Effect of supplier evaluation on procurement performance of Public hospitals in Kisumu, Kenya

Abstract

Supplier Evaluation is key to the overall service delivery in an organization more so in the service industries where quality and timely service delivery is considered critical. Many of the procurement functions in the hospitals are mandated to ensure quality and timely deliveries of hospital pharmaceuticals and non- pharmaceuticals items. Public Hospitals are facing numerous challenges ranging from stockouts, capacity challenges both technical and financial from suppliers, long lead times, and poor workmanship descending their performance as evidenced by the 2020 PPOA report which recommended Supplier Evaluation as a solution to these challenges. This problem is however persistent in abate empirical application of supplier evaluation implementation and research studies. It is with this regard that this study purposed to establish the effect of supplier evaluation on the procurement performance of Public hospitals in Kisumu, Kenya. Specifically, this study sought to determine the effect of supplier consistency, supplier competence, and supplier production capacity on the procurement performance of Public Hospitals in Kisumu, Kenya. The study was anchored on Agile Supply Chain Theory and Supply Chain Management Theory. A correlational research design was adopted to carry out the study. The study target population was 63 drawn from JOOTRH, Kisumu County and Lumumba Hospitals which were selected using census survey as the sampling technique. Primary data collected using structured questionnaires will be used through the drop-and-pick method. A pilot study was conducted at Ahero County hospital on 11 employees. Content validity was ascertained through expert review, the recommendations of the experts were incorporated in the data tool. Cronbach’s alpha was used to gauge internal reliability where a coefficient of 0.971 was established this being above the allowable threshold of 0.7. The study established the following through multiple regression analysis. A general beta constant of 2.055 and a p=0.011. This implies that a unit increase in supplier evaluation all other factors held constant, would lead to a corresponding change of 2.055 in the procurement performance of the public hospitals in Kisumu at 95% confidence level. On the effect of supplier consistency on the procurement performance of Public hospitals in Kisumu, Kenya the study established (β = 0.213, p= 0.199 >0.05) this implies that a unit changes in supplier consistency would lead to unit change(increase) in the procurement performance by 0.213 units, this though is not statistically significant at α = 0.05. On the effect of supplier competency on the procurement performance of Public hospitals in Kisumu, Kenya the study established (β = 1.136, p = 0.000<0.05) this implies that a unit changes in supplier competence would lead to unit change(increase) in the procurement performance by 1.136 units, this being statistically significant at α = 0.05. On the effect of Supplier production capacity on the procurement performance of Public hospitals in Kisumu, Kenya the study established (β = - 0.293, p = 0.075>0.05, this implies that a unit changes in supplier capacity of production would lead to unit change(decrease) in the procurement performance by -0.293 units, this not being statistically significant at α = 0.05. The study therefore recommends the inclusion of supplier competency metrics into supplier evaluation criteria and exclusion of supplier consistency and supplier production capacity from it.