Procurement Best Practices and Procurement Performance of Smes in Nairobi County

Abstract

This study was set out to establish Procurement best practices and Procurement performance of SMEs in Nairobi County. To accomplish this, the study set out two specific objectives which included: (i) To establish the extent to which procurement best practices are adopted by SMEs in Nairobi County and (ii) To determine the relationship between procurement best practices and procurement performance of SMEs in Nairobi County. The study adopted a descriptive research design of a cross sectional type approach and sampled forty-five (45) SMEs out of the total number of four hundred and thirty (450) SMEs in Nairobi operating in CBD through random sampling method to take part in the research. The researcher used questionnaires as the main data collection tool. The data was analyzed from 40 respondents in Trade, Manufacturing, Construction and Service sector using the SPSS (version 22). Mean and standard deviation was used to analyze the data and findings of the results was presented in frequency distribution tables. The study found out that, most of the respondents were Procurement managers, Procurement officers and Stores clerks. Majority had worked for more than 5 years in their designated roles, meaning that they had enough experience concerning the topic of study. Regression analysis findings revealed that procurement best practices has a positive effect on procurement performance with all the independent variables (Green Purchasing, Supplier Partnering, Adoption of Information Technology and Purchasing Ethics) hence all these variables had a statistically significant effect on procurement performance in terms of lowering of information search cost for suppliers, lead time delivery of goods and services to customer, professionalism in procurement of quality goods and services and flexibility in recycling of products procured. The study determined procurement best practices and procurement performance of SMEs in Nairobi County. This study accounts for 78.4% of procurement best practices affects procurement performance in firms. The study recommends that procurement management should ensure that there is an appropriate focus on procurement best practices in order to meet long term procurement performance in SME’s.