Title:
STRUCTURAL EQUATION MODELING OF SUPPLY CHAIN MANAGEMENT PRACTICES ON RELATIONSHIP BETWEEN ADOPTION OF E-PROCUREMENT AND SUPPLY CHAIN PERFORMANCE IN MANUFACTURING FIRMS IN KENYA

Authors:
Ezekiel K. Chirchir, Kenya

Abstract:

As the world's economy becomes increasingly competitive, sustaining competitiveness and the resulting profitability depend largely on how firms manage their performance. The increasing global trend toward purchasing from outside the organization has brought about challenges in the supply chain. To overcome the supply chain problems some manufacturing firms have opted to implement electronic procurement as a strategy to improve their performance. The main purpose of this study was to investigate the mediating effect of supply chain management practices on the relationship between e-procurement adoption and supply chain performance. The study was guided by Diffusion of Innovation Theory, Resource Based Theory and Technology-Organization-Environment framework. An explanatory research design was adopted during the study. The target population was 4200 respondents from 12 manufacturing firms and suppliers. Purposive and proportional sampling was used to select a sample size of 365 respondents comprising of staff, managers and suppliers. Questionnaires and structured interview schedule was used to collect data. Structural equation modelling was used to determine the mediating effect of supply chain management practices on the relationship between the adoption of e-procurement and supply chain performance. The total indirect effect of supply chain performance on supply chain performance was 0.289 compared to the direct effect of 0.121. The total effect of supply chain performance on supply chain performance was 0.410. There was a significant partial mediation effect of the adoption of e-procurement on the supply chain performance via information sharing, partnership and integration mediators. Manufacturing firms should therefore embrace both E-procurement adoption and supply chain management practices to enhance supply chain performance in their firms. Stakeholders will find the research findings useful in diagnosing the problems bedevil ling the manufacturing firms and therefore make sound critical decisions regarding e-procurement for overall supply chain performance.