Effect of Lead Time on Procurement Management in the Motor Industry in Kenya

Abstract

The study sought to investigate the effect of lead time on procurement management in the motor industry in Kenya. The study was hinged on the supply chain management theory, the SCOR framework, the queuing theory and the theory of constraints. Specifically, the study sought to establish the effect of fixed lead time, preprocessing lead time, processing lead time and post processing lead time on procurement management in the motor vehicle assembly firms in Kenya. The study employed a descriptive research design on a target population of 38 registered motor companies in Kenya who were members of Kenya Motor Industry Association (KMIA) by the year 2015.The study conducted a census of the 38 Motor companies instead of adopting a sampling methodology. The respondents for the study were operations managers, IT managers, Procurement officers and logistics managers of the motor companies. The total sample size was 152 respondents. The data used for analysis was quantitative primary data collected through the use of questionnaires administered to operations managers of the companies. Descriptive statistics such as, mean and frequencies and inferential statistics (regression and correlation analysis) were used to perform data analysis. Data was presented in form of Tables, figures and charts. A multiple linear regression analysis model was used to test and link the variables. The study established that Fixed processing lead Time had a positive but insignificant relationship with procurement management this because the p-value was greater than 0.05. On the other hand, Pre Processing lead Time, Processing lead Time, and Post Processing lead Time, were found to have a significant and positive relationship with procurement management this because the p-value was less than 0.05. The study concluded that the company’s good lead time management significantly affected procurement management. The recommended that companies need to determine in real time if and when an order can be fulfilled profitably and should also promise a constant lead time to all customers, regardless of the characteristics of the order and the current status of the system.

Keywords: Fixed lead time, preprocessing lead time, processing lead time, post processing lead time, procurement management