FACTORS AFFECTING THE PERFORMANCE OF PROCUREMENT IN MANUFACTURING INDUSTRIES IN KENYA. A CASE STUDY ACTOM KENYA LIMITED

Abstract

Procurement performance in Kenya’s industrial sector remains weak due to supply chain inefficiencies, limited e-procurement integration, inadequate supplier collaboration, insufficient staff competencies, and low management support. These challenges increase operational costs, delay production processes, and reduce organizational competitiveness and overall procurement effectiveness. The study explored factors affecting procurement performance in Kenya’s manufacturing division, concentrating on Actom Kenya Ltd. The specific objectives include: investigating the impact of supplier relationship management, assessing the role of procurement staff competency, evaluating the effects of e-procurement adoption, and analyzing top leadership support on procurement performance at Actom Kenya Ltd. This study used a descriptive research design. The research focuses on 82 employees of Actom Kenya Ltd, from all departments. The investigator employed the census sampling method to determine the sample size. Data was gathered by employing a standardized questionnaire. Statistics were cleaned, coded, and examined using Microsoft Excel. Descriptive statistics were summarized, while results were interpreted and presented using tables and figures to support decision-making. The study achieved a response rate of 87.5% (70 out of 80 questionnaires). Demographic findings 56% of those surveyed were found to be male, and 44% were female, while 44% possessed undergraduate degrees, and 77% had been employed in the organization for five years or more. Descriptive outcomes indicated positive perceptions regarding supplier relationship management (overall mean = 4.00), procurement staff competency (overall mean = 4.06), e-procurement adoption (overall mean = 4.01), top management support (overall mean = 3.99), and procurement performance (overall mean = 3.98). Supplier compliance with contract terms recorded the highest mean score (M = 4.18), while regular staff training also scored highly (M = 4.18), suggesting strong procurement practices within the company. The investigation discovered that effective supplier management through strong communication and trust enhanced procurement processes. Competent procurement personnel, equipped with relevant skills and training, positively affected efficiency and making decisions. The use of digital procurement systems streamlined operations and improved coordination, supported by user acceptance and integration with existing technology. Active senior management engagement provided strategic direction and resource allocation, strengthening procurement functions. Recommendations include the need for improved supplier relationship management in manufacturing through organized communication and long-term engagement. Continual professional development in procurement, focusing on legislation, negotiation, and digital tools, is essential. Competent staff and mentorship are necessary for decision-making and growth. The study advocates for the implementation of e-procurement systems, suggesting investments in digital infrastructure, user training, and automation. Top management engagement is crucial for resource allocation and alignment with organizational goals. Future research should explore additional factors affecting procurement effectiveness and conduct comparative studies across sectors to identify trends.