INFLUENCE OF SUPPLIER APPRAISAL ON RETAIL IN NAIVAS SUPERMARKET

Name: Wairigu Maryann Wanjiku

A RESEARCH PROJECT SUBMITTED IN PARTIAL FULFILLMENT OF THE

REQUIREMENT FOR THE AWARD OF CERTIFICATE IN PURCHASING AND
SUPPLY CHAIN MANAGEMENT IN THIKA TECHNICAL TRAINING
INSTITUTE.

NOVEMBER 2020
DECLARATION
Declaration by the Student
This research project is my original work and has not been presented to any other
examination body or institution for approval or award in any case. No part of this research
should be reproduced for any purpose without my consent or that of .
WAMBUI ANTHONY WACHIRA
BE233/0564/2015
SIGNATURE……………………………. DATE…………………….

Declaration by the Supervisor

This research project has been submitted with my approval as MUT Supervisor
Madam Ruth
SIGNATURE……………………………..DATE…………………….
Lecturer Supervising

I
DEDICATION
I dedicate this project to my wonderful mum, sisters and brothers for the support they gave
me through inspiration, motivation and patience. They have all along been available to
provide assistance and this project could not have been completed without them.

II
ACKNOWLEDGEMENT
I would like to thank my research supervisor Dr. Gichere for his support, encouragement,
corrections and endurance to lead me all through my research project.
I would like to acknowledge the entire Murang’a University of Technology specifically
commerce department for the conducive environment they have offered me for the whole
study period.
Much appreciation to the management of Naivas Supermarket who gave me the much needed
information to make this research project successful. My gratitude goes to Mr. Peter Mukuha,
chief operation officer for providing me with catalogue and industrial journals.
I would not fail to thank my fellow friends, Milcah Njeri, Evans Ochieng and James Mwaura
for their supportive ideas they gave me at the start of writing the project. Without all these
people, this project would not be comprehensive.

III
ABSTRACT
The purpose of this study was to examine factors affecting supplier appraisal on the retail
industry in Kenya a case study of Naivas Supermarket. The following were the specific
objectives of the study, to establish the effects of financial cost, quality assurance, lead time,
information technology and production capability on supplier appraisal in the retail industry
in Kenya. The significance of the study will be to the Management of Naivas Supermarket
and other researchers.

The study adopted descriptive research design; the target population was 108 employees from
which a sample size of 54 respondents was selected using stratified random sampling
technique. The instruments of data collection were questionnaires. Data was analyzed using
qualitative and quantitative methods. Qualitative data was presented in the form of
descriptive notes while quantitative data was presented in the form of tables and figures.

From the study findings 90% of the respondents were of the opinion that financial cost affects
supplier appraisal while 10% of the respondents disagreed, 86% of the respondents agreed
that quality assurance affects supplier appraisal while 14% of the respondents disagreed, 92%
of the respondents were of the view that lead time affects supplier appraisal while 8% of the
respondents disagreed, 84% of the respondents were of the view that information technology
affects supplier appraisal while 16% of the respondents disagreed and 94% of the respondents
agreed that production capability affects supplier appraisal while 6% of the respondents
disagreed.

The researcher recommended that the supermarket should put in place mechanisms that help
to reduce financial cost of appraising suppliers during appraisal, total quality assurance
management team should be put in place by the supermarket to ensure that there is
continuous improvement on supplies quality assurance in line with the organizational
requirement, the supermarket should consider putting in place agreements with its suppliers
to ensure that the principles of lead time are honoured by suppliers, there is need to put in
place an information technology system that allows easy communication and access to
suppliers online and the supermarket should improve on its housekeeping practices and
advise its suppliers to benchmark on the same. This would ensure that suppliers invest on the
best equipment for their production of goods and services.

IV
Table of Contents
DECLARATION.............................................................................................................................................................i
DEDICATION...............................................................................................................................................................ii
ACKNOWLEDGEMENT...............................................................................................................................................iii
ABSTRACT..................................................................................................................................................................iv
LIST OF TABLES.........................................................................................................................................................vii
LIST OF FIGURES......................................................................................................................................................viii
LIST OF ABBREVIATIONS...........................................................................................................................................ix
OPERATIONAL DEFINITION OF TERMS.......................................................................................................................x
CHAPTER ONE: INTRODUCTION................................................................................................................................1
1.1 Introduction.....................................................................................................................................................1
1.2 Background of the Study.................................................................................................................................1
1.2.1 Profile of Naivas Supermarket..................................................................................................................2
1.3 Statement of the Problem...............................................................................................................................3
1.4 Objectives of the Study....................................................................................................................................3
1.4.1 General Objective.....................................................................................................................................3
1.4.2 Specific Objectives....................................................................................................................................3
1.5 Research Questions.........................................................................................................................................4
1.6 Significance of the Study..................................................................................................................................4
1.6.1 The Management of Naivas Supermarket................................................................................................4
1.6.2 Other Researchers....................................................................................................................................4
1.7 Limitations of the Study...................................................................................................................................4
1.7.1 Confidentiality...........................................................................................................................................4
1.7.2 Fear of Victimization.................................................................................................................................5
1.8 Scope of the Study...........................................................................................................................................5
1.9 Conceptual Framework....................................................................................................................................5
CHAPTER TWO: LITERATURE REVIEW........................................................................................................................7
2.1 Introduction.....................................................................................................................................................7
2.2 Review of Theoretical Literature.....................................................................................................................7
2.3 Review of Critical Literature..........................................................................................................................19
2.4 Summary........................................................................................................................................................21
CHAPTER THREE: RESEARCH APPROACH AND METHODOLOGY.............................................................................22
3.1 Introduction...................................................................................................................................................22
3.2 Research Design.............................................................................................................................................22
3.3 Target Population..........................................................................................................................................22
3.4 Sampling Design and Procedure....................................................................................................................23
3.5 Data Collection Procedures and Instruments Used.......................................................................................23
3.5.1 Validity and Reliability of Research Instrument.....................................................................................23
3.6 Data Analysis Methods..................................................................................................................................24
CHAPTER FOUR: DATA ANALYSIS, RESULTS AND DISCUSSIONS..............................................................................25
4.1 Introduction...................................................................................................................................................25
4.2 Presentation of Findings................................................................................................................................25

V
 4.3 Summary of Data Analysis.............................................................................................................................40
CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS...........................................42
5.1 Introduction...................................................................................................................................................42
5.2 Summary of Findings.....................................................................................................................................42
5.3 Conclusions....................................................................................................................................................43
5.4 Recommendations.........................................................................................................................................44
5.5 Suggestion for Further Study.........................................................................................................................54
REFERENCES.............................................................................................................................................................55
APPENDIX I: QUESTIONNAIRE..................................................................................................................................57

VI
LIST OF TABLES
Table 3.1 Target Population....................................................................................28
Table 3.2 Sample Size.............................................................................................29
Table 4.1 Response Rate.........................................................................................31
Table 4.2 Gender Response.....................................................................................32
Table 4.3 Age Brackets..........................................................................................33
Table 4.4 Highest Level of Education....................................................................34
Table 4.5 Work Experience....................................................................................35
Table 4.6 Effects of Financial Cost........................................................................36
Table 4.7 Rating of the Effects of Financial Cost..................................................37
Table 4.8 Effects of Quality Assurance..................................................................38
Table 4.9 Rating of the Effects of Quality Assurance............................................39
Table 4.10 Effects of Lead Time..............................................................................40
Table 4.11 Rating of the Effects of Lead Time........................................................41
Table 4.12 Effects of Information Technology........................................................42
Table 4.13 Rating of the Effects of Information Technology..................................43
Table 4.14 Effects of Production Capability............................................................44
Table 4.15 Rating of the Effects of Production Capability......................................45

VII
LIST OF FIGURES
Figure 1.1 Organizational Structure of Naivas Supermarket...................................3
Figure 2.2 Conceptual Framework.........................................................................26
Figure 4.1 Response Rate.......................................................................................31
Figure 4.2 Gender Response..................................................................................32
Figure 4.3 Age Brackets.........................................................................................33
Figure 4.4 Highest Level of Education..................................................................34
Figure 4.5 Work Experience..................................................................................35
Figure 4.6 Effects of Financial Cost......................................................................36
Figure 4.7 Rating of the Effects of Financial Cost................................................37
Figure 4.8 Effects of Quality Assurance................................................................38
Figure 4.9 Rating of the Effects of Quality Assurance..........................................39
Figure 4.10 Effects of Lead Time............................................................................40
Figure 4.11 Rating of the Effects of Lead Time......................................................41
Figure 4.12 Effects of Information Technology......................................................42
Figure 4.13 Rating of the Effects of Information Technology................................43
Figure 4.14 Effects of Production Capability..........................................................44
Figure 4.15 Rating of the Effects of Production Capability....................................45

VIII
LIST OF ABBREVIATIONS
ABC Activity Based Financial costing
AQL Acceptable Quality Assurance Level
DPSM Diploma in Purchasing and Supplies Management
EDI Electronic Data Interchange
ERP Enterprise Resource Planning
ISO International for Standardization Organization
IT Information Technology
MRP Material Resource Planning
RBV Resource Based View
TQM Total Quality assurance Management

IX
OPERATIONAL DEFINITION OF TERMS
Financial Cost Financial cost is defined as the cash amount given up
for an asset. Financial cost includes all financial costs
necessary to get an asset in place and ready for use. For
example, the financial cost of an item in inventory also
includes the item's freight-in financial cost.

