Outsourcing and supply chain performance of Kenya medical supplies agency
Abstract
This study aimed at determining the relationship between outsourcing and supply
chain performance in the Kenya Medical Supplies Agency. The task specifically
included determining the influence of outsourcing on supply chain performance
efficiency at Kenya Medical Supplies Agency; determining the relationship between
outsourcing and supply chain performance at Kenya Medical Supplies Agency and
establishing the challenges of outsourcing in Kenya Medical Supplies Agency. The
study adopted a descriptive survey research design. The study targeted 109
respondents out of all 450 employees of KEMSA. The research employed a structured
questionnaire to collect data from the respondents. The findings reveal that
outsourcing influences supply chain performance at KEMSA to a large extent. The
findings reveal to a great extent that under production costs the organization through
outsourcing has: eliminated costly delays, increased the organizations’ overall
financial performance, experienced reduction of cost and operational expenses and
has saved a lot on distribution costs. The findings reveal that to a great extent on
quality improvement the organization through outsourcing has: built long term
relationship with suppliers to enhance its value addition, eliminated waste through
loss of drugs and achieved all time shelf availability. The findings further revealed
that to a great extent under strategic supplier partnership practices the organization
through outsourcing has: built long term relationship and encouraged mutual planning
aimed at improving supply chain performance, built long term relationship with its
suppliers to improve its strategic and operational capacity, become more competitive,
flexible and efficient in its operations, and been able to exchange information on
demand and proper management of inventory levels. The study findings also revealed
that to a great extent under collaboration and lean procurement practices the
organization through outsourcing has: responded to short term change in demand,
reduced lead time and achieved flexibility, achieved faster delivery and flexibility,
and increased access to timely information for decision making. The study findings
also revealed that to a great extent on core competence and continuous development
the organization through outsourcing has: reduced inventory levels and stock out
number, been able to reduce customer demand uncertainty and develop efficient
customer response, and improved customer service by delivering quality and valid
drugs in time. The study findings reveal to a very great extent that; loss of learning
opportunities from the outsourced activity, cost implications, confidentiality issues
and dilution of organizations culture are challenges of outsourcing. The study
concludes that production costs, quality improvement, strategic supplier partnership,
collaboration and lean procurement practices, and core competence and continuous
development have a significant relationship with supply chain performance in Kenya
Medical Supplies Agency. The study recommends that there is need for KEMSA
management to address challenges the organization faces during outsourcing.
Publisher
University of Nairobi