EFFECTS OF JUST-IN-TIME PROCUREMENT STRATEGY ON ORGANIZATION PERFORMANCE OF FOOD AND BEVERAGE MANUFACTURING FIRMS IN NAIROBI COUNTY, KENYA

Abstract

Purpose: The objective of this study was to investigate the effects of Just-in-time procurement strategy on organization performance of food and beverage manufacturing firms in Nairobi County.
 Methodology: The study adopted a causal research design. To collect primary data the respondents answered questions administered to them through questionnaires. The unit of observation consisted of the Heads of Procurement, Production, Sales and Finance of the food and beverage manufacturing firms located in Nairobi County as listed by Kenya Association of Manufacturers in 2019. The sample size was 83 heads of department. Face validity was used to determine the accuracy of the study instrument while test re-test method was used to determine the reliability. The completed questionnaires were analysed with the aid of Statistical Package for Social Sciences. Data was analysed using descriptive and inferential statistical techniques.
 Findings: From the study findings Just-in-time (JIT) procurement strategy (β=0.689, t=3.469, p=0.001) had a positive effect on organization performance of food and beverage manufacturing firms. The value of adjusted R2 was 0.167 indicating that there was variation of 16.7 percent on organization performance due to changes in JIT procurement at 95 percent confidence interval.
 Conclusion: The study concluded that JIT Procurement strategy has a positive effect on organization performance of food and beverage manufacturing firms in Nairobi County. The overall effect of JIT Procurement strategy on organization performance was 68.9%. The study therefore accepted the alternative hypothesis that JIT procurement strategy has significant effect on organization performance of food and beverages manufacturers in Nairobi County.
 Unique contribution to theory, practice and policy: Food and beverge manufacturing firms in developing countries should consider implementing JIT Procurement strategy. This will ensure that they purchase the optimal level of items when needed to avoid keeping unnecessary inventory which ties up money and at the same time ensure that there is no shortage so that the customers have to wait. Policy makers in the food and beverage manufacturing sector should consider developing policies to promote JIT Procurement strategy in this industry. Further research should be conducted focusing on the service sector to investigate the effect of JIT Procurement strategy on organization performance for comparison.