FACTORS AFFECTING SUPPLY CHAIN MANAGEMENT IN THE RETAIL BUSINESS INDUSTRY IN KENYA

FACTORS AFFECTING SUPPLY CHAIN MANAGEMENT IN THE RETAIL BUSINESS INDUSTRY IN KENYA: A CASE STUDY OF UCHUMI SUPERMARKETS (LANGATA BRANCH)

BY
VICTOR OKOTH OCHIENG

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A RESEARCH PROJECT SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF DIPLOMA IN BUSINESS MANAGEMENT TO THE KENYA INSTITUTE OF MANAGEMENT

MAY 2018

DECLARATION
Declaration by the Student
This research project is my original work and has not been presented to any other examination body. No part of this research should be reproduced without my consent or that of Kenya Institute of Management

Name: __________________________ Sign: ________________ Date: __________
KIM/DBM/23654/15

Declaration by the Supervisor
This research project has been submitted for approval as The Kenya Institute of Management Supervisor

Name: __________________________ Sign: ________________ Date: __________
Lecturer Supervising

For and on behalf of the Kenya Institute of Management

Name: __________________________ Sign: ________________ Date: __________ Branch Manager – Nairobi Branch

DEDICATION
This research project is dedicated to my sweet loving parents Mr. and Mrs. Denis Nyamao. They have been very instrumental ensuring that I complete my research project. Thanks to them and God bless you.

ACKNOWLEDGEMENT
I wish to acknowledge the Almighty God for the good health, strength and providing me with all resources that I needed to do the project. I would like to acknowledge my supervisor Madam, Caroline Kioko, the management of Uchumi supermarket and the Kenya Institute of Management staffs who contributed to successful completion of this project. They really gave me strength through advices and efforts to find and provide resources needed.

ABSTRACT
The aim of this project was to investigate into the factors affecting supply chain management in the retail business industry in Kenya. The objectives of the study were to examine how Transport, price control, open tender system and tax affects supply chain management in the retail business industry in Kenya. The study was of significance to: the management of Uchumi supermarkets, other retail business and other researchers for it provided them with vital information concerning supply chain management in the retail business industry if need be.
A descriptive research design was used in this study. The target populations of the study were 90 employees of Uchumi supermarkets Kenya. A sample of 45 which represent 50% of the respondents was drawn using stratified and simple random sampling procedure. The population was divided into top managers, middle level managers and operational staff. The research used questionnaire as a data collection tool. The questionnaire was pre-tested to ensure clarity of the questions. Data was analyzed using quantitative and qualitative techniques and then presentation was done using charts and tables. The findings were also analyzed and presentation of data was by use of tables, figures and charts.
In the findings of the study over 96% indicated that Transport affects supply chain management in the retail business industry in, 80% indicated that price control do affect supply chain management in the retail business industry, 92% of the respondent indicated that open tender system affects supply chain management in the retail business industry and finally 80% indicated that tax affects supply chain management in the retail business industry in Kenya.
It was recommended that Transport should be encouraged since is known to have many favorable effects like moving goods from one place to another, saves time and also in facilitating good performance, on price control, it was recommended that the company should advance technologically to enables its functions to be performed effectively to a given goal. It was also recommended that tenders on the open should be reviewed and adhered to for the company’s long run and profitability and finally tax should be boosted.

TABLE OF CONTENTS
DECLARATION……………………… ii
DEDICATION iii
ACKNOWLEDGEMENT iv
ABSTRACT v
TABLE OF CONTENTS vii
LIST OF TABLES viii
LIST OF FIGURES ix
ABBREVIATIONS x
OPERATIONAL DEFINITION OF TERMS xi

CHAPTER ONE
INTRODUCTION OF THE STUDY
1.1 Introduction 1
1.2 Background of the Study 1
1.3 Statement of the Problem 2
1.4 Objectives of the Study 3
1.5 Research Questions 4
1.6 Significance of the Study 4
1.7 Limitations of the Study 5
1.8 Scope of the Study 5

CHAPTER TWO
LITERATURE REVIEW
2.1 Introduction 6
2.2 Review of Theoretical Literature 6
2.3 Critical Review 26
2.4 Summary 27
2.5 Conceptual Framework 28

CHAPTER THREE
RESEARCH DESIGN AND METHODOLOGY
3.1 Introduction 31
3.2 Study Design 31
3.3 Target population 31
3.4 Sample Design 32
3.5 Data collection procedures 33
3.6 Validity and Reliability of Research Instruments………………………………33
3.7 Data Analysis Methods 33

CHAPTER FOUR
DATA ANALYSIS, PRESENTATION AND INTERPRETATION OF FINDINGS
4.1 Introduction ……………………………………………………..…….…..…. .35
4.2 Presentation of Findings…………………………………………..…………….35
4.3 Summary of Data Analysis ………………………………………..……..……49

CHAPTER FIVE
SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATION
5.1 Introduction ……………………………………………………………. ….….51
5.2 Summary of Findings …………………………………………….… …….…..51
5.3 Conclusion…………………………………………………. …………………..52
5.4 Recommendation ………………………………………… …………….….….53
5.5 Suggestion for Future Research………………………………………….. ..….54
REFERENCES …………………………………………………………….…….…..55
APPENDICES
Appendix I: Authorization Letter
Appendix II: Questionnaire

LIST OF TABLES
Table 3.1 Target population ………………………………………………….……….31
Table 3.2 Sample size ………………………………………………………………….32
Table 4.1 Response rate…………………………………………………..…………….35
Table 4.2 Gender response…………………………………………………………….36
Table 4.3 Age response………………………………………………………….………37
Table 4.4 Education Level…………………………………………………..…….…..39
Table 4.5 Work experience……………………………………………………..….…..40
Table 4.6 Response transport affects supply chain management in the retail ……………business industry……………………………………………………….……41
Table 4.7 Extent transport affects supply chain management in the retail business ……………industry……………………………………………………………..……….42
Table 4.8 Response price control affects supply chain management in the retail ……………business industry……………………………………………………. ……..43
Table 4.9 Extent price control affects supply chain management in the retail business ……………industry…………………………………………………………….……….44
Table 4.10 Response open tender system affects supply chain management in the retail ……………business industry……………………………………………………………..45
Table 4.11 Extent open tender system affects supply chain management in the retail ……………business industry……………………………………………………………..46
Table 4.12 Response tax affects supply chain management in the retail business ……………industry……………………………………………………………………….47
Table 4.13 Extent tax affects supply chain management in the retail business ……………industry………………..………………………………………..…………..48

LIST OF FIGURES
Figure 1.1 Organization Structure…………………………………………………… 2
Figure 2.1 Conceptual Framework……………………………………..…………… 28
Figure 4.1 Response rate…………………………..……………………………………35
Figure 4.2 Response on Gender…………………….……………..……………………36
Figure 4.3 Response on Age……………………………………………………………..37
Figure 4.4 Education level…………………….………………………………..….…..39
Figure 4.5 Work experience…..………………………….……………………………40
Figure 4.6 Response transport affects supply chain management in the retail …………….business industry…………………………………………………….… ….41
Figure 4.7 Extent transport affects supply chain management in the retail business …………….industry………………………………………………………………………………………….42
Figure 4.8 Response price control affects supply chain management in the retail …………….business industry ……………………………………………………….…..43
Figure 4.9 Extent price control affects supply chain management in the retail business …………….industry…………………………………………………………….……….44
Figure 4.10 Response open tender system affects supply chain management in the retail …………….business industry……………………………………..………………….…45
Figure 4.11 Extent open tender system affects supply chain management in the retail …………….business industry……………………………….……………………………46
Figure 4.12 Response tax affects supply chain management in the retail business …………….industry……………………………………………………………………..47
Figure 4.13 Extent tax affects supply chain management in the retail business …………….industry………………………………………………………………………48

LIST OF ABRRIVIATIONS
CIPS Charted Institute of Procurement and Supplies
DRP Distribution Resource Planning
ERP Enterprise Resource Planning
IT Information Technology
GRM Goods Requirement Management
PDM Physical Distribution Management
PPDA Public Procurement and Disposals Act (PPDA)

OPERATIONAL DEFINITION OF TERMS
Transport: This is the medium or the created amenities for movement …………………………… and transportation.
Open Tendering System: A bidding process that is open to all qualified bidders and …… where the sealed bids are opened in public for scrutiny ………and are chosen on the basis of price and quality. It is also ………called competitive tender or public tender.
Price Control: Is the economic term used to refer to a situation where ………the general price level covering consumer goods remains ………unchanged or if it does change
Tax: Advance payment of tax means to pay tax along with the ………earning of income. This tax is paid on the current year ………income in the same year Oil Marketing Companies: Oil ………marketing companies are those companies that ………control the oil market in terms of supply and distribution ………in Kenya

