INFLUENCE OF PROCUREMENT PRACTICES ON PERFOMANCE OF LOGISTICS FIRMS IN KENYA: A CASE OF NAIROBI COUNTY
Abstract
Procurement is a crucial element in the working functions of any state. Logistics firms have the obligation to provide essential services to their clients. Effective implementation of procurement practices entails implementation of strategies to be followed when making organization purchasing decisions. It significantly improves the effectiveness of purchasing decisions. One of the most important factors that promote procurement practices in logistics firms is improving the relationship between them and their clients. Choosing an effective logistic firm is based solely on pricings often viewed as short-sighted and may be ineffective. An alternative procurement practice is to use logistic firms that offer reliable services at fair prices in a very competitive environment. This study sought to establish the influence procurement practices on performance of logistic firms in Kenya. The study adopted a descriptive design and the target population was 75 logistic firms based in Nairobi county. The census survey design technique was carried out by involving all the managers of the logistic firms and primary data was collected through the use of questionnaires. The secondary data was obtained from published documents. A pilot study was conducted for the data collection instrument. The data was with help of SPSS version 21 and Excel. The study adopted a correlation and regression analysis at 5% level of significance to determine strength and direction of the relationship of the variables under study. The regression analysis showed that competitive environment had the strongest positive (Pearson correlation coefficient =.832) influence on performance of logistic firms. In addition, supplier management, inventory management, information communication and technology and competitive environment were positively correlated to performance of logistic firms with Pearson correlation coefficient of .761, .793 and .673 with p-values of .007<0.05, .003<0.05 and .008<0.05 respectively. The study established that competitive environment was the most significant factor. The study recommends for similar studies to be undertaken in other areas in Kenya for generalization of the findings of this study.
Key Words: Supplier Management, Inventory Management, Information Communication Technology, Competitive Environment, Procurement Practices
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DOI: http://dx.doi.org/10.61426/sjbcm.v3i2.278
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