Strategic Procurement Practices and Performance of Export Processing Zone Firms in Machakos County, Kenya.

Abstract

Export Processing Zones (EPZs) were established in Kenya to boost industrialization, attract foreign investment, and drive economic growth. However, despite significant government efforts, the performance of EPZ firms has been below expectations. This study investigates whether strategic procurement practices could improve the performance of EPZ firms in Machakos County, Kenya. Strategic procurement, which aligns procurement with organizational goals and emphasizes long-term value creation, was the focus. The study specifically explored the impact of strategic sourcing, strategic partnerships, strategic inventory management, and strategic contract management on the performance of EPZ firms in Machakos County. Using a descriptive research design, all 99 EPZ firms in Machakos County were surveyed through a census approach. Data was collected via structured questionnaires, with a pilot study conducted to ensure content validity and clarity. Both qualitative and quantitative data were analyzed, with results presented in tables and charts. The findings showed that the four strategic procurement practices adopted improved the performance of export processing zone (EPZ) firms in Machakos County. Strategic sourcing for instance significantly improved the operational efficiency and cost-effectiveness of EPZ firms. Firms that developed strategic partnerships with suppliers experienced enhanced product quality and supply chain reliability. Effective inventory management practices led to reduced waste and better resource allocation, positively impacting overall performance. Proper contract management was associated with improved compliance and reduced legal disputes, contributing to better performance metrics. The study concluded that adopting strategic procurement practices substantially enhances the performance of EPZ firms in Machakos County. By aligning procurement strategies with organizational goals and focusing on long-term value, firms can achieve greater efficiency, reliability, and cost savings. Policymakers should promote the adoption of strategic procurement practices within EPZs to boost economic performance.