THE EFFECT OF OUTSOURCING ON SUPPLY CHAIN PERFORMANCE AT CADBURY KENYA LIMITED

KAVOO Bernard

Abstract


Outsourcing has become an important aspect of the overall strategy of any organization. However, despite the many benefits accrued to outsourcing the level of outsourcing in an organization affects management activities in one way or another and extensive outsourcing can lead to loss of internal controls in the organization. The general objective of this study was to establish the effect of outsourcing on supply chain performance at Cadbury Kenya Limited. The study also sought to establish the effect of suppliers’ selection criteria, supplier-firm relationship and information systems integration the supply chain performance at Cadbury Kenya Limited. The study used a case study design. The target population of this study was therefore 127 staff working in Cadbury Kenya Limited. This study used a stratified random sampling to select 50% of the target population. The sample size of this study was therefore 64 respondents. This study used primary data that was collected by use of questionnaires. This study generated both quantitative and qualitative data. Content analysis was used in processing qualitative data and results were presented in prose form. On the other hand, the quantitative data in this research was analyzed by descriptive statistics and inferential statistics using Statistical Package for Social Sciences (SPSS version 21). Data was then presented in tables, charts and graphs. The study also used a multivariate regression analysis to establish the relationship between the dependent variable and dependent variables. This study found that suppliers' selection criteria influences supply chain performance at Cadbury Kenya Limited most followed by supplier-firm relationship and information system integration. The study recommends that Cadbury Kenya Limited should improve their suppliers’ selection criteria by considering suppliers outsourcing cost, reliability, efficiency, experience, performance history, quality of services and delivery performance. The study also recommends that Cadbury Kenya Limited should improve its relationship with suppliers by considering trust, communication, commitment, loyalty, information sharing, relationship quality and relationship magnitude. This study further recommends that Cadbury Kenya Limited should seek for more information systems integration with suppliers so as to enable them to access their suppliers systems.

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