CHAPTER ONE
INTRODUCTION TO THE STUDY
1.1 Introduction
This chapter contains the background of the study, statement of the problem, objective of the study, research questions and the significant of the study showing the areas to be covered by the study
1.2 Background of the Study
Supply chain management (SCM) has received in recent years a great deal of attention by researchers and practitioners. Effective SCM will lead to a lowering of the total amount of resources required to provide the necessary level of customer service to a specific segment and improving customer service through increased product availability and reduced order cycle time (Banomyong ; Supatn, 2011);engage in information exchange (forecasting techniques, inventory management, delivery) and structural collaboration (just-in-time system, outsourcing, vendor-managed inventory and co-locating plants) (Henry ; Barro, 2009; Raja,Mazlan ; Ali, 2006); relationships with downstream supply chain partners to create end-customer value (Iyer, 2011) and maximize benefits and minimize costs along the supply chain (Chima, 2007). Thus, the nature of SCM becomes visible to participating companies with successful implementation in the ever changing global environment of the business world, risks abound and it greatly affects the decision making processes of the business management.
According to Jain, Jain, V., Wadhwa and Deshmukh, S.G. (2009), a supply chain is a dynamic process and involves the constant flow of information, materials, and funds across multiple functional areas both within and between chain members. Members in the chain need to cooperate with their business partners in order to meet customer’s needs and to maximize their profit. However, it is a very difficult task in managing the multiple collaborations in a supply chain because there are so many firms involved in the supply chain operations with its own resources and objectives. The interdependence of multistage processes also requires real-time operation and decision making across different tasks, functional areas, and organizational boundaries in order to deal with problems and uncertainties. The strategic move of focus for mass customization, quick response, and high quality service cannot be achieved without more complex cooperation and dynamic structure of supply chains. The oil industry works as a global supply chain involving exploration, material handling, domestic and international transportation, use of technology, and so on. The industry offers a strong model for implementing supply chain management (SCM) techniques.
Supply chain management involves providing maximum satisfaction to end users (consumers), in other words, delivering the right product to the right person at the right time while still maximizing profits. Today, there are many opportunities for the coordination of activities across the supply chain even in the ever retail business industry. This is largely due to the development of information systems and communication technologies within the sector. Integrating supply management with other factors of operations allows all functions to be involved in the management decisions (Chima, 2007).Over the years, the oil industry has continued to face growing challenges, from stricter government regulation, political risks, competition, emergent new comers and political hostilities, which has affected growth and output. Due to the scramble for resources, many retail business industries have been driven to explore and produce in some of the most hostile and harsh environments, which in turn tend to be extremely costly. Also, there have been concerns in the industry about the growing scarcity of natural resources, which underlies fears of not being able to meet production levels and goals.
However, in reality, the resources are not the cause of supply restrictions with vast potential still available due to continuous discoveries of oil reservoirs around the world. The main challenge facing the retail business industry is not the availability of retail business industry, but putting these reserves into production and delivering the final products to consumers at the minimum cost possible. Thus, a solid supply chain management program will enhance this goal (Chima, 2007) .Environmental uncertainty in oil industry lead to a need for higher reliability and flexibility within the production systems and the planning and control systems in the supply chain. Reducing these uncertainties will be achieved by understanding the root causes and how they interact with each other. Change in markets, products, technology, and competitors are occurring at an increasingly rapid pace (Defee & Fugate, 2010; Iyer, 2011). As a result, managers must make decisions on shorter notice, with less information, and with higher penalty costs. Therefore, a reliable yet flexible system is fundamentally needed to assist the management in making decisions that might prove to be the make-or-break decision for their companies. In retrial business, the supply-chain network is composed of shipping via vessel, oil tankers, and pipelines that may run across multiple countries. This network is used to transport crude from wellhead to refinery for processing, to transport intermediates between multi-site refining facilities, and to transport finished products from product storage tanks to distribution centers and finally to the customers.
Any disruptions arising in the global supply chain can have tremendous adverse effects in achieving operational efficiency, maintaining quality, profitability, and customer satisfaction. The adverse events may happen due to uncertainty in supply of crude, demand, transportation, market volatility, and political climate. Hence, Shah, Li, and Ierapetritou (2011) identify that to effectively model a supply-chain design problem, the dynamics of the supply chain ought to be considered and data aggregation techniques for the extensive data set should be employed. The complexities in retail business supply chains impose enormous challenges to the SCM. SCM in the oil marketing companies in Kenya was studied in a qualitative and quantitative survey that covered retail business industry in Kenya, with the purposes of identifying the challenges facing the SCM in retail business and determining the extent to which the retail business in Kenya are adopting best practices to manage challenges in their supply chain. The findings show that challenges facing supply chain management in the retail business in Kenya occur in one or more of the supply chain components; transportation, equipment, communication, suppliers, customers, labor and finance.
In an effort to manage their supply chain and reduce costs, retail business is outsourcing their logistics functions to third-party logistics companies to managing their supply chains. retail business also engage in strategic planning-procurement, close partnership with suppliers, use of external consultants, outsourcing non-core activities, dealing with few suppliers, engaging in vertical integration and Supply Chain Benchmarking. The researcher recommends that there is need to expand the Kenya pipe line to increase its retail business industry capacity and as a result reduce the cost of oil transportation. The retail business needs to train their personnel so as to appreciate the concept of SCM and the best practices and systems that are significant in mitigating the challenges of SCM. They also need to develop customer relationship management, supplier relationship management and engage in closer cooperation with other companies, government and regional players. Further, retail business in Kenya need to invest in IT systems (Barua 2010).
1.2.1Profile of Uchumi
Uchumi is the oldest supermarket chain in Kenya, currently celebrating 42 years. With shops in Nairobi, Meru, Eldoret, Kericho, Mombasa and Kisumu .Uchumi continues to grow steadily with new branches coming near you.
Welcome to Kenya’s finest home of value, freshest fruits and vegetables, healthiest bread and pastries, friendly customer service and widest variety of local quality merchandise. Enjoy value added services in our hyper branches, or step in for quick friendly service at our express counters. Stop and Shop for friends and relatives on your way upcountry at one of our up country branches.
Uchumi Supermarkets Plc (Uchumi Supermarkets Private Listed Company) is a Kenya-based company engaged in the retail supermarkets operation. It distributes bakery, wines, meat, fish, vegetables, as well as kitchen appliances and decoration, among others.
On 17th December 1976, Uchumi shareholders-Industrial Commercial ; Development Corporation (ICDC), Kenya Wine Agencies Limited (KWAL) and Kenya National Trading Corporation (KNTC) – all Government owned parastatals entered into a management contract with Standa SPA of Italy. Standa, a leading supermarket group with a presence in Europe and vast retail experience was given the task to manage and train Kenyan personnel who would eventually take over the running of the organization. In the 1990’s Uchumi spearheaded the hypermarket concept in Kenya.
In early 2000s Uchumi started to experience financial and operational difficulties occasioned by a sub-optimal expansion strategy coupled with weak internal control systems.. As a result, on 31st May 2006, the Board of Directors resolved that the Company ceases operations and on 2nd June 2006, the Debenture Holders placed the Company under receivership. Simultaneously, the Capital Markets Authority (CMA) suspended the Company’s listing on the Nairobi Securities Exchange (NSE).
Following a framework agreement between the Government of Kenya, suppliers and debenture holders, the company is revived and commenced operations from 15th July, 2006 under Specialized Receiver Manager (SRM) and interim management.
The management and staff have since worked tirelessly to redeem the company. From a negative bottom line in 2006, the company has reported profits in the last three financial years. The lending banks in turn lifted the company’s receivership in 2010 and the company was successfully re-listed in the Nairobi Securities Exchange on 31st May 2011 – exactly five years to the date that it was suspended. The company is indebted in gratitude to the government, lending banks, our suppliers, customers and shareholders for their support and commitment to saving one of Kenya’s oldest strongest brands.

