Procurement Outsourcing and Supply Chain Performance of Manufacturing Firms in Nairobi, Kenya

Abstract

he study was conducted to establish the effect of procurement outsourcing on supply chain performance among manufacturing firms in Kenya. The study had three specific objectives to achieve: to determine the extent to which procurement outsourcing is done in manufacturing firms in Nairobi, Kenya, to determine the effect of procurement outsourcing on supply chain performance of manufacturing firms in Nairobi, Kenya and to determine the challenges in procurement outsourcing among manufacturing firms in Nairob i, Kenya. The collected data was edited and cleaned for completeness and consistency in preparation for coding. Once coded, the data was keyed into the Statistical Package for Social Sciences (SPSS) for analysis. Descriptive statistics such as means and s tandard deviations were used to analyze the data. Regression analysis was used to test the relationship between the variables under study in relation to the objectives of the study. The study concluded that the manufacturing firms outsource procurement practices to a great extent and this affects supply chain performance of manufacturing firms in Kenya positively by leading to improved supply chain performance in ways such as increased productivity, minimized costs, maximized profits, increased operational efficiency and increased customer satisfaction. Challenges were faced to a moderate extent. The managements of manufacturing firms should take le gal precautions against the third parties offering the services or products being outsourced to prevent information leaks or a bleach of company privacy and that the management of the manufacturing firms should carry out a benchmarking activity against the best players in the market as a way of improving their procurement outsourcing practices. This would enable them to achieve undisputed performance of their supply chains.