Contract Cost Management and Supply Chain Performance of County Referral Hospitals in Kenya

Abstract

A large body of literature underscores the impact of contract management on supply chain performance from diverse contexts. Although the concept of contract cost management and supply chain performance has extensively been researched from the Kenyan context, most of the studies have zeroed in on manufacturing supply chains. Therefore, the study seeks to establish the relationship between contract cost management and supply chain performance of county referral hospitals in Kenya. The study is anchored on transactional cost economies theory. The study employed a descriptive research design and mainly concentrated on the forty-seven county referral hospitals in Kenya. In order to meet the research objective, the respondents were chosen based on the sample frame. The heads of department in each of these departments: procurement, finance, and stores were employed as a unit of observation across the referral hospitals. The pilot study targeted 10 respondents which is 10% of the final study sample size of who were randomly selected in each of the firms. The primary data were collected through a self-administered questionnaire that had both open and closed ended questions, designed to obtain definite responses. Statistical Package for the Social Sciences (SPSS version 28) was used to analyze the data and present the variables through coding and summarizing the responses of all the respondents and the analyzed data was presented in form of tables. The Cronbach’s Alpha value was greater than 0.7 which indicated that the questionnaire met the minimum acceptable threshold. The study findings showed that contract cost management significantly influence the supply chain performance of county referral hospitals in Kenya. The study concluded that performance was predicted to improve for every unit increase in these practices. The study further recommends that county referral hospitals should implement electronic document management systems for contract documentation, streamlining processes, and improving overall efficiency. Some recommendations included through choosing right software, systems configuration, document importation, user training, and need identification.