TABLE OF CONTENTS
Title: Page
Declaration ..................................................................................... .i
Approval .................................................... ..................................... ii
Dedication ...................................................................................... .iii
Acknowledgement ... ... ............................................................. .......... .iv
Table ofcontents ............................................................................... v
List of tables .. .... .......... .......... .... .... ...... .... .......................... .............. viii
List of figures ................................................................................ ... ix
Abstract. ...... ..... .... ............................................................ J •••••••••••.• x
CHAPTER ONE: INTRODUCTION.
1.0 Introduction ............................................................................ 1
1.1 Background to the study ............... ................ . ............................. 1
1.2 Statement of the study ................................................................ 2
1.3 Purpose of the study ......................... . .............. ........................... 3
1.4 Objectives of the study ...................... . .......................................... 3
1.5 Research questions ........................................................................ 3
1.6.0 Scope of the study ........ ................ ........................ . ....... ............... 3
1.6.1 Study scope .. .... . ............ ................................................. ......... 3
1.6.2 Time scope .. ... ....................................... ...... ... ......................... 4
1.6.3 Geographical scope ......................................... .............................. 4
1.7 Significance ofthe study ....... .-.................................................... .4
1.8 Conceptual frame work .................... ............ .... ............ . ! ............. 5
CHAPTER TWO: LITERATURE REVIEW
2.0 Introduction ........ .. .. . ............................ ......... ........ ... . ....... . ...... 6
2.1.0 Definition of key terms ................................. . ..... ........... ............. 6
2.1.1 Procurement strategy ............................................................... .... 6
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2.1.2 Cost performance .................. .. .............. ........................... .......... .. 7
2.2 The Procurement process ....... ...... ........... ........... ... ....... ... ... .............. 8
2.3.0 Procurement strategies ................................................................... 8
2.3.1 Supply base optimization ................................................................ 9
2.3.2 Global sourcing ...... ............................ ... ...... ..... .................. .......... 9
2.3.3 Early supplier design involvement. ....................................... ............... 9
2.3.4 Total cost of ownership .. ... ........... .................................................. 9
2.3.5 Long-term supplier relationships ...................................................... .10
2.3.6 E-reverse auctions ........................................................................ 1 0
2.4 Challenges of procurement strategy ................................................... 11
2.4.1 Lack of skilled personnel. ...................................... .... ........... .......... 11
2.4.2 Corruption and embezzlement .............................. ............................ 12
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2.4.3 Inflation .......... .............................. ..... .... ....... .............. .... ......... 12
2.4.4 Financial constraints . .................................................. ... ............... 12
2.4.5 Implementation ........................................................................... 13
2.5 Cost Performance Measures .. .......................................................... 13
2.6 Various products/ services offered .... .... ............................... ...... ........ 14
2. 7 The relationship between procurement strategy and cost performance .......... 14
2.8 Conclusion ......... ................ ......... .................................. ...... ...... 15
CHAPTER THREE: METHODOLOGY
3.0 Introduction ................................................................ ............... 16
3.1 Research design .................... .. ................ .... ... .. .. .............. ..... .... .. 16
3.2 Study/ target population ...................... . .............. ............ . ............... 16
3.3
3.4
3.5
3.6
Sample design/ techniques ........................ .......... .... ........ ..... ............ 16
Sample size .. ............................... ................... ............................. 16
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Data collection instruments ............................................. ....... .......... 17
Data Processing, Presentation and analysis ............... ........ ..................... 18
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3.7 Limitation of the study .................................................................. .18
3.7.3 Limited time .............................................................. 1 •••••••••••••••• l8
CHAPTER FOUR: PRESENTATION, ANALYSIS AND INTERPRETATION OF
THE FINDINGS
4.0 Introduction .............................................................................. .19
4.1 Data analysis and nature of respondents .............................................. 19
4.2 Procurement strategies ................................................................... 24
4.3 Challenges of procurement strategy ................................................... .27
4.4 Cost of performance ...................................................................... 28
4.5 The relationship between procurement strategy and cost performance ........... 30
CHAPTER FIVE: SUMJ\IIERY OF THE FINDINGS, CONCLUSIONS AND
RECOMMENDATIONS
5.0 Introduction ............................................................................... 31
5.1 Summery of findings .................................................... ! ............... .31
5.2 Conclusions ............................................................................... .32
5.3 Recommendations ........................................................................ 32
5.4 Areas of further research ................................................................. 34
References ......................................................................................... .35
Appendix A ........................................................................................ 37
Appendix B ....................................................................................... .40
Appendix C. ....................................................................................... 41
ABSTRACT This study was carried out to examine procurement strategies and cost performance in business fums and in particular Shell petrol station - Bugolobi. The objectives were focused on procurement strategies in organizations, the challenge of implementing strategies, the cost performance measures and the relationship that indicated a positive progress between the two variables. It also reflected the procurement process used by firms while undertaking procurement activities. I The method of collecting data and the research design used was descriptive in nature where the researcher designed questionnaires that were given to a selected number of respondents in different departments of the organization randomly. The data sources were both primary and secondary which enabled the researcher to obtain the relevant information. The findings revealed that adopting procurement strategies can assist films to achieve their stated objectives and reduced extra costs hence increasing the level of profitability in the long run. The recommendations made included sensitizing all the employees about procurement strategies so that those who were not sure can realize the benefits and also adopting other viable strategies apart from supply base optimization. The buying firm requires providing for at1Y unlikely changes that may result so that the supplier is able to comply and meet the organizational objectives.