Information A company technology can be defined as the

Technology
equipment, people, procedure, methods and knowledge
used to perform certain tasks or procedure to solution
problem pertaining to supplier appraisal in the retail
industry.

Lead Time Lead time is the period between a customer's order and
delivery of the final product. Retail industries are
always looking for ways to improve the lead time on
their products.

Production Capabilities are identified as high-level routines or

Capability
bundles of routines. Compared to resources, routines
and capabilities built on routines are embedded in the
dynamic interaction of multiple knowledge sources and
are more firm-specific and less transferable.

Quality Assurance This is the conformity to requirements not goodness. He

also stresses that the definition of quality assurance can
never make sense unless it is based on what customer
want.

X
XI
CHAPTER ONE: INTRODUCTION
1.1 Introduction
This chapter introduces the background of the study, statement of the problem, objectives of
the study, research questions, significance of the study, limitation of the study and scope of
the study. A conceptual framework was used in the study so as to show the existing
relationship between independent and dependent variables for the study.

1.2 Background of the Study

Supplier appraisal is a field that continues to attract significant focus in supply chain
management literature with effective evaluation and selection of suppliers considered to be
one of the critical roles of procurement officers. A number of parameters exist for the
evaluation and selection of suppliers which include: quality assurance, price, and on-time
delivery. According to Lysons (2008), suppliers can be appraised on eight areas, namely:
finance, production capability, human resource, quality assurance, performance,
environmental and ethical considerations, and organizational structure.

Supplier appraisal can be defined as an assessment of supplier suitability and capability to

supply specific goods or services before awarding a contract. Suppliers can have a significant
impact on the success or failure of the organization (Newman, 1988). As a result, one of
purchasing key activities is securing the best suppliers, in terms of value for money, to
operate within the supply chain. Depending on the strategic nature of the product, the buying
organization may be interested in not just own supplier but in the supplier's suppliers; this can
be seen most clearly in the car industry where supplier appraisal is common (Slack, 2007).

Chung (2004), noted that the global competitive environment drives organizations to be
highly dependent on the success of supplier selection process. The author also noted that any
deficiency in coordination of the process will lead to excessive delays and poor customer
service. Suppliers are manufacturer's external organizations or business partners, and their
performance will decide the future performance of the whole supply chain, thus the business
takes keen interest in thorough appraisal. The frequency of supplier assessment determines
the performance of the supplier. Frequent meetings with suppliers facilitate the prevention of
inefficient practices at an early stage and encourage continuous improvement of suppliers.

1
These assessments however, are mutually beneficial only if both parties are willing to
cooperate and provide the necessary inputs (Bello, 2003).

Suppliers’ appraisal grows to be very important to the organizations especially the retail
sector, where the buying organization develops criterion to appraise suppliers. Birell (2005),
confirms that the criteria used in the supplier appraisal process to select a suitable supplier
empowers the procuring entity to determine whether the supplier is capable or competent
enough to perform the work within budget, on schedule and at the required safety and quality
assurance standards. The author continued stating that selecting the proper evaluation criteria
is essential especially to a private procuring entity whose objectives almost always comprise
of maximizing profit, market share and future growth. Supplier evaluation decisions are
complicated by the fact that various criteria must be considered in decisions making process.

The retail sector in Kenya holds promise to agricultural and industrial sector appraisal
because as the country develops, efficient consumer outreach is through formal retail outlets.
This fact is recognized in Vision 2030 where the government targeted to raise the share of
products sold through the formal retail channels, such as supermarkets, from 5% in 2007 to
30% by 2012 (State Department for Trade, 2018). This dream was to be achieved through
establishment of at least three new Retailers with more than 10 stores each in the Kenyan
economy.
In Kenya the scenario is similar; the retail industry holds a prominent assessment of their
suppliers, the performance of suppliers substantially impacts on the efficiency and
effectiveness of the buying firm and is of great importance. According to Ombati (2013), one
reason for supplier selection is that of product appraisal process, meaning that as the product
appraisal cycle reduces suppliers are also required to reduce the delivery cycle or else
competent ones will be sought for and those that do not meet the criteria set by firms are
supposed to be weeded out. They argue that the goal of supplier evaluation is to secure valued
resources and technologies of the selected suppliers in situations that preclude the option of
vertical integration due to resource limitations and managerial constraints. Apart from being
able to harness the strengths and skills of suppliers to their advantage firms that conduct
supplier evaluation also benefit from improved quality assurance and process performance
and continuous financial cost reductions.

1.2.1 Profile of Naivas Supermarket

1
Naivas Supermarkets is one of the largets supermarkets in Kenya after Tuskys having been
established and registered on 24th July 1990 previously traded as Rongai Self Service Limited,
serving mainly in Nakuru County. The name was changed later to Naivasha Self Service
Stores Limited, before rebranding to current Naivas Limited. Currently Naivas has eight (47)
stores across the country. Naivas is committed to provide a world class retail shopping
experience to its customers. It strives and adapts all its operations to meet and exceed all
ethical, legal, commercial, public and societal expectations. Naivas is actively involved in
environmental awareness, respect for nature, sustainable use of resources, healthy product,
clean production and supply chain.

Figure 1.1 Organizational Structure of Naivas Supermarket

Chief Executive
Officer

Human
Chief Finance Resource
Officer Distribution

Regional
Mangers
Merchandizing
Public
Distribution
Customer
Service
Public
Procurement Distribution
Managers and
Associates
Advertising,
Receiving And

Research and Marketing

Inspection
Development

Source: Author (2019)

2
1.3 Statement of the Problem
Suppliers are important stakeholders whose operations can impact the overall performance of
a given retail industry. The choice of an organization’s supplier should be guided by an
elaborate appraisal of the potential suppliers since the suppliers can impact the performance
of any retail industry or process. Delayed deliveries, poor quality assurance products or
services, non-completion of orders and even threats of litigation due to delayed payments is a
common scenario experienced by retail industries (Slack, 2007). Up to 30% of procurement
inefficiencies in the retail industries in Kenya are attributed to supplier’s performance issues.
There is therefore concern as to what can be done to reduce supplier related procurement
issues. One of the ways through which organizations strive to reduce supplier related
inefficiencies is through appraisal of suppliers. In ideal situations, supplier appraisal is
expected to positively influence procurement performance. It was against the background that
the researcher established the effects of financial cost, quality assurance, lead time,
technology and production capability on supplier appraisal in the retail industry in Kenya.

1.4 Objectives of the Study

1.4.1 General Objective

The main objective of the study was to examine factors affecting supplier appraisal in the
retail industry in Kenya.

1.4.2 Specific Objectives

i. To establish the effects of financial cost on supplier appraisal in Naivas
ii. To determine the effects of quality assurance on supplier appraisal in Naivas.
iii. To find out the effects of lead time on supplier appraisal in Naivas.
iv. To examine the effects of information technology on supplier appraisal in
Naivas.
v. To assess the effects of production capability on supplier appraisal in Naivas.

3
1.5 Research Questions
i. To what extent does financial cost affect supplier appraisal in Naivas?
ii. How does quality assurance affect supplier appraisal in Naivas?
iii. To what extent does lead time affect supplier appraisal in Naivas?
iv. How does information technology affect supplier appraisal in Naivas?
v. To what extent does production capability affect supplier appraisal in Naivas?

1.6 Significance of the Study

1.6.1 The Management of Naivas Supermarket

It aim of this project will be, helping the supermarket top management to use the
recommendations which will be given a platform to make long-term objectives and plans to
improve standards. Supplier appraisal will be easy to access. The study will enable Naivas
Supermarket to ensure that supermarket’s strategies are on the right track and being
implemented properly to be worth the effort especially on supplier appraisal.

1.6.2 Other Researchers

This study contribute to the existing knowledge, address and provide the background
information to research organizations, individual researchers and scholars who would want to
carry out further research in this area. The study will help researchers and academicians to
expand their research into the supplier appraisal in the retail industry in Kenya.

1.7 Limitations of the Study

1.7.1 Confidentiality
The respondents were resistant to give information that they considered confidential and that
they felt could be threat to the organization. Some of the information required for the
research was held back for fear that the study might turn out to be a trap to victimize some
employees thus making it difficult for the study. This problem was overcome by showing the
form which indicated that the study was done for learning purposes.

4
1.7.2 Fear of Victimization
The secrecy and fear of victimization was deemed detrimental to the organization by the
employees ending up limiting the study. Some information was difficult to obtain since
access to such information was limited to senior managers who were not willing to release
such information. To ensure that the information used for the research was factual, the
researcher conducted his attachment period at the organization.

1.8 Scope of the Study

The main aim of the study was to determine factors affecting supplier appraisal in the retail
industry in Kenya. The study was conducted in Naivas Supermarket head office located at
Sameer Business along Mombasa Road in Nairobi County. The study targeted 108
employees’ top management, middle management and support staff and the sample size of 54
employees. The study was conducted between October 2018 to Jan 2019
1.9 Conceptual Framework

Figure 2.1 Conceptual Framework

Independent Variables Dependent Variable

Financial cost

Quality Assurance
Supplier Appraisal in the Retail
Lead Time
Industry

Information Technology

Production Capability

Source: Author (2019)

2.5.1 Financial cost

Financial cost is defined as the cash amount given up for an asset. Financial cost includes all
financial costs necessary to get an asset in place and ready for use. For example, the financial
cost of an item in inventory also includes the item's freight-in financial cost. The financial
cost of land includes all financial costs to get the land ready for its use to increase supplier
appraisal in the retail industry.
2.5.2 Quality Assurance
This is the conformity to requirements not goodness. He also stresses that the definition of
quality assurance can never make any sense unless it is based on what the customers want.
5
That is a supplier appraisal in the retail industry is quality assurance only when it conforms to
the customers' requirements.

