Purchasing Capability and Innovation of the County Government Suppliers in Kenya

Abstract

The study sought to investigate the extent to which purchasing capability has influenced county supplier innovation in Kenya. The study adopted a descriptive survey research design and was guided by the following specific objectives: to establish the extent of purchasing capability of the county governments in Kenya; establish the extent of supplier innovation among the county governments in Kenya; and to establish the relationship between the purchasing capability and supplier innovation among the county governments in Kenya. Both secondary and primary data was utilized in the study. Primary data was collected using a semi-structured questionnaire while secondary data was obtained from the financial statements and reports of the respective counties suppliers. The study population was the county government suppliers. Due to the heterogeneity of the suppliers, the suppliers were categorized into three main streams for easy analysability representing 30% of the total number of categories of suppliers in the devolved governance structure in Kenya; Agricultural & farm inputs, pharmaceuticals/chemicals, and construction/consultancy services. 1,288 suppliers were on the roll. Simple random sampling technique was applied to arrive at a sample of 296 respondents for the study. Descriptive and inferential statistics were applied to analyse the data. With the aid of SPSS version 23, a multivariate regression model was computed to establish the association between purchasing capability and supplier innovation among county government suppliers. The outcome of the study establishes a positive correlation between purchasing capability and supplier innovation with a Coefficient of Multiple Determination (R2) of 0.91 implying that up to 9.1% of the variation in supplier innovations in Kenya can be attributed to the purchasing capability of the county in Kenya. The p-value of 0.002 implies that the impact of purchasing capability on supplier innovation is significant at the 95% confidence level among the county governments in Kenya. At the micro level, suppliers in Kenya should invest more in putting up systems that can enable them tap into the opportunities of emanating from purchasing capabilities at the county governments in Kenya. Given the fact that most county governments have adopted purchasing capability to a moderate extent calls, the study further recommends that county governments put up more structures to foster supplier innovation to enhance supply chain performance among the counties. At policy level, the study recommends that the national government thought the line ministries put in place critical success factors for the implementation of best practice with regards to purchasing capability at the county governments across the country. The study sought to establish the association between purchasing capability and supplier innovation among the county government suppliers. It’s clear a study of this magnitude should include a sizeable number of suppliers. However time and material resources did not make this feasible and for this reason the study was confined to county government suppliers only. Due to the sensitivity of county operations matters in Kenya today, some of the respondents were non-committal posing major challenges in the field during data collection. This called for substantial editing after field work. Future studies should shade light on the challenges that have faced the adoption of practices associated with purchasing capability in Kenya’s public sector. Coupled with the fact that devolution and the county government structure in Kenya is nascent, future researchers should concentrate on determining the extent to which supplier innovation can enhance the competitiveness and efficiency of county governments in Kenya.