ANALYSIS OF PROCUREMENT GOVERNANCE PRACTICES AND PETROLEUM SUPPLY CHAIN PERFORMANCE IN KENYA

Abdirizack Mohamed Sheikh, Dr. Jackson Ndolo

Abstract


This research aimed to analyze procurement governance practices and petroleum supply chain performance in Kenya. A survey was conducted with 100 oil marketing companies using a questionnaire. Data was analyzed quantitatively using descriptive and inferential statistics. The study found that most companies have implemented procurement policies, planning activities, performance management, and risk management to varying degrees, aligning with Institutional, Kaizen, and Transaction Cost theories. Procurement policies had a moderate influence, explaining 52.2% of performance variation. Planning had a significant influence, accounting for 62.4% of the variation. Performance management had the strongest link, explaining 74.2% of the variation. Risk management explained 70.1% of performance differences. Overall, governance practices positively influenced supply chain performance. However, in 2020 many companies experienced volatility in backorders, costs, and cycle times, indicating external factors also affect outcomes. The analysis suggests governance practices lay the foundation but must be complemented by data-driven improvements, process excellence, and supplier integration to drive performance. Key recommendations include adopting digital technologies for visibility, Lean Six Sigma to eliminate waste, collaboration with suppliers, talent development, and rigorous tracking of procurement KPIs. While current governance practices are necessary, leveraging data and technologies to actively improve processes and integration is crucial to realize the full benefits. Further research can explore governance in SMEs, organisational culture, supplier perspectives, and longitudinal studies.

Keywords: Procurement Rules and Processes, Procurement Strategy, Procurement Performance Management, Procurement Risk Management, Performance, Supply Chain


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