Figure 1.1 Organizational Structures of Uchumi Supermarkets

Source: Uchumi supermarket (2018)
1.3 Statement of the Problem
Environmental uncertainties in retail business lead to a need for higher reliability and flexibility within the production systems and the planning and control systems in the supply chain. Reducing these uncertainties will be achieved by understanding the root causes and how they interact with each other. Change in markets, products, technology, and competitors are occurring at an increasingly rapid pace (Defee; Fugate, 2010; Iyer, 2011). As a result, managers must make decisions on shorter notice, with less information, and with higher penalty costs. Therefore, a reliable yet flexible system is fundamentally needed to assist the management in making decisions that might prove to be the make-or-break decision for their companies. There is a general acceptance of the existence of market failure which requires government intervention to rectify. Such failure has three sources.
The existence of imperfect competition arising from the presence of monopoly power and asymmetric information, the presence of ownership externalities and finally the existence of public goods defined as goods where consumption is non-rival and exclusion from access technically infeasible. Solutions to these problems of market failure lay in corrective taxes and subsidies, regulation, price controls, planning and ultimately government ownership (Barua 2010).Awino (2009) conducted a study on empirical investigation of supply chain management best practices in large private manufacturing firms in Kenya. She noted that today, large companies are mainly focusing on becoming efficient and flexible in their manufacturing methods in order to handle uncertainty in the business environment. Chima (2007) conducted a study on Supply-Chain Management Issues in the Oil and Gas Industry and asserted that oil and gas industry is involved in a global supply-chain that includes domestic and international transportation, ordering and inventory visibility and control, materials handling, import/export facilitation and information technology. However the above studies did not concentrate on the factors affecting effective supply chain management by retail business industry. It is for this research gap that the study wishes to investigate the factors affecting Supply Chain Management retail business industry in Kenya.
1.4 Objective of the Study
1.4.1General Objective
The main objective of the study was to find out factors affecting supply chain management in the retail business industry in Kenya with reference to Uchumi supermarkets.
1.4.2Specific Objectives
i. To establish the effect of transport on supply chain management in the retail business industry in Kenya.
ii. To find out the effect of price control on supply chain management in the retail business industry in Kenya.
iii. To establish the effects of open tender system on supply chain management in the retail business industry in Kenya.
iv. To establish how tax affects supply chain management in the retail business industry in Kenya.

1.5 Research Question
i)What is the effect of transport on supply chain management in the retail business industry in Kenya?
ii) How does price control affect supply chain management in the retail business industry in Kenya?
iii) How does open tender system affect supply chain management in the retail business industry in Kenya?
iv) How does tax affects supply chain management in the retail business industry in Kenya?

1.6 Significance of the Study
1.6.1 Management of Uchumi supermarket
The research study was of significance to the management of Uchumi supermarket, it helped top management to understand issues affecting supplier evaluation on procurement performance in private organizations. Identifying areas that the company has not been doing right or areas that have been ignored though they are useful to the company, the findings obtained from various respondents helped the management to make the concrete decision on how well the Uchumi supermarket can be sustained.
1.6.2 Other retail businesses
The success of retail business industry can easily translate to the success of other companies this can be in position to emulate the path that Uchumi has undertaken to get to the top and going by the modern business practices that involved benchmarking.
1.6.3 Other Researchers
The study was important to scholars, students and future researcher as a source of reference for any investigation that needs to be undertaken. Relying from the findings will be possible for one to conduct further research.

1.7 Limitation of the Study
1.7.1 Confidentiality
Some of the respondents’ were giving information needed without confirming that the information was not be disclosed to any other party. So it was difficult to access information needed to carry out the study due to secrecy of the organization. Researcher assured them that all they said was to be treated in confidential manner and no other party will be involved.
1.7.2 Suspicious
Most of the respondents were reluctant to provide information and did not answer the questions truthfully. This was quite challenging because inadequate could consequently affect the success of this study. However to encounter this challenge, the researcher assured them that the data was for academic purpose only and that information to be collected was not channeled to any wrongful purpose other than official purpose, that is, a trial fulfillment of award for diploma.
1.7.3 Negative Attitude
Some of the respondents were not interested to give the researcher the information towards the research because of uncooperative. However, the researcher overcame this challenge by explaining to them the benefits they were to get by participating in the study.
1.8 Scope of the Study
The study was carried out on the factors affecting supply chain management in the retail business industry in Kenya, Uchumi as a case study of choice which is located along Langata road. The target population will be 90 employees of Uchumi supermarket. The study will be carried out within a period of three months from March2018 to May 2018.

