Modelling Vendor Dynamics for Power Sector Resilience and Digital Readiness

The global power sector faces procurement inefficiencies projected at USD 50 billion annually by 2030, partly due to static vendor selection models that ignore temporal dynamics. This study conceptualizes vendor selection as a dynamic system, integrating maturity, agility, innovation, risk mitigation, cost optimization, and efficiency across long project lifecycles. Guided by Systems Theory, Dynamic Capabilities Theory, and the Resource-Based View, a coupled differential equation model is developed, validated through numerical simulation, and supported by three novel lemmas. Findings reveal that upstream vendor constructs—credibility, contracting efficiency, and relationship management—serve as enduring drivers of procurement maturity, agility, and resilience. In contrast, downstream outcomes such as cost optimization, operational efficiency, and digital readiness gradually deteriorate without continuous reinforcement. Technological adoption emerges as the weakest link, requiring deliberate institutionalization beyond vendor maturity. The study advances the literature by introducing a mathematical formalism embedding resource deterioration into procurement dynamics. It offers practical insights for power utilities by framing vendor maturity as a strategic asset and providing decision-support tools for targeted interventions to enhance resilience, agility, and overall performance of energy infrastructure.