Electronic Procurement Implementation and Supply Chain Performance of Dairy Firms in Kenya

Abstract

In today’s dynamic and radical global business competition scenario, web based technology is of great importance. Due to increased globalization, deregulation and digitalization, information technology has become extremely important and businesses are now adopting e-commerce such as electronic procurement. Over the past decade in Kenya dairy processing firms have been using information and communication technology to enhance the procurement functions. Dairy industry in Kenya is undergoing stiff competition. This has seen them diversify their products and increase their customers’ network. Despite this, they are still experiencing slow adoption of e-procurement. The main objective of the study was to establish the relationship between electronic procurement implementation and supply chain performance of dairy firms in Kenya. The study will be anchored on relevant theories on e-procurement which are: Technology Acceptance Model, Supply Chain Network Theory and Systems Theory. This study used descriptive research design. The study population was the dairy firms in Kenya. Questionnaire was used to collect data. Data collected was analyzed quantitatively. The findings indicated that the firms had implemented E-procurement to a moderate extent. The procurement processes include: E-sourcing, E-tendering, E-reverse auctioning, E-ordering and E-informing. The respondents indicated that E-reverse auction contributes to Supply Chain performance to a large percentage (M=3.04, SD=0.031). The challenges faced by dairy firms include: fear of security threats and confidentiality of information (M=3.92, SD=0.854), inadequate technical expertise and staff in competencies (M=3.80, SD=1.004).From the above findings the following conclusions were made. E-procurement has been implemented to varying extents by the dairy processing firms. The aggregate E-procurement implementation level for all the dairy firms is moderate indicating that some of the firms are still using the traditional procurement methods to a moderate extent. The study concludes that the challenges of E-procurement implementation among dairy firms that were established from the study are: fear of security threats and confidentiality of information, inadequate technical expertise and staff in competencies. Security matters on any IT platform are a concern for all. Despite this, investment in the necessary IT security features in any electronic system will provide substantial deterrent from any unauthorized access or manipulation. The dairy firms should therefore invest in security systems within their entire IT platform that will give them the ability to minimize their exposure to such risks. The limitations of the study include the use of questionnaire which might suffer the problem of social desirability and study concentrated on only one industry thus generalization of results was limited.