CHAPTER TWO
LITERATURE REVIEW
2.1 Introduction
This chapter provides the reviews of theoretical literature, critical review of the study, the summary of the studies conducted in relation to the problem and finally the conceptual framework.
2.2.1 Transport
Any disruptions arising in the global supply chain can have tremendous adverse effects in achieving operational efficiency, maintaining quality, profitability, and customer satisfaction. The adverse events may happen due to constrained transport, price control, open tender system and payment of taxes. Shah, Li and Ierapetritou (2011) identify that to effectively model a supply-chain design problem, the dynamics of the supply chain ought to be considered and data aggregation techniques for the extensive data set should be employed. The key element in a logistics chain is transportation system, which joints the separated activities. Transportation occupies one-third of the amount in the logistics costs and transportation systems influence the performance of logistics system hugely.
Transporting is required in the whole production procedures, from manufacturing to delivery to the final consumers and returns. Only a good coordination between each component would bring the benefits to a maximum (Chima, 2007).In the retail business industry, the supply-chain network is composed of shipping via vessel, oil tankers, and pipelines that may run across multiple countries. This network is used to transport crude from wellhead to refinery for processing, to transport intermediates between multi-site refining facilities, and to transport finished products from product storage tanks to distribution centers and finally to the customers. Any disruptions arising in the global supply chain can have tremendous adverse effects in achieving operational efficiency, maintaining quality, profitability, and customer satisfaction. The adverse events may happen due to uncertainty in supply of retail business industry, demand, transportation, market volatility, and political climate. Hence, Shah et al. (2011) identify that to effectively model a supply-chain design problem, the dynamics of the supply chain ought to be considered and data aggregation techniques for the extensive data set should be employed.
Budiman (2004) found that supply fluctuation was due to capacity adjustment lead time, production lead time, order processing delay and order wait time. Svenson, Jacob (2005) observes that the reversed bullwhip effect is caused by factors such as deficient information sharing, insufficient market data, deficient forecasts and capacity issues. Facilities with mass production are responsive to supply variability while customization platforms are prone to longer production lead times. Business processes sub optimization by design or default can lead to a butterfly effect where a small variation can lead to system wide variation. Most companies are no longer simply contented with price as a determinant in procurement services but also sustainability of the supply and ability to meet unpredictable and short notice supply instructions. Ability and expertise override costs where the cost curve minimization is already achieved.
Sweeny (2005) argues that managing the information flows is the most critical of these activities. This is because the flow or movement of materials or money is usually triggered by associated information movement. Lalwani et al (2006) proposed that current developments in systems thinking and continuous system simulation, when applied within the context of an operations management framework, may offer the good design of supply chain and improve in supply chain performance. Shahetal. (2011) stated that, a typical petroleum industry supply chain is composed of an exploration phase at the wellhead, retail business industry and storage logistics, and transportation to the retail business industry, refinery operations, and distribution and transportation of the final products. The upstream activities (exploration, development and production of retail business industry and downstream activities (tankers, pipelines, retailers and consumers) are two important activities in the petroleum industry (Mohd and Ali, 2009).
SCM in O&G industry requires the company to integrate its decisions with those made within its chain of customers and suppliers. This process involves relationship management of the company to their customers and suppliers. A firm can create long-term strategic relationships with their suppliers and in most cases there is a collaborative process between the oil and gas company with its suppliers (Chima, 2007). Kimani (2013) conducted a study on supply chain management challenges in Kenya petroleum industry and noted that Kenya’s petroleum industry faces supply chain challenges such as lack of strategic stocks, relatively high petroleum prices compared to other East African countries, frequent fuel shortages, sub-standard products and diversion of products destined for export back into the country. He explored challenges facing implementation of effective supply chain management practices in petroleum industry in Kenya, a case of National Oil Corporation.
Specifically the study sought to explore the influence information technology, supply chain design, people issues and partnership/collaboration issues to the implementation of effective supply chain management. He concluded that all four independent variables have high effect on implementation of effective SCM in the retail business industry. Chima (2007) conducted a study on Supply-Chain Management Issues in the retail business industry. He asserted that retail business industry is involved in a global supply-chain that includes domestic and international transportation, ordering and inventory visibility and control, materials handling, import/export facilitation and information technology. Thus, the industry offers a classic model for implementing supply-chain management techniques. In a supply-chain, a company is linked to its upstream suppliers and downstream distributors as materials, information, and capital flow through the supply-chain.
Awino (2009) conducted a study on empirical investigation of supply chain management best practices in large private manufacturing firms in Kenya. She noted that Today, large companies are mainly focusing on becoming efficient and flexible in their manufacturing methods in order to handle uncertainty in the business environment. To do this, they need different strategies to manage the flow of goods from the point of production to the consumer. However, most firms have not been able to formulate the right strategies required to achieve this objective in Supply Chain Management (SCM),this calls for a strategic fit of an organization’s core competencies, strategy and core capability. Critical factors were established as the best practices: operating policies, linkages within supply chain firms, improved performance, information technology systems, strategic alliance, performance measures, goal orientation, customer relationships, guidelines and procedures, supplier selection and supplier evaluation. When benchmarked, these practices were found to be universal and compares with the best practices globally. The petroleum industry can be characterized as a typical supply chain where all levels of decisions (strategic, tactical, and operational) may arise in it. Management of the petroleum supply chain is a complex task due to the large size of the physical supply network which dispersed over vast geography, complex refinery production operations, and inherent uncertainty. Shah et al. (2011) stated that uncertainty arises in realistic decision making processes and has a huge impact on the retail business industry. Three major uncertainties that should be considered in refinery production planning include: market demand for products; prices of crude oil and the saleable products; and product or production yields of crude oil from chemical reactions in the primary crude distillation unit (Shah et al., 2013).
2.2.2 Price Control
Eight countries have price controls, including all five West African countries. The eight countries use different variations of an import-parity structure with international spot reference prices, market marine freight rates, and the dollar-local currency exchange rates as the three key short term adjustment parameters. With the exception of Malawi, the countries with price controls adjust prices monthly. Malawi has price stabilization fund and has no pre-set automatic adjustment frequency. The stabilization fund ran up a large deficit in 2008(Kojima &Masami, 2009). Kenya Association of Manufacturers (2002) posits that removal of price controls, foreign exchange controls and introduction of investment incentives have, however, not resulted in major changes in the overall economy.
In particular, they have not improved the manufacturing performance. Therefore, to build a self-sustaining industrial sector, it is necessary to establish strategic linkages within the domestic economy. Some efforts have to be made to promote strategic options among supply chains so as to enhance spread effects of industrial growth and to facilitate transfer of technology, skills and growth of small and medium scale sub-contractors. The linkages of the study variables in SCM in Kenya are weak and because of this, there exists little inter-industry integration in the country. This has resulted in consistently low manufacturing value added in the sector (KAM,1989). According to Rong et al. (2009), when customers react not only to price itself but changes in the price, some pricing strategies implemented by the supplier may lead to reversed bullwhip effect. Where there is a central pricing authority like in price controls, price change anticipations can result in supply shocks as every supply chain element seeks to maximize on the price differentials. Under imperfect market conditions like in the oligopolistic markets, collusions by the market players can set supply quotas that are preservative of desired price levels. However price variations under perfect market conditions are a reflection of market forces of demand and supply and reverse bull whip effect plays the causal role on pressure on price.
Wabwoba (2011) did a research on the impact of retail business industry regulation on the financial performance of NOCK. It was observed that when the international crude oil prices were rising, retail business industry quickly passed on these increased costs to consumers but took long to pass on cost reduction benefits to consumers when international oil prices were on a downward spiral. Hence the government through its agency the ERC (Energy Regulatory Commission)came up with a way of regulating the fuel prices by setting the maximum prices which the retail business industry are to charge. The ERC in addition developed a concept paper enumerating the petroleum supply chain logistics and their cost implications on downstream retail prices (ERC 2011). Storage capacity, which exists at every point in the supply chain, is important because stocks can be used to help reduce the magnitude of sharp price spikes due to physical disruptions to supply (Bacon & Kojima 2008). Such protection against supply shortages may be particularly important for landlocked countries. Storage capacity is expensive to build and holding stocks within this capacity also incurs substantial additional financial costs.
As a result, companies hold contingency stocks to avoid stock-outs but use just-in-time inventory management just as in any other business; they strive to optimize their capacity with other links in their supply-and-delivery chain. Maximum cost efficiency is achieved when this optimization is achieved and contingency stock levels are the result of a careful risk assessment. The optimal level is situation-specific with no typical standard. Business Daily (2009) noted that the ERC in line with its mandate has drafted regulations to control pump prices. The Energy Act requires all proposed regulations to be recommended by the ERC to the Minister for Energy after consultations with the public. Although the National Energy Policy of 2004 states clearly that government will let market forces determine prices, during the Parliamentary readings of the Energy Bill a last minute clause was inserted in section 102 giving the Minister for Energy power to make regulations determining the retail prices of petroleum and petroleum products. Accordingly the ERC in line with its function of protecting consumer and stakeholder interests has recommended regulations that will control pump prices.
The regulations propose a formula for pump prices which incorporates the retail business industry product prices, freight, local transportation costs, financing, insurance, the refinery processing fees, taxes and a profit margin. The proposed pump price regulations have attracted resistance from oil marketers who would prefer to have the market forces and competition control pricing. The regulations have been viewed by economists as taking the country back to the pre-1994 days before the industry was liberalized
2.2.3Open Tender System
In Kenya, the government set up an Open Tender System (OTS) to import retail business industry products. Under the system, retail business industry is purchased every month by a single company for the entire market on the basis of a public tender, transported through one terminal, and shared among all marketing companies in proportion to their share of the market. Retail business industries are similarly purchased through the Open Tender System. Depending on supply and demand, the oil marketing companies may source the balance of their needs independently (Wabwoba,2011).
The Open Tender System is intended to have the dual benefit of ensuring competitive prices (which are made public) and transporting the oil in a way that would minimize evasion of the import duty. Each company is required to take the retail business industry allocation and pay for the consignment within a specified time frame or risk penalties for late payment. In times of high oil prices, some marketers could not pay on time for imports, and their late payments delayed subsequent crude shipments, lowered refinery throughput, and caused fuel shortages. Kenya imports enough retail business industry to accommodate three separate tenders a month, opening up the possibility of options other than the current Open Tender System where the right to import is granted to only one company (Kojima & Masami, 2009).Business Daily (2009) noted that the importation of retail business industry is undertaken through the open tender system which is a procurement system that requires an oil marketer to bid for the supply requirements for the entire market. For an oil company to participate in the open tender system it must be licensed and meet the conditions set by the ERC. The successful bidder then imports and sells the product to the other oil companies as per their share of the market.
The quality and quantity of products and their pricing is closely monitored by the Ministry of Energy. The importation of petroleum products through the open tender system is regulated by section 31A of the Petroleum Rules, Legal notice No. 197 of 2003 and the tender terms and conditions for the delivery of crude oil into Kenya. The open tender system ensures supply of product. It also ensures that products are imported at the lowest bid price and that the price is not subjected to fluctuating international market prices. Owuor (2007) noted that from January 1, 2004, the government introduced a process in which all the crude oil is imported through an Open Tender System (OTS) coordinated by the Ministry of Energy on behalf of all the companies licensed to import petroleum products. This implies retail business industry obtain bulk of their imports at more or less the same cost and therefore opportunity to gain competitive advantage through low costs is generally limited to product storage and distribution activities.
Njoroge (2007) noted that retail businesses in Kenya are imported either as retail business industry or as refined products. From January 1, 2004, the government introduced a process in which all the crude oil is imported through an Open Tender System (OTS) coordinated by the Ministry of Energy on behalf of all the companies licensed to import petroleum products. The crude is refined at Kenya Petroleum Refineries Limited (KPRL) to meet 70% of the country’s requirements. The balance 30% of the demand is met by importation of refined products. Of this quantity of refined products, 70% is imported through a product tender system, also coordinated by the Ministry of Energy, while the oil companies can import the remaining requirement on their own. Africog (2009) argued that Kenya’s retail business industry and trading arrangement is based on a complex Open Tendering System (OTS). Under the OTS, which is operated by the Ministry of Energy, retail business industry competes to import crude and refined products for the whole industry. The winner imports the monthly oil requirements and sells to other marketers at an agreed price.
The import is in some instances guaranteed by financiers under a Collateral Financing Agreement (CFA). The CFA arrangement was introduced in 2004 by KPC in order to enable oil marketing companies to use their stock within KPC transport and storage system as security in order to secure financing. Under the scheme, banks issue Letters of Credit committing themselves to pay 80 percent of the total cost of the oil imported. In turn, an oil importer signs an agreement with KPC stating that oil within the KPC system can only be released with the authority and instructions of the financiers of the consignment. Retail business industry would only have access to their share of the imported oil from KPC on the written authorization of the financiers after they have paid for their entitlement. Further study indicates that, after the prequalification of suppliers’ based on supplier competence, private organizations expect a lot from their suppliers because they are confident that they have filtered their suppliers on very efficient basis but still they are uncertain about the quality of the items to be delivered, on time delivery, commitment to quality, technology leverage, and overall performance of suppliers.
These findings concur with findings of CIPS (2013) in their report on monitoring the performance of suppliers pointed that strategic monitoring of competence of suppliers is critical in management of performance operations and most importantly, management of supplier-buyer relationship. It is important that any procurement and supplies professional have the required skills in supplier relationship competence determination so as to be in a position to develop appropriate performance criteria both for suppliers and the entire procurement function. The report further indicates that performance management criteria should be well communicated to all stakeholders who are directly involved in procurement operations so as to enhance their contribution towards achievement of the desired standards (Masceko, 2013).
Supplier Evaluation Criteria and Procurement Performance Supplier selection is largely seen as the most vital role of the procurement function since the organization’s suppliers can affect the price, quality, delivery reliability and availability of its products (Li,2008). Organizations feel that proper supplier selection would assist reduce product and material costs whilst ensuring a high degree of quality and after-sales services. The implication here is that an efficient appraisal should be in place for the successful procurement (Lyson, 2002).
2.2.4Tax
Taxes on petroleum products are a critical source of government revenue for low-income countries. The reason is that taxing retail business industry is one of the easiest ways to get revenue: collecting fuel taxes is relatively straightforward, and the consumption of fuels as a group is relatively price inelastic and income elastic, ensuring buoyant revenue as income rises and tax rates are increased (Bacon,2001). In setting tax rates on retail business industry, many factors need to be considered. They include the government’s revenue requirements, efficiency of resource use, the need to finance road maintenance, road congestion impacts, equity, the use of retail business industry in sectors other than transport, and the impact of the fuel tax structure on other economic activities and on the poor.
It is not possible to achieve all these objectives simultaneously through retail business industry tax policies alone. Most governments complement fuel taxation with other policy instruments, in particular to correct for externalities. The challenge of meeting the various objectives is especially difficult in low income countries, where fewer policy instruments are available. In determining the levels and structure of fuel taxation, important compromises have to be made between the effects on government revenue generation, income distribution, the efficient use of roads, and environmental pollution. In so doing, attention must be accorded to the relative importance of each objective, the efficiency of fuel taxation as an instrument for achieving the objectives, and the magnitude of any perverse effects—such as adulteration of high-tax fuels with low-tax fuels—in relation to other aims (William,2001).
Kathuri (2006) noted that Kenya is standing on the threshold of a severe fuel crisis following an order stopping the Kenya Pipeline Company (KPC) from supplying oil to 10 top petroleum companies in the country. Kenya Revenue Authority issued the order citing failure by the companies to pay taxes as required by law. The companies, including market leaders Kenya Shell and Kenol Kobil, have been engaged in a bitter war with the taxman over the new rule that requires them to pay taxes within 30 days of collecting the oil from KPC. Some of the oil companies have deliberately refused to pay up arguing that it was unfair for the taxman to demand that they pay taxes while it was sitting on billions of shillings in Value Added Tax and suspended duty refunds. Standard Online (2006) noted that Industry experts said the KRA order may throw the entire Eastern African region into a severe fuel crisis.
Standard Online (2006) also noted that differences between the oil companies and the taxman arise from the fact the law is specific as when the companies should pay taxes for oil supplies but does not give a timeframe within which KRA should pay VAT refunds. KRA is said to be lagging behind in VAT refunds by up to two years. The marketers argue that it is unfair for the taxman to sit on billions of shillings they need to conduct their business while at the same time demand that they pay in billions of shillings in taxes they owe the same entity. The oil marketers have been at loggerheads with KRA since last September when the new taxation rule instituted by former Finance minister David Mwiraria came into effect. On Thursday, KPC said the oil dealers had always forced consumers and suppliers to pay them in advance and should embrace the same principle in their dealings with the taxman. Kosgei ruled out any negotiations on the matter and ordered all KPC outlets to enforce the decision.
Nairobi Chronicle (2008) noted that the imposition of advance tax by the Kenya Revenue Authority has worsened a bad situation. KRA introduced advance tax as a means of curbing the dumping of duty free fuel meant for export into the local market. With this measure, KRA collects taxes at the port of Mombasa before fuel is distributed to consumers. In effect retail business industry must pay billions of shillings to the KRA before they are allowed to sell. Consequently, they must borrow to pay the tax. When advance tax was introduced, the price of fuel immediately shot up by Shs3 a litre due to interest payments for tax loans. In a global financial environment where credit is hard to come by, oil companies will find it challenging to borrow to pay advance tax.
It is defined as the systematic modification of behavior through learning. This occurs as a result of education, instruction and planned experience. Training is task oriented as it focuses on a specific area of work. The training standards are derived from the job. Training is provided when there is a skill gap between expected and actual standards of work performance. Efforts have been put into providing Distribution managers the adequate skills, experience and qualification for preventing risk of management and minimizing the potential corruption (Amstrong, 2000).
Staff training especially in form of training is a major component of enhancing skills within an organizational performance. Training aims to provide knowledge, skills and attitude required to discharge duties to appropriate standards in an efficient and timely manner. Training and development of employees is an issue that is faced by every organization to another. It is observed that there are various factors that influence the quality and quantity of training and development (Sims, 2004).
Research done had found that training leads to increased productivity through improved job performance and better understanding of the organization job. Training facilitates internal mobility of the workforce which helps the organization to keep the best hired people for long. Training can be structured so as to lead employee’s satisfaction as observed by having employees sent to programs not because they have specific learning objectives but because it makes them fill well (Sims, 2002).
2.3 Review of Critical Literature.
Infrastructure is one of the key factors which determine the eventual performance of the supplier and procurement performance, the study depicted high correlation between the financial capacity of supplier and ability of supplier to deliver which in turn enhances procurement performance indicating a need for strategic alliances for improved performance of the parties. Similarly, a study on the evaluation of procurement process in private institutions (Whiteley, 2006).Where this is true, the author failed to show us how infrastructure affects supply chain management in the retail business industry thus the need for the study.

