EFFECTSOFSUPPLIERSELECTIONONPROCUREMENTPERFORMANCEINPUBLICHEALTHSECTORINKENYA.ACASESTUDYATELDAMARAVINESUB-COUNTYREFFERALHOSPITALBARINGOCOUNTY.

KIMUTAIJEPMWETICHMETRIN

INDEX:5621010016

RESEARCHPROJECTSUBMITTEDTOKENYANATIONALEXAMINATIONSCOUNCILINPARTIALFULFILMENTOFTHEREQUIREMENTFORTHEAWARDOFCERTIFICATEINSUPPLYCHAINMANAGEMENTOFEMININGTECHNICALTRAININGINSTITUTE.

JULY2022

DECLARATION

DECLARATIONBYTHESTUDENT

Iherebydeclarethattheworkpresentedinthisresearchproposalhasneverbeenpresentedbefore,tothisexaminationbodyorotherinstitutionforanacademicaward,allworkisoriginal.

Name:KimutaiJepmwetichMetrin

DeclarationbytheSupervisor          

Name.Mrs.Rono.                   Sign…………………………Date…….……………

DEDICATION

Idedicatethisprojectfirst,tothealmightyfatherwhogavemebothphysicalandmentalstrength,toaccomplishthisstudy.Secondly,Idedicateittomysupervisor;Mrs.Ronoforthetirelesseffortandcommitmenttowardsmakingthisprojectproposalsuccessful.Lastly,Idevoteittomyfamilyandfriendsforthesupporttheyaccordedmeduringthistimeofresearch.

ACKNOWLEDGEMENT.

IwouldliketothankthealmightyGodforthegiftoflifeandguidancethroughoutmyeducation,ithasbeentoughbutHehasmadeitpossible.

MyheartfeltgratitudegoestomysupervisorMiss.Ronoforthetirelesseffortsandexpertiseherenderedtousduringhersupervision.

Specialthanksgotomyparents,siblings,friends,andclassmates,fortheirlove,moralandfinancialsupportduringtheentireperiodofourprojectproposal.

Iamindebttoallthosethathelpmeinanyway,andtherespondentswhowillinglygavemetheInformationIneeded.

GodBlessyou.

 

ABBREVIATIONS

AHP:AnalyticHierarchyProcess

BLI:BetterLifeIndex

CPAR:CountryProcurementAssessmentReport

ERH:EldamaRavineSub-countyHospital

ISO:InternationalOrganizationforStandardization

MOH:MinistryofHealth

OECD:OrganizationforEconomicDevelopment

PPDA:PublicProcurementandDisposalAct

WHO:WorldHealthOrganization

DEFINITIONOFTERMS

Procurement-Itistheprocessofacquisitionofgoodsandservices.Itincludessourcing,purchasingandallactivitiesfromidentifyingpotentialsuppliersthroughtodeliveryfromsuppliertotheusers.Itisfavorablethatthegoodsorservicesareappropriateandthattheyareprocuredatthebestpossiblecosttomeettheneedsofthepurchaserintermsofqualityandquantity,time,andlocation.

Suppliers-thisisapersonidentifiedandawardedacontractbyabuyingorganizationtoprovidegoodsorservicesatafee.Theyareidentifiedthroughasupplierselectionprocess.Theprocessshouldbecarriedoutthroughatransparentwaytoensurethatsuppliesareofhighquality.

Supplierselectionprocess-thisisthesystematicwayofidentifyingandselectingsuppliers,itiscarriedoutbythebuyingorganization;itiscarriedoutaccordingtotherulessetoutinthePPDA.

Purchasing:Thespecificfunctionassociatedwiththeactualbuyingofgoodsandservicesfromsuppliers

Sourcing:Referstotheprocessingofidentifyingandworkingwithappropriatesuppliers.

LeadTime:Thisisthetimebetweenorderandplacementofmaterialandtheactualdelivery,theshortertheleadtime,thebetterthesupplier.Everypurchasingfirmwillbecomfortablewhentheleadtimeisshortestpossible.Longleadtimehastheimpressionthatthespecificsupplierislessefficientorhejusthasmorecustomersthanhecanservethusdelayingdeliveries.

Procurementfunction-thisistheprocurementdepartmentinanorganization.

Healthsector-thisdealswiththephysical,mentalandsocialwell-beingofthepublicforexamplecureorremedytodiseases.

ABSTRACT

Thepurposeofthestudywastodeterminetheeffectsofsupplierselectiononprocurementperformanceinthepublichealthsector.AcasestudyofEldamaRavineSub-countyRefferalHospitallocatedatEldamaRavineTownBaringoCounty.Theresearcheraimedatfindingouttowhatextentcost,servicelevels,andsuppliersprofileaffectprocurementperformanceinpublichealthsector.Thestudyusedresearchdesign,whichwasapplicableforthestudy,asthestudyfocusedonassessingtheeffectsofsupplierselectiononprocurementperformanceinpublichealthsector.Thetargetpopulationforthestudywas15procurementemployeesinEldamaRavineSub-countyHospitallocatedatEldamaRavineTown.Theresearcherusedsurveymethodsinconductingthestudy.ThiswasinformedbythefactthatthenumberofstaffworkinginprocurementinERHwasknown.Thedatacollectedwasanalyzedusingmainlyfrequencytables,percentagesandpiecharts.

Thetopicentailsfourchapters.Chapteroneentailsintroduction,backgroundofthestudy,organizationprofile,globalperspective,regionalperspective,localperspective,statementoftheproblem,objectivesofthestudy,generalobjectives,researchquestions,significancescopeofthestudy,limitationofthestudyandtheassumptionofthestudy.Chaptertwocontains;introduction,theoreticalreview,analytichierarchyprocesstheory,attributeutilitytheory,conceptualframework,supplierprofile,financialstatus,price,distributioncost,servicelevel,leadtime,deliveryresponsetocustomer,procurementperformance,efficiency,deliverytime,effectiveness,empiricalreview,critiqueofliteraturereview,researchgapsandsummaryofliteraturereview.Chapterthreeentails;researchmethodology,researchdesign,targetpopulation,sampletechnique,datacollection,pilotstudy,validityofresearchinstrument,reliabilityofresearchinstrumentanddataanalysis.Chapterfourhas;dataanalysis,findings,interpretationoffindings,summaryoffindings,conclusionandrecommendations.

Contents

DECLARATION………………………………………………………………………………………………… i

DECLARATIONBYTHESTUDENT………………………………………………………………………. i

DEDICATION…………………………………………………………………………………………………… i

ACKNOWLEDGEMENT……………………………………………………………………………………. ii

ABBREVIATIONS……………………………………………………………………………………………. iii

DEFINITIONOFTERMS…………………………………………………………………………………….. iv

ABSTRACT……………………………………………………………………………………………………… v

CHAPTERONE…………………………………………………………………………………………………. 1

1.0INTRODUCTION………………………………………………………………………………………….. 1

1.1.BACKGROUNDOFSTUDY……………………………………………………………………………. 1

1.1.2ORGANIZATIONPROFILE………………………………………………………………………….. 2

1.1.2GLOBALPERSPECTIVEONSUPPLIERSELECTION………………………………………… 3

1.1.3REGIONALPERSPECTIVEONSUPPLIERSELECTION…………………………………….. 3

1.1.4KENYANPERSPECTIVEONSUPPLIERSELECTION……………………………………….. 4

1.2STATEMENTOFTHEPROBLEM……………………………………………………………………… 5

1.3OBJECTIVES……………………………………………………………………………………………….. 6

1.3.1GENERALOBJECTIVES……………………………………………………………………………… 6

SPECIFICOBJECTIVES……………………………………………………………………………………… 6

1.4RESEARCHQUESTIONS……………………………………………………………………………….. 6

CHAPTERTWO………………………………………………………………………………………………… 9

2.0LITERATUREREVIEW………………………………………………………………………………….. 9

2.1INTRODUCTION………………………………………………………………………………………….. 9

2.2THEORETICALREVIEW……………………………………………………………………………….. 9

2.2.2MULTIPLEATTRIBUTEUTILITYTHEORY………………………………………………….. 10

2.3CONCEPTUALFRAMEWORK………………………………………………………………………. 10

2.3.5SERVICELEVELS…………………………………………………………………………………….. 12

2.3.6PROCUREMENTPERFORMANCE……………………………………………………………… 12

2.6RESEARCHGAPS……………………………………………………………………………………….. 15

CHAPTERTHREE……………………………………………………………………………………………. 16

3.0RESEARCHMETHODOLOGY………………………………………………………………………. 16

3.1INTRODUCTION………………………………………………………………………………………… 16

3.2RESEARCHDESIGN……………………………………………………………………………………. 16

3.3TARGETPOPULATION……………………………………………………………………………….. 17

3.4SAMPLETECHNIQUE…………………………………………………………………………………. 17

3.6PILOTSTUDY…………………………………………………………………………………………….. 18

3.6.2RELIABILITYOFRESEARCHINSTRUMENT………………………………………………… 18

CHAPTERFOUR……………………………………………………………………………………………… 20

4.0DATAANALYSIS,INTERPRETATIONOFFINDINGS,SUMMARYOFFINDINGS,CONCLUSIONSANDRECOMMENDATIONS…………………………………………………………………………………………………………………….. 20

