STRATEGIC SOURCING PROCESS AND PERFORMANCE OF SELECTED CEMENT MANUFACTURING COMPANIES IN KENYA

Solomon Lemomo Oloitiptip, Dr. Charles Ndeto PhD

Abstract


Strategic sourcing is a very important component in the success of operations in any organization. Cement manufacturing companies face a major challenge in controlling the overall operating cost because of the constant increase of sourcing cost; this is evident by some companies posting a decrease in profit prior to tax of Sh6.42 billion compared to Sh8.5 billion noted in the previous year according to KP 2019 annual report. This study therefore sought to establish the influence of strategic sourcing process on performance of selected cement manufacturing companies in Kenya. Specifically, the study sought to assess how organizational policy affects performance of selected cement manufacturing companies in Kenya, to establish how supplier relationship management affects performance of selected cement manufacturing companies in Kenya. This study used descriptive research design. The study’s target population includes the 504 employees working in cement manufacturing firms in Kenya. The study’s sample size was reached at using Krejcie and Morgan sample size determination formula. The 218 respondents were chosen with the help of stratified random sampling technique. Primary data was used in this study. Primary data was collected through use of structured questionnaires. The study conducted pilot study to test the validity and reliability of the research instruments. Quantitative and qualitative data was generated from the closed-ended and open-ended questions, respectively. Descriptive statistics such as frequency distribution, mean (measure of dispersion), standard deviation, and percentages were used. Inferential data analysis will be conducted by use of Pearson correlation coefficient, and multiple regression analysis. Inferential statistic is used to make judgments about the probability that an observation is dependable or one that happened by chance in the study. The study results were presented through use of tables and figures. The study concludes that organizational policy has a positive and significant effect on performance of selected cement manufacturing companies in Kenya. In addition, the study concludes that supplier relationship management has a positive and significant effect on performance of selected cement manufacturing companies in Kenya. Based on the findings; this study recommends supplier Quality Index Policy, Inventory Stock Policy and Purchase Order Delivery Policy. In addition, this study recommends Supplier Partnerships, Supplier Development and Early Supplier Involvement

Key Words: strategic sourcing process, performance, organizational policy, supplier relationship management 


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