An Analysis of customer satisfaction with procurement practices in manufacturing state corporations in Nairobi
Date
2017
Authors
Ogwang', John
Journal Title
Journal ISSN
Volume Title
Publisher
Strathmore University
Abstract
This study analyzed customer satisfaction with procurement practices in manufacturing State Corporations in Nairobi. This study was informed by the contingency theory of management and the resource-based view of strategy. The study focused on six manufacturing State Corporations with headquarters in Nairobi. A descriptive survey research design was adopted for the study. Structured questionnaires were administered to 66 respondents drawn from procurement, user departments, and external institutional customers of manufacturing state corporations. Quantitative data collected was summarized through the use of frequency distributions and analyzed using chi-square tests to show relations between respondents' ratings on procurement practices and study variables. The findings show that staffing levels in manufacturing state corporations do not affect cost efficiency in procurement processes in manufacturing state corporations. Cost efficiency, time efficiency, and quality control efficacy in procurement practices are cross-cutting issues that affect all manufacturing state corporations in a similar manner. To a moderate extent, cost efficiency in procurement processes in manufacturing state corporations is affected by transparency in the processes, the wastage due to paperwork, transport, and postage costs, many failed/abortive procurement processes, and the lengthy processes of sourcing for suppliers. The major causes of delays in the procurement processes, in manufacturing state corporations, are lengthy procurement process, requisition having to wait to be signed by the head of department, understaffing of procurement department, negligence by staff, lack of finance, Staff with vested interests and delays in paying of suppliers. The main measure of quality in manufacturing state corporations is whether goods supplied meet specifications or not. Price plays a significant role in quality determination due to the practice of picking bidders with the lowest pricing. Correlation analysis shows that lead times are strongly correlated to most complaints received from customers (end users and user departments). Additionally, there is a correlation between the quality of goods (measured in terms of meeting specifications) and most complaints from customers (internal and external). There is a correlation between procurement costs and common complaints from suppliers. There was no correlation between lead times, quality of goods procured, procurement costs, and the number of complaints received in the organization about procurement practices. The study recommends benchmarking among manufacturing state corporations and the adoption of e-procurement as ways of dealing with cost efficiency, time efficiency, and quality control challenges. The study also recommends a review of the Public Procurement and Disposals Act (PPDA) in order to shorten the lengthy procurement process but also provide mechanisms so that procurement managers can proactively purchase the best quality supplies at market prices.
Description
A dissertation submitted in partial fulfilment of the requirements for Master of Business Administration (MBA) at Strathmore University