INFLUENCE OF GLOBAL SOURCING AND SUPPLY CHAIN PERFORMANCE IN THE MANUFACTURING SECTOR IN KENYA
Kavoo Bernard Mbole - Master of Science in Procurement Management, Jomo Kenyatta University of Agriculture and Technology, Kenya
Gichure Joseph Mwangi - Lecturer, Jomo Kenyatta University of Agriculture and Technology, Kenya
ABSTRACT
The main purpose of the study was to examine the relationship between global sourcing and supply chain performance in the Manufacturing sector in Kenya. The study sought to answer the following research question: how do effect systematic supplier selection, transfer of competencies, inventory management and sourcing cost affect supply chain performance in the Manufacturing sector in Kenya? The study used a descriptive design in collecting data from the respondents because it ensures complete description of the situation, making sure that there is minimum bias in the collection and interpretation of data. The target population was drawn from 50 respondents. The study used census because the target population was small. The primary data for the study was collected using the questionnaires. Quantitative data was analyzed using descriptive and regression statistics with the aid of Statistical Package for Social Sciences (SPSS 21.0). The results of the study were presented using frequency tables. The study established that it is significant for businesses to develop systematic and standardized criteria and conditions in order to select the best and most dependable supplier in the international arena as a company must have a network of competent suppliers in order to compete effectively in the world market, transfer of competencies influences the supply chain performance as the organization has not only accessed new technology from suppliers but also benefitted from skills transfer from the same which has enhanced its supplier chain performance, global sourcing not only enables the organization to respond to market changes effectively without affecting inventory levels but also allows the organization to reduce demand uncertainty by sourcing from different global sources and global sourcing has reduced supply chain cost arising from shifting income, tax laws and cheaper operating costs. The study concludes that to remain globally competitive, firms must receive competitive performance advantages from their suppliers that match or exceed the advantages that suppliers provide to competitors, technology transfer is critical since it provides new business capabilities and consequently enables others, thus stressing the need for Information-based decision-making to become a core competency, the major reason for global sourcing is to improve the certainty of the supplier in meeting schedule requirements and the primary advantage of global sourcing is cost reduction. The study recommends that in order for organizations to achieve performance improvements, there is need for; first, a restructuring of their supplier base, firms need to align the organization with the incremental phases of capability development and also supports the organizations strategic objectives, there is need for organizations to adopt the vendor managed inventory as an operating model when global sourcing in order to improve operating efficiencies and customer service levels and recommends that organizations need to consider sourcing costs that have an impact on firm’s overall profitability.
