Challenges Affecting Performance of Supply Chain Systems in the Petroleum Industry in Kenya

Abstract

The purpose of this study was to establish the challenges affecting performance of supply chain systems in the petroleum industry in Kenya. The study examined several parameters that affect workers’ Supply chain performance in the petroleum industry in Kenya resulting to often oil shortages. This has been occasioned by globalization which has intensified competition and increased the mobility of high skilled personnel yet oil companies depend on their staff for success and sustainability whether skilled or not. Specifically, the objectives of the study was to establish whether these factors; level of skills of staff, information and communication technology, cost of crude oil and tendering systems and the moderating factor have effect of performance on supply chain systems. The study was conducted using a survey design. The target population for this study was the 73 registered oil companies in Kenya, which was the unit of observation. For this study, the unit of analysis comprised all the senior procurement officers from the 73 registered oil companies in Kenya by June 2014. A census of all the 73 registered oil companies was conducted. This study anchored variables on different theories and models. This study was anchored on positivist Philosophy. The study used questionnaires to collect Data from the respondents. This involved both structured and semi-structured questions. Data was analyzed mainly using statistical package for social science (SPSS) version 22, where descriptive and inferential statistic such as mean and standard deviation were produced. This was more than the generally recommended sample size for statistical data analysis. The study used inferential statistics, correlation analysis, and multiple regressions for moderation analysis. Qualitative and Quantitative data was put into categories based on themes that was aligned to thesis objectives and was integrated in the study’s discussion and findings. The study also revealed that level of skill for staff negatively affected the performance of supply chain. This study therefore brought to the fore, the role of skills and its effect on performance. The findings also indicated that crude oil price affect performance. In the presences of level of skills of staff, crude oil price, information communication and technology and tendering systems did not affect performance. These findings also indicated that in the presence of level of skill of staff, information communication and technology, crude oil price and tendering systems did not affect performance of the supply chain systems. Further, the study established that majority of the respondents felt that the cause of fuel shortages was unpredicted price increase in the petroleum industry. The findings showed that personal characteristics such as age and education level did not have a moderating effect on the relationship between independent variables and dependents variable. The study established that on average the staff possessed undergraduate degree unlike the previously where empirical findings had indicated there was paucity of undergraduate degrees in the employees in the petroleum industry in Kenya. Finally, this study concluded that there is need to emphasize the effect of performance on supply chain systems by doing proper forecasting from the up streams to the down streams towards achieving a competitive edge in the business markets such as the petroleum industry. The study recommended basically three functions that attribute to performance indicators; Information functions, support decision and Steering function and controlling function. The study also recommended an extension study to unregistered oil companies, since this study confined itself to the 73 registered oil companies only in Kenya. A comparative study should be carried out to compare whether the findings also apply for the unregistered oil companies in Kenya in order to validate whether the findings can be generalized to all unregistered oil companies operating in Kenya. The study ended up developing new policies in the area of performance on supply chain systems in the Kenya context.