THE INFLUENCE OF PURCHASING RISK MANAGEMENT ON SUPPLY CHAIN PERFORMANCE OF MANUFACTURING FIRMS IN NAKURU COUNTY, KENYA

Abstract

Many manufacturing firms look to continuous improvement as a tool to enhance their core competitiveness using Supply Chain Management (SCM). Heightened competition among firms posed by globalization, firms can drive value through effective SCM. Researchers notes that firms should look at whole SC performance as opposed to improving particular functions like logistics while neglecting upstream and downstream effects. A study argued that environmentally proactive companies are increasingly managing their suppliers’ environmental performance to ensure that purchased materials are environmentally friendly and have been produced by environmentally conscious processes. Green purchasing revolves around evaluation of suppliers ‘environmental performance and providing advice to suppliers to improve their performance. This study however did not investigate into the price cost analysis concepts as proactive purchasing practices that enhances supply chain performance a gap this still sought to fill. However, this is not yet the case in Kenyan manufacturing firms’ supply chain at present. This study sought to examine the influence of purchasing risk management on supply chain performance of manufacturing firms in Nakuru County, Kenya. The correlation results showed that a positive significant relationship existed (r = 0.528; p < 0.05). The study recommended that ,there needs to ensures there is supply assurance from the suppliers to mitigate purchasing risk to enhance supply chain performance and also firm should consider the possibility of improper supplier selection to ensure supply chain performance.