Managing supply chain risks within the state department of agriculture, Kenya

Abstract

Supply chain risks in the public sector continue to dominate the agenda of many Governments’ fiscal policy with the aim advancing transformation and opportunity. However the supply chain risks in the public sector remain under-researched and mitigation strategies are not well documented. The research project addressed the following objectives: (i) to identify supply chain risks within the public sector in Kenya with special reference to the Department of Agriculture, (ii) To establish mitigation measures for key supply chain risks that sought to enable effective and efficient supply chain management (iii) to establish the challenges faced in mitigation supply chain risks within the public sector. The research design incorporated empirical, descriptive and survey research to evaluate supply chain risks and empirically analyse the information. A two stage sampling technique was used to delineate the target population in to the two strata of department staff and suppliers. Secondary data was collected from published literature while primary data was collected using the interview method guided by a structured questionnaire. Both descriptive and statistical analysis was undertaken using SPSS vs 19. The Relative Importance Index (RII) ranked the top ten risk drivers in order of importance. The ranking of the broader risk categories using the RII identified procurement risk as critical and needing Government attention to address exchange rate risks, single sourcing (non competiveness), and unrealistic contract duration risk. Using PCA, seven principal components (PCs) with Eigen values above 1 were extracted from the covariance matrix. Reducing the consequence of risk and transferring risk were identified as the preferable mitigation strategy. The challenges to addressing risk in the public sector was identified as inadequate budget, political interference among others The study concludes and recommends that the classification and management of supply chain risks is a fundamental ingredient to effective management and governance in the public sector and the responsibility of risk mitigation responsibility actually resides with staff at all levels of the entity. Suggestions for further research include a comparative analysis of public vs private sector risk and also undertaking an impact assessment of risks on the performance of the public sector