Strategic Procurement Practices and Procurement Performance Among Commercial Banks in Kenya

Abstract

Procurement is increasingly becoming one of the critical and strategic functions of every organization with the potential to contribute positively to the success of operations leading to reliable service delivery and competitiveness. Strategic procurement indeed sets in motion the entire acquisition/ procurement process of all the purchases by the commercial banks. Despite this importance very limited scientific research has been done to examine the extent to which efforts in strategic procurement affect procurement performance among the commercial banks in Kenya. This study looked at the role of strategic procurement practices on procurement performance of commercial Banks in Kenya. Specifically the study reviewed six strategic procurement practices and how they contribute to success of procurement function in these Banks.The practices discussed mainly comprised; clear goal identification and setting measurable objectives, development of strategies and tactics, supplier relationship management plan, measurement plan, category management and spend management plans and technology utilization and how they affected the procurement performance of commercial banks in Kenya. It was hypothesized in the study that strategic procurement practices, positivelyaffect the procurement performance of banks.Empirical data was collected from procurement officers of the 39 respondentsfrom the targeted population of 43.The empirical data was analyzed both quantitatively and qualitatively to examine the relationshipsbetween strategic procurement practices and procurement performance. The key findings of the study indicated that only nineteen percent (19%) of the variation in procurement performance were explainable by the six procurementpractices.Despite this low significance in the relationshipbetween the variables, we recommended that the existing procurement practices be revisedand strengthened to further improve bank procurement performance.Further research was recommended to cover other strategic procurement attributes hence improving the significance of the whole model.