GLOBAL PROCUREMENT PRACTICES AND PERFORMANCE OF SELECTED LARGE MANUFACTURING FIRMS IN NAIROBI COUNTY, KENYA

Perez Akinyi, Dr. Cherles Ndeto

Abstract


Statistics from World Bank show that, manufacturers operating in Kenya registered stagnation and declining profits for the last five years due to a turbulent operating environment (World Bank, 2020). Manufacturing sector's contribution to the economy in Kenya was about 9.3% in 2016, 8.7% in 2017, 8.4% in 2018, 7.9% in 2019, and 7.6 % in 2020 which is a downward trend (KNBS, 2021). This study therefore sought to determine the effect of global procurement practices on performance of large manufacturing firms in Nairobi County, Kenya. Specifically, the study sought to determine effect of supplier sourcing on performance of large manufacturing firms in Nairobi County, Kenya, and to assess effect of logistics management on performance of large manufacturing firms in Nairobi County, Kenya. The study adopted a descriptive research design. The target population was 500 respondents working in 50 large manufacturing companies in Nairobi County. Nairobi County has been selected since majority of manufacturing sectors in Kenya are concentrated in Nairobi County. The study targeted two senior procurement, production, marketing, finance and accounting staff from each of the 50 manufacturing firms. The study’s sample size was reached at using Krejcie and Morgan sample size determination formula. The 217 respondents were chosen with the help of stratified random sampling technique. This study also used questionnaire to collect data relevant to this study. Quantitative data collected was analyzed using descriptive statistical techniques which are frequencies, mean, standard deviation. Inferential statistics which include Pearson correlation and the Regression Analysis Model was used to test the relationship between study variables. The significance of the model was tested at 5% level of significance. Data was analysed using Statistical Package for Social Sciences (SPSS) software. The study results were presented through use of tables and figures. The study concludes that supplier sourcing practice has a positive and significant effect on performance of large manufacturing firms in Nairobi County, Kenya. The study also concludes that logistics management practices have a positive and significant effect on performance of large manufacturing firms in Nairobi County, Kenya. Based on the findings, the study recommends that the management of large manufacturing firms should adopt a structured procurement strategy that emphasizes transparency, accountability, and strategic sourcing. In addition, the study recommends that the management of large manufacturing firms should diversify and decentralize the supplier base.

 

Key Words: Global Procurement Practices Supplier Sourcing, Logistics Management, Performance of Large Manufacturing Firms 


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References


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