ABSTRACT

The main purpose of this research proposal is to investigate the effect of supply chain
management on procurement performance of county governments: a case study of county
government of Nairobi. The specific objectives of this study will be to determine the effects of
staff competence on the procurement performance in County Government of Nairobi, to
establish the effects of resource allocation on the procurement performance in County
Government of Nairobi and to determine the effects of stakeholder influence on the procurement
performance in County Government of Nairobi. The study will guided by the following specific
objectives to determine the effect of staff competency on procurement performance in County
Government of Nairobi, to establish how resource allocation affects procurement performance in
County Government of Nairobi and to establish the effects of stakeholder influence on
procurement performance in County Government of Nairobi. This study is set to use a
descriptive research design. The target population of the study will comprise approximately 96
employees of selected departments in the county government of Nairobi. Data for this study is
set to be obtained from primary and secondary sources. The secondary data will be gathered
from the county’s government review reports on Human Resource Management. Primary data is
set to be obtained from questionnaires given to the employees. The study targets a sample size of
77 respondents from 96. The questions presented to the respondents will be closed ended
questions. Both quantitative and qualitative data will be collected. The qualitative data from
secondary sources will be analyzed using content analysis and logical analysis techniques. Data
analysis will be facilitated by statistical package for social sciences (SPSS) program vision 24
which automates data preparation. The data will be presented using tables and charts to give a
clear picture of the research findings at a glance.

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 CHAPTER ONE

1.1 Introduction
The study's background, the problem's statement, and the study's objectives are only a few of
the topics in this chapter. Additionally, it establishes the study issues that will be investigated
and indicates how the findings will benefit other people.

1.1 Background of the Study

Supply chain management (SCM) is one of the recent branches of management that have
evolved in the recent years. It has impact on economic growth as well as investment decision
of firms all over the world. Although supply chain counts for 15% of the total demand in
certain sector, in other sectors it can account for majority of the demand. On the other hand
public sector in procurement can still have impact on organizations which are not its primary
customers (Carter & Rogers, 2019).

As defined by Mentzer, et al., (2019), Supply Chains are interrelationship of organizations

where there is flow of services, products, information and finances either upstream or
downstream. SCM has been termed as a crucial function in many organizations whether in
the service or production industry. This is because every organization aims at satisfying their
customers whether internal or external which in turn lead to improved performance
(Kopczak& Johnson, 2017).

Supply chain management (SCM), as a global network used to deliver products and services
from raw materials to end customers through an engineered flow of information, physical and
cash. According to Lenny Koh et al., (2018) they stressed the need to have coordinative
mechanism that would uphold standards. This coordinative mechanism is termed Supply
chain performance. According to Waters (2018), he defines supply chain performance as the
way in which supply chains are administered from a central place to achieve responsibility
for business continuity, developing a shared sense of value within the organization,
safeguarding corporate knowledge and management of human capital.

Supply chain performance has changed the way public sector operates. This is as a result of
integration which enhances co-ordination of demand in order to satisfy customers’ needs.
Carter and Rogers (2019) point that, Supply chain performance not only helps organizations
streamline and manage supplier quality and supplier performance, but also enables them to

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identify, mitigate and manage supplier risks for key procurement and manufacturing
processes.

With the increased demand for better services in the public sector, there is need to effectively
manage the public supply chains. Nyaga, Whipple, and Lynch (2019), stressed that
interrelationships between the partners in the supply chain needs to be managed to enhance
performance, enhances continuity and shared sense of value within the whole organization.
Thus Supply chain performance seeks to implement a framework of integrating supply chain
plans which link to both internal and external customers (OGC, 2018). To sum up, Supply
chain performance has been seen as a powerful tool in enhancing the performance of supply
chain in both the public and private sector.

In the past decades, the public supply chain management system in Kenya has undergone
significant developments. In developing countries, public supply chain management is
increasingly recognized as essential in service delivery. Governments are the biggest
"spenders" and most of this amount is "internal" spending but some 25% to 50% is indeed
spent "externally" (on sourcing goods and services) and mainly through Public Supply chain
management.

Supply chain management functions enable firms to achieve maximum value from various
expenditures on crucial services (Supply chain management Policy Manual, 2018).The
presence of poor contract management characterized by payments delays to suppliers
obstructs greatly their ability to offer timely service delivery leading to delays that derails
organizational supply chain management timelines and schedules. The presence of a high
frequency of supply chain management plans formulation and evaluation contributes to better
organizational supply chain management performance. Transparency and publicity
effectively promotes accountability in the processes of purchasing and supply which in turn
improves on overall supply chain management performance. Adopted integrated supply chain
management systems enhances supply chain management accountability since they enable
procedures to be more clear thereby safeguarding against non-compliance through prompt
monitoring (Chene, 2019).

Supply chain management over time has become an important function at major firms.
Supply chain management experts are accountable in helping corporations to enhance the
value they receive from sourced materials, minimize costs, identify and manage risks related

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to suppliers (Kinyanjui, 2018). Achua (2018) deduced that employees on job competence
have an effect on organizational supply chain management processes. Higher employee skills
and capabilities leads to more diligent handling of assigned supply chain management tasks
as they are able to exercise due care and skill. In addition, inherent skills have an influence on
moral code of conduct that has an effect on the manner in which supply chain management
tasks are to be carried out.

