The Shift from Cost Cutting to Value Creation: A Paradigm for Integrating Procurement Strategy in Dufil Company, Port Harcourt

Abstract

Abstract The study examines the shift from cost cutting to value creation through an integrated procurement strategy framework, using Dufil Industries, Port Harcourt as a case context. Procurement strategy was conceptualised through three dimensions, namely strategic sourcing, supplier relationship management, and procurement integration, while value creation was treated as a composite dependent variable. Three hypotheses were formulated and tested using Spearman's rank correlation coefficient, given the ordinal nature of the perception-based data obtained through a structured questionnaire administered to 152 staff of the procurement, supply chain, and production departments. Descriptive results showed generally favourable perceptions of procurement practice, with strategic sourcing recording the highest mean score (M = 3.74), followed by value creation (M = 3.68) and supplier relationship management (M = 3.61), while procurement integration recorded the lowest, though still moderately high, mean score (M = 3.42). The correlation results showed that strategic sourcing (rho = 0.612, p < 0.05), supplier relationship management (rho = 0.587, p < 0.05), and procurement integration (rho = 0.493, p < 0.05) each had a positive and statistically significant relationship with value creation, leading to the rejection of all three null hypotheses, with strategic sourcing exerting the strongest association and procurement integration the weakest. The study is anchored on the Resource-Based View and Dynamic Capabilities Theory, which jointly explain how procurement-related resources and capabilities can be configured to create and sustain competitive advantage, and the findings are consistent with prior empirical studies linking sourcing, supplier relationships and functional integration to firm performance and value outcomes. The study concludes that procurement strategy, taken as a whole, significantly drives value creation in Dufil Company, Port Harcourt. It is recommended that procurement units in manufacturing firms such as Dufil Company be repositioned from transactional cost centres to strategic value-creating units. Keywords: procurement strategy, strategic sourcing, supplier relationship management, procurement integration, value creation.