According to Sims (2002) in many markets today, price control is expected as a given requirement and is considered an entry level characteristic of the market place. Price control is fierce in today’s business environment and quality is recognized as a key consideration in many purchasing decisions. It is no wonder that quality is an essential component of market mix as companies seek ways to differentiate effectively their products and services from those of their competitors. For instance, many major European companies have during the last decades encouraged their suppliers to develop their quality management system, use lean manufacturing techniques, adopt a continuous improvement philosophy, eliminate non value adding activity, pursue cost down activities, and concentrate on their core competencies and product line. Where this is true, the author failed to show us how price control affects supply chain management in the retail business industry thus the need for the study.

The organizations therefore choose suppliers with who have the capacity to deliver. The study further observed that supply chain management can work as a tool to influence future behavior of both buyer and supplier organization. By connecting procurement targets to certain open tender system, organizations achieve higher supplier performance thereby leading to improved procurement performance. On the other hand Nzau (2014) in his study on factors affecting procurement performance of private organizations in Kenya found out that selection of suppliers is done based on certain set criteria and the needs of the procuring entity. Where this is true, the author failed to show us how open tender systems affects supply chain management in the retail business industry thus the need for the study.

According to Sims (2002). Taxing is hard work and a background in psychological studies for understanding people is useful. Business intelligence is fundamental to working with staff members in any organization a manager is not able to make sound business decision without a full picture of the situation at hand. Therefore, developing staff competency levels requires research and strategic incentives. Employment competency can be enhanced in a number of ways training been a very important component. In all organization, employing training done due to job satisfaction, higher quality of goods, fewer accidents and saves time in the business. Where this is true, the author failed to show us how taxation affects supply chain management in the retail business industry thus the need for the study.
2.2.4 Summary
Transport is one of the key factors which determine the eventual performance of the supplier and procurement performance, the study depicted high correlation between the financial capacity of supplier and ability of supplier to deliver which in turn enhances procurement performance indicating a need for strategic alliances for improved performance of the parties. Similarly, a study on the evaluation of procurement process in private institutions. The rejection rate of the product is defined in the terms of the number of parts rejected by the customers in fixed time period because of some quality problems. It also includes the defective parts detected in the incoming products.
Price control is fierce in today’s business environment and quality is recognized as a key consideration in many purchasing decisions. It is no wonder that quality is an essential component of market mix as companies seek ways to differentiate effectively their products and services from those of their competitors. For instance, many major European companies have during the last decades encouraged their suppliers to develop their quality management system, use lean manufacturing techniques, adopt a continuous improvement philosophy, eliminate non value adding activity, pursue cost down activities, and concentrate on their core competencies and product line.
Monitoring the performance of suppliers pointed that strategic monitoring of competence of suppliers is critical in management of performance operations and most importantly, management of supplier-buyer relationship. It is important that any procurement and supplies professional have the required skills in supplier relationship competence determination so as to be in a position to develop appropriate performance criteria both for suppliers and the entire procurement function. The report further indicates that performance management criteria should be well communicated to all stakeholders who are directly involved in procurement operations so as to enhance their contribution towards achievement of the desired standards. Competition is fierce in today’s business environment and quality is recognized as a key consideration in many purchasing decisions. It is no wonder that quality is an essential component of market mix as companies seek ways to differentiate effectively their products and services from those of their competitors. For instance, many major European companies have during the last decades encouraged their suppliers to develop their quality management system, use lean manufacturing techniques, and adopt a continuous improvement philosophy
Developing good taxation is hard work and a background in psychological studies for understanding people is useful. Business intelligence is fundamental to working with staff members in any organization a manager is not able to make sound business decision without a full picture of the situation at hand. Therefore, developing staff competency levels requires research and strategic incentives. Employment competency can be enhanced in a number of ways training been a very important component. In all organization, employing training done due to job satisfaction, higher quality of goods, fewer accidents and saves time in the business. Training staff members is a very importance activity in support of employees’ skills so as to improve the customer satisfaction. Staff training especially in form of training is a major component of enhancing skills within an organizational performance. Training aims to provide knowledge, skills and attitude required to discharge duties to appropriate standards in an efficient and timely manner. Training and development of employees is an issue that is faced by every organization to another. It is observed that there are various factors that influence the quality and quantity of training and development.

