Procurement Strategies and Cost Performance in Business Firms (A Case Study of Shell Petrol Station-Bugolobi)

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

I

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