Procurement Best Practices and Organizational Performance: Case Study of Cadbury’s Kenya Limited

Abstract

Procurement best practices such as procurement risk management, planning and supply performance influence organizations in achieving the collaboration and communication capabilities while maintaining the flexibility and responsiveness capabilities of market-oriented governance structures. Leading organizations like Cadbury’s Kenya limited are simplified and consolidate the entire procurement process, by improving the responsiveness of their procurement systems. Procurement services in the organization are under considerable pressure to deliver performance improvements and to achieve financial savings through more efficient and coordinated service delivery. The objective of the study was to establish the extent to which procurement best practices are adopted at Cadbury (K) Limited and to determine the relationship between procurement best practices and organizational performance of Cadbury (K) Limited. The research design for this study was case study since the unit of analysis is one organization. Stratified proportionate random sampling technique was used to select the sample size of 45 respondents. Primary data was collected using an unstructured questionnaire. The collected data was summarized, coded and tabulated. The study established that company had adopted procurement best practices that were followed when making company purchasing decisions. The study established that the company focused on performance through procurement best practices to achieve price variance, effective contract utilization, inspiration management, improve procurement staff skills, improved procurement cycle time and effective payment processing time. Procurement best practices are strategic procurement planning, performance measurement, performance metrics, use of cooperative contracts, transparency; risk management, ethical procurement, procurement policy manual, performance management and performance-based contracting. The study concludes that procurement best practices that are followed when making company purchasing decisions are building supplier relationships, team-based approaches to procurement and proper use of technology. The study recommends that management in Cadbury (K) Limited should ensure that there is an appropriate focus on good practice in procurement and that there is a significant procurement procedure in place to ensure compliance with all relevant guideline. On delivering services management must address the issue of procurement best practices as these has accrued benefits directly to the bottom line of organizations. Finally the study recommends that company’s resources need to be dedicated to the practices that enhances the functioning of best procurement practices for development and maintenance of profitability.