2.5Conceptual Framework
Figure 2.1 Conceptual Framework
Conceptual frame work on factors affecting supply chain management in retail business industry with the following variables independent variables, Transport, Price control, open tender system and tax.
Independent Variables Dependent Variable

Source: Author, (2018)
2.2.1 Transport
Transport is one of the key factors which determine the eventual performance of the supplier and procurement performance, the study depicted high correlation between the financial capacity of supplier and ability of supplier to deliver which in turn enhances procurement performance indicating a need for strategic alliances for improved performance of the parties.
Similarly, a study on the evaluation of procurement process in private institutions. The rejection rate of the product is defined in the terms of the number of parts rejected by the customers in fixed time period because of some quality problems. It also includes the defective parts detected in the incoming products.
2.2.2Price Control
Price control is a government regulation establishing a maximum price to be charged for services in the supply chain. It is fierce in today’s business environment and quality is recognized as a key consideration in many purchasing decisions. It is no wonder that quality is an essential component of market mix as companies seek ways to differentiate effectively their products and services from those of their competitors.
For instance, many major European companies have during the last decades encouraged their suppliers to develop their quality management system, use lean manufacturing techniques, adopt a continuous improvement philosophy, eliminate non value adding activity, pursue cost down activities, and concentrate on their core competencies and product line.
2.2.3 Open Tender Systems
Downstream sector involves licensing and monitoring of the operations of all countrywide retail network on monitoring the performance of suppliers pointed that strategic monitoring of competence of suppliers is critical in management of performance operations and most importantly, management of supplier-buyer relationship. It is important that any procurement and supplies professional have the required skills in supplier relationship competence determination so as to be in a position to develop appropriate performance criteria both for suppliers and the entire procurement function.
The report further indicates that performance management criteria should be well communicated to all stakeholders who are directly involved in procurement operations so as to enhance their contribution towards achievement of the desired standards. Competition is fierce in today’s business environment and quality is recognized as a key consideration in many purchasing decisions. It is no wonder that quality is an essential component of market mix as companies seek ways to differentiate effectively their products and services from those of their competitors.
2.2.4 Tax
Taxes reduce both demand and supply, and drive market equilibrium to a price that is higher than without the tax and a quantity that is lower than without the tax. After imposition of the tax, the supply curves shift up and to the left. Consumers pay.
One form of government intervention is the introduction of taxes. Taxes are typically introduced to increase government revenue, but they also have the effect of raising the cost of goods and services to the consumer. Because of the increased cost, we generally see a reduction in the quantity of goods and services produced and consumed after the introduction of taxes. A common form of tax is a sales tax, which is added on to the price of a product and paid by the consumer. Another common type of tax is a VAT (value added tax) which is paid by the producer along their production chain.
Developing good taxation is hard work and a background in psychological studies for understanding people is useful. Business intelligence is fundamental to working with staff members in any organization a manager is not able to make sound business decision without a full picture of the situation at hand. Therefore, developing staff competency levels requires research and strategic incentives. Employment competency can be enhanced in a number of ways training been a very important component.

CHAPTER THREE
RESEARCH DISIGN AND METHODOLOGY
3.1 Introduction
This section contains the researcher instruments in which the researcher was to gather organize, comply and analyze data in relation to the research problem questions. It therefore comprised the following subsection namely research design, target population, sampling and procedures, data analysis procedure and validity and reliability of the research instrument.

3.2 Study Design
Research design is the plan or scheme that was used to generate answers to the research problems. It attempt to find out the factors affecting supplier evaluation on procurement in manufacturing sector in Kenya. The researcher decided to use descriptive research design. This is because descriptive design is qualitative whose main purpose is description on the state of affairs as it exists (Mugenda & Mugenda 2003). Descriptive research as a scientific method of investigating in which data was collected and analyzed in order to describe the current conditions, terms or relationships concerning a problem. The design was preferred as to allow clear definition of the variables thereby making it possible to obtain the complete and accurate information from the study. A survey was conducted in order to establish people’s views of what they think, believe, value or feel, in order to discover these views for their own sake, or to support an argument that you are presenting, sampling a population of potential respondents in order to generalize conclusion more widely.
3.3 Target Population
According to Williamson (2008); a research population is generally a large collection of individuals or objects that is main focus of a scientific query. The target population for this study comprised the employees of Uchumifrom senior management, Middle Management and Support staff as shown in Table 3f gbfbfgugjgfjkjnu.1 below.

Table 3.1Target Population
Category Target population Percentage
Senior Management 3 1
Middle Management 5 2
Support staff 82 97
Total 90 100
Source: Author (2018)
3.4 Sample Design and Procedure
According to Weiss (2002), sampling is concerned with the selection of a subset of individuals from within a particular population to estimate characteristics of the whole population. In this study stratified random sampling was used. According to Mugenda and Mugenda (2003) the method ensures that different groups of a population are adequately represented in the sample so as to increase the level of accuracy when estimating parameter. In addition to that, all other things being equal stratified sampling method use available information on the population as whole. That is, it creates a set of heterogeneous samples based on the variable to be studied. According to, Elis; Freeman, (2004) the sample size is more accurate when the sample size is at 50 % of the target population. Therefore, the sample size used in the study was 45 employees of the target population to be selected such that each category was divided into two equal samples. The systematic technique used select members to participate in the study from each stratum as depicted in Table 3.2.
Table 3.2 Sample Size
Category Target population Sample size Percentage
Senior Management 3 1 1
Middle Management 5 2 2
Support staff 82 42 97
Total 90 45 100
Source: Author (2018)
¬3.5 Data Collection Methods
3.5.1 Questionnaires
The researcher used questionnaires to collect primary data. Questionnaire consists of a number of questions to typed and printed in adequate order or form. The questions were open and closed ended. The open ended questions provided relevant explanation by the respondents. It provides total freedom for the respondents closed needed questions provides a list of all possible alternatives from which respondents choosing the best to suit them. Closed ended questions will require the respondents to give “Yes” or “No” for answers. This enables the researcher to collect comparable data and encourages high response rate. The researcher used self-administering the questionnaires for the primary data collection.
3.5.2 Validity and Reliability of Research Instrument
The researcher obtained permission from relevant departmental sections of the organization to circulate questionnaires. To ensure validity and reliability questionnaires will bepre-tested on respondents outside the target population. A careful crafted but wide ranging questionnaire aiming at eliciting responses was piloted in order to detect any ambiguities or inherent problems from the comments and remarks of the respondents. The entire questionnaire were thereafter revamped and improved on to ensure reliability of the data. It also ensured validity of the data, experts view from the top managers and supervisors who were incorporated with the aim of capturing specific information from respondents. These respondents were not included in the final study. The questionnaires were then corrected before the final distribution.
3.5.3 Administration of Questionnaires
Questionnaires were used in the study; they were hand-delivery and they were to be collected after two days. The types of questions to be used both open and closed ended. Closed ended questions were used to ensure that the given answers are relevant. The researcher phrased the questions clearly in order to make clear dimensions along which respondents analyzed. In open ended questions, space was provided for relevant explanation by the respondents, thus giving them freedom to express their feelings. This method was effective to the study in that; it created confidentiality and the presence of the researcher was not required as the questionnaire were self-explanatory.
3.6 Data Analysis Methods
The data to be collected from the field was assessed and comparison to be made so as to select the most accurate and quality information from the feedback to be given by various respondents. It involved assessing and evaluating the questionnaires and other sources of both primary and secondary data. The data was analyzed using qualitative and quantitative techniques. Qualitative method involves content analysis and evaluation of text material. Quantitative method involves the use of statistical measures such as frequencies and percentages and presented by the use of diagrams such as tables and charts

CHAPTER FOUR
DATA ANALYSIS PRESENTATION AND INTERPRETATION OF FINDINGS
4.1 Introduction
This chapter explains the analysis done on the data which was collected by the researcher.
4.2 Presentation of Findings
These are flow diagrams and tables that show the methods used to present data outcomes.
4.2.1 Response Rate
Table 4.1 Response Rate
Category Frequency Percentage (%)

Response 35 78

No Response 10 22

Total 45 100

Source: Author (2018)

Figure 4.1 Response Rate

Source Author (2018)
The table 4.1 and figure 4.1 indicates the response got from the respondents who were given the questionnaires. The response of 78% indicate the response of the questionnaires returned which represents the number of the questionnaires returned by respondents who contributed to the study, while the response of 22% indicate the response of the respondents who did not return the questionnaires. This indicated that a good number responded and returned the questionnaire.
4.2.2 Gender Response
Table 4.2 Gender Responses
Category Frequency Percentage
Male 30 86
Female 5 14
Total 35 100
Source: Author (2018)

Figure 4.2 Gender Response

Source: Author (2018)

The table 4.2 and the figure 4.2 above indicate the gender response. The response of male was 86% indicating the majority response while the 14% indicated the response of female respondents. It was indicated that a few ladies take part in the organizations running.

