1a.

Definitions and Operationalization (20 marks)

I. Global Sourcing (4 marks)

Definition:
Global sourcing is the process of identifying, evaluating, and utilizing suppliers outside the
firm's domestic market to achieve cost efficiency, quality, innovation, and competitive
advantage (Monczka et al., 2015).

Operationalization:
It involves activities like supplier selection across countries, managing international
logistics, assessing currency risks, and adhering to local laws and trade agreements. For
example, Apple sources components like semiconductors from Taiwan (TSMC) and
assembles its products in China to optimize cost and quality.

II. Measurement as Benchmarking (4 marks)

Definition:
Benchmarking refers to the continuous process of measuring products, services, and
practices against the strongest competitors or industry leaders (Camp, 1989).

Operationalization:
It involves setting key performance indicators (KPIs), identifying world-class firms,
comparing processes, and adopting best practices. For example, Toyota benchmarks its
lean production system to maintain world-class manufacturing performance.

III. Strategic Purchasing (4 marks)

Definition:
Strategic purchasing is a long-term, proactive approach that aligns procurement activities
with an organization’s overall business strategy to add value and achieve competitive
advantage (Carr & Pearson, 2002).

Operationalization:
It includes supplier relationship management, category management, risk management,
and integrating procurement in product development. E.g., Boeing works closely with
strategic suppliers to co-develop aerospace components and ensure innovation.

IV. Purchasing Management (4 marks)

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Definition:
Purchasing management is the process of planning, organizing, directing, and controlling
the activities related to acquiring goods and services needed for production or operations
(Lysons & Farrington, 2020).

Operationalization:
It includes procurement planning, negotiating contracts, managing inventory, ensuring
supplier compliance, and maintaining cost control. For instance, Unilever’s centralized
purchasing ensures economies of scale across global markets.

V. Corporate Strategy (4 marks)

Definition:
Corporate strategy refers to the overarching strategy of a diversified firm that defines the
scope of its business activities and allocates resources to achieve long-term objectives
(Porter, 1985).

Operationalization:
It sets the direction for business units, including procurement, by determining focus areas
such as cost leadership, diversification, or differentiation. For example, Amazon’s corporate
strategy emphasizes cost efficiency and rapid delivery, influencing procurement practices
such as automated replenishment systems.

1b. Interrelation and Influence in Strategic Supply and Purchasing Management (10
marks)

Institutional Context: Kenyatta National Hospital (KNH)

1. Global Sourcing:
To enhance access to specialized medical equipment and pharmaceuticals, KNH
engages in global sourcing—procuring equipment like MRI machines from Germany
or India. This enables cost efficiency and access to advanced technology.
2. Benchmarking:
KNH measures its procurement performance against international hospital
standards (e.g., NHS in the UK) to improve inventory turnover, supplier lead times,
and cost savings. Benchmarking helps KNH adopt best practices in supply
management.
3. Strategic Purchasing:
KNH builds long-term relationships with key pharmaceutical suppliers to ensure
consistent quality and supply of essential drugs. It engages in volume contracting to
leverage economies of scale and stabilize pricing.
4. Purchasing Management:
The hospital’s procurement department manages tender processes, supplier vetting,

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 and contract administration in line with Kenya’s Public Procurement and Asset
Disposal Act (2015), ensuring transparency and compliance.
5. Corporate Strategy Influence:
As a state hospital, KNH’s corporate strategy focuses on providing affordable and
accessible healthcare. This strategic goal influences procurement to prioritize cost-
effective and timely supply of essential medical items without compromising
quality.

Overall Interrelation:
These concepts collectively enhance strategic supply and purchasing management by
aligning procurement goals with institutional strategy, improving efficiency, reducing risks,
ensuring value for money, and fostering innovation.

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4o

You said:
C). Show how each can be applied in public institutions to foster effectiveness of
procurement department and reduce costs in objective supply and purchasing (10 marks)
Give detailed answers

ChatGPT said:

Certainly! Here is a detailed response to part (c) of your question on how each concept
can be applied in public institutions (such as government ministries, parastatals, or public
hospitals) to foster procurement effectiveness and reduce costs in objective supply and
purchasing.

