Influence of Electronic Procurement Practices on Supply Chain Performance of Sugar Processing Firms in Kenya

Abstract

The purpose of this study was to establish the influence of E-procurement practices on supply chain performance of sugar processing firms in Kenya guided by four specific objectives, to establish the influence of electronic tendering practice on supply chain performance of sugar processing firms, to evaluate the influence of electronic order processing practice on supply chain performance of sugar processing firms, to assess the influence of electronic material management practice on supply chain performance of sugar processing firms and to find out the influence of electronic supplier management practice on supply chain performance of sugar processing firms. This study was based on are Electronic Market Hypothesis, Dynamic Capability Theory, Value Chain theory, Resource Based View Theory and Contingency Theory of Management. The study applied a mixed research design and the target population comprised all the 12 sugar manufacturing firms in Kenya with a population of 7,584 permanent employees. Stratified random sampling technique was applied to come up with a sample of 379 respondents drawn from management staff working in the departments of Procurement, Finance, Information communication Technology, Strategy, Factory, Agriculture, Marketing and Stores. Data was gathered by a self-administered drop and pick questionnaire, interviews and observation. Frequencies, percentages, mean scores was used to analyze the data with the help of Statistical Package for the Social Sciences. Pearson’s correlation coefficient was used to determine the relationship between electronic procurement practices and Supply chain performance, multiple regression analysis was used to test the hypotheses and to determine the influence of electronic procurement practices on supply chain performance. The results of overall model reveals that electronic procurement practices had a positive influence on supply chain performance. With the inclusion of the values of the independent variables, supply chain performance is predicated to improve when e-tendering, e-order processing e-material management goes up and decrease when e-supplier management goes up. The study concludes that electronic procurement practices enhance supply chain performance. The study recommends that Sugar processing firms’ management should ensure working Websites, working internal and external mail and application of all E-procurement modules in order to reduce procurement process time, costs and errors. Sugar processing firms should also provide their suppliers with access credentials to company electronic procurement portal to increase buyer and supplier access to information to enhance electronic tendering, electronic order processing, electronic material management and electronic supplier management practices. Further the Government should institute policies concerning data safety to enhance the application of electronic procurement practices between the buyers and suppliers in terms of improved the electronic payment and application of electronic signature.