4.2.3 Age Response
Table 4.3 Age Response
Category Frequency Percentage (%)

18-25 years 4 12
26-35 13 38
36-45 9 26
46-55 6 18
Above 55 3 6
Total 35 100
Source: Author (2018)

Figure 4.3 Responses

Source: Author (2018)

The table 4.3 and the figure 4.3 above indicate the response got on the age of the respondents. The age analysis of the respondents was as follows the respondents with less than 25yrs responded by 12% while the response of those between 26 -35 gave a response of 38%. There was a response of 26% from those with ages between 36-45 yrs. on the other hand. Those with 46-55 years gave response of 6
4.2.5 Education Qualification
These are the degrees, diplomas, certificates, professional titles and so forth that an individual has acquired.
Table 4.4 Education Qualifications
Category Frequency Percentage (%)
Secondary 10 28
College 23 66
University 2 6
Total 35 100
Source: Author (2018)

Figure 4.4 Education Qualifications

Source: Author (2018)
The table 4.5 and figure 4.5 above indicate the response on the education qualification. The responses were as follow: the secondary level of education had responses of 28% while the college level had a response of 66% with majority percentage and finally the university level had the smallest response of 6%. This indicated that the organization has the potential to perform since the most workers are more qualified.

4.2.6 Work Experience
Table 4.5 Work Experience
Category Frequency Percentage
Below 5 years 12 36
5-10 years 10 28
11-15 years 8 24
16-20 years 3 8
21 years and above 2 4
Total 35 100
Source: Author (2018)

Figure 4.5 Work Experience

Source: Author (2018)

The table 4.6 and the figure indicate response that was got on the work experience. In this regard the response of those below 5 years was 36% the response of those between 5 -10 was 28% the response of 11-15 was 24% the response of those between 16-20 years was 8%. The response of those above 21 years was 4% and it had the minority response. The majority of the workers who respondents to the questionnaire, majority worked for less than five years.

4.2.7 Response effects of transport on supply chain management in the retail business industry in Kenya.
Table 4.6 Response effects of transport on supply chain management in the retail business industry in Kenya.
Response Frequency Percentage (%)
Yes 33 96
No 2 4
Total 35 100
Source: Author (2018)

Figure 4.6 Response effects transport affects supply chain management in the retail business industry in Kenya.

Source: Author (2018)

The above table 4.7 and figure 4.7 indicated the response got on the Analysis of whether the transport affects supply chain management in the retail business industry in Kenya. The response of 96% indicated yes that the transport affects supply chain management in the retail business industry in Kenya. 4% indicated that it does not affect. By comparing the two it can be noted that transport affects supply chain management in the retail business industry in Kenya.

Table 4.7 Extent in transport affects supply chain management in the retail business industry in Kenya.
Category Frequency Percentage (%)
Very Great Extent 17 48
Great Extent 9 24
Moderate Extent 6 16
No Extent 3 12
Total 35 100
Source: Author (2018)

Figure 4.7 Extent transport affects supply chain management in the retail business industry in Kenya?

50% 48%
40%
Percentages (%) 30% 24%
20% 16%
10% 12%
0%
Very Great Great Moderate No
Extent Extent Extent Extent
Responses
Source: Author (2018)

Table 4.8 and figure 4.8 indicate that. 48% were of the opinion that transport greatly affects supply chain management in the retail business industry, 24% great extent,16% to a moderate extent and 12% had No extent on supply chain management in the retail business industry in Kenya.

4.2.8 Response effects of price control on supply chain management in the retail business industry in Kenya.
Table 4.8 Response effects of price control on supply chain management in the retail business industry in Kenya.
Response Frequency Percentage
Yes 28 80
No 7 20
Total 35 100
Source: Author (2018)

Figure 4.8 Response effects of price control on supply chain management in the retail business industry in Kenya.

Source: Author (2018)
The above table 4.9 and figure 4.9 indicate the response got from the respondents on whether price control affect supply chain management in the retail business industry in Kenya. In this regard 56% agreed while 44% did not agree that price control affects supply chain management in the retail business industry in Kenya.

Table 4.9 Extent price control affects supply chain management in the retail business industry in Kenya
Category Frequency Percentage (%)
Very Great Extent 16 46
Great Extent 10 28
Moderate Extent 5 14
No Extent 4 12
Total 35 100
Source: Author (20178)

Figure 4.9 Extent price control affects supply chain management in the retail business industry in Kenya.

50% 46%
40%
Percentages (%) 30% 28%
20% 14%
10% 12%
0%
Very Great Great Moderate No
Extent Extent Extent Extent
Responses
Source: Author (2018)
Table 4.10 and figure 4.10 indicate that 46% were of the opinion that price control affects supply chain management in the retail business industry, 28% were of the opinion that it has a great effect, 14% moderate effects and 12% No effects on supply chain management in the retail business industry in Kenya.

4.2.9 Response effects of open tender system on supply chain management in the retail business industry in Kenya.
Table 4.10 Response effects of open tender system on supply chain management in the retail business industry in Kenya.
Response Frequency Percentage (%)
Yes 32 92
No 3 8
Total 35 100
Source: Author (2018)

Figure 4.10 Response effects open tender system affects supply chain management in the retail business industry in Kenya

Source: Author (2018)
The above table 4.11and figures 4.11 indicate that 92% said that open tender system affects while the 8% didn’t agree. By comparing the two responses it was noted that open tender system affects supply chain management in the retail business industry in Kenya.

Table 4.11 Extent open tender system affects supply chain management in the retail business industry in Kenya
Category Frequency Percentage (%)
Very Great Extent 16 47
Great Extent 8 23
Moderate Extent 6 16
No Extent 5 14
Total 35 100
Source: Author (2018)

Figure 4.11 Extent open tender system affects supply chain management in the retail business industry in Kenya

50% 47%
40%
30% 23%
Percentages (%) 20% 16%
10% 14%
0%
Very Great Great Moderate No
Extent Extent Extent Extent
Response
Source: Author (2018)

Table 4.12 and figure 4.12 indicate that 47% were of the opinion that open tender system greatly affects supply chain management in the retail business industry, 23% were of the opinion that it has a great effect on supply chain management in the retail business industry, 16% moderate effects on supply chain management in the retail business industry and 14% No effects on supply chain management in the retail business industry in Kenya.

4.2.10 Response effects of tax on supply chain management in the retail business industry in Kenya
Table 4.12 Response effects of tax on supply chain management in the retail business industry in Kenya
Category Frequency Percentage

Yes 28 80

No 7 20

Total 35 100

Source: Author (2018)

Figure 4.12 Response effects of taxon supply chain management in the retail business industry in Kenya

Source: Author (2018)
The table 4.13 and figure 4.13 above indicate the response of whether tax affects supply chain management in the retail business industry in Kenya. 80% said that it affects supply chain management in the retail business industry while 20% said it does not affect supply chain management in the retail business industry in Kenya. By comparing the two responses it can be noted that tax affects supply chain management in the retail business industry in Kenya.

Table 4.13 Extent tax affects supply chain management in the retail business industry in Kenya
Category Frequency Percentage (%)
Very Great Extent 17 48
Great Extent 9 26
Moderate Extent 6 15
No Extent 3 11
Total 35 100
Source: Author (2018)

Figure 4.13 Extent tax affects supply chain management in the retail business industry in Kenya

50% 48%
40%
Percentages (%) 30% 26%
20% 15%
10% 11%
0%
Very Great Great Moderate No
Extent Extent Extent Extent
Response
Source: Author (2018)
Table 4.14 and figure 4.14 indicate that 48% were of the opinion that tax greatly affects supply chain management in the retail business industry, 24% were of the opinion that it has a great effect on supply chain management in the retail business industry, 15% moderate effects on supply chain management in the retail business industry in Kenya and 11% No effects on supply chain management in the retail business industry in Kenya.