4.1INTRODUCTION………………………………………………………………………………………… 20

4.2RESPONSERATE………………………………………………………………………………………… 20

4.3PILOTSTUDY…………………………………………………………………………………………….. 21

4.3.1RELIABILITYTEST………………………………………………………………………………….. 21

4.4DEMOGRAPHICRESULTS…………………………………………………………………………… 22

4.4.1GENDEROFRESPONDENTS……………………………………………………………………… 22

4.5DESCRIPTIVESTATISTICS………………………………………………………………………….. 24

4.5.1FINANCIALEVALUATIONOFSUPPLIER…………………………………………………….. 24

4.5.2SERVICELEVEL………………………………………………………………………………………. 24

4.5.3SUPPLIERPROFILE………………………………………………………………………………….. 25

4.5.4PROCUREMENTPERFORMANCE……………………………………………………………… 26

4.5.5INTRODUCTION……………………………………………………………………………………… 26

4.5.6SUMMARYOFSTUDYFINDINGS……………………………………………………………….. 27

4.5.7CONCLUSIONS……………………………………………………………………………………….. 29

4.5.8RECOMMENDATIONS……………………………………………………………………………… 30

4.5.9LIMITATIONS…………………………………………………………………………………………. 31

4.5.10SUGGESTIONSFORFURTHERRESEARCH………………………………………………… 31

REFERENCES………………………………………………………………………………………………… 32

APPENDIXONE………………………………………………………………………………………………. 33

QUESTIONNAIRE…………………………………………………………………………………………… 33

INTRODUCTION……………………………………………………………………………………………. 33

SECTIONA:GENERALINFORMATION……………………………………………………………… 33

SECTIONB…………………………………………………………………………………………………….. 34

SUPPLIERPROFILE………………………………………………………………………………………… 35

PROCUREMENTPERFORMANCE…………………………………………………………………….. 35

APPENDIXTWO……………………………………………………………………………………………… 36

WORKPLAN………………………………………………………………………………………………….. 37

APPENDIXTHREE………………………………………………………………………………………….. 38

BUDGET……………………………………………………………………………………………………….. 38

.                                                     

CHAPTERONE

1.0INTRODUCTION

ThisstudyentailedassessmentoftheeffectsofsupplierselectiononprocurementperformanceinpublichealthsectorinKenya.Thechapterentailsthebackgroundofthestudy,statementoftheproblem,objectiveofthestudy,researchquestionsandsignificanceofthestudy,thescopeofthestudy,thelimitationofthestudyandtheassumptionsofthestudy.Thisguidedtheresearcherinconductingthestudyinaccordancewiththelaiddownprocedures.

1.1.BACKGROUNDOFSTUDY

Accordingto(Garry,2014),supplierselectionisameanofanalyzingandcomparingcurrentsupplierwiththenewlyacquiredoneswiththeaimofselectingonewhowillsatisfytherequirementoftheprocurementdepartment.Yousefatal,(2016)furtherdefinedsupplierselectionasaprocessofchoosingtherightsupplierwhichinvolvesmuchmorethanscanningaseriesofpricelistdependingonawiderangeoffactorssuchasvalueformoney,qualityandreliabilityandservices.

TheawardingofpublicprocurementcontractsisregulatedbythePublicProcurementAct,whichspecifiestherulesunderwhichthepublicprocurementshouldbeperformedandsetsconditionsofawardproceduresofpubliccontracts.Thequalityofexecutionprocedureinfluencestheefficiencyandtransparencyofthecontracts.Provisionofhealthfacilitieswithdrugsandmedicalsuppliesisaverycomplexprocessthatinvolvesalargevarietyofactorsfromboththeprivateandpublicsectors.Government’shealthministry’softenlackthemanagementskillsrequiredtopreparepropertechnicalspecifications,supervisecompetitivebidding,andmonitorandevaluatethecontractperformance.Corruptioncanoccuratanystageoftheprocessandinfluencedecisionsonthemodelofprocurement,onthetypeandvolumeofprocuredsupplies,andonspecificationsandsupplierselectioncriteriaultimatelycompromisingaccesstoessentialqualitymedicines.

1.1.2ORGANIZATIONPROFILE

EldamaRavineSub-countyHospitalisapublichospitallocatedatEldamaRavineTown.Offeringthemedicalandclinicalservicestothesubjectsofthecountry.Belowisasummaryofitssupplyandpurchasingstructure

 

1.1.2GLOBALPERSPECTIVEONSUPPLIERSELECTION

Globally,countrieslikeRussia,ChinaandUSA,thefollowingfactorsaffectssupplierselectionprocess;multiplesupplierselectioncriteria;conflictingviewsontheselectioncriteriatouse,involvementofmanysuppliersintheprocess,internalandexternalproblemsintheprocess.

However,inRussia,supplierselectiondecisionsintricateduetothefactthatmultiplecriteriamustbeconsideredinthedecisionmakingprocess.Multicriteriaapproachisusedintheselectionofsuppliers;(Weberandcurrent2011).

Althoughtherearenumerouscriteriausedinselectingsuppliersdependingonorganizations,manyhospitalsinRussiasuggeststhatthemostimportantareprice,lead-timeandquality.Comparatively,inbothChinaandUSA,nearly90%ofhospitalsbasetheirsupplierselectionprocessonquality,on-timedeliveryandresponsivenesstocustomerneeds,Chaoetal(2013)andmummalanenietal(2016)

1.1.3REGIONALPERSPECTIVEONSUPPLIERSELECTION

Regionally,inGhanaforinstance,therearemanyfactorsaffectingthesupplierselectioncriteria,andsomeofthemare;poorawardingofcontractswhichleadstounreliablesuppliers,corruptionwhileundertakingthesupplierselectionprocess.However,manyhospitalsinGhanahasputinplacethemeasurestoremedythisconstrains.HospitalsinGhanastrictlyandseriouslyadheringonPPDAAct663of2003,whichservesasaguidethatprovidesguidelineandprocurementprocedureforpublicprocuremententitiestoensurejudicious,economicandefficientuseofstateresourcesensuringthatpublicprocurementiscarriedoutinafairtransparentandnon-discriminatorymanner.Nigeriaalsoisnotleftbehind,amongothermethodsofsupplierselection,Nigerianhospitalsfocusontechnicalqualificationsandcompetency;financialresourcesand;equipmentandotherphysicalfacilities;managerialcapabilities,reliabilityandreputationoftheemployeestoperformprocurementcontractasprovidedforunder(PPDAAct663of2003),incarryingoutsupplierselectioncriteriaforeffectiveprocurementperformance.

Comparatively,inSouthAfricanhospitals,supplierselectionexerciseshouldconsider;ethics,humanrights,environmentandcommunityandworkplacesafetyanddiversity,aslaiddownbyCarter(2014),(LyonsandFarrington,2015)onengagingineffectivesupplierselectionprocesssoastoachieveeffectivepurchasingandeffectiveprocurementperformance.

1.1.4KENYANPERSPECTIVEONSUPPLIERSELECTION

Accordingtohealthsectorperformancereport2013and2014healthinstitutionsareailingfromshortageofdrugsorholdingonexpireddrugs.Publichealthcentersanddispensariesarehardlystockedwiththerecommendeddrugs.Itindicatesthathighrateofexpireddrugsindispensariesandotherpublichospitals,poorplanningandhighwastageofpublicresourcesinthecountiesthisaffectsefficientdeliveryofqualityservices.Supplierselectioninprocurementisanimportantpartofefficientmanagementandsupplyandreductionofwastageiscriticalforalloflevelhealthinstitutions.AneffectivesupplierselectionprocessensurestheavailabilityoftherightMedicalsintherightquantities,availableatrighttimefortherightpatientandattherightpricesandatrecognizablestandardsofquality(WHO,2007).

ThepublichealthsectorinKenyaisorganizedandimplementedthroughanetworkoffacilitiesorganizedinapyramidalpattern.Thenetworkstartsfromdispensariesandhealthclinics/postsatthebottom,uptothehealthcenters,sub-districthospitals,districthospitalslevel4,provincialgeneralhospitalslevel5andattheapexthereistheEldamaRavineSub-countyHospital.TheMinistryofHealth(MOH)isthemajorfinancierandproviderofhealthcareservicesinKenya.

ThepreparationofCountryProcurementAssessmentReport(CPAR)byateamofGovernmentofficials,WorldBankanddonorstaff,andnationalconsultants,revealsthatsubstantialinefficiencyinpublichealthsectorandconcludesthatthevalueformoneyisnotachieved.Themainfindingsofthe2002CountryPortfolioPerformanceReviewofWorldBankprojectsalsoreviewedslowprojectimplementationanddisbursementamongotherfactorsdueto,alargeextentofpoorsupplierselectioninprocurement,non-transparentprocurementproceduresandpoorawardingofcontract.

AtERHtherearevariousissuesidentifiedwhichincludesshortageofdrugs,poorspecificationsandineffectivemedicalequipmentwhichdoesnotsuitthehospitalsrequirements.Poorsupplierselectionprocesses,poorawardingofcontractswhichleadtounreliablesuppliers.

Supplierselectionencompassesactivitiesusedtoevaluatecapabilitiesofpotentialsuppliersandtoselecttheminordertoconfigureabuyer’ssupplychainforlong-termcompetitiveadvantage.Supplierselectioniscritical(Lao,HongandRao2010)asfirmsarebecomingmoredependentonsuppliers.Theevaluationsandselectionofsupplierscanbeappliedtoavarietyofsuppliersthroughoutthewholeprocessofproductlifecycletotheenduser.

