Influence of Supplier Evaluation on Performance of Manufacturing Firms in Kenya: A Case of Tata Chemicals Magadi

Abstract

The failure of suppliers to meet the deadlines and supply materials as and when required leads to huge losses in the supply chain operations. Studies have indicated that such supply chain issues can be solved by having a proper supplier evaluation because of the positive relationship between the two. Supplier evaluation has a direct correlation to the overall performance of the procurement process with 57.1% of the performance of the procurement process being directly determined by the supplier evaluation. The performance of the manufacturing sector in Kenya has experienced constant unsteady trends. Tata chemicals Magadi Limited is one of the companies that has recorded turbulence in its performance. Scholars argue that supplier evaluation has a direct correlation to the overall performance contributing 57.1% of the performance of the procurement process and hence the overall organizational performance. There was a need to establish influence of supplier evaluation on performance of manufacturing firms in Kenya with a focus on TATA chemicals Magadi. The study focused on suppliers’ financial status, technical capability, capacity and culture evaluation. The target population for this research study was 112 respondents in management positions at Tata Chemical Magadi Limited Company comprising of directors, managers, assistant managers and supervisors. Yamane formula was used to sample 87 respondents. The study findings revealed that supplier evaluation in terms of the suppliers’ financial status, technical capability, capacity and culture leads to a positive influence on performance.  The study recommends an enhanced practices of the four evaluation criteria’s among manufacturing firms in Kenya in order to improve their already deteriorating performance.

Keywords: Supplier Financial Status, Suppliers Technical capability, Suppliers Capacity, Suppliers Culture, Performance