1c. Application in Public Institutions (10 marks)

I. Global Sourcing

Application:

• Public institutions like national hospitals or ministries can source specialized

equipment or bulk supplies (e.g., vaccines, laboratory machines, or ICT
equipment) from international suppliers through open international tendering.
• This approach can yield cost savings, access to higher quality goods, and broader
supplier competition.
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Effectiveness & Cost Reduction:

• Helps avoid over-reliance on local monopolies.

• Leverages global price competitiveness and product availability.
• Example: Kenya Medical Supplies Authority (KEMSA) importing medical kits
directly from WHO-certified suppliers.

II. Measurement as Benchmarking

Application:

• Public procurement departments can benchmark their performance against best-

performing local or international government procurement agencies (e.g., Uganda's
PPDA or UK's NHS Supply Chain).
• Use KPIs like procurement cycle time, cost savings, supplier performance, and
compliance levels.

Effectiveness & Cost Reduction:

• Identifies gaps in performance and provides data-driven insights for improvement.

• Promotes transparency, accountability, and process improvement.
• Encourages adoption of digital procurement systems that save time and
administrative costs.

III. Strategic Purchasing

Application:

• Government agencies can develop long-term supplier relationships for recurring

purchases (e.g., school textbooks, fertilizers, medical supplies) instead of repeated
tendering.
• Use framework agreements and category management for bulk purchasing.

Effectiveness & Cost Reduction:

• Reduces tendering costs and lead times.

• Ensures consistent supply and volume discounts.
• Improves forecasting and demand planning across government departments.

IV. Purchasing Management

Application:
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 • Implement e-procurement systems, standardized purchasing procedures, and
centralized procurement units to manage procurement workflows effectively.
• Conduct training for procurement officers in planning, negotiation, and contract
management.

Effectiveness & Cost Reduction:

• Reduces manual paperwork, fraud, and procurement errors.

• Increases compliance with the Public Procurement and Asset Disposal Act (2015).
• Enhances vendor tracking and cost monitoring.

V. Corporate Strategy

Application:

• Align procurement objectives with the institution's strategic goals (e.g., Vision 2030,
affordable healthcare, infrastructure development).
• Public institutions should embed procurement planning in annual performance
targets and budgeting cycles.

Effectiveness & Cost Reduction:

• Procurement becomes proactive and goal-driven, not just a compliance exercise.

• Promotes sustainable and value-based procurement decisions.
• Example: Ministry of Education aligning book procurement to curriculum rollout
schedules.

Summary Table (Optional for Clarity in Exams)

Key Application in Effectiveness
Concept Cost Saving Outcome
Public Institutions Benefit
International tenders for Better quality, supply Lower prices due to
Global Sourcing
bulk/critical items reliability global competition
Use of KPIs and
Performance
Benchmarking comparisons to best Reduces inefficiencies
improvement
practices
Long-term supplier Lower unit costs,
Strategic Supplier reliability,
partnerships & bulk reduced administrative
Purchasing streamlined sourcing
contracts load

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 Key Application in Effectiveness
Concept Cost Saving Outcome
Public Institutions Benefit
Digital tools,
Purchasing Higher transparency Reduces fraud and
standardized
Management and control delays
procedures
Aligning procurement to Procurement
Corporate Better budget
national development supports core
Strategy utilization
goals mission

Let me know if you’d like sample case studies from Kenya or a summary version for easier
revision.
4o

You said:
2. There is growing concern on Ethics in procurement across government and private
sector, Critically with examples explain strategic supply and purchasing management
Ethical considerations and their role in strategic supply and purchasing management,
Demonstrate how they are effective or not in procurement process. (20 marks)

ChatGPT said:

Here's a detailed and well-structured response to your question on ethical considerations

in strategic supply and purchasing management, with examples, critical analysis, and
evaluation of effectiveness in procurement processes.

Question 2: Ethical Considerations in Strategic Supply and Purchasing Management

(20 Marks)

I. Introduction (2 marks)

Ethics in procurement refers to the moral principles guiding the actions and decisions of
procurement professionals. In strategic supply and purchasing management, ethics
ensures transparency, fairness, accountability, and value for money. With growing
scandals in public procurement and private sector malpractice, ethical conduct has become
a cornerstone of sustainable and credible procurement.

II. Key Ethical Considerations in Strategic Supply and Purchasing (10 marks)

1. Transparency and Accountability

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 • Explanation: All procurement decisions should be open and traceable, from
supplier selection to contract awarding.
• Example: In Kenya, the Public Procurement and Asset Disposal Act (2015) requires
public institutions to publish tender results.
• Role: Builds public trust, reduces fraud, and ensures equitable supplier
opportunities.
• Effectiveness: When enforced, it reduces corruption and increases supplier
participation. However, in some cases, loopholes or lack of enforcement
undermine its impact.