Procurementisacriticalprocessthatpertainstheallocationofbudget,invitationofbids,evaluation,contractaward,contractadministration,performanceevaluationandreporting.Itishighlyalogicalprocessthatplaysabigroleininfluencingtheultimatepriceandcost.

Globally,manyauthorsagreethatthefollowingfactorsareprevalentinmakingthesupplierselectionprocessdaunting;multiplesupplierselectioncriteria,conflictingviewsontheselectioncriteriatouse,involvementofmanysuppliersintheprocess,internalandexternalproblemsintheprocess.Sincetheeffectiveprocessmustdealwithalltheseproblemseffectivelybothqualitativeandquantitative,ourobjectiveistoinvestigatefactorsaffectingsupplierselectioninprocurementofgoods,servicesandworksinpublicorganizationsinKenya.

1.2STATEMENTOFTHEPROBLEM

ThepreparationofCountryProcurementAssessmentReport(CPAR)byateamofGovernmentofficials,WorldBankanddonorstaff,andnationalconsultants,revealsthatsubstantialinefficiencyinpublichealthsectorandconcludesthatthevalueformoneyisnotachieved.Themainfindingsofthe2002CountryPortfolioPerformanceReviewofWorldBankprojectsalsoreviewedslowprojectimplementationanddisbursementamongotherfactorsdueto,alargeextentofpoorsupplierselectioninprocurement,non-transparentprocurementproceduresandpoorawardingofcontract.

EldamaRavineSub-countyHospitalisnotanexception.Variousprocurementissueshavebeenidentifiedsuchaspoorqualityofdrugsandmedicalequipment,latedeliveries,shortageofdrugsandequipment,expireddrugsstillinstore.Thesearesomeoftheissuestriggeredtheresearchertoundertakethisstudy.

BeilandRoss2009,arguethatpoorsupplierselectioncriteriawillcostthefirmalotoflossesduetorecalls,warrantycostsandinventoryadjustmentshavebroughtaboutdamagestofirmsontheirreputationsandfuturesalespotentials.Toavoidsuchnegativeconsequences,itisimportanttohaveeffectivescreeningprocessthatwillhelptoidentifythetopnotchsuppliersbeforeawardingthecontract.

 

1.3OBJECTIVES

1.3.1GENERALOBJECTIVES

ThegeneralobjectiveofthestudywastodeterminetheeffectsofsupplierselectiononprocurementperformanceinthepublichealthsectorinEldamaRavineSub-county.

SPECIFICOBJECTIVES

  1. To find out how financial evaluation influence supplier procurement performance of Eldama Ravine Sub-County.
  2. To evaluate how effects of ethics influence supplier procurement performance of Eldama Ravine Sub-County.
  3. To establish how accountability influence supplier procurement performance of Eldama Ravine Sub-County.

1.4RESEARCHQUESTIONS

  • How does financial evaluation influence supplier procurement performance of Eldama Ravine Sub-County?
  • How does effects of ethics influence supplier procurement performance of Eldama Ravine Sub-County?
  • How does accountability influence supplier procurement performance of Eldama Ravine Sub-County?

1.5SIGNIFICANCEOFTHESTUDY

ThisstudywassignificantinthesensethatitputsintoperspectivetheexactdeterminantsforsupplierselectioninEldamaRavineSub-countyHospital.Thestudyisofsignificancetosuppliersofgoodsasitshedlightonwhatthepublicorganizationsconsiderinasupplierbeforeawardingacontracttoanysupplierwhatsoever.Thestudyisalsovaluabletobusinessconsultantsandentrepreneurshiptrainersasithelpbusinessesdevelopcapacitiesinthekeyaspectsthatthepublicprocuringentitiesconsiderbeforeselectingsuppliers.Thestudyenablesmorefirmsdobusinesswithpublicprocuringentities.Thestudyalsoprovideddirectiontoresearchersindevelopingatheoryofbuyer’sbehavior.FurtherthestudyisverysignificantinthesensethatitcanserveasavertablesourceofinformationforpolicymakersinKenyaandacrosstheAfricancontinentonhowtoimprovethesupplierselectionqualities.

1.6SCOPEOFSTUDY

ThestudywasbasedondeterminingtheeffectssupplierselectiononprocurementperformanceinpublichealthsectorinKenyatakingthecasestudyofEldamaRavineSub-countyHospital.ThestudywascarriedoutbetweenthemonthofMayandAugustoftheyear2021

1.7LIMITATIONSOFTHESTUDY

Studyofthisnatureisnotexpectedtobewithoutlimitations.Someoftheselimitationsinclude:

Poorquestionnairefilling:Theemployeesfilledinthequestionnaireswithouttakingintomindtheseriousnessrequired.Pooransweringofquestionnairesmayleadtowrongoutcomesafteranalysisiscompletedandspoilageofthequestionnairesmayaddintothecosthencedistortingthebudget.

Lackofparticipationofallstakeholders:Inourresearch,datacollectioninstrumentswepreparedwereintendedtotargetemployeestakingpartinprocurementandtheChiefProcurementOfficer,therefore,otherstakeholderlikethesupplierswerenotabletoexpresstheiropinion.

Unavailabilityoftherespondents:Whenconductingdatacollection,therespondentswerebusyorunavailabletofillthequestionnairesduringthetimeweconductedthefieldwork.

Samplesize;thesamplepopulationstudiedwasonlybeenlimitedtooneorganizationbasingontimeandfinancialconstraints.

Secrecyofinformation;confidentialitysurroundingoperationofmanyentitiesmadeithardforstafftodiscloseinformationneededsincewewereconsideredasoutsiderstotheentity.

1.8ASSUMPTIONSOFTHESTUDY

Thestudyassumedthatallpublicinstitutionsemploythesameprocedureswhenselectingsuppliers.Theseinclude;

  1. Pre-qualificationstageofsuppliers
  2. Tendering
  3. Contractaward
  4. Thesamplepopulationselectedandtherespondentsgavetherequiredinformationforthestudy,anditwashonest.

CHAPTERTWO

2.0LITERATUREREVIEW

2.1INTRODUCTION

Thischaptercoveredthefollowing:theoreticalreview,empiricalreviewandconceptualframework.Literaturereviewistheprocessofidentifying,evaluating,synthesizingandpresentingrelevantinformationfromotherresourceslikepublicationjournalsandmagazines(MugendaandMugenda,2003).Thischapterexaminedpreviousstudiesregardingsupplierselectioninpublicorganizationsandaimedinidentifyingthegapsthatneededtoberesearchedon.

2.2THEORETICALREVIEW

Thischapterhighlightsthetheoriesusedbytheotherresearchersthatarerelevanttothestudy.

2.2.1THEANALYTICHIERARCHYPROCESSTHEORY

TheanalytichierarchyprocesswasdevelopedbySaaty(2001),whichisapowerfultoolinsolvingcomplexdecisionproblems.TheAHPhelpstheanalyststoorganizethecriticalaspectsofaproblemintoahierarchicalstructuresimilartoafamilytree.

Byreducingcomplexdecisionstoaseriesofsimplecomparisonsandrankings,thensynthesizingtheresults,theAHPnotonlyhelpstheanalyststoarriveatthebestdecision,butalsoprovidesthemwithaclearrationaleforthechoicesmade(Chinetal.,1999).IntheAHPapproach,thedecisionproblemisstructuredhierarchicallyatdifferentlevelswitheachlevelconsistingofafinitenumberofdecisionelements.Theupperlevelofthehierarchyrepresentstheoverallgoal,whilethelowerlevelconsistsofallpossiblealternatives.Themaingoalofeveryorganizationistoselectasupplierthatwillhelpinboostingitsprocurementperformance.Thistheoryhelpstheresearchertoevaluatethemostimportantvariablessuchascost,suppliersprofileandservicelevel.

Thistheoryalsohelpsdecisionmakerstoprioritizetheirneedsdependingontheirimportancetotheorganization,andtoselectthesupplierswhocansupplyatafavorablecostwhichwillboosttheorganizationsprocurementperformance,thesuppliersshouldalsoofferthebestservicesandtheirprofileshouldbegood.

2.2.2MULTIPLEATTRIBUTEUTILITYTHEORY

Basically,supplierselectionisacomplexdecision-makingprocess.Thecomplexitystemsfromamultitudeofquantitativeandqualitativefactorsinfluencingsupplierchoicesaswellastheintrinsicdifficultyofmakingnumeroustradeoffsamongthesefactors.Multipleattributeutilitytheoryenablesthedecisionmakertostructureacomplexproblemintheformofasimplehierarchyandtosubjectivelyevaluatealargenumberofquantitativeandqualitativefactorsinthepresenceofriskanduncertainty.ThemajorstrengthofMultipleAttributeUtilityTheoryisitsabilitytodealwithbothpredictableandrandomdecisionenvironments(Butler,2001).

Thistheorywillhelptheorganizationtomakethebestdecisionsonthesupplierforexample,asuppliercanhaveaslightlyhighercostthanothersbuttheirleadtimeisshortandtheirservicelevelisgoodandtheystillcanbeofferingavarietyofservicescomparedtosupplierwhosequotationislowbuthavealongerperiodofdeliveryandofferslessservices.Thistheorywillhelpthedecisionmakertochoosethebestamongsuchsuppliers.

2.3CONCEPTUALFRAMEWORK

Thisisadiagrammaticrepresentationofhypothesizedrelationshipbetweenindependentdependentvariablesofthestudy(Mugenda)

Independent variables                                                                      Dependent variable

Technicalevaluation
Financial evaluation
Ethicsonprocurement
Effectsofaccountability
Procurementperformance

Figure2.3.0ConceptualFramework

2.3.1FINANCIALEVALUATION

(Supplierprofile)

  • Financialstatus
  • Price.
  • Distributioncosts.

