Service Outsourcing and Supply Chain Performance of Private Hospitals in Nairobi, Kenya

Abstract

It has become challenging to conduct business in the contemporary world, given the dynamic global environment. Based on numerous indicators of increased uncertainties in the future, organizations are becoming weary of the traditional ways of doing business. Most companies have come up with strategies to cope up with these challenges in order for them to be competitive and relevant in the market. One of the strategies is to concentrate on the core competencies and to entrust most of the activities to outside suppliers or to outsource them. Supply chain performance improvement is an endless process that needs an analytical measurement system. This study had two objectives; to determine the services that are commonly outsourced by private hospitals in Nairobi, Kenya, and to determine the effect of outsourcing on supply chain performance in private hospitals in Nairobi, Kenya. This study adopted a descriptive research design which was used to explain the relationship between the outsourcing and supply chain performance of private hospitals in Nairobi, Kenya. The study established that ICT services, logistics management services, cleaning services, and security services were the most commonly outsourced services. The findings of the study also revealed that there was a positive relationship between service outsourcing and supply chain performance. The study recommended that companies should carefully review their outsourcing strategies to use service providers in the delivery of certain services that are not significant in operation. The limitation of this study was that hospitals refused to participate in the study mentioning that the firm’s policy did not allow the dissemination of any proprietary information. This study recommended that a similar study should be done in the future, but on other industries to establish whether results and findings will vary.