PROCUREMENT OPTIMIZATION TECHNIQUES ON AND PERFORMANCE OF MANUFACTURING FIRMS IN KENYA

Vincent Mwaniki Ongaro, Dr. Purity Gatobu

Abstract


The purpose of the study was to examine the influence of procurement optimization on performance of manufacturing firms in Kenya with an aim of making recommendations. The study aimed at establishing how; triangle approach, and Pareto’s approach influence the performance of manufacturing firms in Kenya. To achieve this, the researcher reviewed both theoretical and empirical literature and proposed the research methodology that addressed the gaps identified in literature as well as answer the stipulated research questions. The study employed a descriptive research design, the study prefers this method because it allows an in-depth study of the subject. The 2017 KAM directory has listing of members (firms) by sectors which contains a register of 12 sectors of those in manufacturing firms spread all over the country. The population of the large sized registered members as per the directory is 499. This study used the large sized firms only. This study used Cochran’s formula to sample 165 large manufacturing firms from the total population, heads of procurement were the respondents. Semi-structured questionnaires were administered to collect qualitative and quantitative data. Secondary data was collected from firm’s reports and websites. The questionnaires were tested for validity and reliability using 10% of the total sample respondents. Quantitative data was analyzed using both descriptive and inferential statistics and with the help of SPSS version 21 while qualitative data was analyzed descriptively. Multiple regression models was used to show the relationship between the dependent variable and the independent variables. The information was presented using tables, charts, frequencies, percentages and graphs. The response rate of the study was 85%. The findings of the study indicated that triangle approach, Pareto’s approach have a positive relationship with performance of manufacturing firms in Kenya. Finally, the study recommended that manufacturing firms should embrace procurement optimization so as to improve performance and further researches should to be carried out in other institutions to find out if the same results can be obtained.

Key Words: Procurement Optimization, Triangle Approach, Pareto’s Approach, Performance, Manufacturing Firms


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