EFFECT OF PROCUREMENT OUTSOURCING ON PERFORMANCE OF STATE CORPORATIONS IN KENYA

Abstract

The aim of the study was to find out the effect of procurement outsourcing on performance of state corporations in Kenya. This study was guided by 4 objectives namely: to evaluate the effect of inbound logistics outsourcing, outbound Logistics, Logistics Outsourcing and third Party Logistics Outsourcing on performance of state corporations in Kenya. Based on this, the current study is anchored on transaction cost economics theory, resource based view, SCOR model and the Principal Agent theory. To satisfy the objectives, descriptive research design was adopted. The study population was 152 state corporations in Kenya. A total of 64 state corporations were randomly sampled. Primary data was collected from the Head of procurement and operations managers of state corporations using structured questionnaire. Data analysis was done using Statistical Package for Social Sciences (SPSS) version 22.0 with the main analysis tools being frequencies, mean and standard deviation and multivariate linear regression. Correlation results showed that inbound logistics outsourcing, outbound Logistics, Logistics Outsourcing and Third Party Logistics Outsourcing have a positive and significant effect on the performance of state corporations in Kenya. The study concluded that inbound logistic outsourcing; outbound outsourcing, logistic outsourcing significantly and Third Party Logistics Outsourcing positively and significantly affects the performance of state corporations in Kenya. The study recommends the state corporations in Kenya to ensure there are offloading facilities. There is also need for state Corporations to train their staff on handling delicate inputs. The study recommends the state corporations to ensure there are appropriate storage facilities for outbound goods as well as handling facilities for goods in store. There is also need for state corporations to ensure their routes are optimized. The study further recommends the state Corporations to ensure they have fleet tracking tools so as to increase vehicle visibility.

Key Words: Inbound Logistics Outsourcing, Outbound Logistics, Logistics Outsourcing, Third Party Logistics Outsourcing, Performance