2.5.3 Lead Time

Lead time is the period between a customer's order and delivery of the final product. Retail
industries are always looking for ways to improve the lead time on their products. Lead time
can mean the difference between making the sale and watching a competitor sign the contract
to enlarge supplier appraisal in the retail industry.

2.5.4 Information Technology

A company technology can be defined as the equipment, people, procedure, methods and
knowledge used to perform certain tasks or procedure to solution problem pertaining to
supplier appraisal in the retail industry. The basic element of technology continuation is
formed from the information, human resource and management systems.

2.5.5 Production Capability

Capabilities are identified as high-level routines or bundles of routines. Compared to
resources, routines and capabilities built on routines are embedded in the dynamic interaction
of multiple knowledge sources and are more firm-specific and less transferable.

CHAPTER TWO: LITERATURE REVIEW

6
2.1 Introduction
This chapter contains theoretical literature, critical and analytical review, summary of gaps.
Theoretical literature will be highly reviewed in this chapter. Literature mainly from
textbooks, magazines, journals, websites will be of great assistance towards the achievement
of the research objectives.

2.2 Review of Theoretical Literature

2.2.1 Financial cost

According to Richard (2001), design to financial cost is a management strategy and
supporting methodologies to achieve an affordable supplier appraisal in the retail industry by
treating financial cost as an independent design parameter that needs to be achieved during
the development of a supplier appraisal process. The management of product financial cost
begins with the competition of a new supplier product. A large percentage of the supplier
appraisal in the retail industry ultimate acquisition of life cycle financial costs. Once the
design of the product has been established, relatively little attitude exists to reduce the
financial cost of the supplier appraisal in the retail industry.

Opportunity financial cost refers to the economic financial cost products the value of the next
best opportunity foregone. Choices must be made between desirable yet mutually exclusive
actions. The opportunity financial cost of an activity is an element in ensuring that scarce
resources are used efficiently, such that the financial cost is weighed against the value of that
activity in deciding on more or less of it opportunity financial costs are not restricted to
monetary or financial costs but could be measurable by the real financial cost of output
forgone, leisure or anything else that provides the alternative benefit in terms of supplier
appraisal (Barley, 2005).

Richard (2001), with use of standard parts and modules from other existing supplier appraisal
in the retail industry will also lower non-recurring development financial costs. This suggests
a strategy of not letting supplier appraisal in the retail industry and process technology
application get too far ahead of customer affordability requirements.

7
Supplier appraisal in the retail industry development team members should buy-in to or
commit to product financial cost targets and development budgets to improve the chances of
meeting this objectives. A keener awareness of design to financial cost requirements is
needed. This happens when supplier appraisal development team members and executive
management have direct contact with customers to understand their true needs and hear their
sensitivity to financial costs directly, or when they are exposed to competitor’s supplier
appraisal in the retail industry pricing in the market place. In an environment where
development financial cost is significant relative to the recurring supplier appraisal in the
retail industry, more attention will need to be paid to managing these non-recurring
development financial costs. Non-recurring development financial cost will be a function of
the extent of few supplier appraisal strategies in the retail industry and process technology
and the extent of use of new materials, parts and subsystems. If supplier appraisal in the retail
industry is an evolutionary step with minimal development risk, non-recurring development
financial costs and be lower.

According to Otieno (2002), Activity Based Financial costing (ABC) is a relatively new
approach to establishing financial cost which allows hope for accurately determining what
financial costs should be assigned to particular supplier appraisal in the retail industry lines
consumers, under ABC, managers separately keep account of expenses required to produce
and keep the manufacturing facility running. It is also required that financial costs be allowed
not to supplier appraisal in the retail industry but also to consumers so that the manager can
determine the financial cost to serve a particular consumer. In special needs including parking
and loading, order processing and invoice post sales and the other financial cost of offering
credits. This financial cost are attributed to each customer and allocated to supplier appraisal
in the retail industry based on the volume of each product purchased by a particular customer.

According to Drummond (2001), financial costs can be estimated in several ways. A common
approach for supplier appraisal is to use reserve engineering for a detailed analysis of
financial cost structure. Supplier appraisal manager can readily identify components and
financial costs in the markets particularly for product is possible to understand current
financial cost and forecast future financial cost through the use of experience curve.

8
The consumer should be part of pricing decisions of a retail industry and therefore a retail
industry should understand the value of customers in pricing at all times. Pricing may be too
heavy and influence by financial cost, when product financial costs are high the final
financial costs also goes high. This is to cater for what was used in the supplier appraisal in
the retail industry. All the financial cost should be complexity of pricing, goods should not be
made completed so that unnecessary thins are added to be final price. The other things that
may lead to infective pricing are the traditional mark-ups and target return on investment.
Naivas Supermarket therefore, should base it strategies on core concept laid down.

2.2.2 Quality assurance

According to Sople (2007), quality assurance is whatever customer expects to be and what
they say it is. He proposes that compromise in quality assurance results in heavy losses for
the supplier appraisal. A supplier appraisal in the retail industry or service that fails to have
this will financial cost the retail industry In terms of repair financial cost or making
amendments to the supplier appraisal in the retail industry. Quality assurance is a degree of
excellence of a supplier appraisal in the retail industry. Most retail industries believe in
quality assurance always goes with the better the quality assurance the longer the time used in
achieving it. Management should ensure each supplier appraisal in the retail industry get
enough time so that it comes out to be of good quality assurance.

The great concern has always been on the supplier's ability to meet the required Standards of
supplier appraisal in the retail industry(Sople, 2007) states that the ability required quality
assurance standards and deliver good supplier appraisal approaches in the retail industry on
time as well as performance history are the most important performance criteria even with
convention purchasing strategy. Many conceptual studies also emphasize the supplier
management must have quality assurance focus; supply becomes critical appraisal criteria
because supplier's failure on these dimensions has more serious adverse effects on buyer
operation.

According to Baily (2008), quality assurance is often used to satisfy excellence of a supplier
appraisal in the retail industry or service, if we define quality assurance in a way that is useful
in its management then we recognize the need to include in assessment of quality assurance
the requirements of the customer. Quality assurance has to be managed and it must involve
everyone in the retail industry. Many people in the support friction of the industry handle or
produce things like.

9
Chase orders or invoices if every fourth invoices carries at least one error, will bring failure
in one part of the system and these creates elsewhere.

The price of quality assurance is the continued examination of the requirements in terms of
availability, reliability, maintainability and financial cost effectiveness then this has wide
implication. The concept of quality assurance financial cost can be used to initiate quality
assurance improvement initiatives. In many retail industries a considerable number of man
hour spent on the inspection of incoming goods and on solving acute quality assurance
problems. The financial costs involved are often invisible and many retail industries have
absolute no idea what the lack of quality assurance is financial costing them. Making these
financial costs of preventing errors; assessments financial cost- the financial costs relate to
the timely recognition of errors and correction, financial cost that result from rectifying
mistakes. Prevention financial costs are all financial costs that are related to actions in the
context of preventing quality assurance errors (Baily, 2008).

There are numerous definitions of quality assurance ISO 8402, which defines the
fundamental terms relating concepts states that quality assurance is the totality of features and
characteristics of a supplier appraisal in the retail industry that bears on the ability to satisfy
stated or implied needs. In this definition features and characteristics of supplier appraisal in
the retail industry implies the ability to identify what quality assurance aspects can be
measured or controlled or constitute an acceptable quality assurance level (AQL) while
ability to satisfy given needs relates to the value of the supplier appraisal in the retail industry
or service to the customer including economic value as well as safely, reliability
maintainability and other relevant features (Baily, 2003).
Crosby (2009), defines quality assurance as the conformity to requirements not goodness. He
also stresses that the definition of quality assurance can never make any sense unless it is
based on what the customers want. That is a supplier appraisal in the retail industry is quality
assurance only when it conforms to the customers' requirements. When they say that quality
assurance inputs results in quality assurance output then it follows that trained man power
should be employed so to ensure that they produce the right quality assurance at all times.
This could help to increase retail industry operations with non-core functions under the
management of a third party, the consortium for purchasing and distribution research asserts
that the outsourcing gives 100m for retail industries to manage efficient supplier appraisal in
the retail industry system and improve the quality assurance of their goods to increase
competitiveness of the market place.

10
These alternative definitions of quality assurance often overlap and may conflict. Perspective
for quality assurance may also change as supplier appraisal in the retail industry moves from
the design to the marketing stage for these reasons; it essential to consider each of the above
properties when framing an overall quality assurance philosophy. According to Gradin’s
eight dimensions, quality assurance is performance of the supplier appraisal in the retail
industry operating characteristics. Reliability, the probability of a supplier appraisal in the
retail industry surviving for a specified period of time under stated conditions of use.
Serviceability, the speed, accessibility and ease of repairing the item or having it repaired
(Dobler, 2005).
According to Gardins eight dimensions, quality assurance is performance of the supplier
appraisal in the retail industry operating characteristics. Reliability, the probability of a
supplier appraisal in the retail industry surviving for a specified period of time under stated
conditions of use. Serviceability, the speed, accessibility and ease of repairing the item or
having it repaired. Performance and efficiency is a key to satisfying customer and remaining
competitive requires creating a lean supplier appraisal in the retail industry, services system
which has found to be extremely difficult both operationally and financially. Quality
assurance of the services a retail industry should offer must satisfy the need of their
customers (Dobler, 2005).