2.3.2PROCUREMENTPERFORMANCE

  • Effectiveness
  • Deliverytime
  • Efficiency

2.3.3TECHNICALEVALUATION

(Servicelevel)

  • Leadtime
  • delivery
  • Responsetocustomers

Source:Researcher2022

2.3.4SUPPLIERSPROFILE

Pasthistoryofsuppliershelpsinmakingdecisioninsupplierselection.Agoodhistorymeansthatthesupplierhasmoreexperienceinwhathedoesanditimpliesthatthesupplierhasagreaterprobabilityofperforminghistasksasrequiredascomparedtoasupplierwhoseprevioushistorywithclientsistaintedwithcomplaintsandpoorperformance.Theelementshereinclude;

2.3.4.1FINANCIALSTATUS

Financialcapabilityofasuppliercanbescreenedbyobtaininginformationabouthisannualturnoverandhisfinancialstructureinaccordancetopasthistory.Economicstatusofsupplier’scountrycanaffectrateofexchangeandlocalpricecontrol.Thismayresultinhigherhiddencostasinthecaseofinternationalsourcingduringsupplierselection.Agoodsuppliershouldhavegoodfinancialbase.

2.3.4.2PRICE.

Anorganizationrequirestheminimumpriceoftheproducttoincreaseprofitability.Itmustthereforefindalowcostsupplybasewhereitcanminimizecost.

2.3.4.3DISTRIBUTIONCOST.

Thisaffectanorganizationasitcontainschannelcost,distributionexpenses,inventorycost,handlingcostsandeveninsurancecost.Sinceanorganizationneedstoacquiregoodsandservicesatleastcostpossible,costmanagementbringsalotofbusinesstosupplierswhoofferleastcost.

2.3.5SERVICELEVELS

Theperformanceofthesupplierinprovidingserviceisthecriteriatodecideitssuitabilityforaparticularproduct.Forahigherprocurementperformance,thesupplierselectedmustofferbettercomplementaryservicesasidefromjustpricingsuchasreliability,intimedeliveryandefficiency.Itisthereforeimportanthencetoconsiderthesefactorsbeforeselectinganysupplier.Thisareanalyzedusingthefollowingattributes;

2.3.5.1LEADTIME

Thisreferstothetimebetweenorderandplacementofmaterialandtheactualdelivery.Theleadtimeshouldbeshortaseveryorganizationiscomfortablewhentheleadtimeisshorter.Longleadtimecansignifythatasupplierprofileislessefficientthusdelayingdeliveries.

2.3.5.2DELIVERY.

Suppliershouldbeabletofollowthedeliveryscheduledefinedinadvance.Supplierswhoareabletokeeppromisesareeasierinprofitableinworkingwiththem.

2.3.5.3RESPONSETOCUSTOMERS

Supplyshouldefficientlyandtimelyrespondtoandcustomerschangebehavior.Incaseemergencyoccursandcustomersraiseanorder,suppliershouldrespondtoitwithoutanydelaysoastoenhancesmoothoperations

2.3.6PROCUREMENTPERFORMANCE

Theaimofeveryorganizationistoutilizescarceresourcesinthemostefficientandeffectivemannersoastoachieveitsobjectiveswithminimalcosts.Thisnecessitatestheevaluationofsupplierssoastoensurethataninstitutiongetsthebestcontractsintermsofquality,costs,flexibilityandreliability.AccordingtoWalkerandRawlinson(2008),themeasurementofprocurementperformanceisthefirststepinbeingabletounderstandtheweaknessesandstrengthsofagivensystemandputintoplacecorrectiveactions.Developinganeffectivemethodformeasuringtheperformanceofprocurementrequirescertainindicatorstomakeevaluationpossible.

Theindicatorsofprocurementperformanceincludeefficiencyintheprocurementprocessmeasuredintermsofthecostoftransactionsandtime.Procurementperformanceisameasureofidentifyingtheextenttowhichtheprocurementfunctionisabletoreachtheobjectivesandgoalswithminimumcosts.VanWeele(2002)notedthattherearetwomainaspectsoftheprocurementperformance:effectivenessandefficiency.ProcurementeffectivenessasdefinedbyVanWeele(2002)istheextenttowhichthepreviouslystatedgoalsandobjectivesarebeingmet.Itreferstotherelationshipbetweenactualandplannedperformanceofanyhumanactivity.Additionally,heexplainsthatprocurementefficiencyistherelationshipbetweenplannedandactualresourcesrequiredtorealizetheestablishedgoalsandobjectivesandtheirrelatedactivities,referringtotheplannedandactualcosts.Asaresult,supplierperformanceisthemostimportantprocurementperformancedriver.

2.3.6.1EFFICIENCY

Accordingtovanweele(2002),theprocurementefficiencyistherelationshipbetweenplannedandactualresourcesrequiredtorealizeestablishedgoalsandobjectivesandtheirrelatedactivitiesreferringtotheplannedandactualcosts.Asaresult,procurementefficiencyisoneofthemainaspectsofprocurementperformance.

2.3.6.2DELIVERYTIME

Anotheraspectofprocurementperformanceisthedeliverytime.Theshorterthedeliverytime,theeffectivetheprocurementperformanceandviceversa.Deliverytimealsoindicatestowhatextenttheprocurementperformanceisabletheobjectivesandgoalsandobjectiveswithminimumcosts.

2.3.6.3EFFECTIVENESS

Procurementefficiencyasdefinedbyvanweele(2002)istheextenttowhichthepreviouslystatedgoalsandobjectivesarebeingmet.Itreferstotherelationshipbetweenactualandplannedperformanceofanyhumanactivity,asaresult,supplierperformanceisthemostimportantperformancedriver.

Previousempiricalstudiesshowthatfromempiricalfont,comprehensiveeffortshavebeenmadetodevelopdecisionmethodsandtechniquesforsupplierselection.Weber(2001)reviewedandclassifiedthe74articlesthatappearedsince1966withregardtoparticularcriteriausedinsupplierselection(Mendoza,2007).Inthispaperswhatcomeoutasmajorsupplierselectiondeterminantsinclude;price,deliverytime,qualityandproductioncapacityandlocation.Degreareeta(2000)usesthetotalcostofownership(TCO)astheframeworkforcomparingsupplierselectionmodels.2.5CRITIQUEOFLITERATUREREVIEW

Kamenya(2014)didaresearchonrelationshipbetweensupplierevaluationandperformanceinlargemanufacturingfirmsinEldamaRavineSub-countyandrevealedthatthereisapositiverelationshipbetweenthetwo;KamenyainhisstudyfailedtoextentthestudytovarioushospitalsinEldamaRavineSub-countysoastotouchonrelationshipbetweensupplierevaluationandprocurementperformanceinpublichealthsector.Nasra(2014)didaresearchseekingtoestablishtherelationshipbetweenprocurementperformanceandoperationefficiencyinthetelecommunicationindustryinKenya.Thestudydidnotlookattherelationshipbetweenprocurementperformanceandoperationsefficiencyinhospitals(publichealthsector)MwikaliandKavale(2012)didaresearchonfactorsaffectingsupplierselectionprocessinmanufacturingfirms,butthestudyfailedtoconsiderpublichealthsectorsoastoincludehospitalsinthestudy.Aseka(2010)didastudyonsupplierselectioncriteriaandperformanceofmanufacturingfirmslistedintheEldamaRavineSub-countystockexchange.ThestudydidnotconsiderthesupplierselectionandprocurementperformanceinthehospitalslistedinhealthsectorlistedinEldamaRavineSub-countyCounty,thusthefindingsarenotapplicable.

2.6RESEARCHGAPS

Alotofresearcheshavebeendoneonsupplierselectionprocessandtheireffectsinprocurementperformanceofanyorganization.Chemjor{2015}conductedaresearchonsupplierevaluationcriteriaandprocurementperformanceinparastatalsinKenya.

Wambui{2014}didaresearchofsupplierselectioncriteriaandsupplychainperformanceinnon-governmentalorganizationinKenya,Aseka{2010}didastudyonsupplierselectioncriteriaandperformanceofmanufacturingfirmslistedinEldamaRavineSub-countyStockExchange.Allthisstudieshavefoundpositiverelationbetweeneffectivesupplierselectionandorganizationalperformance.Thesestudiesillustratedthatfirmsconsideredquantitativefactorssuchassuppliertechnicalexpertise,commitmenttoquality,andabilitytomeetdeliveryduedateinsupplierselectionratherthanqualitativefactorssuchassupplierwillingnesstoshareconfidentialinformation.

Thesepreviousstudiesagreeonthevitalrolesupplierselectionprocessplayindeterminingprocurementperformanceinpublicinstitutions.However,therestillexistsomeuncertaintiesinthewholeprocessofsupplierselectionresultingtopoorperformanceinprocurementactivities.

ThisstudyaimedatdeterminingtheeffectsofsupplierselectionprocurementperformanceinpublichealthsectorinKenya.ItalsoaimedtounderstandprocurementperformanceinEldamaRavineSub-countyHospital.

2.7SUMMARYOFLITERATUREREVIEW

Underthischapterbothempiricalandtheoreticalexistingliteraturesarereviewedinthechapterandalsodiscussedtheresearchfindingsarisingfromthepreviousresearchers,aswellaseffectsofsupplierselectiononprocurementperformancerelatedtheories.egtheanalyticalhierarchyprocesstheory.Thechapteralsoentailstheconceptualframeworkwhichenablestheclearidentificationofindependentvariables.

