EFFECT OF SUPPLY CHAIN PRACTICES ON PROCUREMENT PERFORMANCE OF STATE CORPORATIONS IN KENYA

Abstract

Firm performance is a key determinant of business success, influencing operational efficiency, customer satisfaction, and profitability. To remain competitive and enhance performance, businesses are increasingly turning to supply chain digitalization as a strategic tool. However, past studies have not sufficiently linked supply chain digitalization with other critical business aspects. This study aimed to examine the effect of supply chain digitization on the performance of state corporations in Nairobi County, Kenya, focusing on the impact of electronic tendering, enterprise resource planning, cloud computing, and artificial intelligence on firm performance. The study was guided by the Resource-Based View Theory and the Technology Acceptance Model (TAM). An explanatory research design was used, targeting 411 state corporations registered with the Kenya National Bureau of Statistics. A sample size of 203 firms was selected through stratified and simple random sampling. Data collection was done using structured questionnaires, with a five-point Likert scale used to capture responses. Descriptive and inferential statistics were applied in data analysis. The study’s hypotheses were tested using linear regression analysis. The results revealed that electronic tendering (β=0.636, p<0.05), enterprise resource planning (β=0.178, p<0.05), cloud computing (β=0.157, p<0.05), and artificial intelligence (β=0.276, p<0.05) had a positive and significant effect on firm performance. The study concluded that digital tools such as these effectively enhance firm performance by improving operational processes, and recommended fostering long-term relationships within the supply chain to support competitiveness.