11
2.2.3 Lead Time
Datta (2007), states that for supplies management to be viable it must have the time of
delivery and supplier appraisal mechanism. Lead time planning is essential since it gives the
buyers opportunity to identify instance of any issue. It additionally improves better method
for overseeing inventories that they are getting. This gives better method for choosing the
better method for choosing the best method of transport to be utilized amid the delivery.
Absence of good lead time restrains the achievement of the retail ventures as far as stock
administration prompting poor lead time of products and enterprises that prompts
inappropriate supply management.

As per Touch (2006), lead time specifically influences supplier appraisal in the retail industry
which joins with buyer and the retail industry. It is expressed that supplier appraisal in the
retail industry questions the focal part of organizing the stream of products in supplier
appraisal with the framework modules that places the merchandise in the hand of a decent
client. It furnishes the premise of collaborating with the assembling, arranging and the control
framework using MRP from the firm to the field. This is on the grounds that lead time is the
time between delivery of merchandise to the buyers and the time the products touch base in
the retail industry. On the off chance that the lead time is long it might have an impact to the
supplier appraisal since the buyers may tend to locate alternate approaches to abbreviate the
lead time this consequently going to influence the supply of products. The time taken to
traverse the industrial facility is enormously lessened along these lines empowering
production lines to participate in time based rivalry utilizing speed. On the off chance that the
perfect measure of items is delivered at time customers’ adequacy is upgraded. Set up times
are ordinarily diminished by applying normal mechanical building procedures to breaking
down the set up process itself, regularly by laborers themselves utilizing a camcorder
prompting a lessening in changers of a few hours.

In the present aggressive industry condition, retail ventures attempt to furnish buyers with
merchandise and enterprises quicker and less expensive than their rivals. Regularly the key is
to have effective incorporated data framework. As indicated by Cheng (2003), expanding the
productivity of the data frameworks brings about more proficient administration of industry
forms. At the point when a retail industry's data frameworks are not coordinated operational
expensive wasteful aspects can come about. A venture asset arranging (ERP) framework can
incorporate a retail industry's activities by going about as a supplier appraisal wide figuring
condition that incorporates a database that is shared by every single practical region.

12
Enhanced acquirement hones prompt less deficiency and interferences, and less revamp and
extra minutes. By limiting surge employments and parts deficiencies, less time is required for
speeding up, material taking care of, additional setups, interruptions, and following split
parcels or occupations that have been put aside. Supplier appraisal in the retail industry chiefs
have better perceivability of required work and can change limit or loads to meet calendars.
Directors have more opportunity for overseeing, coordinating and preparing individuals.

Barry (2008), expressed that for trading item divert change in the quantity of center men
include. A few diverts are shortening as far as center men include: they are specifically
connected with the makers and buyers while other offer long and in a roundabout way
connected. The two through at least one go betweens, their supplier appraisal in the retail
industry channel comes about into either long lead time or short lead time, grouped into
either maker's buyers where makers specifically pitch their items to buyers like in numerous
branches in the supply industry, found in various parts of the nation. This occasionally occurs
in the instances of advancement or commercial to help the supplier appraisal item and lift the
retail industry.

Through supplier appraisal in the retail industry administration’s lead time is moved forward.
For example, the outsider will convey to the client toward the finish of each working day.
Oral correspondence ought to be affirmed in composing inside 24hours. As the plant or the
distribution centre is associated on the web, outsider will be in charge of the information
passage in the framework inside one hour of material inflow and surge from individual spots.
Outsider guarantees that online stock records are refreshed by stock audit timing of 12hours,
18hours at the head office. This is accomplished by the utilization of innovation i.e. the
utilization of EDI and web for instance retail enterprises like yippee tie up with numerous
makers for supply of products which are shown on their site. A case of internet exchanging
and the supplier appraisal is Amazon.com which is the world biggest exchanging retail
industry's-industry coordination’s framework guarantees that merchants, purchasers and
supplier appraisal in the retail industry and enhanced correspondence (Touch, 2006).

13
 A case of internet exchanging and the
supplier appraisal is Amazon.com which is
the world biggest exchanging retail
industry's-industry coordination’s
framework guarantees that merchants,
purchasers and supplier appraisal in the
retail industry and enhanced
correspondence (Touch, 2006).
It gives premise to connecting the assembling arranging and control framework using MRP
from the firm to the field. In the event that the lead time is long it might affect the supplier
appraisal since the buyers may have a tendency to need to locate alternate approaches to
abbreviate the lead time.

The measure of time that passes between when a procedure begins and when it is finished.
Lead time is analyzed intently in assembling, supplier appraisal and venture administration,
as retail industries need to decrease the measure of time it takes to convey items to the
market. In industry, lead time minimization is regularly favored. Lead time is broken into a
few segments: pre-handling, preparing and post preparing. Pre-preparing includes deciding
asset necessities and starting the means required to take care of a request. Preparing includes
the real assembling or making of the request. Post preparing includes delivery of items to the
market. Retail ventures take a gander at every part and contrast it against benchmarks with
figure out where log jams are happening (Maltson, 2009).

14
2.2.4 Information Technology
According to Scott (2004), today supply chain cannot succeed without incorporating into its
strategy the astonishing technologies that exist and continue to evolve. Technology advance
create new products, advanced production techniques and better ways of managing and
communicating. In addition, as new technology evolves public and private hospitals. New
technologies also provide new production techniques. In manufacturing, sophisticated robots
performs jobs without suffering, fatigue, requiring vacations or weekend off or demanding
wage increase. They also provide new ways to manage and communicate computerized
management information systems make information available when needed. Computer
monitors productivity and performance deficiencies. Advances in design and manufacturing
technology have made it possible to reduce substantially the amount of time to introduce a
new product in market. The computers and statistical analysis in manufacturing have boosted
quality assurance with machines and processes integrated by means of common databases
and routines that simplify procedures and reduce the potential of human error.

According to Robinson (2008), information technology can be defined as the equipment,

people and procedure used to produce its own products and services. The choice of
technology affects every aspect of supplier appraisal. The hospitals’ technological capability
and the ways in which it uses technology are important strategic issues. More recent
technological advances are dramatically changing the structure of the modern hospitals from
the assembly line to the executive suits new manufacturing and information processing
technologies are revolutionizing life in health sectors activities. Technology can be grouped
into two categories namely information technology and communication technology.
Technology has removed workplace boundaries that previous limited health sectors
expansion.

According to Malcolm (2008), information technology plays a significant role in the supplier
appraisal. Information technology according to her is the processing and distribution of data
using computer hardware and software, data base management, telecommunication and
digital electronics. Information technology makes it easy for a retail industry decision making
because they have information at hand, with the aid of information technology managers have
more information at their reach and it also improves good organization and usefulness at each
stage of the strategic decision making procedure. A great potential for added value lies in the
proactive linking of information system development activities to strategic business planning
in management area. Effective use of information technology function to aid in the process of

15
surfacing retail industry wide in fact knowledge and actively integrating it into the existing
organizational culture are explored.

Information technology is generally and expression covering computers telecommunication

and electronics and there is no doubt that IT has brought tremendous change in tasks
executions in both private and retail industries. According to Stephen (2004), introduction of
computers into the business is an element that should be considered with great concern
because it involves capital expenditure and such should be done if it’s really necessary and
financial cost effective. Management information system computerization has an impact on
efficiency, effectiveness and transformation. They typically run faster and require fewer,
personnel and other business sources than manual systems. Organizations that have an
adopted the information technology in have overcome many hurdles in their job executions.
In order for a supply chain to operate it must deal with many different pieces of information
about suppliers, customers, employees, invoices and payments, and of course their products
and services. They must organize work activities that use this information to operate
efficiently and enhance the overall performance of the firm.

Information Technology make it possible for retail industry to manage all their information,
make better decisions and improve the execution of their business processed (Laudon ,2006).
Information technology allows the supply chain to access different market faster and more
easily making business faster and global. This calls for a better judgment and quick
evaluation due to the many global respondents one needs to set policies, guidelines, terms
and standards for efficiency like in Kenya an implementation of the Public Procurement and
Disposal Act would act as a good evaluation and reference point as it offers guidelines for
adherence to Kenyan standards.

According to Robins (2008), the advantages of information technology include getting the
right product from the right supplier to the right buyer at the right time, for the right price and
the right quantity. Information technology has significantly changed procurement as more
information is readily available and it is easier to share the information to interested parties
within the public retail industry as part of the decision making process.

16
In this regard e-procurement has the advantage of taking supplier appraisal to the next level
provided real time information to the vendor as to the status of a customer's need.
Appropriate use of “IT knowledge management and information should give further boast to
the benefit of the retail industries. The practicing retail industries could successfully response
time, redesigning the business process, stream-lined logistics activities across the supply
chain to reduce financial cost and improve efficiency.

