 

Budgeting, Accounting & Financial Management, 12(2): 272-290. 
 

Cavinato, J. 1991. Evolving procurement organizations: Logistics implications. Journal of Business 

Logistics, 13(1): 27-45. 
 

Degraeve, Z., Roodhooft, F., & van Doveren, B. 2005. The use of total cost of ownership for strategic 

procurement: A company-wide management information system. Journal of the Operational 

Research Society, 56(1): 51-59. 
 

Dyer, J. 2000. Collaborative advantage: Winning through extended enterprise supplier networks. 

Oxford University Press, New York, NY. 
 

Fearon, H. 1988. Purchasing organizational relationships. Tempe, AZ: Center for Advanced 

Purchasing Studies. 
 

Gunasekaran, A. 2004. Supply chain management, theory and applications. European Journal of 

Operational Research, 159(2): 265-268. 
 

Hawkin, T., Gravier, M., & Powley, E. 2011. Public versus private sector procurement ethics and 

strategy: What each sector can learn from the other. Journal of Business Ethics, 103(4): 567-586. 
 

Harland, C., Gibbs, J., & Sutton, R. 2000. Supply strategy for the public sector: Framing the issues. In 

Conference 2000 Proceedings (pp. 342-351). London, Ontario, Canada: Richard Ivey School of 

Business. 
 

Johnson, P., Leenders, M., & Fearon, H. 1998a. Evolving roles and responsibilities of purchasing 

organizations. International Journal of Purchasing and Materials Management, 34(4): 2-11.   
 

Johnson, P., Leenders, M., & Fearon, H. 1998. The influence of organizational factors on purchasing 

activities. International Journal of Purchasing and Materials Management, 34(2): 10-19. 
 

Johnson, P., F., Leenders, M., R., & McCue, C. 2003. A comparison of purchasing's organizational roles 

and responsibilities in the public and private sector. Journal of Public Procurement, 3(1): 57-74. 
 

Larson, P. 2009. Public versus private sector perspectives on supply chain management. Journal of 

Public Procurement, 9(2): 222-247. 
 



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Leenders, M., & Johnson, P. 2000. Major structural changes in supply organizations. Tempe, AZ: 

Center for Advanced Purchasing Studies. 
 

McCrudden, C. 2004. Using public procurement to achieve social outcomes. Natural Resources Forum, 

28(4): 257-267. 
 

McCue, C., & Pitzer, J. 2005. Fundamentals of leadership and management in public procurement. 

Herndon, VA: National Institute of Governmental Purchasing. 
 

McCue, C., & Prier, E. 2008. Using agency theory to model cooperative public purchasing. Journal of 

Public Procurement, 8(1): 1-35. 
 

Mori, P., & Doni, N. 2010. The economics of procurement contract awarding: Problems and solutions in 

theory and practice. Journal of Public Procurement, 10(1): 93-120. 
 

Muller, E. 1991. An analysis of the purchasing manager’s position in private, public and nonprofit 

settings. International Journal of Purchasing and Materials Management, 27(4): 16-23. 
 

Murray, J. 2007. Improving the validity of public procurement research. International Journal of Public 

Sector Management, 22(2): 91-103. 
 

Pooley, J., & Dunn, S. 1994. A longitudinal study of purchasing positions: 1960-1989. Journal of 

Business Logistics, 15(1): 193-213. 
 

Reed, T., Bowman, D., & Knipper, M. 2005. The challenge of bringing industry best practices to public 

procurement: Strategic sourcing and commodity councils. International Public Procurement 

Conference, May 2011, http://www.ippa.ws/IPPC1/BOOK/ Chapter_14.pdf. 
 

Telgen, J., Zomer, G., & de Boer, L. 1997. The efficiency and effectiveness of government purchasing in 

the Netherlands. IPSERA Conference Proceedings, Naples, Italy: T8/2 1-8 
 

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in buyer-supplier trust development. Journal of Operations Management, 29(4): 318-328. 
 

 

Jake Heller is currently a purchasing account manager for Intel Corporation. He received in Ph.D. in 

public administration from Arizona State University. His current research interests include supply chain 

management, public procurement efficacy, and procurement ethics. 

 

 

  



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Appendix A: Independent Sample T-Tests: Public Vs. Private Sector 
  

  Mean     

  PR PU T P 

Procurement Cards 1.95 3.36 7.733 < .0001* 

Price and Cost Analysis 4.03 4.22 1.168 0.8775 

Vendor Certification 3.63 3.51 0.657 0.2562 

Outsourcing 2.76 2.89 0.624 0.7332 

Partnerships / Alliances 3.50 3.62 0.598 0.7247 

Transparency 3.96 4.00 0.213 0.5842 

Conflict Management 3.88 3.86 -0.083 0.4669 

Social Responsibility 3.78 3.76 -0.100 0.4603 

Supply Chain Mapping 4.00 3.98 -0.145 0.4424 

Relationship Building 4.16 4.11 -0.290 0.3816 

Request for Quote 3.93 3.88 -0.307 0.3795 

Ecommerce 3.18 3.11 -0.320 0.3749 

Activity-based Costing 2.67 2.59 -0.413 0.3402 

Sustainability 3.90 3.82 -0.428 0.3346 

Ethical Issues 4.48 4.41 -0.470 0.3195 

Inventory Management 3.62 3.50 -0.596 0.2761 

Total Cost of Ownership 2.09 1.95 -0.627 0.266 

Third-party Logistics 3.12 2.98 -0.670 0.2522 

Total Quality Management 3.78 3.61 -0.846 0.1997 

Contract Management 4.21 4.03 -1.055 0.1467 

Just in Time 3.54 3.30 -1.234 0.1096 

Enterprise Resource Planning 3.28 3.02 -1.295 0.0988 

Legal Considerations 4.47 4.26 -1.308 0.0965 

Logistics and Transportation 2.72 2.42 -1.504 0.0676 

Risk Management 4.24 3.98 -1.702 .0457* 

Purchasing and Supply Management 4.29 3.98 -1.846 .0336* 

Supplier Development 3.91 3.49 -2.050 .0212* 

Cycle Time Reduction 3.98 3.61 -2.075 .0201* 

Single v. Multiple Supplier Sourcing 2.90 2.42 -2.128 .0177* 

Forecasting 3.48 2.62 -4.076 < .0001* 

Supplier Selection and Evaluation 4.33 3.11 -6.380 < .0001* 

Supply Chain Management 3.74 2.50 -6.960 < .0001* 

Negotiation 3.52 1.97 -7.452 < .0001* 
 

 

 

 

 


