Effect Of Procurement Management Practices On Performance Of The Kenya Tea Development Agency Factories

Abstract

Procurement management practices play an important role in the performance of an organization. The general objective of the study was to examine the effects of procurement management practices on the performance of Kenya Tea Development Agency (KTDA). The specific objectives of the study were to assess the effect of supplier alliance on the performance of the KTDA; determine the effect of procurement cost control practices on the performance of the KTDA; examine the effect of procurement risk management practices on the performance of the KTDA and; explore the effect of technology adoption in procurement processes on the performance of the KTDA. This study was premised on resource-based view theory, balanced score card theory, systems theory and transaction cost theory. The descriptive research design was used with data being collected using quantitative and approaches. The target population of the study was the staff working in all the 66 Tea Factories under KTDA. The unit of observation was each factory while the unit of analysis was the employees. In these factories, there are 594 workers. These can be categorized broadly into Procurement officers, operational officers, and finance officers. Stratified proportionate random sampling techniques was utilized to choose the sample and estimate overall population parameters more precisely, resulting in a more representative sample. Simple random sampling was utilized to choose 198 respondents for the study. A questionnaire was used to collect data for analysis. To draw inferences and make generalizations about the population, the researcher used descriptive statistics. SPSS software was used to obtain mean, frequencies, descriptive, and inferential statistics for the study. To link the independent factors to the dependent variable, a multiple linear regression model was utilized. The findings show that there were significant relationships between the Performance of KTDA Factories and independent variables as follows: supplier alliance, r=0.892, p<0.05; cost control practices, r=0.827, p<0.05; risk management practices, r=0. 862, p<0.05; and technology adoption, r=0. 844, p<0.05). Also, the combined influence of the independent variables could statistically and significantly predict Performance of KTDA Factories (F= 305.931, p<0.05). In this regard, it can be concluded that supplier alliance, cost control practices, risk management practices and technology adoption affected the performance of KTDA factories. The study recommends that KTDA should keep databases of key suppliers so as to enhance their contribution to the performance of KTDA factories. Regular meetings and forums should be put in place to create rapport with existing and emerging key suppliers. KTDA should continuously review any areas of wastage in the factories. Budgets should be regularly reviewed to ensure that costs are reduced. In addition, effort should be put in place to procure high quality goods to reduce maintenance costs of machines and items. There should be due diligence to enhance risk management practices. Staff should be regularly trained on risk management strategies. In addition, there should be effort to ensure that all emergent risks are promptly identified and ways of dealing with them explored. KTDA should always ensure that new technologies are adopted. All obsolete technologies should be passed out systematically and replaced with new ones. A search of the market place for new technology that could create competitive advantages should be undertaken and such technologies promptly adopted.