Thechapterconcludesbyevaluatingcritiquesofliteraturesoastoshowthattheresearchisuniquefromtheresearchesofrelatedtopics,finally,thechapterconcludeswiththesummaryofliteraturereview,soastohighlightall

 

CHAPTERTHREE

3.0RESEARCHMETHODOLOGY

3.1INTRODUCTION

Thischapterrepresentsthemethodsthatwereusedtocollect,analyzeandinterpretdata.Itfurtherprovidesinformationregardingthetargetpopulation,samplesize,samplingdesign,datacollectioninstruments,proceduresandthetechniquesusedindataanalysis.

3.2RESEARCHDESIGN

Aresearchdesignistheplanandstructureofinvestigatingsoconceivedastoobtainanswerstoresearchquestions(Kothari,2004).Aresearchdesignfunctionsastheresearchblueprintformeasurementandanalysisofdata(Creswell,2003).Assuch,itisusedtoshowhowthemajorpartsoftheresearchprojecti.e.thesamples,measurementofvariables,treatmentsorcontrols,andmethodsofassignmentworktogethertotrytoaddressthecoreresearchquestions.

Basically,therearedifferenttypesofresearchdesign,andtheapplicationofeachoneisdeterminedbytypeandsizeoftheproblembeinginvestigated.Forthepurposeofthisstudytheresearcherwillmainlyapplytheuseofquantitativedataalthoughqualitativewillalsobeadopted.Thisapproacheswillbeadoptedbecauseofthenatureofthestudywherebyqualitativewillbeneededfordescriptivedataandquantitativewillbecompulsoryfornumericaldataandtheywillbothbeofferedindepthanalysisofvariablesthatwillbestudied.So,theresearcherwillbeflexibleindatacollectiontechniquesaswellasanalysis.

Thepurposeofthisstudywastoanalyzefactorsaffectingsupplierselectionandtheireffectsonprocurementperformance;itsoughttodescribethephenomenaasitexists.Therefore,researchdesignwillbeusedasitisdeemedtobethemostappropriate.

Variousauthorsrecommendtheuseofdescriptivedesign(e.g.seeOrodho,2004;Dane,2000)toproduceinformationthatisofinteresttopolicymakerseveninbusiness.Thedescriptiveresearchdesignwillalsohelpsavetimeandmoney.

3.3TARGETPOPULATION

Apopulationisthetotalcollectionofelementsaboutwhichinferencesaremadeandreferstoallpossiblecaseswhichareofinterestforastudy(Sekaran,2003).

ThetargetpopulationsforthestudyweretheemployeesattheEldamaRavineSub-countyHospitalinprocurementdepartment.Thestudyalsotargetedthechiefprocurementinthisorganizationastheunitofanalysisbecausehe/sheisalsotaskedwiththeresponsibilityofsourcingforsuppliesofgoodsandservicestotheirorganization.Thetargetpopulationswere40employees.ThestudyusedsurveytogatherinformationbecausethetotalnumberofemployeesinERHprocurementfunctionwasknown;italsoencompassedtheuseofsamplingsincequestionnaireswereissuedtoasampleofthepopulationintheprocurementfunction.

3.4SAMPLETECHNIQUE

Samplingreferstothesystematicselectionofalimitednumberofelementsoutofatheoreticallyspecifiedpopulationofelements.

Asamplesizeof15respondentsofthepopulationwastakenaccordingtooursampleformula.Thiswasinformedbytheprinciplethatiftheelementsofapopulationarequitesimilar,onlyasmallsampleisnecessarytoaccuratelyportraythecharacteristicsofinterest.Therationaleistodrawconclusionsabouttheentirepopulation.AccordingtoKothari(2004),theultimatetestofasampledesignishowwellitrepresentsthecharacteristicsofthepopulationitpurportsto.Thereasonforsamplinginthisstudyistolowercost,accessibilityofstudypopulationandthegreaterspeedofdatacollection.

Samplingwasusedbecauseitensuresagreaterstatisticalefficiencyandreducessamplingerror.

Formulatoobtainasample

3.5DATACOLLECTIONPROCEDURES

Thisresearchusedprimarymethodsofdatacollection.Primarymethodsofdatacollectionusedwerethequestionnairesasthemaininstrument.ThequestionnaireadministeredwasdividedintosectionAandB.Thatis,Aincludedquestionsongeneralinformation,SectionBincludedhowcostaffectssupplierselection,howservicelevelsaffectsupplierselection,howsupplier’sprofileaffectssupplierselectionBoththeemployees’andchiefprocurement’squestionareasaredividedintofivesections.Questionnairesgavetheresearchcomprehensivedataonawiderangeoffactors.Bothopen-endedandclosed-endeditemswereused.Questionnairesallowedforgreateruniformityinthewayquestionsareaskedandensuredgreatercompatibilityintheresponses.

Thequestionnaireswereadministeredbytheresearcherinordertohelpclarifyissuesormisunderstandingthattherespondentmayhave.Therespondentsweregivenatimeframewithinwhichtheywererequiredtorespondtothequestionnairewiththeresearcherpresenttohelpandcollectthequestionnaireuponcompletion.

Theuseofquestionnairesforprimarydatacollectionhasbeensupportedbymanyscholarsamongthem;Mugenda(1999),andPeil(1995).Aquestionnaireiseasiertoadminister,lesscostly,andensuresgreaterdepthofresponse,accordingtoMugenda(1999).Aquestionnairealsohelpscapturefactualinformationeffectively.Forthepurposeofthisstudy,thequestionnairewasusedforthemainlyeconomical,andappropriatenessreasons.

3.6PILOTSTUDY

Schindlerandcooperdefinedpilotstudyasatestasanactivitythatenablestheidentificationofflaws,weaknessesorevenlimitationsinresearchinstrumentshenceenablingtheresearcherstomakenecessarychangesandcorrectionbeforefinalstudyimplementation;(Kohari,2004).Inthisregard,thestudyconductedapilotstudyof40ofemployeesfromprocurementfunctionatERH.Thiswasenhancingathoroughtestingofvalidityandreliabilityofdatacollectioninstruments.Pilottestingassessthevalidityandreliabilityofthedatacollectioninstrumentshenceenablestheresearchertoamendontimetheadoptedresearchinstrumentstofacilitateaccuratefinaldatacollection.

3.6.1VALIDITYOFRESEARCHINSTRUMENTS

AccordingtoLindner,MurphyandBriers(2001),researchinstrumentsvalidityisthedegreetowhichthestudysampleoftestitemsactuallyfullyrepresentsthedesiredcontentsthattheyaredesignedtomeasure.Nevertheless,thisstudyperformedcontentvaliditysoastomeasurethedegreebywhichthecollectedresearchdatarepresentsspecificcontent.Alternatively,theengagementofaprofessionalexpertintheparticularfieldofinterestwascarriedoutsoastoobtainopiniontobeusedtoascertainthevalidityofthedesignedresearchinstruments.

3.6.2RELIABILITYOFRESEARCHINSTRUMENT

AccordingtoCronbach(1951)reliabilityisbasicallytheconstituencyofmeasurementofitems.Reliabilityisessentiallythedegreetowhichdesignedresearchinstrumentsmeasuresinthesamemannereachandeverytimeunderthesameconditionwiththesamesubjects.Ameasureisdeemedtobereliableifitprovidesconsistentresultwitheachrepetition.Thisstudyadoptedtheinternalconsistencymeasuredreferredtoascronbach’salpha.Thisisaco-efficientthatmeasuresinternalresearchinstrumentsreliability.Aco-efficientvalueabove0.7impliesthattheresearchinstrumentsarereliablehencetheresearchercanproceedusingtheminthefinalstage.

3.7DATAANALYSIS

Dataanalysisistheprocessofputtingthecollectedinformationinaformthatcanbeunderstoodbythepersonundertakingtheresearch.Thestatisticalmethodusedinthisstudyisdescriptiveandinferentialstatistics.Tables,piechartsandgraphswereusedtopresenttheresultsonvariousvariablesinthestudy.Descriptivestatisticssuchasmode,meanandmedianwasusedtopresentthevariouscharacteristicsfordatasetsafterthedescriptiveanalysis.Forthiskindofstudy,descriptiveanalysiswasthebestandhasbeensupportedbysuchscholarsasSchindler(2001),andCrawford(1995).Responsesfromquestionnaireswereorganizedaccordingtopertinentaspectsofthestudy.Johnson(2003)pointsoutthatmassivequantitativedatacollectedfromquestionnairesandobservationneedstobeorganizedwithsignificantpatternstorevealtheessenceofthedata.Responsestotheclosed-endeditemsinthequestionnaires,responsesandobservationdatawereanalyzedandrecordedquantitatively.Thatistheywereeditedandcoded.Theclosed-endeditemsinthequestionnaireswereanalyzedandreportedusingdescriptivestatisticssuchasfrequenciesandpercentages.Gay(2010)observesthatthecomplexityofanalysisisnotanindicatorofitsgoodness.Hethereforerecommendeduseofsimplestatisticsratherthanthemorecomplicatedone.Alltheresponseswereorganizedinthepertinentaspectsofthestudy,thatis,theywerevalidated.Theywerecheckedforcompletenessintermsoferrorsandomissions,inadequacy,illegibilityandirrelevantresponses.Structuredquestionnairesandsecondarydatawerecodedtofacilitatestatisticalanalysis.Descriptivestatisticssuchasmean,percentages,standarddeviationandfrequencydistributionwereusedtoenabletheresearchermeaningfullydescribethedistributionofmeasurements.Othersincludedpiecharts,tablesandcharts.