2. Fair Competition

• Explanation: Suppliers must be given equal opportunity to compete for contracts

without favoritism or bias.
• Example: A ministry awarding a contract based on political connections violates
this principle.
• Role: Ensures quality and cost-effectiveness through competitive bidding.
• Effectiveness: Highly effective when tender evaluation criteria are objective and
standardized. However, subjective scoring and bid rigging still occur, especially
in politically influenced agencies.

3. Conflict of Interest Management

• Explanation: Procurement officers should declare any personal interest that could
influence decision-making.
• Example: An officer involved in evaluating bids from a company owned by a
relative should recuse themselves.
• Role: Prevents bias and ensures decisions serve organizational, not personal,
interests.
• Effectiveness: When proper declaration systems are in place (e.g., ethics forms),
conflicts are manageable. Failure to disclose, however, still leads to unethical
contract awards.

4. Bribery and Corruption Prevention

• Explanation: Procurement personnel must reject any gifts or inducements from

suppliers.
• Example: The Anglo Leasing scandal in Kenya is an infamous case involving inflated
contracts influenced by corruption.
• Role: Ensures procurement is based on merit and value, not kickbacks.

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 • Effectiveness: Ethics training and whistleblower protections help deter this
behavior, but systemic corruption and weak enforcement mechanisms limit
effectiveness.

5. Confidentiality

• Explanation: Procurement data, especially during bidding, should be protected to

prevent unfair advantage.
• Example: Leaking bid prices to a preferred bidder compromises the integrity of the
process.
• Role: Maintains trust in the process and prevents bid rigging.
• Effectiveness: With proper ICT controls and access restrictions, confidentiality can
be preserved, but human leaks are still a challenge.

III. Role of Ethics in Strategic Supply and Purchasing Management (5 marks)

1. Improves Supplier Relations: Ethical behavior fosters long-term partnerships,

trust, and reliability.
2. Supports Sustainable Procurement: Ethical sourcing considers environmental
and social impacts, aligning with CSR goals.
3. Reduces Legal Risks: Ethical compliance reduces litigation, audit flags, and
regulatory penalties.
4. Enhances Organizational Reputation: Ethical procurement protects institutional
image and stakeholder confidence.
5. Supports Strategic Goals: Procurement that is ethical ensures alignment with
corporate strategy and public value delivery.

IV. Critical Evaluation – Are These Ethics Effective in Practice? (3 marks)

• Positive Impacts:
o In countries with strong legal frameworks and procurement oversight bodies
(e.g., UK’s Crown Commercial Service), ethical standards significantly
improve efficiency and supplier diversity.
o Use of e-procurement systems (e.g., Kenya’s IFMIS) reduces human
interference, increasing transparency.
• Challenges:
o In many developing nations, ethical guidelines exist but are poorly enforced,
and political interference undermines procurement decisions.
o Lack of ethics training and protection for whistleblowers discourages
reporting unethical behavior.
o Cultural acceptance of favoritism or bribery in some settings hinders full
ethical adherence.

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V. Conclusion (1 mark)

Ethical considerations are central to effective strategic supply and purchasing

management. When properly implemented, they reduce costs, foster competition, and
improve service delivery. However, without consistent enforcement, institutional will, and
capacity-building, ethical frameworks remain symbolic rather than functional.

3a) Strategic Planning and Purchasing, Levels of Strategy, and Business Strategy (10
marks)

i. Strategic Planning and Purchasing:

Strategic planning in purchasing involves setting long-term procurement objectives aligned

with the organization’s vision and mission. It includes supplier selection strategies, cost
management, value analysis, and risk management (Monczka et al., 2015).

ii. Levels of Strategy:

1. Corporate Strategy – Determines the organization's overall scope and resource

allocation across business units (e.g., diversification).
2. Business Strategy – Focuses on how a specific business unit competes in the
market (e.g., cost leadership).
3. Functional Strategy – Covers operational areas like procurement, logistics, and HR
(e.g., strategic sourcing plan).

iii. Business Strategy:

It outlines how a firm competes in a particular market to achieve competitive advantage—

through cost leadership, differentiation, or focus strategies (Porter, 1985).

