STRATEGIC PROCUREMENT PRACTICES AND ORGANIZATIONAL PERFORMANCE OF MILK PROCESSING FIRMS IN KIAMBU COUNTY, KENYA
M’thiangeta Ellyjoy Mwendwa - Master’s Student, Department of Management Science, Kenyatta University, Kenya
Dr. Perris Wambui Chege - Senior Lecturer, Department of Management Science, Kenyatta University, Kenya
ABSTRACT
The milk processing industry plays a significant role in agricultural output and supports the livelihoods of millions of people through agro-based activities. However, milk processing firms in Kiambu County have experienced a notable decline in performance over the past five years, with profit margins dropping from 15% in 2020 to 8% in 2024, and market share declining from 25% to 18% over the same period. Against this backdrop, this study examined the effect of strategic procurement practices specifically supplier collaboration, supplier evaluation, supplier diversification, and supplier development programs on the performance of milk processing firms in Kiambu County, Kenya. Anchored on the Resource-Based View (RBV) Theory, Stakeholder Theory, and Supply Chain Management (SCM) Theory, the study adopted a descriptive research design. The target population comprised all 17 registered milk processing firms, with 102 respondents including senior managers, procurement officers, and operational staff. A census sampling approach was employed. Primary data were collected through structured self-administered questionnaires using a drop-and-pick method, while secondary data were sourced from organizational documents and relevant journals. A pilot study conducted in Murang'a County confirmed instrument validity and reliability. Data were analyzed using Pearson correlation and multiple linear regression via SPSS Version 27. Results revealed a significant positive multiple correlation (R = 0.843) and that the four procurement practice dimensions collectively explained 71.1% (R² = 0.711) of the variance in organizational performance. Supplier development programs emerged as the strongest predictor (β = 0.263, p < 0.001), followed by supplier collaboration (β = 0.248, p < 0.001), supplier evaluation (β = 0.236, p < 0.001), and supplier diversification (β = 0.194, p < 0.001). The study concludes that strategic procurement practices are essential drivers of organizational performance in the dairy processing sector. It recommends that managers invest in structured supplier development programs, formalize supplier evaluation frameworks, pursue deliberate supplier diversification, and build collaborative supplier platforms.