Public service supply chain management: A study of Australian employment services

Abstract

To continuously improve public service provision has been a stated goal of governments worldwide. Despite the increasing popularity of systems approaches to analysing public service delivery, research into the topic from a supply chain management (SCM) perspective, while acknowledged for its potential contribution to improving public service delivery, remains underdeveloped. This study, utilising a service SCM model as an analytic framework, explores how the performance of public services can be traced back to the effectiveness of service providers’ management of their supply chains. As evidenced by data collected via interviews and observations of best-performing agencies under Australia's fourth iteration of its welfare-to-work reform, jobactive, SCM practices such as effective management of customers’ demands, flexible service capacity/workforce, and strong internal collaboration proved to have positive impacts on services delivered to jobseekers as end-users. Inefficiencies in the management of relationships with suppliers and flows of finance and information, on the other hand, were found to impede the creation of value for jobseekers. Contributions to the field of public management aside, our study provides an illustration of how to deploy the SCM approach for the purpose of optimising public service delivery when multiple suppliers are engaged.

Points for practitioners

• Underpinning any welfare provision, there exists a supply chain, whether it is consciously managed or not. Insights into public service provision in a quasi-market from an SCM perspective remain underdeveloped.
• A public service supply chain is characterised by added complexity due to customer multiplicity and co-production from end-users, the management of which impacts service delivery.
• An analysis of a public service supply chain from the contracted private providers’ perspective sheds light on whether and how they successfully adapt SCM practices to manage the service delivery network to ensure effectiveness. This lays the foundation for further improvements, both in policymaking and implementation.