CHAPTERFOUR

4.0DATAANALYSIS,INTERPRETATIONOFFINDINGS,SUMMARYOFFINDINGS,CONCLUSIONSANDRECOMMENDATIONS

4.1INTRODUCTION

Thischaptercoversdataanalysisandinterpretationoffindings.Thechapteraddressesthegeneralinformationaboutrespondents,thefindingsgeneratedfromthestudy,descriptiveandinferentialstatistics.

4.2RESPONSERATE

Atotalof15respondentswereinvolvedinthestudyfromwhich15oftherespondentsfilledthequestionnairewithapercentagerateof100%whereas0%ofquestionnaireswerenotresponsive.Forthisreason,thestudyestablishedthattheresponseratewasconsideredexcellent.

ThisisasshowninTable4.2

TABLE4.2:RESPONSERATE

ResponseFrequencyPercent
Response15100
Non-response00
Total15100

Basedonthefigure4.1.5,therespondentswereaskedtoindicatetheireducationallevel.Accordingtothefindings,0%oftherespondentswereholdersofcertificatelevel,33.33%oftherespondentswereholdersofdiplomas,60%weredegreeholderswhile6.67%wereholdersofPHD.Thisindicatesthatmostoftherespondentswereholdersofdegrees.

 

4.3PILOTSTUDY

4.3.1RELIABILITYTEST

TABLE4.3.1MODELSUMMARY
ModelRRSquareAdjustedRSquareStd.ErroroftheEstimate
1.545a.297.1052.63825
Predictors:(Constant),X3,X1,X2DependentVariable:Y 

Fromtheresultsinthetable4.5.1above,thethreeindependentvariablesthatwerestudiedexplainstheprocurementperformanceby29.7%asrepresentedbyR2,thisimpliesthatthethreeindependentvariablesonlycontributesto29.7%oftheprocurement,whileotheraspectsnotcoveredinthisresearchcontributesto70.3%oftheprocurementperformance

Theresearchertestedamultipleregressionanalysistofindoutthecorrelationinvolvingtheindependentvariablesofsupplierselectionandtheboundariesofprocurementperformanceofthehospital.

Table4.3.2Validitytest
ModelUnstandardizedCoefficientsStandardizedCoefficientsTSig.
BStd.ErrorBeta
1(Constant)4.7237.352 .642.534
      
X1-.449.475-.338-.947.364
X2.845.526.5481.608.136
a.Predictors:(Constant),,X1,X2 b.DependentVariable:Y    

X2=Servicelevel

X3=supplierprofile

Thevalueofβ0indicatesthatthelevelofprocurementperformancewhenallexplanatoryvariablesareatzerois4.72.Thedataexaminedaswellshowsthat,obtainingalltheindependentvariablesatzero,aunitincreaseinservicelevelofsupplierswillleadtoa0.338increaseinprocurementperformancewhileaunitincreaseinsupplierprofilewillleadtoa0.526increaseintheprocurementperformanceofthehospital.Theseresultsinferthatsupplierprofilecontributesmoretotheprocurementperformancefollowedbyservicelevel.

4.4DEMOGRAPHICRESULTS

4.4.1GENDEROFRESPONDENTS

FIGURE4.4.1GENDEROFRESPONDENTS

Therespondentswereaskedtoindicatetheirresponseongender.Accordingtothefindings,67%oftherespondentsweremalewhile33%werefemalerespondentsasshownontable4.1.Theinterpretationderivedfromthestudyrevealedthattherewasbalance.

4.4.2LEVELOFEDUCATION

LevelofeducationFrequency%frequency
Certificate00
Diploma533.33
Degree960
PHD16.67
Others00

4.4.3YEARSOFWORKEXPERIENCEOFRESPONDENTS

NumberofyearsFrequency%frequency
Below1year213.33
1year-2years533.33
3years-4years533.33
Above4years320

Basedontheresearchfindingsfromfiguretherespondentswereaskedtoindicatetheworkexperienceinformofyears.Accordingtothefindings,13.33%oftherespondentshadlessthan1yearsofexperience,33.33%werebetween1to2years,33.33%oftherespondentswerebetween3to4years,and20%oftherespondentswereabove4years.

4.4.4DESIGNATIONOFTHERESPONDENTS

DesignationFrequency%frequency
Toplevel16.67
Middlelevel960
Lowerlevel533.33
OthersNone0

Basedonthefigure4.1.4,therespondentswereaskedtoindicatetheirpresentdesignationposition.Accordingtothefindings,6.67%werefromtoplevelmanagement,60%weremiddlelevel

4.5DESCRIPTIVESTATISTICS

4.5.1FINANCIALEVALUATIONOFSUPPLIER

StatementMeanStd.Deviation
Supplierselectionaffectstheprocurementperformanceofanorganization4.066667  0.883715  
Thetechnicalevaluationofsupplieraffectstheprocurementperformance3.733333  0.703732  
TherearestrategiesinplacetoensurecostsareproperlyminimizedinKenyatta4.133333  0.743223  
Thecostsincurredintheorganizationareproperlyaccountedfor3.933333  1.162919  
Averagemean3.966667   

Fromthefindingsintable4.2above,Supplierselectionaffectstheprocurementperformanceofanorganization(Mean=4.07,SD=0.883715),thisisbecausetherearestrategiesinplacetoensurethatcostisproperlyminimized(4.13,SD=0.743223),andcostincurredintheorganizationarewellaccountedfor(Mean=3.93,SD=1.16),thehighstandarddeviationsimpliesthattherewaslowlevelofconcurrenceamongtherespondents.Supplier.Thesupplierselectionprocessalsoaffectstheprocurementperformanceoftheorganization.Theaveragemean3.97impliesthattherespondentsagreedthat,costaffectstheprocurementperformance.

4.5.2SERVICELEVEL

StatementMeanStd.Deviation
TheservicelevelofsuppliersisconsideredduringthesupplierselectionprocessinKenyatta4.2  0.414039  
Theservicelevelofsuppliersaffecttheprocurementperformanceoftheorganization4.066667  0.798809  
Evaluationofservicelevelofsuppliersiscarriedoutbeforeselectionoftherightsuppliers4.266667  0.883715  
Strategieshavebeenputinplacetoensuresuppliersmeetstheexpectedservicelevels4.066667  0.798809  
Averagemean4.15   

Fromtheoutcomesinthetable4.3,theaveragemean4.15impliesthattherespondentsagreedthatsupplierselectionprocessaffectstheprocurementperformance.Strategieshavebeenputinplacetoensuresuppliersmeetstheexpectedservicelevels(Mean=4.07,SD=0.798809),whichincludeevaluationofservicelevelofsuppliersbeforeselectingtherightones(Mean=4.27,SD=0.883715)andconsideringservicelevelbeforeselection(Mean=4.2,SD=0.414039).Thelowstandarddeviationimpliesthattherewasahighlevelofconcurrenceamongtherespondentsontheirperception.Theservicelevelofsuppliersaffectstheprocurementperformanceoftheorganization(Mean=4.067,SD=0.798809)

4.5.3SUPPLIERPROFILE

StatementMeanStd.Deviation
Supplierprofileaffectsthesupplierselectionprocessinanorganization4.266667  0.593617  
ThereareeffectivestrategiesputinplacetoensuresuppliersprofileiswellevaluatedinKenyatta3.866667  0.915475  
Supplierswiththebestsupplierprofilearegivenfirstconsiderationduringtheselectionprocess4  0.654654  
Theorganizationhasputmeasurestoensuresthatthereiscontinuousimprovementinsupplier’sprofile4.333333  0.816497  
Averagemean4.116667   

Fromtheoutcomesintable4.4,anaveragescoreof4.12impliesthat,therespondentsagreedthatsupplierprofileaffectsthatprocurementperformance.ThereareeffectivestrategiesputinplacetoensuresuppliersprofileiswellevaluatedinKenyatta(Mean=3.87,SD=0.915475),Supplierswiththebestsupplierprofilearegivenfirstconsiderationduringtheselectionprocess(Mean=4,SD=0.654654)andtheorganizationputmeasurestoensuresthatthereiscontinuousimprovementinsupplier’sprofile(Mean=4.33,SD=0.816497).TheSupplierprofileaffectsthesupplierselectionprocessinanorganization(Mean=4.27,SD=0.593617)thelowstandarddeviationimpliesthattherewasahighlevelofconcurrenceamongtherespondentsontheirperception.

4.5.4PROCUREMENTPERFORMANCE

StatementMeanStd.Deviation
Suppliersdeliverbestquality3.666667  0.899735  
Wegetvaluefromsuppliersatcompetitiveprices3.866667  0.743223  
Highdiscountsonpurchases3.8  0.861892  
Reducedcostsinacquiringgoods3.4  0.736788  
Ontimedeliveriestoreducedelays3.333333  1.046536  
Averagemean3.613333   

Theaveragemean3.61inthetable4.5showsthatprocurementperformancehasbeenaffectedbysupplierselection.Thisisbecausetheorganizationfrequentlyassessestheprocurementperformance(Mean=3.866667,SD=0.743223)thisisbecausesuppliersdisplayreliabilitywhileexercisingtheirduty(Mean=3.8,SD=0.861892)andtheyareefficientintheirwork(Mean=3.4,SD=0.73446788),therespondentswereneutralonthat.TherespondentsneitheragreeingnordisagreeingthattheprocurementperformanceofEldamaRavineSub-countyhospitalwassatisfactory(Mean=333,SD1.046525)thehighstandarddeviationimpliesthattherewasalowlevelofconcurrenceamongtherespondentsontheirperception.