In addition to this the automated inventory tracking system which is important information
technology tool which is quite popular in supplier appraisal in the retail industry. Information
system is designed to control inventory flow in the supply chain and use of computerized
material planning and the EDI system. The system gives the real time status of inventory
levels of all the items at retail industries and feeder mother warehouse for replenishment of
items at retail and feeder and mother for replenishment of items sold information conveyed
directly to the supplier after the item inventory level is checked at the distribution and the
warehouse.

2.2.5 Production Capability

According to Lysons (2008), a buyer should assess a supplier’s machinery with attention paid
to the following points: the availability of full range of machinery required to produce a
required product, mechanisms to overcome shortage of machinery, evidence of good
housekeeping, adoption of approaches such as computer aided designs, computer aided
manufacture, satisfaction on safety provisions and modernity and well maintenance of
machines.

A buyer should focus on suppliers who have listed the name and location of the production
facility, whose facilities have complied with ISO 9001 standards, are socially compliant.
Arsan (2011), noted that using considering factors in supplier appraisal is the easiest way to
implement but suffers from subjectivity. However, the author noted that the method is simple
and effective especially where the number of suppliers is limited and the number and volume
of transactions are small. The supplier should have production experience documentation and
the age of the equipment should be assessed.

Corbett (2002), denote capabilities as the ability of a firm to apply resources to do something
and further states that capabilities form the primary basis for competition between firms. In
the retail industry literature, capabilities are often conceptualized as a business unit’s intended
or realized competitive performance or operational strengths and are therefore assessed using
measures of operational performance, which typically includes financial cost, quality
17
assurance, flexibility, and delivery measures. The performance-based approach to capabilities
is conceptually aggregated to clearly direct the proper use of manufacturing resources.
Different from the performance-based approach to capability research that is dominating the
retail industry literature is the routine based approach to explaining the heterogeneity of
firms. Capabilities are identified as high-level routines or bundles of routines.
The two main dimensions of delivery performance are delivery reliability and delivery speed
(Ward, 2006). Delivery reliability is sometimes referred to as dependability or on-time
delivery and concerns the ability to deliver according to a promised schedule or plan. This
sub dimension of operational performance is often regarded a prerequisite. Delivery speed is
concerned with the length of the delivery cycle. The author argues that although the
dimensions are separable, long run success requires that promises of speedy deliveries be
kept with a high degree of reliability. There is a caution with the delivery dimension, retail
industries in different environments relate differently to both delivery speed and reliability.
Delivery speed is, from a market perspective, the elapsed time from the receipt of a customer
order to final delivery.

Retail industry has adopted the notion of capabilities from the strategic management
literature, particularly the resource-based view (RBV) of the firm proposed by (Barney,
2001). The basis in RBV is that resources are not uniformly distributed across firms and thus
provides the potential of being a source to competitive advantage. Resources are referred to
as assets, routines, practices etc. controlled by a firm that are valuable, rare, and imperfectly
imitable and substitutable. Hayes and a retail industry need to differentiate itself from its
competitors on the basis of something valuable to the customer. The way to do this is to
harness the benefits of various improvement programs or bundles of practices, like Lean
manufacturing or TQM, in the service of a broader retail industry that emphasizes the
selection and growth of unique operating capabilities.

18
2.3 Review of Critical Literature
According to Richard (2001), design to financial cost is a management strategy and
supporting methodologies to achieve an affordable supplier appraisal in the retail industry by
treating financial cost as an independent design parameter that needs to be achieved during
the development of a supplier appraisal process. The management of product financial cost
begins with the competition of a new supplier product. Once the design of the product has
been established, relatively little attitude exists to reduce the financial cost of the supplier
appraisal in the retail industry. This is very true but the author failed to indicate how affects
supplier appraisal in the retail industry in Kenya financial cost. A study was conducted to fill
in the gaps left.

According to Sople (2007), quality assurance is whatever customer expects to be and what
they say it is. He proposes that compromise in quality assurance results in heavy losses for
the supplier appraisal. A supplier appraisal in the retail industry or service that fails to have
this will financial cost the retail industry In terms of repair financial
cost or making amendments to the supplier appraisal in the retail industry. Quality assurance
is a degree of excellence of a supplier appraisal in the retail industry. Most health retail
industry’s believe in quality assurance always goes with the better the quality assurance the
longer the time used in achieving it. Management should ensure each supplier appraisal in the
retail industry get enough time so that it comes out to be of good quality assurance. This is
very true but the author failed to indicate how quality assurance affects supplier appraisal in
the retail industry in Kenya financial cost. A study was conducted to fill in the gaps left.

Datta (2007), states that for supplies management to be viable it must have the time of
delivery and supplier appraisal mechanism. Lead time planning is essential since it gives the
buyers opportunity to identify instance of any issue. It additionally improves better method
for overseeing inventories that they are getting. This gives better method for choosing the
better method for choosing the best method of transport to be utilized amid the delivery.
Absence of good lead time restrains the achievement of the retail ventures as far as stock
administration prompting poor lead time of products and enterprises that prompts
inappropriate supply management. This is very true but the author failed to indicate how lead
time affects supplier appraisal in the retail industry in Kenya financial cost. A study was
conducted to fill in the gaps left.

According to Scott (2004), today supply chain cannot succeed without incorporating into its
strategy the astonishing technologies that exist and continue to evolve. Technology advance

19
create new products, advanced production techniques and better ways of managing and
communicating. In addition, as new technology evolves public and private hospitals. New
technologies also provide new production techniques. In manufacturing, sophisticated robots
performs jobs without suffering, fatigue, requiring vacations or weekend off or demanding
wage increase. They also provide new ways to manage and communicate computerized
management information systems make information available when needed. Computer
monitors productivity and performance deficiencies. Advances in design and manufacturing
technology have made it possible to reduce substantially the amount of time to introduce a
new product in market. The computers and statistical analysis in manufacturing have boosted
quality assurance with machines and processes integrated by means of common databases
and routines that simplify procedures and reduce the potential of human error. This is very
true but the author failed to indicate how information technology affects supplier appraisal in
the retail industry in Kenya financial cost. A study was conducted to fill in the gaps left.

According to Lysons (2008), a buyer should assess a supplier’s machinery with attention paid
to the following points: the availability of full range of machinery required to produce a
required product, mechanisms to overcome shortage of machinery, evidence of good
housekeeping, adoption of approaches such as computer aided designs, computer aided
manufacture, satisfaction on safety provisions and modernity and well maintenance of
machines. This is very true but the author failed to indicate how production capability affects
supplier appraisal in the retail industry in Kenya financial cost. A study was conducted to fill
in the gaps left.

20
2.4 Summary
The literature review indicates that a financial cost of reduction or a profitability problem has
to start with the design of the retail industry’s supplier appraisal in the retail industry at the
very beginning of the development cycle. Effective supplier appraisal financial cost
management requires a design to financial cost philosophy as its basis since a substantial
portion of the product financial cost is dictated by decisions regarding its design.

The literature review shows that quality assurance has to be managed and it must involve
everyone in the retail industry. Many people in the support friction of the industry handle or
produce things like. Chase orders or invoices if every fourth invoices carries at least one
error, will bring failure in one part of the system and these creates elsewhere.

The literature review confirms that lead time is broken into several components: pre-
processing, processing and post processing. Pre-processing involves determining resource
requirements and initiating the steps required to fill an order. Processing involves the actual
manufacturing or creation of the order. Post processing involves delivery of products to the
market. Retail industries look at each component and compare it against benchmarks to
determine where slowdowns are occurring

The literature review acknowledges that information technology allows the supply chain to
access different market faster and more easily making business faster and global. This calls
for a better judgment and quick evaluation due to the many global respondents one needs to
set policies, guidelines, terms and standards for efficiency like in Kenya an implementation
of the Public Procurement and Disposal Act would act as a good evaluation and reference
point as it offers guidelines for adherence to Kenyan standards.

The literature review indicates that the performance-based approach to capabilities is

conceptually aggregated to clearly direct the proper use of manufacturing resources. Different
from the performance-based approach to capability research that is dominating the retail
industry literature is the routine based approach to explaining the heterogeneity of firms.
Capabilities are identified as high-level routines or bundles of routines.

21
CHAPTER THREE: RESEARCH APPROACH AND METHODOLOGY

3.1 Introduction
This study is based on evaluation of factors affecting supplier appraisal in the retail industry
in Kenya. The chapter discusses research design and methodology by looking at research
design, target population, sample design, data collection, procedures for acquiring
information needed and data analysis.

3.2 Research Design

Kothari (2004), defines a research design as a master plan specifying the methods and
procedures used for collecting and analysing the needed information. In this study descriptive
research design was used by researcher since information gathered involves administering
questionnaires. The main purpose of the design is to describe systematically the situation or
area of interest factually and accurately. It will be useful for addressing questions that related
to what, why and how much and can be used to measure the incidence of phenomena.

3.3 Target Population

Target population as defined by Kothari (2004), is a universal set of the study of all members
of real or hypothetical set of people, events or objectives to which an investigator wishes to
generalize the results, the target population of the study will be illustrated as shown below in
the table 3.1 where the study will be best at the top management, middle level management
and support staff.