3b) Application as a Senior Procurement Officer (10 marks)

1. Strategic Planning:
o Develop a procurement plan aligned with national goals (e.g., Vision 2030).
o Establish KPIs to track procurement performance.
2. Corporate Strategy Alignment:
o Ensure procurement supports institutional goals (e.g., service delivery in
health or education sectors).
o Align supplier development with sustainability goals.
3. Business Strategy Application:
o Use cost-effective sourcing methods to support cost leadership.
o Partner with innovative suppliers to support a differentiation strategy.
4. Functional Strategy Development:
o Implement category management and framework contracts.

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 o Apply e-procurement to improve transparency and efficiency.

4) Case Study: Risk Management in Purchasing & Supply in Developing Countries (20
marks)

Case Study: Uganda Ministry of Health Procurement

Eight Risks and Their Impacts:

1. Supplier Risk – Unreliable suppliers led to drug stock-outs.

o Impact: Service delivery failure and reputational damage.
2. Political Interference – Contracts awarded based on influence.
o Impact: Poor quality supplies, inflated prices.
3. Currency Fluctuation Risk – Depreciating local currency against USD.
o Impact: Budget overruns on international procurements.
4. Corruption and Fraud – Ghost suppliers and bribes in tendering.
o Impact: Loss of public funds and credibility.
5. Legal/Regulatory Risk – Changes in procurement laws or non-compliance.
o Impact: Legal penalties and procurement delays.
6. Logistical Risk – Poor infrastructure and transport delays.
o Impact: Late delivery of essential goods like vaccines.
7. Technology Risk – Poor integration of e-procurement systems.
o Impact: Inefficiencies and manipulation of procurement data.
8. Contract Management Risk – Inadequate monitoring and evaluation.
o Impact: Contractors underperform without consequence.

Overall Impact:

These risks reduce the effectiveness, transparency, and value-for-money in strategic

procurement, harming service delivery and national development goals.

5a) Statement Analysis: Kenya's Strategy Implementation (15 marks)

"Kenya has clear strategy implementation, evaluation and control..." – Analysis

Kenya’s Strategic Framework Includes:

• Vision 2030: Emphasizes infrastructure, manufacturing, and healthcare delivery.

• AU Agenda 2063: Aligns with regional economic integration and industrialization.
• Bottom-Up Approach: Focus on grassroots development and local supplier
inclusion.

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Examples:

• Use of IFMIS (Integrated Financial Management System) enhances tracking and

evaluation of procurement.
• The Public Procurement Regulatory Authority (PPRA) enforces compliance and
reporting.
• National Government Affirmative Action Fund (NGAAF) promotes bottom-up
inclusivity by involving youth and women.

Challenges:

• Corruption, political interference, and slow enforcement dilute strategic

implementation.
• Evaluation reports exist but are often not acted upon.
• Lack of coordination among counties and national departments.

5b) Government Reform Steps (5 marks)

1. Strengthen Enforcement – Fully implement existing laws and hold offenders

accountable.
2. Capacity Building – Train procurement officers on strategic sourcing and ethics.
3. Enhance Technology – Improve IFMIS and integrate supplier performance tools.
4. Support Local Suppliers – Develop local sourcing policies aligned with bottom-up
strategy.
5. Establish Independent Monitoring – Create third-party oversight bodies for
procurement audits.

6a) Impact of Technology on Procurement (15 marks)

1. Information Management

• Impact: Real-time decision-making, better demand forecasting, and supplier

tracking.

2. E-Commerce

• Impact: Faster B2B transactions, online catalogues, reduced manual processes.

3. E-Business

• Impact: Integrates supply chain functions; automates procurement, invoicing, and

payment.

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4. E-Procurement

• Impact: Enhances transparency, speeds up tendering, reduces corruption.

• Example: Kenya’s IFMIS platform facilitates online tenders and approvals.

5. E-Marketplaces

• Impact: Governments and institutions can source products competitively from

multiple vendors.
• Example: Government e-market platforms used in India and Rwanda for aggregated
buying.

6b) Influence on Effectiveness and Integrity in Kenya + 5 Key Advice Areas (5 marks)

Influence:

• Transparency: Digital trails help fight corruption.

• Efficiency: Reduces tender processing time.
• Accountability: Automated approvals and audit trails reduce manipulation.
• Inclusion: Women, youth, and small businesses can access tenders online.

