Insights into centralized procurement for construction material supply chain: a study in Sri Lanka

The rise of centralized procurement has strengthened the modernization process of materials procurement management in the construction industry. Despite its global implementation, centralized procurement has not yet been widely adopted in the Sri Lankan construction industry. Hence, the study aims to investigate the application of centralized procurement of construction supply chains in Sri Lanka. A qualitative survey was conducted using an interview strategy, with data collected through ten semi-structured interviews with experts in the field. The collected data was analyzed using manual content analysis. The findings of the study elucidate the positive and negative impacts of practicing centralized procurement in this context. Key positive impacts include possible cost reduction opportunities, precise procurement operations monitoring, and assistance in making intelligent procurement choices. The vital negative impacts were restricted competition, loss of client satisfaction, less innovation, and diminished stakeholder confidence. Key factors that hinder strategy adoption include the lack of uniformity in procurement practices, resistance to changes in the construction business, and obstacles from legal and regulatory bodies. The recommended solutions include creating transparent and uniform procurement procedures through standards, developing explicit norms for supplier selection, bidding procedures, and contract administration, and fostering collaborations with legal professionals and government entities. The study provides valuable insights into adopting centralized procurement in the Sri Lankan construction industry. It highlights its positive impacts and strategies to overcome obstacles and offers a foundation for further research on using digital technologies to enhance procurement efficiency and potentially benefit similar developing countries' construction industries.