Table 3.1 Target Population

Category Target Population Percentage

Top Level Management 4 4

Middle Level Management 5 5

Support Staff 99 91

Total 108 100

Source: Author (2019)

22
3.4 Sampling Design and Procedure
According to Kothari (2004), sampling is the process by which a relatively small number of
individual, object or event is selected and analyzed in order to find out something about the
entire population from which it was selected. A sample is a small proportion of targeted
population selected using systematic form. The researcher used stratified random sampling
procedure because it enabled generalization of a larger population with a margin of error that
was statistically determinable (Mugenda and Mugenda, 2003). The sample size of 50% of a
target population was selected as follows:

Table 3.2 Sample Size

Category Target Population Sample Size Percentage

Top Level Management 4 2 4

Middle Level Management 5 3 5

Support Staff 99 49 91

Total 108 54 100

Source: Author (2019)

3.5 Data Collection Procedures and Instruments Used

Questionnaires were hand delivered and collected after a few days. The types of questions
included both open and closed ended questions. Closed ended questions were used to ensure
that the answers given were relevant. The researcher had to phase the questions clearly in
order to make clear dimensions along which respondents were analyzed. In open – ended
questions, the respondents were given freedom to express their feelings on the provided
spaces for relevant explanations. This method was considered effective to the study in that; it
created confidentiality. The presence of the researcher was not required as the questionnaires
were self-administered.

3.5.1 Validity and Reliability of Research Instrument

Validity refers to whether the research measures what it intends to. Reliability can be
identified as the extent to which the measurement of a test remains consistent over repeated
tests of the same subject under identical conditions. A pilot study was done to identify
elements of study population and unit of analysis. During the study, draft questions were pre
tested to remove ambiguity and achieve high degree precision.

23
On the other hand, questions which did not yield the required data were discarded. All the
units of analysis were comprehensively studied and whole population taken into account.

3.6 Data Analysis Methods

This involves qualitative and quantitative analysis. The data was collected by use of various
instruments which was first edited to get the relevant data for the study. Data analysis is a
process of gathering, modeling and transformation of data with the goal of highlighting
useful information, suggesting conclusions and supporting decision making hence preparing
crude data into interpretable designs (Mugenda & Mugenda, 2003). Data was analyzed using
statistical methods by use of tables, figures, frequencies and percentages. It is visualized that
the comparative methods was the best since the data was quantitative in nature prior to the
summarization of the data. The questionnaires were checked to ensure that they are fully
completed and accurate.

24
CHAPTER FOUR: DATA ANALYSIS, RESULTS AND DISCUSSIONS
4.1 Introduction
This section presents the analysis and findings from the primary data that was gathered from
the respondents. The questionnaires were taken by hand and sufficient time was provided for
filling in the questionnaires. All completed questionnaires were edited for completeness and
consistency.

4.2 Presentation of Findings

Table 4.1 Response Rate

Category Frequency Percentage

Responsive 49 91

Non Responsive 5 9

Total 54 100

Source: Author (2019)

Figure 4.1 Response Rate

Respons
ive Non Responsive
9%

91%
Source: Author (2018)

Table 4.1 and figure 4.1 indicate the response rate of the respondents. Out of 54
questionnaires distributed only 49 questionnaires represented by 91% were filled in
and returned for analysis while 5 questionnaires represented by 9% were never
returned and therefore they were not analysed. The response rate was sufficient for
the research to proceed on.
25
4.2.2 Gender Response

Table 4.2 Gender Response

Category Frequency Percentage

Male 28 57

Female 21 43

Total 49 100

Source: Author (2019)

Figure 4.2 Gender Response

Male Female

43%

57%

Source: Author (2019)

Table 4.2 and figure 4.2 indicate the gender of the respondents of the respondents.
From the study findings 57% of the respondents were male while 43% of the
respondents were female. Based on the analysis of findings majority of the
respondents were male as compared to women in the retail industry.

4.2.3 Age Brackets

26
 Table 4.3 Age Brackets
Category Frequency Percentage

18-27 years 7 14

28-37 years 19 39

38-47 years 11 22

Above 47 years 12 25

Total 49 100

Figure 4.3 Age Brackets

39%
40

35

30
25%
25 22%
Percentage

20
14%
15

10

0
18-27 years 28-37 years 38-47 years above 47 years
Category

Source: Author (2019)

Table 4.3 and figure 4.3 indicate the response rate of the respondents in terms of age
bracket. Based on the study findings 14% of the respondents were aged between 18-
27 years, 39% were aged between 28-37 years, 22% were aged between 38-47 years
whereas 25% of the respondents were aged above 47 years. This indicates that
majority of the respondents were aged between 28-37 years represented by 39%.

4.2.4 Highest Level of Education

27
Table 4.4 Highest Level of Education
Category Frequency Percentage
Primary Level 5 10
Secondary Level 8 16
College Level 16 33
University Level 9 18
Postgraduate Level 11 23
Total 49 100
Source: Author (2019)

Figure 4.4 Highest Level of Education

35 33%

30

25 23%
Percentage

20 18%
16%
15
10%
10

0
Primary Secondary College Level University Postgraduate
Level Level Level Level
Category

Source: Author (2019)

Table 4.4 and figure 4.4 indicate the response rate of the respondents in terms of
education level. From the study findings 10% of the respondents had attained primary
level of education, 16% had attained secondary level of education, 33% had attained
college level of education, 18% had attained university level of education while 23%
of the respondents had attained postgraduate level of education. This indicates that
majority of the respondents had attained college level of education represented by
33%.

4.2.5 Work Experience

28
Table 4.5 Work Experience
Category Frequency Percentage

Less than 2 years 9 18

2-7 years 17 35

8-13 years 13 27

Above 13 years 10 20

Total 49 100

Source: Author (2019)

Figure 4.5 Work Experience

40
35%
35

30
27%
25
Percentage

20%
20 18%

15

10

0
Less than 2 years 2-7 years 8-13 years Above 13 years
Category

Source: Author (2019)

Table 4.5 and figure 4.5 indicate the work experience of the respondents. According
to the study findings 18% of the respondents had worked in the supermarket for less
than 2 years, 35% had worked in the supermarket between 2-7 years, 27% had
worked in the supermarket between 8-13 years whereas 20% of the respondents had
worked in the supermarket for more than 13 years. This indicates that majority of the
respondents had worked in the supermarket between 2-7 years represented by 35%.

29
4.2.6 Effects of Financial Cost

Table 4.6 Effects of financial cost on supplier appraisal in the retail industry in
Kenya
Category Frequency Percentage

Yes 44 90

No 5 10

Total 49 100

Source: Author (2019)

Figure 4.6 Effects of financial cost on supplier appraisal in the retail industry in
Kenya

Yes No
10%

90%

Source: Author (2019)

Table 4.6 and figure 4.6 indicate the effects of financial cost on supplier appraisal in
the retail industry in Kenya. From the study findings 90% of the respondents were of
the opinion that financial cost affects supplier appraisal while 10% of the respondents
disagreed. This indicates that financial cost affects supplier appraisal in the retail
industry in Kenya.

30
4.2.7 Rating of the Effects of Financial Cost

Table 4.7 Rating of the effects of financial cost on supplier appraisal in the retail
industry in Kenya
Rating Frequency Percentage

Very High 17 35

High 12 25

Moderate 9 18

Low 6 12

No Effect 5 10

Total 49 100

Source: Author (2019)

35%
35

30
25%
25
Percentage

20 18%

15 12%
10%
10

0
Very High High Moderate Low No Effect
Rating

Source: Author (2019)

Table 4.7 and figure 4.7 indicate the rating of the effects of financial cost on supplier
appraisal in the retail industry in Kenya. Based on the study findings 35% of the
respondents rated very high, 25% rated high, 18% rated moderate, 12% rated low and
10% of the respondents rated no effect. This indicates that financial cost affects
supplier appraisal in the retail industry in Kenya.

31
4.2.8 Effects of Quality Assurance

Table 4.8 Effects of quality assurance on supplier appraisal in the retail industry
in Kenya
Category Frequency Percentage

Yes 42 86

No 7 14

Total 49 100

Source: Author (2019)

Figure 4.8 Effects of quality assurance on supplier appraisal in the retail

industry in Kenya

Yes No

14%

86%

Source: Author (2018)

Table 4.8 and figure 4.8 indicate the effects of quality assurance on supplier appraisal
in the retail industry in Kenya. According to the study findings 86% of the
respondents agreed that quality assurance affects supplier appraisal while 14% of the
respondents disagreed. This shows that quality assurance affects supplier appraisal in
the retail industry in Kenya.

32
4.2.9 Rating of the Effects of Quality Assurance

Table 4.9 Rating of the effects of quality assurance on supplier appraisal in

Naivas
Rating Frequency Percentage

Very High 14 29

High 11 23

Moderate 9 18

Low 8 16

No Effect 7 14

Total 49 100

Source: Author (2019)

Figure 4.9 Rating of the effects of quality assurance on supplier appraisal in

Naivas

29%
30

25 23%

20 18%
16%
Percentage

14%
15

10

0
Very High High Moderate Low No Effect
Rating

Source: Author (2019)

Table 4.9 and figure 4.9 indicate the rating of the effects of quality assurance on
supplier appraisal in the retail industry in Kenya. According to the study findings 29%
of the respondents rated very high, 23% rated high, 18% rated moderate, 16% rated
low and 14% of the respondents rated no effect. This indicates that quality assurance
affects supplier appraisal in the retail industry in Kenya.
33
 4.2.10 Effects of Lead Time

Table 4.10 Effects of lead time on supplier appraisal in Naivas

Category Frequency Percentage

Yes 45 92

No 4 8

Total 49 100

Source: Author (2019)

Figure 4.10 Effects of lead time on supplier appraisal in the retail industry in
Kenya, Naivas

Yes No
8%

92%

Source: Author (2019)

Table 4.10 and figure 4.10 indicate the effects of lead time on supplier appraisal in the retail
industry in Kenya. Based on the analysis of the findings 92% of the respondents were of the
view that lead time affects supplier appraisal while 8% of the respondents disagreed. This
indicates that lead time affects supplier appraisal in the retail industry in Kenya.

