Impact of Dimensions of Centralization Procurement System on Financial Performance with Special Reference to Health Care Industry in Sri Lanka

Abstract

The private sector contribution in provision of health care in Sri Lanka has been growing tremendously during last two decades. There were several international standard tertiary care private hospitals established in recent past and many more are to operate soon. The capacity of these institutions is ranging from highly sophisticated multi specialized hospitals to small-scale medical centres. Private sector always focus to obtain optimum value from investment. Health care sector also spend more than 40 percent from income to purchase the goods and services. Around the world, wide organizations use centralize procurementsystem to purchase the goods and services. Centralize procurement approach is meant to obtain maximum benefit form efficient supply chain activities. Centralization of procurement is highly focuses not only on individual processes but also focuses on overall operations, further centralizing can bring greater control over the various buying processes that company engages in. This greater control allows for more efficiency and more visibility into how the company is obtaining its resources. In keeping with this study and many of studies, there are five main areas that embody within the centralizing procurement method and facilitate to reinforce the financial performance in a company as Time Compression, Negotiation, Managing quality, Activity Management and Relationship Management. ABC laboratory chain is one of the main laboratory chain in Sri Lanka which implements centralizing procurement activities. Nineteen sample of employees have used and, by using interview method their ideas regarding the variables were collected. Thematic method is used to analyses the collected data. The study reveal positive impact of centralization of procurement activities on financial performance of the ABC laboratory chain as the findings.