4.5.5INTRODUCTION

Thischaptermainlyoutlinesthesummaryofstudyfindings,theconclusions,recommendationsmadebasedonfindings,limitationofthestudyandthesuggestionsforfurtherstudies.

4.5.6SUMMARYOFSTUDYFINDINGS

Theresearcherdividedthestudyintothreepartsonthequestionnaire;firstly,responserateandgeneralinformationofrespondents,thesecondpartcontainedsupplierselectionfactorsatEldamaRavineSub-countyhospitalwhilethelastsectioncontainedtheprocurementperformanceofKenyattahospital.

Fromthefindings,15questionnairesthatwerefrontedtotherespondentswerecompletedandreturned.Thisrepresentedaresponserateof100%.Thisresponseconsideredsufficientforthestudy.Thestudyalsoestablishedthat67%oftherespondentsweremalewhile33%werefemale.66.66%oftherespondentshadbeenemployedintheorganizationforover2years.ThisthereforedemonstratesthattheyhadadequateinformationregardingtheeffectofsupplierselectiononperformanceofKenyattahospital.Thestudyfurtherestablishedthatmostoftherespondentsweremiddlelevelmanagers(60%)andlow-levelmanagers(33%).60%oftherespondentswereinprocessionofuniversitydegrees,33.33%haddiplomasand6.67%hadacquiredPhD.Thisindicatedthatmostoftherespondentshadknowledgethetopicunderstudyandhowprocurementperformanceintheorganizationwasaffectedbythesupplierselectionfactors.

TheresearchersoughttoassesstheeffectofsupplierselectiononprocurementperformanceofKenyattahospital.ThefindingsrevealedthatcostofsupplierselectionhighlyinfluencedprocurementperformanceofEldamaRavineSubcountyhospital.ItwasclearthatEldamaRavineSub-countyhospitalhadbeenputinplacetoimproveprocurementperformancewithameanof4.133,supplierselectionprocess(3.733),supplierselection(4.0667)andprocurementauditsandaccountingaffectedprocurementatameanof(3.9667).Choiceofsupplierselectionandstrategiestominimizehighlyinfluencedprocurementperformancewithameanof4.067and4.133respectively.Ameanof4-5indicatedthatthefactorinquestionhighlyinfluencedperformanceofKenyattahospital.Thefindingsfromregressionanalysisindicatethatbyobtainingalltheindependentvariablesatzero,aunitincreaseincostwillleadtocorrespondingincreaseinprocurementperformanceby0.287.ThefindingsofthisstudyrelatestothatofMwikaliandKavale(2012)whosoughttoidentifythefactorsaffectingsupplierselectionillustratedthat;theyconcludedthatcostassessment,organizationalprofile,servicelevels,supplierprofileandriskfactorsarethemajorfactorsaffectingselectionofsupplierselection.

TheresearchalsosoughttoassesstheeffectofsupplierservicelevelsonprocurementperformanceinEldamaRavineSubcountyhospital.Anaveragemeanof4.15indicatesthatservicelevelsofthesupplierhighlyinfluencedprocurementperformance.Supplierservicelevelwasconsideredhighlyinselectionprocesswithameanof(4.2).Thefindingsrevealedthatsupplierservicelevelsaffectedprocurementperformanceandthatstrategieswereputinplacetoensuresuppliersmettheselectionlevelcriteriawithameanof4.06667.Afurtheranalysisrevealedthataunitincreaseinservicelevelofsuppliersledtocorrespondingshiftinprocurementperformanceby0.338.ThestudywasthereforeabletoanswerthequestionthatsupplierservicelevelsaffectprocurementperformanceofEldamaRavineSub-Countyhospital.

Theresearchersoughttoassesstheeffectofsupplierprofileonprocurementperformance.Performancehistoryofsuppliershelpsinmakingdecisiononwhethertoretainasupplierorsourcefornewcompetitivesuppliers.Anaveragemeanof4.11667indicatesthatsupplier’sprofilesignificantlyaffectsprocurementperformanceofEldamaRavineSub-countyhospital.Continuousimprovementonthepartofthesupplierisconsideredatameanof4.3333.Supplier’sprofileisalsoconsideredinselectionofasupplierwithameanof4.2667.Supplierswithgoodperformanceprofileareusuallyselectedameanof4.Onthelowestpartareadequatecriteriaandstrategiestoassesssupplierprofilebeforeselection.Thefindingsrevealthatsupplierprofilewasthehighestfactorininfluencingprocurementperformance.AunitvariationinsupplierprofileleadstoanincreaseinprocurementperformanceofEldamaRavineSub-countyhospitalby0.526.

TheresearchsoughttoassesshowprocurementperformanceofEldamaRavineSub-countyhospitalandhowitisaffectedbysupplierselectionfactors.AccordingtoWalkerandRowlinson(2008),themeasurementofprocurementperformanceisthefirststepinbeingabletounderstandtheweaknessesandstrengthsofagivensystemandputintoplacecorrectiveactions.Fromtheoperationaldimension,procurementperformancerelatestothecostsofpurchasing,productand/orservicequality,deliveryandflexibilityinprocurement(Nair,Jayaram&Das,2015.AccordingtoBarsemoi,MwangagiandAsienyo(2014),poorprocurementperformancecontributestodecreaseinprofitabilityintheprivatesectorhenceisamajorhindrancetotherealizationoforganizationalgrowthasitleadstodelaysindelivery,lowqualitygoodsandservicesandincreaseindefects.Supplierprofile,servicelevelsandcostofsupplierselectiononprocurementperformancewerethevariablesconsideredusedtoassesstheireffectonprocurementperformance.Procurementperformancewasmeasuredinseveralways;qualitysupplies(3.6667),competitiveprices(3.8667)andhighdiscountsonpurchases(3.8).Whenallfactorsarekeptconstantat0,procurementperformanceofEldamaRavineSub-countyhospitalstandsat4.723.

4.5.7CONCLUSIONS

TheaimofthestudywastodeterminetheeffectofsupplierselectiononprocurementperformanceofEldamaRavineSub-countyhospital.Thefindingsofthestudyrevealedthatallthethreeindependentvariablesthatwerestudiedexplaintheprocurementperformanceby29.7%asrepresentedbyR2.Thisimpliesthatthethreeindependentvariablesonlycontributesto29.7%oftheprocurement,whileotheraspectsnotcoveredinthisresearchcontributeto70.3%oftheprocurementperformanceofEldamaRavineSub-countyhospital.

Thestudydiscoveredthatoutofthethreevariablesaffectingprocurementperformance,supplierprofilewasthemostinfluentialonprocurementperformance.Thefindingsstipulatethataunitchangeinsupplierprofileleadstoasignificantshiftinprocurementperformanceby0.526.AccordingtoMurigi(2014),supplierappraisalhasadirectcorrelationtotheoverallperformanceoftheprocurementprocesswith57.1%oftheperformanceoftheprocurementprocessbeingdirectlydeterminedbythesupplierevaluationandappraisalcriteria.Financiallystablesuppliersposelowerbusinessrisksastheyarelikelytoremainindependentthantheirfinanciallyweakcounterparts(Kipkorir,2013).

Theresearchalsoassessedcostofsupplierselectionasakeyvariableaffectingprocurementperformance.Thefindingsindicatedapositivesignificancebetweencostofsupplierselectionandprocurementperformance.Theanalysisofthevariableindicatedthataunitchangeincostofsupplierselectionleadstoacorrespondingvariationinprocurementperformanceby0.287.ThefindingsofthisresearchconformwiththatofMwikaliandKavale(2012)whotriedtoidentifythefactorsaffectingsupplierselection.Theirstudyconcludedthatacostcriterionisakeyfactoraffectingsupplierselectionforitdictatesamongmanyelements,theprofitmargins.Technicalcapability,qualityofmaterialsandtheprofileofthesupplierarealsocloselyconsidered.

Thestudyalsoestablishedasignificantrelationshipbetweensupplierservicelevelandprocurementperformance.Suppliersservicelevelrelatestoquality,deliveryperformance,continuousimprovementinitiatives,reliabilityandcostreductioninitiatives,Theaveragemeanof4.15indicatedthatsupplierservicelevelinfluencedprocurementperformancetoalargeextend.Aunitincreaseinsupplierservicelevelsleadstocorrespondingincreaseinprocurementperformanceby0.338.ThefindingsofthisstudyrelatestoanotherresearchconductedbyAseka(2010)onsupplierselectioncriteriaandperformanceofmanufacturingfirmslistedintheEldamaRavineSub-countyStockExchange.Thestudyillustratedthat,firmsconsideredquantitativefactorssuchasthesuppliers’technicalexpertise,commitmenttoqualityandabilitytomeetdeliveryduedatesinsupplierselectionthanqualitativefactorssuchassuppliers’willingnesstoshareconfidentialinformation.

4.5.8RECOMMENDATIONS

Fromthefindingsofthestudy,EldamaRavineSub-countyhospitalneedstoputmeasuresinplaceforidentificationandproperselectionofsupplierstomaximizeoverallprocurementperformance.Thestudyobservedthatcostofsupplierselection,supplierservicelevelsandsupplierprofileaffectedprocurementperformancewithameanof3.9667,4.15and4.11667respectively.

