EFFECT OF SUPPLIER APPRAISAL ON PERFORMANCE OF MANUFACTURING FIRMS IN NAIROBI COUNTY, KENYA

Abstract

With the increased organization performance concerns and awareness among several stakeholders in the manufacturing firms as well as interest groups such as consumer groups, manufacturing sector organizations may find it appropriate to adopt supplier appraisal practices. This study is guided by the lean supplier competence model, shareholders theory, strategic theory and grey system theory. The study is guided by the following objectives, the supplier appraisal criteria, the supplier development, supplier appraisal practices and supplier appraisal approach. The research objectives and research questions set out and the scope of study limited to manufacturing firms in Nairobi County, Kenya. The study used descriptive research design. Data was analyzed using both descriptive and inferential statistics where regression analysis was used to establish the effect of independent variables on the dependent variable. The population census was 455 respondents drawn from manufacturing firms Nairobi county with a sample size population of 213. The data was analyzed with SPSS version 23. Non-probability sampling technique was used. As such, since the purposive non-probability sampling technique would be appropriate. Questionnaires were used to collect both primary and secondary data. Data collected was validated, edited, coded and then analyzed qualitatively. Descriptive statistics such as percentages and frequencies was used to summarize the data. It was established that most of the supplier appraisal indicators have positive impact on performance of the firm. The study findings showed that the four variables had a significant influence on performance of the firms. The study recommended that a similar research should be conducted with an aim at investigating the effects of supplier appraisal on performance with other variables or of other firms in other sectors, including the service industry in the Kenyan market. The study indicated that there has been limited amount of research on effects of supplier appraisal on performance of manufacturing firms in Kenya. Thus, the findings of this study serve as a basis for future studies on supplier appraisal.

Key words: Supplier Appraisal Criteria, Supplier Development, Supplier Appraisal Practices, Supplier Appraisal Approach, Performance