Examination of Effects of Internal Procurement Processes on Performance of Dairy Producer Co-operative Societies in Kenya

Abstract

Procurement is the nerve centre of performance in every institution whether public or private and therefore requires a strict system to be adopted. Kenyan dairy co-operative societies lose about 4 billion shillings every year due to inflated procurement quotations and post – harvest losses brought about by inadequate facilities, leading to lack of sufficient capacity and ageing infrastructure. Efficient integration of internal procurement processes can contribute greatly in eliminating these challenges but no co-operative has strongly been able to integrate procurement processes in their systems. The general objective of the study was to examine effects of internal procurement processes on performance of dairy producer co-operative societies in Kenya. The specific objectives of the study were to examine effect of requisition procedures on performance of dairy producer co-operative societies in Kenya, to determine effect of ordering procedures on performance of dairy producer co-operative societies in Kenya and to establish effect of inspection procedures on performance of dairy producer co-operative societies in Kenya. The study adopted descriptive correlational design and target population comprised of 72 dairy producer co-operative societies involved in production and processing of dairy products in Kenya. Census technique was employed for sampling, with respect to the unit of observation, which was the dairy producer co-operative societies involved in production and processing of dairy products in Kenya. Questionnaires were used as the main data collection instrument in a drop and pick later method and were reviewed for validity and reliability through a pilot study. Data collected was edited and reviewed for any errors and analyzed through descriptive and regression methods, where data collected was coded and entered in Statistical Package for Social Sciences version 26 for analysis. The study established that requisition procedures, ordering procedures and inspection procedures had significant positive relationship with performance of dairy producer co-operative societies in Kenya. Findings revealed that requisition procedures (p=0.001), ordering procedures (p=0.0041) and inspection procedures (p=0.0015) had significant positive effects on performance of dairy producer co-operative societies in Kenya. Therefore, the study recommended that for better performance of dairy producer co-operative societies in Kenya, the co-operatives should integrate efficient requisition procedures, ordering and inspection procedures in their procurement functions.