Factors That Influence Performance of Procurement in the Private Sector: A Case Study of Pwani Oil Products Limited, Mombasa County, Kenya

Procurement performance is the backbone of an organization success since it contributes to competitive purchase and acquisition of quality goods that puts the organization products or services in the competitive edge in the market. However, on several occasions, poor procurement performance has caused private sector financial loss due to delivery of poor-quality work materials, loss of value for money and inflated prices. The general objective of the study was to establish the factors that influence procurement performance at Pwani Oil Products Limited. The specific objectives of the study were: to establish the effects of specification on procurement performance, to assess the effects of supplier selection on procurement performance, to ascertain the effects of trained personnel on procurement performance and to establish the effects of information technology on procurement. The study was anchored on performance theory; Resource based view theory, theory of change management and technology acceptance theory. The study used descriptive research design. The target population of the study included 90 employees (top management, heads of departments and employees) at Pwani Oil Kikambala and Jomvu Plant. This study employed stratified and simple random sampling techniques in selecting study participants. The sample size for the study comprised of 73 respondents. The main data collection tool was questionnaire. Collected data were analyzed using Statistical Package for Social Sciences (SPSS 23). Pearson correlation and multiple linear regressions were used to test the relationship between variables in the study hypotheses. Analyzed data was presented descriptively using tables, graphs and pie charts. The study concluded that there was a significant effect on procurement performance. The organisation had proper material specifications and material specifications was always guided by quality service delivery, budget/cost, quality of work needed and availability of time. In addition, material specifications included regular follow ups. The study concluded that supplier selection had a significant effect on procurement performance. The organisation had effective selection supplier policies and supplier selection was influenced by supplier prequalification, supplier capacity, supplier appraisal, supplier financial ability and supplier budget as well as supplier flexibility. However, supplier selection was not influenced by supplier relationship with the organization supplier proximity to the organisation. The study concluded that personnel training had a significant effect on procurement performance. The organisation had enough employee training programs, employees of the organisation had relevant procurement knowledge and skills as well as procurement experiences. Furthermore, employee training reduced employee turnover and improved employee performance. The study concluded that IT had a significant effect on procurement performance. The organisation had embraced information technology in its processes and it had an ERP system. In addition, the organisation practised e-procurement and e-tendering. Furthermore, information technology improved service delivery in the procurement department. The study recommends that; there should continuously plan for procurement processes to adopt the best and new practices that reduce operational costs and enhance efficiency and organisations should embrace technology and implement the end to end use of technology that will improve efficiency in procurement performance among others.