From Cost Savings to Value Preservation: Rethinking Procurement Performance Metrics in Crude Oil Refining.

Abstract: Procurement performance in capital-intensive, continuous-process industries is commonly assessed using cost-centric indicators such as purchase price variance, budget adherence, and procedural compliance. In crude oil refining, however, where unplanned downtime can generate losses that dwarf procurement savings, cost-based metrics may misrepresent procurement's true contribution to organizational performance. This study re-examines procurement performance measurement in Ghana's crude oil refining sector and argues for a shift from cost savings to value preservation, defined in terms of refinery uptime, throughput stability, and maintenance continuity. Using survey data from 150 industry professionals analyzed through Partial Least Squares Structural Equation Modeling (PLS-SEM), the results indicate that procurement processes have a strong positive effect on refinery efficiency (β = 0.56, p

Keywords: procurement performance; value preservation; refinery efficiency; cost savings; continuous-process industries; Ghana