34
 4.2.11 Rating of the Effects of Lead Time

Table 4.11 Rating of the effects of lead time on supplier appraisal in Naivas
Rating Frequency Percentage

Very High 16 33

High 12 24

Moderate 9 19

Low 8 16

No Effect 4 8

Total 49 100

Source: Author (2019)

Figure 4.10 Effects of lead time on supplier appraisal in the retail industry in Kenya,
Naivas

Yes No
8%

92%

Source: Author (2019)

Table 4.10 and figure 4.10 indicate the effects of lead time on supplier appraisal in the retail
industry in Kenya. Based on the analysis of the findings 92% of the respondents were of the
view that lead time affects supplier appraisal while 8% of the respondents disagreed. This
indicates that lead time affects supplier appraisal in the retail industry in Kenya.

35
 4.2.12 Effects of Information Technology

Table 4.12 Effects of information technology on supplier appraisal in Naivas

Category Frequency Percentage

Yes 41 84

No 8 16

Total 49 100

Source: Author (2019)

Figure 4.12 Effects of information technology on supplier appraisal in the retail

industry in Kenya, Naivas

Yes No

16%

84%

Source: Author (2019)

Table 4.12 and figure 4.12 indicate the effects of information technology on supplier
appraisal in the retail industry in Kenya. According to the study findings 84% of the
respondents were of the view that information technology affects supplier appraisal while
16% of the respondents disagreed. This indicates that information technology affects supplier
appraisal in the retail industry in Kenya.

4.2.13 Rating of the Effects of Information Technology

36
Table 4.13 Rating of the effects of information technology on supplier appraisal in
Naivas
Rating Frequency Percentage

Very High 14 29

High 12 25

Moderate 9 18

Low 6 12

No Effect 8 16

Total 49 100

Source: Author (2019)

Figure 4.13 Rating of the effects of information technology on supplier appraisal
in the retail industry in Kenya, Naivas

29%
30
25%
25

20 18%
16%
Percentage

15
12%

10

0
Very High High Moderate Low No Effect
Rating

Source: Author (2019)

Table 4.13 and figure 4.13 indicate the rating of the effects of information technology
on supplier appraisal in the retail industry in Kenya. Based on the analysis of the
findings 29% of the respondents rated very high, 25% rated high, 18% rated
moderate, 12% rated low whereas 16% of the respondents rated no effect. This
indicates that information technology affects supplier appraisal in the retail industry in
Kenya.

37
4.2.14 Effects of Production Capability

Table 4.14 Effects of production capability on supplier appraisal in Naivas

Category Frequency Percentage

Yes 46 94

No 3 6

Total 49 100

Source: Author (2019)

Figure 4.14 Effects of production capability on supplier appraisal in the retail

industry in Kenya, Naivas

Yes No

6%

94%

Source: Author (2019)

Table 4.14 and figure 4.14 indicate the effects of production capability on supplier
appraisal in the retail industry in Kenya. From the study findings 94% of the
respondents agreed that production capability affects supplier appraisal while 6% of
the respondents disagreed. This indicates that production capability affects supplier
appraisal in the retail industry in Kenya.

4.2.15 Rating of the Effects of Production Capability

38
Table 4.15 Rating of the effects of production capability on supplier appraisal in
Naivas
Rating Frequency Percentage

Very High 16 33

High 13 27

Moderate 11 22

Low 6 12

No Effect 3 6

Total 49 `100

Source: Author (2019)

Figure 4.15 Rating of the effects of production capability on supplier appraisal in

the retail industry in Kenya, Naivas
Perentage

39
 35 33%

30
27%

25
22%

20

15
12%

10
6%
5

0
Very High High Moderate Low No Effect
Rating

Source: Author (2019)

Table 4.15 and figure 4.15 show the rating of the effects of production capability on supplier
appraisal in the retail industry in Kenya. According to the study findings 33% of the
respondents rated very high, 27% rated high, 22% rated moderate, 12% rated low and 6% of
the respondents rated no effect. This indicates that production capability affects supplier
appraisal in the retail industry in Kenya.

40
4.3 Summary of Data Analysis

4.3.1 Analysis of General Information

Out of 54 questionnaires distributed only 49 questionnaires represented by 91% were filled in
and returned for analysis while 5 questionnaires represented by 9% were never returned and
therefore they were not analysed. The response rate was sufficient for the research to proceed
on. On the gender response 57% of the respondents were male while 43% of the respondents
were female. Based on the analysis of findings majority of the respondents were male as
compared to women in the retail industry. On the age brackets 14% of the respondents were
aged between 18-27 years, 39% were aged between 28-37 years, 22% were aged between 38-
47 years whereas 25% of the respondents were aged above 47 years. This indicates that
majority of the respondents were aged between 28-37 years represented by 39%.

Under the highest level of education 10% of the respondents had attained primary level of
education, 16% had attained secondary level of education, 33% had attained college level of
education, 18% had attained university level of education while 23% of the respondents had
attained postgraduate level of education. This indicates that majority of the respondents had
attained college level of education represented by 33%. On the work experience 18% of the
respondents had worked in the supermarket for less than 2 years, 35% had worked in the
supermarket between 2-7 years, 27% had worked in the supermarket between 8-13 years
whereas 20% of the respondents had worked in the supermarket for more than 13 years. This
indicates that majority of the respondents had worked in the supermarket between 2-7 years
represented by 35%.

4.3.2 Financial Cost

From the study findings 90% of the respondents were of the opinion that financial cost affects
supplier appraisal while 10% of the respondents disagreed. This indicates that financial cost
affects supplier appraisal in Naivas.

4.3.3 Quality Assurance

According to the study findings 86% of the respondents agreed that quality assurance affects
supplier appraisal while 14% of the respondents disagreed. This shows that quality assurance
affects supplier appraisal in Naivas.

41
4.3.4 Lead Time
Based on the analysis of the findings 92% of the respondents were of the view that lead time
affects supplier appraisal while 8% of the respondents disagreed. This indicates that lead time
affects supplier appraisal in Naivas.

4.3.5 Information Technology

According to the study findings 84% of the respondents were of the view that information
technology affects supplier appraisal while 16% of the respondents disagreed. This indicates
that information technology affects supplier appraisal in Naivas.
4.3.6 Production Capability
From the study findings 94% of the respondents agreed that production capability affects
supplier appraisal while 6% of the respondents disagreed. This indicates that production
capability affects supplier appraisal in Naivas.

42
CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSIONS AND
RECOMMENDATIONS

5.1 Introduction
This chapter summarizes, discusses and makes conclusions on the findings of this study in
relation to the objectives put forward in chapter one. It also discusses the recommendations
for further research as well as recommendations for policy and practice.

5.2 Summary of Findings

5.2.1 To what extent does financial cost affect supplier appraisal in Naivas?
Based on the study findings 35% of the respondents rated very high, 25% rated high, 18%
rated moderate, 12% rated low and 10% of the respondents rated no effect. This indicates that
financial cost affects supplier appraisal in Naivas.

5.2.2 How does quality assurance affect supplier appraisal in Naivas?

According to the study findings 29% of the respondents rated very high, 23% rated high, 18%
rated moderate, 16% rated low and 14% of the respondents rated no effect. This indicates that
quality assurance affects supplier appraisal in Naivas.
5.2.3 To what extent does lead time affect supplier appraisal in Naivas?
From the study findings 33% of the respondents rated very high, 24% rated high, 19% rated
moderate, 16% rated low whereas 8% of the respondents rated no effect. This indicates that
lead time affects supplier appraisal in Naivas.

5.2.4 How does information technology affect supplier appraisal in Naivas?

Based on the analysis of the findings 29% of the respondents rated very high, 25% rated high,
18% rated moderate, 12% rated low whereas 16% of the respondents rated no effect. This
indicates that information technology affects supplier appraisal in Naivas.
5.2.5 To what extent does production capability affect supplier appraisal in Naivas?
According to the study findings 33% of the respondents rated very high, 27% rated high, 22%
rated moderate, 12% rated low and 6% of the respondents rated no effect. This indicates that
production capability affects supplier appraisal in Naivas.

43
5.3 Conclusions
The study findings concluded that the management of product financial cost begins with the
competition of a new supplier product. A large percentage of the supplier appraisal in the
retail industry ultimate acquisition of life cycle financial costs. Once the design of the product
has been established, relatively little attitude exists to reduce the financial cost of the supplier
appraisal in the retail industry.

The findings of the study concluded that today quality assurance is widely recognized in that
quality assurance and supplier appraisal in the retail industry go hand in hand. So quality
assurance and manufacturing are often recognized in parallel on the need of interdependence
and autonym of the quality assurance function has been reduced. Effective retail industry
needs an accurate understanding of what their customers expect; if they are going to properly
target improvement activities, they also need to identify the gap between their current
performance and customer requirements.

The study findings concluded that if the lead time is long it may have an effect to the supplier
appraisal since the customers may tend to find the other ways to shorten the lead time this in
return going to affect the supply of goods. The time taken to get through the factory is greatly
reduced thus enabling factories to engage in time based competition using speed. If the right
amount of products is produced at time consumers effectiveness is enhanced.