4.3 Summary of Data Analysis
4.3.1 General information
The response of 78% indicate the response of the questionnaire returned which represents the number of respondents who contributed to the study while the response of 22% indicated the response of respondents who did not return the questionnaires. The response of male was 86% indicating the majority response while the 14% indicated the response of female respondents. The respondents with less than 25 years responded by 12% while the response of those between 26 – 35 gave a response of 6% 26-35 gave a response of 58%. There was a response of 26% from those with ages between 36-45 years. On the other hand those with 46 – 55 years gave response of 18% and finally those with above 55 years gave response of 65. A response of 44% indicated respondents who are single, while the married got a response of 56% there was no response got on the area of separated and divorced. This indicated that the majority workers are married. The primary level of education had a response of 0%, Secondary 28%, College with the majority of 66% and finally the University level had the smallest response of 6%.

4.3.2 Transport
The majority respondents of 96% agreed that transport is one of the key factors that affect supply chain management in the retail business industry with 4% disagreeing that it does not affect. The organization respondents indicate that the distribution channel determines performance process. Majority respondents indicated that it affects the supply chain management in the retail business industry.

4.3.3. Price Control
The Uchumi supermarket was said to be having more issues with price control and management with 80% of the respondents agreed that price control maters greatly affects the company with slight low rate of 20% disagreeing that it does not affect. In this case the majority respondents indicated that the company has managed to adhere to the price control matters with the aid of improved technology. The employees however indicated that there is need to look into the matter and ensure that the appropriate matters concerning price cases are made.

4.3.4 Open tender system
Open tender system is one of the major factors which determine the progression of any retail company. In this regard the equal number of respondents with 92% agreed that information technology affects with the other 8% disagreeing, that the open tender system does not affect the supply chain management in the retail business industry whereby the respondents indicated that the firm which has good influence with the technology is able to give predictions on general performance which finds it easier to bring service improvement to enhance effective sustenance of distribution.

4.3.5. Tax
The Uchumi supermarkets was said to be having a well laid price structures. In this case the majority respondents with 80% agreed that tax affects supply chain management in the retail business industry with the help of improved structure that protects the distribution from falling and failing. But 20% disagreed tax has minor effects on supply chain management in the retail business industry products.

CHAPTER FIVE
SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

5.1 Introduction
This chapter consists of summary of major findings, answers to research questions, conclusion and recommendation of the study.

5.2 Summary of Findings
5.2.1 How does transport affect supply chain management in the retail business industry in Kenya?
According to this finding, transport affects supply chain management in the retail business industry in Kenya to a very great extent by 48%, great extent 24%, moderate extent16% and No extent by 12%. It can be concluded that transport has a great impact on supply chain management in the retail business industry in Kenya

5.2.2 To what extent do price control affect supply chain management in the retail business industry in Kenya?
According to this finding, price control affects supply chain management in the retail business industry in Kenya to a very great extent by 46%, great extent 28%, moderate extent14% and no extent by 12%. It can be concluded that price control has a great impact on supply chain management in the retail business industry in Kenya.

5.2.3 How does open tender system affect supply chain management in the retail business industry in Kenya?
According to this finding, open tender system affects supply chain management in the retail business industry in Kenya to a very great extent by 47%, great extent 23%, moderate extent16% and no extent by 14%. It can be concluded that open tender system has an important impact on supply chain management in the retail business industry in Kenya.

5.2.4 To what extent does tax affect supply chain management in the retail business industry in Kenya?
According to this finding, tax affects supply chain management in the retail business industry in Kenya to a very great extent by 48%, great extent 26%, moderate extent15% and no extent by 11%. It can be concluded that tax has an important impact on supply chain management in the retail business industry in Kenya. That of those who disagreed were 8%. The respondents said that tax is a chore factor in supply chain management in the retail business industry.

5.3 Conclusions
Based on the findings of the study, it can be concluded as follows: The study has found that there’ are factors influencing supply chain management in the retail business industry in Kenya. The study has found out a general dissatisfaction in staff within the company on methods used in the distribution. Based on the findings of the study, it can be concluded that infrastructure is an important element in the success of any company. A weakness of many companies is that managers are not adequately trained and they provide little meaningful feedback to subordinates. Evidence indicates that managers can make them more accurate in sustaining the company’s distribution channels.

The Uchumi Kenya was said to be improving its access channels in order to encourage customers. In this case the majority respondents indicated that the organization through the policies laid has been able to sustain its products. The employees however indicated that somehow the information technology procedures should be improved

From the study analysis the researcher noted that price control is an essential accompaniment of all entities and has to be adequate everywhere Therefore the farms capital should always be maintained at the top level.

Open tender system was said to be one of the key issues affecting the supply chain management in the retail business industry in regard to management. In this regard the respondents indicated that the organization with well laid technological structures enables its employees to perform effectively and thus reflect on the distribution of locally manufactured industrial products.
5.4 Recommendations
Based on the findings of the study it is recommended as follows: The managers should ensure that the distribution processes used are developed in consultation with all the stakeholders. The objectives should be applied uniformly to all sources depending on the level and nature of what they do. The management, in consultation with other managers should ensure that the government policies management process are reviewed from time to time with improved structures so as to ensure that the systems process and results are relevant and useful to the sector
5 .4.1 Transport
It was recommended that transport should be encouraged since is known to have many favorable effects: it facilitates good performance, and reduces working as a cause of failure among departments of the industrial industry, it provides easier movement of goods from one point to another and a suitable means of transport should be improved depending on the product being transported, based on their fragility, perishability and size.
5.4.2 Price Control
The price control is essentially seen as that of creating positive attributes to the company. It was recommended that control measures should be reviewed and adhered to for the company’s long run and profitability
5.4.3 Open Tender System
Open tender system was said to be one of the key issues influencing the supply chain management in the retail business industry in the country. It was recommended that the firm should advance technologically to enables its functions to be performed effectively to a given goal.
5. 4.4 Tax
Tax was said to be one of the key issues influencing the supply chain management in the retail business industry in the country. It was recommended that the company should advance its tax to enables its functions to be performed effectively to a given goal.

5.5Suggestions for further research
Based on the research done, it can be concluded that factors affecting supply chain management in the retail business industry should be considered. Similar research should be replicated in other industrial companies to determine if a similar factor affecting the supply chain management in the retail business industry by use of other variables like organizational policies.

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APPENDIX II
QUESTIONNAIRE
For each of the question below, please tick in the space provided for the answer that describes your opinion
SECTION A: GENERAL INFORMATION
1. Gender
Male Female
2. Department
a) Senior Management
b) Middle Management
c) Support Staff

3. Work Experience.
Less than 5 years
5 -10 years
11 -15 years
16 -20 years
Above 21 years

4. Education Level
a) Secondary
b) College
c) University

5. Age of Respondents.
18 – 25

26 – 35

36 – 45

46 – 55

Above 55

SECTION B: INFRASTRUCTURE
6. Does transport affect supply chain management in the retail business industry in Kenya?
a. Yes
b. No
Explain………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
7. To what extent does transport affect supply chain management in the retail business industry in Kenya?
a. Very Great Extent
b. Great extent
c. Moderate extent
d. No extent

Explain the extent …………………………………………………………………..
……………………………………………………………………………………
……………………………………………………………………………………
SECTION C: PRICECONTROL
8. Do price control affect supply chain management in the retail business industryin Kenya?
a. Yes
b. No
Explain………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
9. To what extent do price control affect supply chain management in the retail business industry in Kenya?
a. Very Great Extent
b. Great extent
c. Moderate extent
d. No extent

Explain………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

SECTION D: OPEN TENDER SYSTEM
10.Does open tender system affect supply chain management in the retail business industry in Kenya?
a. Yes
b. No
Explain…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
11. To what extent open tender system affect supply chain management in the retail business industry in Kenya?
a. Very Great Extent
b. Great extent
c. Moderate extent
d. No extent

Explain the extent ………………………………………………………………….
………………………………………………………………………………………
………………………………………………………………………………………
SECTION E: TAX
12. Does tax affect supply chain management in the retail business industry in Kenya?
a. Yes
b. No
Explain………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………..

13. To what extent does tax affect supply chain management in the retail business industry in Kenya?
a. Very Great Extent
b. Great extent
c. Moderate extent
d. No extent
Explain the extent ……………………………………………………………………………
………………………………………………………………………………………..
………………………………………………………………………………………..

THANK YOU