Supplierprofilewasthemostsignificantvariableinfluencingprocurementperformance.Ameanof4.11667indicatesthatsupplierprofileinfluencessupplierselectionandoverallprocurementperformancetoalargeextend.Aunitchangeinsupplier’sprofileaffectsprocurementperformanceby0.526.EldamaRavineSub-countyhospitalshouldputitsemphasisonscreeningsupplierspriortoselectiontosupplymaterialsandgoodstotheorganization.Supplier’sprofileshouldincludehisriskprofile,financialperformance,pastaccomplishmentsandcompliancewithlegalandregulatoryrequirements.Thesefactorshaveabearingonperformanceofthesupplierperformanceindischarginghisdutiesaswellasimprovingoverallprocurementperformance.Someofthesupplier’sprofileevaluationcriteriaincludefinancialability,quality,productionfacilities,environmentalissues,supplier’sorganizationalculture,costfactorsproductioncapacityandemployeecapabilitiesamongothers(Lysons&Farrington,2006).

Thestudyalsoestablishedthatcostofsupplierselectionaffectsprocurementperformance.Thegoalofeveryenterpriseistoutilizelimitedresourcesinthemostefficientmannersoastorealizeitsobjectiveswithminimalcosts.Supplierselectionisasignificantprocessforanyorganizationbecauseonaverage,productsthatarepurchasedaccountforbetweenfortyandsixtypercentofsalesoffinalproducts(CharteredInstituteofProcurementandSupply,n.d).Thisdirectlyinfluencethequalityandcostofpurchasedproducts;asmallgainincostduetosupplierselectionhassignificantbenefitsfororganizations.EldamaRavineSub-countyhospitalshouldthereforeensureefficientacquisitionofmaterialsatlowercoststomaximizethebottomlinewhilecreatingvaluefortheorganization.Thiscanbethroughonlinesourcingande-procurementtoreducerepetitiveandpaperintensivetasksthataddtooverallcostofacquiringmaterials.Thereisalsoanincreasingtrendtowardscollaborationbetweensuppliers,buyersandotherpartiesinthesupplychaininabidtoworkjointlytoreducecosts.

ThestudyalsoidentifiedsupplierservicelevelsasakeyvariabledeterminingselectionofsuppliersandhasabearingonoverallprocurementperformanceatEldamaRavinesubcountyhospital.Servicelevelcanbemeasuredindifferentways;reliability,responsetourgencies,ontimedelivery,qualityofservicesoffered,problemresolutionandaspectssuchasroutinecommunication.Asupplierwithexcellentservicelevelcanusuallypromotefasterresolutiontoproblems,reducedconflicts,andbetterdeliveryofcustomerserviceaswellaspromotingharmoniousrelationships.Ifasupplieroffersexcellentservicelevels,itcanleadtocostsavingsandimprovedprocurementperformance.

4.5.9LIMITATIONS

Someofthelimitationsofthestudy:Firstly,theindependentvariablesthathavebeenusedinthisresearcharenotlimitedtothree(3).Thestudystipulatesthatthethreeindependentvariablesthatwerestudiedexplaintheprocurementperformanceby29.7%asrepresentedbyR2.Thisimpliesthatthethreeindependentvariablesonlycontributesto29.7%oftheprocurement,whileotheraspectsnotcoveredinthisresearchcontributesto70.3%oftheprocurementperformance.Secondly,theresearchwasacasestudyofEldamaRavineSub-countyhospitalinBaringoasthecasestudyfortheresearch.ThefindingsmaynotrepresentthetruepictureofthepublichealthsectorinEldamaRavineSub-countyCounty.

4.5.10SUGGESTIONSFORFURTHERRESEARCH

BasedonthefindingsofthisstudythereisneedtoconductfurtherresearchonotherfactorsaffectingprocurementperformanceofpublichealthsectorinEldamaRavineSub-countyCounty.Furtherstudiesshouldbeconductedtoassessthecriteriausedinselectingsuppliersandtheireffectivenessinimprovingprocurementperformance.ThiswillhelptosolvechallengesthatsurroundsupplierselectioninKenya.

REFERENCES

Biel,D.(2009).Supplierselection(unpublishedresearchpaper).StephenM.RossSchoolofUniversityofMichigan,USA.Availableatwww-personal.umich.edu/…/SupplierSelection.

Bail,C.andSarkis,J.(2009).Selectionandsustainability:AGreyRoughSetevaluation(Workingpaper2009-05).GeorgePerkinsMarshInstitute.Beamon,B.(2001).Measuringsupplychainperformance

Mugenda,O.M&Mugenda,A.G.(2003).Researchmethods:Quantitativeandqualitative   Approaches:EldamaRavineSub-county:ACTSPress.

http://www.un.org

Quantityallocation(PHDthesis,Michigan.

Motwani,J.andYoussef,M.(2001).Supplierselectionindevelopingcountries:A  modeldevelopment.Emerald,10(13):154-162.

Ellram(1990).Thesupplierselectiondecisionsinstrategicpartnerships.JournalofPurchasingandMaterialsManagement.8-14

Ellrams(1995),TotalCostofOwnership:AnAnalysisApproachforPurchasing,InternationalJournalofPhysicalDistributionandLogistics,163-184.

KennethLyson(2001),PurchasingandSupplyChainManagement6thedition.

Cox,L.(1999),Vendorselection,methodsandevaluationcriteria.Theglobalreviewofpurchasingandsupplymanagement4theditionMichiganUSA

Kothari,C.R(2004),Researchmethodologymethodsandtechnique4thedition,newageinternational(p)LimitedPublisher,4835/24AnserineRoadNewDelhiIndia

LiJ,(2000),vendorselectionusingprincipalcomponentAnalysis.Theglobalreviewofpurchasingandsupply.63-69Li,N(2006),Supplierselectionindevelopingcountriesamodeldevelopment,Emerald10(13):154-162

Monczka,TrentandHandfield,(2002.)PurchasingandSupplyChainManagement.2(Ed)

Tan,K.CKannanVIR&Hadfield,R.B(1998),Supplychainmanagement,SupplierperformanceandfirmperformanceinternationalJournalofPurchasingandmaterialmanagement.

APPENDIXONE

QUESTIONNAIRE

INTRODUCTION

IamastudentfromEminingTechnicalTrainingInstituteconductingaresearchonthetopic“Effectsofsupplierselectiononprocurementperformanceinpublichealthsector”.Yourinstitutionhasthereforebeenselectedasacasestudyforthepurposeofthisresearch.Thisisanacademicresearchandtheinformationprovidedispurelyforacademicpurposeandwillbetreatedwithutmostconfidentiality.

Kindlyspendafewminutesofyourtimeandparticipateinourstudybyfillingthequestionnaire.Yourco-operationishighlyappreciated.

SECTIONA:GENERALINFORMATION

(Forthissection,pleasetick( )themostappropriatealternativeandfillinthespaceswhereapplicable)

1.Gender

AMale()BFemale()

2.         Howlonghaveyouworkedinthehealthsector?( )

 TimeTick
1Below7months()
27months–1year()
31.5years-2years()
42.5years-andabove()

3.What’syourpresentdesignation?

                        Toplevelmanagement()

                        Middlelevelmanagement()

                        Lowerlevelmanagement()

                        Others(specify)……….

4.Levelofeducation?

                        Certificate()

                        Diploma()

                        Degree()

                        PhD()

                        Others(specify)………

SECTIONB

Useatick(√)

Key:

SA-StronglyAgree

A-Agree

N-Neutral

D-Disagree

SD-StronglyDisagree

SERVICELEVEL

StatementSAANDSD
TheservicelevelofsuppliersisconsideredduringthesupplierselectionprocessinERH     
Theservicelevelofsuppliersaffecttheprocurementperformanceoftheorganization     
Evaluationofservicelevelofsuppliersiscarriedoutbeforeselectionoftherightsuppliers     
Strategieshavebeenputinplacetoensuresuppliersmeetstheexpectedservicelevels     

SUPPLIERPROFILE

StatementSAANDSD
Supplierprofileaffectsthesupplierselectionprocessinanorganization     
ThereareeffectivestrategiesputinplacetoensuresuppliersprofileiswellevaluatedinERH     
Supplierswiththebestsupplierprofilearegivenfirstconsiderationduringtheselectionprocess     
Theorganizationhasputmeasurestoensuresthatthereiscontinuousimprovementinsupplier’sprofile     

PROCUREMENTPERFORMANCE

StatementSAANDSD
ThecurrentprocurementperformanceofERHissatisfactory     
Theorganizationfrequentlyassessestheprocurementperformance     
Thesuppliersdisplayreliabilitywhileexercisisngtheirduty     
Thesuppliersareefficientintheirwork     
Materialssuppliedaredeliveredingoodtimeasagreed     

APPENDIXTWO

ActivityProject TopicChapter1Chapter2Chapter3Presentation AndCorrectionsCollection OfDataChapter4Chapter5Presentation OfReport
September           
October           
November           
December           
January           
February           
March           
April           
May           
June           
July           
August           

WORKPLAN

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIXTHREE

BUDGET

ActivityAmount
Stationery Pens Erasers Whitewash    350 50 100
ComputerServices Printing Photocopy Binding    2500 1000 500  
Contacts Meetings TransportCost Airtimecost    5000 3000 4000
DataCollection CostofPurchasingdata OtherExpenses  1000 2500
  Totals  20,000

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