Analysis of electronic procurement practices on supply chain performance in Nairobi metropolitan, Kenya

Abstract

The landscape of business management has undergone significant transformation, shifting from traditional in-house services and multipurpose functions to the widespread adoption of outsourced services. Study evaluates influence of (e-procurement) practices on performance of operations within the Nairobi Metropolitan area in Kenya. E-procurement systems refer to digital platforms that streamline the entire procurement process from requisition to payment and encompass functionalities such as e-sourcing, e-tendering, e-invoicing, and Procurement Management Information Systems (PMIS). Observation anchored on three: Resource-Based View (RBV), E-Technology Perspective, and Transaction Cost Theory. From primary objective, four specific objectives were derived: assess extent of e-procurement adoption Nairobi Metropolitan area, analyze impact of e-procurement on efficiency in operations, examine role of e-procurement in enhancing transparency and accountability and evaluate effectiveness of eprocurement in managing supplier relationships. These objectives guided formulation of hypotheses for testing. Data was collected using structured questionnaires distributed among respondents Nairobi Metropolitan region. Total of 210 respondents were targeted, comprising 60 individuals from top management and 150 from middle management. Data was analyzed using SPSS Version 29, employing both descriptive and inferential statistics. ANOVA results confirmed model’s statistical significance (p < 0.05). Study findings revealed that majority of respondents agreed e-procurement practices (mean = 3.79, SD = 0.901), particularly electronic tendering, positively influence organizational supply chain performance. Further results demonstrated Electronic Material Management (EMM) practices significantly enhance supply chain dimensions inventory management, logistics, cost control, and material handling efficiency (mean = 4.09, SD = 0.830). Additionally, electronic invoicing was perceived effective tool for improving cost efficiency, communication speed, and service reliability, which collectively enhance overall organizational performance (mean = 4.09, SD = 0.819). In conclusion, study suggests electronic tendering offers substantial benefits to organizations, including increased transparency, cost savings, standardized processes, and improved efficiency across supply chain. Furthermore, EMM practices were found particularly effective in enhancing logistics, reducing costs, minimizing excess inventory, and ensuring accurate material acquisition. Outcome underscore importance of electronic systems in ensuring accuracy, consistency, and timeliness within procurement processes, ultimately contributing to superior organizational outcomes. Based on findings, study recommends several strategic actions: Enhancement of technological infrastructure, Investment in training and capacity building, Development of comprehensive policy and regulatory frameworks and Standardization of procurement processes.