The findings of the study concluded that information technology makes it easy for a retail
industry decision making because they have information at hand, with the aid of information
technology managers have more information at their reach and it also improves good
organization and usefulness at each stage of the strategic decision making procedure. A great
potential for added value lies in the proactive linking of information system development
activities to strategic business planning in management area.
The study findings concluded that the performance-based approach to capabilities is
conceptually aggregated to clearly direct the proper use of manufacturing resources. Different
from the performance-based approach to capability research that is dominating the retail
industry literature is the routine based approach to explaining the heterogeneity of firms.

44
5.4 Recommendations

5.4.1 Financial Cost

The researcher recommended that the supermarket should put in place mechanisms that help
to reduce financial cost of appraising suppliers during appraisal so that they get the best
suppliers who are able to offer services of supply at a relatively lower financial cost in order
to allow the supermarket reduce the financial cost of procuring supplies.

5.4.2 Quality Assurance

The researcher recommended that total quality assurance management team should be put in
place by the supermarket to ensure that there is continuous improvement on supplies quality
assurance in line with the organizational requirements. Therefore, it is important to ensure
that policies are put in place to help in monitor continuous improvement on quality assurance.

5.4.3 Lead Time

The researcher recommended that the supermarket should consider putting in place
agreements with its suppliers to ensure that the principles of lead time are honoured by
suppliers to avoid unnecessary stock outs that could lead to loss of revenue due to customers
migrating to competitor outlets.

5.4.4 Information Technology

The researcher recommended that since the supermarket is striving to achieve effective
supplier appraisal practices, there is need to put in place an information technology system
that allows easy communication and access to suppliers online. This will enhance better
supplier appraisal practices as only suppliers who have better information technology systems
will be considered.
5.4.5 Production Capability
The researcher recommended that the supermarket should improve on its housekeeping
practices and advise its suppliers to benchmark on the same. This would ensure that suppliers
invest on the best equipment for their production of goods and services. Through this, the
supermarket will opt for only suppliers with the best production capabilities.

45
5.5 Suggestion for Further Study
This research study focused its research activities on the major effects that were addressed by
the specific objectives of the study. This contributed to the study not exploring other factors
affecting supplier appraisal in the retail industry in Kenya. It was recommended that the retail
industry should carry out further research on other variables such as supplier relationship,
financial capability and culture which would help Naivas Supermarket in future to get more
information on the significance of supplier appraisal in the retail industry in Kenya.

54
REFERENCES
Arsan, A. (2011), Supplier Management Handbook, 1st Edition, Pitman Publishers,
London, UK
Baily, B. (2008), Supply Relationships Management, 1st Edition, Hopkins Publishers,
New York, USA
Barley,S. (2005), Supply Chain Management, 2nd Edition, Apprentice Hall Publishers,
New Dheli, India
Barney, A. (2001), Supply Chain Logistics Management, 2nd Edition, Machine Press
Mc Graw-Hill, Ohio, India
Barry, A. (2008), 'Supply Chain Management', 2nd Edition, Baba Barkha Nath Printers
Publishers, Ohio, India
Bello, J (2003), Supplies and Supply Management, 1st Edition, Southern Illinois Press,
London, UK
Birell, K. (2005), Strategic Management and Organizational Dynamics, 2nd Edition,
Pitman Publishers, London, UK
Cheng, S. (2003), Supply Chain Management 2nd Edition, Prentice Hall Publishers,
New Jersey, USA
Chung, T. (2004), Supplies Management, 9th Edition, Pearson Education Publishers
Ltd, New Hampshire, USA
Corbett, J. (2002), Strategic Management, 6th Edition, Jaico Publishing M.C. Grew
Hill Publishers, New York, USA
Contact, B. (2006), Supply Chain Management, 2nd Edition, Baba Barkha Nath
Printers, New Delhi, India
Crosby, P. (2009), Storage and Supply of Goods, 6thEdition, Prentice Hall Publishers,
Great Britain, Britain
Datta, R. (2007), Law for Purchasing and Supplies Management, 3rd Edition, Pearson
Education Publishers Limited, London UK
Dobler, R. (2005), Purchasing and Supplies Chain Management 7th Edition, Prentice
Hall Publishers, New York, U.S.
Drummond, T. (2001), Purchasing and Supply Management, 2nd Edition McGraw Hill
Irwin, New York, USA
Ewell, L. (2003), Introduction to Public Procurement, 5th Edition, Atlantic University
Publishers, Florida, USA

55
Kothari, P. (2004), Research Methodology, 6th Edition, New Eye International
Publisher, Nairobi, Kenya
Kumar, R. (2010), Purchasing and Supply Management, 5th Edition, McGraw – Hill
Irwin Publishers, London, UK
Laudon, J. (2006), Strategic Management, 6th Edition, Jaico Publishing M.C. Grew
Hill Publishers, New York, USA
Lewis, A. (2002), Purchasing and Supply Chain Management 7th Edition Ashford
Press, San Francisco City, USA
Lysons, T. (2006), Procurement Practices, 3rd Edition, Desktop Publishers, Madrid,
Spain
Lysons, R. (2008), Introduction of Procurement, 4th Edition, Stephen Marshals
Publishers, Boston, USA
Malcolm, C. (2008), A Strategic Framework for Change Management, 1st Edition,
Springer Publishers: New York, U.S.A
Maltson, J. (2009), Contemporary Management, 5th Edition, McGraw Hill Publishers,
London, UK
Mugenda and Mugenda (2003), Research Methods Quantitative and Qualitative
Approaches, 3rd Edition, Contact Publishers, Nairobi, Kenya
Ombati, S. (2013), Supply Chain Management, 2nd Edition, Apprentice Hall New
Nairobi, Kenya
Otieno, N. (2002), Supplier Management Handbook, 1st Edition, Pitman Publishers,
Nairobi, Kenya
Peter, A. (2007), Global Strategic Management, 7th Edition, Oxford University Press;
New York, USA
Richard, R. (2001), Supply of Materials, 6th Edition, Prentice Hall Publishers, Great
Britain, Britain
Robins, R. (2008), Supply Chain Management, 2nd Edition, Apprentice Hall
Publishers, New Delhi, India
Robinson, R. (2008), Logistics Management, 3rd Edition, Practice Hall Publishers,
New York, USA

56
APPENDIX I: QUESTIONNAIRE
Kindly answer the questions by putting a tick in the appropriate box or by writing in the
space provided.
SECTION 1: PERSONAL INFORMATION
1. Gender
Male { }
Female { }

2. Age Brackets
18-27 years { }
28-37 years { }
38-47 years { }
Above 47 years { }

3. Highest Level of Education

Primary Level { }
Secondary Level { }
College Level { }
University Level { }
Postgraduate Level { }

4. Work Experience
Less than 2years { }
2-7 years { }
8-13 years { }
Above 13 years { }

57
SECTION 2: FINANCIAL COST
5. Does financial cost affect supplier appraisal in the retail industry in Kenya?
Yes { }
No { }
Briefly Explain
…………………………………………………………………………………………
…………………………………………………………………………………………
………………………………………………………………………………..
6. How would you rate the effects of financial cost on supplier appraisal in the retail
industry in Kenya?
Very High { }
High { }
Moderate { }
Low { }
No Effect { }
Briefly Explain
..........................................................................................................................................
..........................................................................................................................................
..........................................................................................................................................
.........................................................................................................................................

58
SECTION 3: QUALITY ASSURANCE
7. Does quality assurance affect supplier appraisal in the retail industry in Kenya?
Yes { }
No { }

…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………….
8.How would you rate the effects of quality assurance on supplier appraisal in the
retail industry in Kenya?
Very High { }
High { }
Moderate { }
Low { }
No Effect { }
Briefly Explain
..........................................................................................................................................
..........................................................................................................................................
..........................................................................................................................................

59
SECTION 4: LEAD TIME
9. Does lead time affect supplier appraisal in the retail industry in Kenya?
Yes { }
No { }
Briefly Explain
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………..............
.........................................................................................................................................

10. How would you rate the effects lead time on supplier appraisal in the retail
industry in Kenya?
Very High { }
High { }
Moderate { }
Low { }
No Effect { }
Briefly Explain
..........................................................................................................................................
..........................................................................................................................................
..........................................................................................................................................

SECTION 5: INFORMATION TECHNOLOGY

11. Does information technology affect supplier appraisal in the retail industry in
Kenya?
Yes { }
No { }
Briefly Explain
..........................................................................................................................................
..........................................................................................................................................
..........................................................................................................................................
..........................................................................................................................................

12. How would you rate the effects of information technology on supplier appraisal
in the retail industry in Kenya?
Very High { }
60
 High { }
Moderate { }
Low { }
No Effect { }
Briefly Explain
..........................................................................................................................................
..........................................................................................................................................
.........................................................................................................................................

SECTION 6: PRODUCTION CAPABILITY

13. Does production capability affect supplier appraisal in the retail industry in
Kenya?
Yes { }
No { }

..........................................................................................................................................
..........................................................................................................................................
..........................................................................................................................................
14. How would you rate the effects of production capability on supplier appraisal in
the retail industry in Kenya?
Very High { }
High { }
Moderate { }
Low { }
No Effect { }
Briefly Explain
..........................................................................................................................................
..........................................................................................................................................
..........................................................................................................................................

61
62