Five Key Areas of Improvement:

1. Upgrade IFMIS – Make it user-friendly and fully interoperable with finance and HR
systems.
2. Digital Literacy – Train county officials and suppliers in e-procurement systems.
3. Cybersecurity – Secure procurement data to avoid manipulation.
4. Supplier Portals – Develop real-time platforms for contract tracking and payment
status.
5. Legislative Updates – Align procurement law with modern digital tools and
standards.

Would you like a consolidated PDF or PowerPoint summary of these answers for your
revision?
4o

You said:
7. Drawing examples from both public and private institution. Discuss critically the Concept
of strategy, mission and philosophy and how they relate to 6Rs of supply and purchasing in
any organization of your choice, provide seven alternatives for effective service delivery
specifically for procurement departments in government (20 marks) give detailed
responses

Page 12 of 42
Here is a detailed and structured answer to Question 7, integrating the concepts of
strategy, mission, and philosophy with the 6Rs of purchasing, using examples from
both public and private institutions, and concluding with seven actionable alternatives
for improving service delivery in government procurement departments.

7. Strategy, Mission, and Philosophy in Relation to the 6Rs of Supply and Purchasing
(20 Marks)

I. Key Concepts (6 marks)

1. Strategy

• Definition: A long-term plan or roadmap to achieve an organization's objectives by

efficiently deploying resources.
• Example (Public): Kenya’s Ministry of Health's strategy to source vaccines globally
for affordable healthcare.
• Example (Private): Safaricom’s procurement strategy focuses on innovation and
reliable telecom infrastructure supply.

2. Mission

• Definition: The organization’s core purpose and the reason it exists.

• Example (Public): KEMSA’s mission to deliver quality and affordable medical
supplies to public facilities.
• Example (Private): Equity Bank’s mission to transform lives through inclusive
financial access.

3. Philosophy

• Definition: The values, beliefs, and ethical principles that guide organizational
actions.
• Example: An ethical philosophy in procurement at the World Bank emphasizes
transparency, accountability, and fairness.

II. 6Rs of Procurement and Their Strategic Linkage (6Rs = Right Quality, Quantity,
Time, Place, Source, and Price) (8 marks)

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1. Right Quality

• Strategic Link: Quality aligns with the mission of providing reliable

services/products.
• Example: In hospitals, strategic procurement ensures purchase of high-standard
surgical gloves to protect patients.

2. Right Quantity

• Strategic Link: Over-purchasing wastes resources; under-purchasing disrupts

operations. This affects operational strategy.
• Example: Schools using data-driven systems to forecast textbook requirements
based on enrolment trends.

3. Right Time

• Strategic Link: Timely delivery aligns with mission-critical goals (e.g., emergency
relief procurement).
• Example: Kenya Red Cross using rapid response procurement strategies for
disaster relief.

4. Right Place

• Strategic Link: Timely and accurate delivery to correct locations supports logistical
and operational efficiency.
• Example: Public hospitals receive essential medicines at the point of use through
centralized distribution.

5. Right Source

• Strategic Link: Sourcing from ethical, reliable vendors reflects an organization’s

procurement philosophy.
• Example: Safaricom uses supplier evaluation metrics (CSR compliance, quality
history) to select partners.

6. Right Price

• Strategic Link: Supports cost leadership strategy and value for money principle in
public procurement.
• Example: Government e-tendering promotes competitive pricing through open
bidding.
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III. Relationship Summary: Strategy, Mission, Philosophy & 6Rs (2 marks)
Concept Relation to 6Rs
Strategy Guides what, when, and how to procure (6Rs) in line with long-term goals.
Mission Informs the overall purpose behind procurement choices (e.g., affordability).
Philosophy Ethical, sustainable, and fair purchasing practices (e.g., right source, price).

IV. Seven Alternatives for Effective Service Delivery in Government Procurement (4

marks)

1. E-Procurement Integration

• Reduce delays, improve transparency, and create a real-time audit trail.

• Example: Automate tendering and supplier registration using IFMIS.

2. Procurement Planning Alignment

• Link procurement to national strategy (Vision 2030, county budgets, and SDGs).
• Ensure that budgeted needs match actual procurement outcomes.

3. Professional Development

• Train procurement officers on strategic sourcing, category management, ethics.

• Use certifications (e.g., CIPS) and refresher workshops.

