E-procurement and Operational Performance of Pharmaceutical Firms in Nairobi, Kenya

Abstract

This study was set to establish the extent of e-procurement implementation by pharmaceutical firms in Kenya. In order to achieve this, the study set three research objectives namely; to establish the extent of e-procurement implementation by pharmaceutical firms in Nairobi, to determine the relationship between e-procurement and firm performance of pharmaceutical firms in Nairobi, and to find out the challenges faced by pharmaceutical firms in Nairobi when implementing e-procurement. The study used a descriptive research design to conduct the research. Questionnaires were the main data collection tools used by the researcher to collect data from the 40 respondents selected through a simple random sampling procedure. Descriptive statistics such as frequency distribution and percentages were used to analyze general information collected while means were used to analyze e-procurement practices, operational performance and challenges of e-procurement. Regression analysis was used to explain the relationship between e-procurement and organizational performance of pharmaceutical firms in Nairobi. Results revealed that E-Communication and E-Tendering are implemented to a great extent while E-Sourcing, E-Order Processing and E- Auctioning are implemented to a moderate extent. The study also established that there is a strong relationship between e-procurement and operational performance of pharmaceutical firms in Nairobi, Kenya. The study also found out that the most faced challenge is the high costs of implementing e-procurement. Other challenges faced to a moderate extent include high cost of training staff and poor e-Procurement implementation strategy. The researcher therefore recommends pharmaceutical firms to implement e-procurement in their procurement operations to improve the performance of their firms. The study also recommends that pharmaceutical firms should manage the rising costs associated with implementing e-procurement. On the other hand, the study encountered non-response while conducting the research. Some of the respondents also had difficulty understanding the questions in the questionnaire. Finally, the study recommends further research to be carried out in non-pharmaceutical firms order to improve on the study findings and policy change recommendations arising from this study to facilitate making of more adequate conclusions