More resources allocation as well as equipment to the supply chain management department
positively improves on supply chain management capabilities. The involvement of the supply
chain management department in decision making leads to more favourable outcomes in
organizational sourcing of needed material, services and equipment. The provision of
adequate professional support by management through training and educational has a positive
impact on supply chain management performance (Nzau & Njeru, 2018). Wanyonyi and
Muturi (2018) concluded that staff competence, information technology and ethics positively
affect supply chain management function performance. Organizations should therefore strive
to adopt modern technologies, promote employees competence and enhance the
implementation of good organizational moral code of conduct so as to attain improvements in
their supply chain management departments.

1.1.1 Profile of Nairobi County Government

This study is being undertaken at the County Government of Nairobi. The county government
is a legal entity under the local government Act (Cap 265) Laws of Kenya and the Devolved
government under the New Constitution of Kenya (Chapter 11). It is a kind of public
organisation organization mandated to provide services within its area of jurisdiction.
Additionally, county government is mandated to legislate, execute, and levy taxes. Nairobi
County is one of the 47 counties, situated in the coastal Kenya with a population of 4,397,073
as per the 2019 Census report.

County government of Nairobi has faced supply chain management challenges in the FY
2019/2020 expenditures according to the Auditor General reports, (2021) and the county
government budget implementation review report 2019/2020 published in August 2020 by
the Controller of Budget, the reports indicated that the county was faced with inadequate
staffing and low levels of staff capacity especially in public supply chain management and
financial management. This affected budget implementation, resulting in low absorption of
funds thereby hindering the supply chain management performance.

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1.2 Statement of the Problem
Performance measurement is crucial in enhancing the performance of organizations because
whatever gets measured gets done. The supply chain management function has not been
given the recognition it deserves in developing countries, in most public entities, regardless
of the effort by the partners like the World Bank, the International Trade Organization, the
United Nations Conference on Trade and Development, the World Trade Organization and,
others. This could be deliberate or sheer ignorance on the value the supply chain management
function could contribute to any organization (Telgen, Zomer, & deBoer, 2018).

According to the Auditor General’s 2019/2020 report, the supply chain management
functions of most public entities were not complying to set supply chain management
processes and performance procedures which have led to irregular and subjective decisions.
These decisions have had costly consequences for any public entity, and the country at large.
In developing countries, public supply chain management is increasingly recognized as
essential in service delivery and it accounts for a high proportion of total expenditure. For
example, public supply chain management accounts for 60% in Kenya, 58% in Angola, 40%
in Malawi and 70% of Uganda’s public spending. Due to the colossal amount of money
involved in government supply chain management, there is need for accountability and
transparency. Supply chain management is the nerve centre of performance in every
institution, whether public or private and thus needs a tight system to be followed and
adopted.

Local studies on the area of supply chain management performance have focused on the
effect of supply chain management process in companies. Ngugi and Mugo (2018) analyzed
the effect of supply chain management activities on the operation and effectiveness of public
sectors in Kenya; however, the study did not focus on county governments in Kenya. Chipiro
(2018) examined the impact of E-supply chain management on strategic sourcing in limited
banks in Zimbabwe while Heng (2018) examined the factors influencing supply chain
management performance in Malaysian Banks however these studies did not focus on county
governments in Kenya. Jackinda (2020) did an investigation into the effectiveness of the
supply chain management performance measurement systems of large manufacturing
companies in Nairobi but did not address the determinants of supply chain management
performance. (Rwoti, 2019) did a study on supply chain management performance
measurement systems of large manufacturing companies in Nairobi but did not address the
supply chain management performance in Kenya. However, there lacks conclusive studies in

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Kenya as majority of reviewed studies focus on developed economies. This forms the
research gap. It is for this research gap that the study wishes to establish the determinants of
effective supply chain management performance in Nairobi County.

1.3 Research Objectives

1.3.1 General Objective
The general objective will be to establish the effect of supply chain management on
procurement performance of county governments: a case study of county government of
Nairobi

1.3.2 Specific Objectives of the Study

1. To establish the effect of staff competence on procurement performance in County
Government of Nairobi.

2. To establish the effect of resource allocation on procurement performance in County

Government of Nairobi.

3. To establish the effect of stakeholder engagement on procurement performance in

County Government of Nairobi.

1.4 Research Questions

1. Does human staff competence have an effect on the procurement performance in
County Government of Nairobi?

2. Does resource allocation affect the procurement performance in County Government

of Nairobi?

3. Does stakeholder engagement affect the procurement performance in County

Government of Nairobi?

1.5 Significance of the study

The findings and recommendations of the study will be useful to the government, all supply
chain management units at the County ministries, and interested stakeholders for guidance in
coming upon with a comprehensive policy that is supportive to effective management of the
supply chain management performance. The findings may also be useful as reference
materials guiding future studies, planning and monitoring of correct and future supply chain
management performance. The findings and recommendations of the study will add on to the
existing knowledge on the determinants of supply chain management performance. This

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research will also enable the researcher attain the requirements for the award of degree in
bachelor of Supply chain management logistics option.

1.6 Scope of the study

The study will be carried out to establish the determinant of effective supply chain
management performance at the County Government of Nairobi. The study will aim at
collecting information from 80 respondents. The study will comprise various departments in
county government of Nairobi and the category population will include both male and
female.