ROLE OF STRATEGIC E-SOURCING PRACTICES ON SUPPLY CHAIN PERFORMANCE IN STATE CORPORATIONS IN KENYA: A CASE OF KENYA ELECTRICITY GENERATING COMPANY LTD.
Bruno Kimutai - Master of Science in Procurement and Logistics, Jomo Kenyatta University of Agriculture, Kenya
Dr. Noor Shalle Ismael - Lecturer, Jomo Kenyatta University of Agriculture and Technology, Kenya
ABSTRACT
The purpose of this study was to assess the role of strategic e-sourcing practices on supply chain performance in state corporations and thereby determine the value addition in the value chain. The study sought to establish the effect of cost reduction on supply chain performance, ascertain the strategic supplier relationships and the supply chain risks affecting supply chain performance in state owned firms. Numerous studies have been done on strategic sourcing and effects of e-commerce on supply chain management. This study sought to further the knowledge gap in strategic E-sourcing to enable procurement process deliver the added value in supply chain management. Strategic e-sourcing create value by lowering cost, streamlining processes and enabling development of new businesses. The study was a cross –sectional survey and an analysis of purchasing activities in state corporations at given period. The target population in this study included staff in top level management, supply chain, ICT, Finance and customer service at Kenya Generating Co. Ltd drawn from the one hundred and eighty seven (187) state corporations. Stratified random sampling was adopted for commercial and non-commercial State Corporation based on government shareholding in various ministries within Nairobi County. Data collection was both quantitative and qualitative; questionnaires, unstructured interviews and observation were used to collect data. Further analysis using linear regression model was used to establish the relationship between the independent and dependent variables. The study found that Organization cost reduction is important in customer service, return on investment and total cost while organization cost reduction is slightly important in impacting return on investment and speed of delivery. Organization ICT integration is important in impacting customer service, total cost and return on investment while it is slightly important in impacting speed of delivery and return on investment. The study confirmed that there exist a short term between Kengen and its suppliers, Kengen has a relatively stable relationship with its suppliers. The study concludes that supply chain risk management is another aspect of strategic e-sourcing practices that affects the supply chain performance of organizations. The study recommends that supply chain management practices, tools and techniques needs to be relooked into with significant importance and must call for serious attention, when it comes to strategy development and seeking advice regarding external market environment and be involved in the formulation of policies affecting the supply chain function in Kengen. Kengen should seek ways to enhance integration for greater collaboration within the industry and with suppliers. Strategic supplier relationship and supply chain management efforts should reach across the entire supply chain to help streamline essential processes such as product development and pricing, as well as reduce costs and improve responsiveness to customer demand. To avoid problems in the supply chain, there is need for the Company to create a department for supplier selection and evaluation.