4. Supplier Relationship Management

• Implement structured vendor evaluation, communication, and feedback

mechanisms.
• Build long-term partnerships with strategic suppliers.

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5. Decentralized Yet Controlled Procurement

• Give departments some autonomy while ensuring compliance with central

regulations.
• This allows flexibility while maintaining control.

6. Public-Private Partnerships (PPPs)

• Leverage private sector innovation and efficiency in infrastructure and service

procurement.
• Example: Leasing ICT equipment instead of outright purchase.

7. Performance-Based Procurement

• Introduce KPIs and link them to supplier contracts and officer performance.
• Example: Payment based on delivery timelines, quality, and user satisfaction.

V. Conclusion (Optional)

An effective procurement department aligns its strategy, mission, and philosophy with
the 6Rs, ensuring efficient, ethical, and cost-effective supply chain operations. By adopting
alternative service delivery mechanisms, government institutions can overcome
inefficiencies and deliver better services to the public.

Would you like a summary sheet or table version of this content for exam preparation or
presentation use?

Question: Drawing examples from both public and private institutions, critically
discuss the concept of strategy, mission and philosophy and how they relate to the
6Rs of supply and purchasing. Provide seven alternatives for effective service
delivery specifically for procurement departments in government.

A. CONCEPTS OF STRATEGY, MISSION, AND PHILOSOPHY (6 marks)

1. Strategy

Strategy is the long-term plan that outlines how an organization will achieve its goals by
utilizing resources efficiently.

Page 16 of 42
 • Private Example: Safaricom's procurement strategy focuses on strategic
partnerships and innovation to ensure reliable telecom infrastructure.
• Public Example: The Ministry of Health Kenya has a strategy for centralized
procurement of essential drugs through KEMSA to enhance efficiency and reduce
costs.

2. Mission

The mission defines the core purpose and reason for an organization’s existence, guiding
daily activities and decision-making.

• Private Example: Equity Bank's mission to enhance access to inclusive financial

services shapes its procurement of affordable IT systems.
• Public Example: KRA’s mission to collect revenue for national development
informs its procurement of secure, scalable digital systems.

3. Philosophy

This is the underlying set of values and beliefs that shape how decisions are made, often
focusing on ethics, sustainability, and transparency.

• Private Example: Unilever’s sustainable sourcing philosophy encourages

procurement from eco-friendly and ethical suppliers.
• Public Example: The World Bank’s procurement policies emphasize integrity,
competition, and fairness.

B. RELATIONSHIP WITH THE 6Rs OF PROCUREMENT (6 marks)

The 6Rs — Right Quality, Quantity, Time, Place, Source, and Price — are core elements of
procurement performance.
6R Strategic Link Example
NHIF procures certified medical
Right Ensures procurement aligns with mission
equipment to ensure treatment
Quality to deliver reliable services/products.
standards.
Avoids overstocking or shortages, Schools order textbooks based on
Right
aligning with operational efficiency accurate student population
Quantity
strategies. forecasts.
Critical for mission delivery, especially in KEMSA supplies health products on
Right
healthcare, security, and infrastructure a Just-in-Time basis to avoid expiry
Time
sectors. and wastage.
Ensures goods/services are delivered County governments distribute
Right
where they’re needed, aligning with emergency food relief to designated
Place
logistical strategies. centers efficiently.

Page 17 of 42
 6R Strategic Link Example
Safaricom uses prequalified, vetted
Right Reflects ethical sourcing philosophy,
suppliers to ensure compliance and
Source supports strategic supplier relationships.
reliability.
Ensures financial sustainability and Auditor General’s office enforces
Right
aligns with mission to offer value for cost benchmarking for public
Price
money. tenders.

Summary:

The 6Rs provide measurable performance targets that operationalize the organization’s
strategy, fulfill its mission, and reflect its philosophy through transparent, ethical, and
value-driven procurement practices.

C. SEVEN ALTERNATIVES FOR EFFECTIVE SERVICE DELIVERY IN GOVERNMENT

PROCUREMENT DEPARTMENTS (8 marks)

1. Full Integration of E-Procurement Systems

• Automates tendering, approvals, and contract management.

• Example: Kenya’s IFMIS system enhances transparency and reduces lead time.

2. Performance-Based Contracting

• Payments are tied to measurable outputs (KPIs like timely delivery, quality).
• Example: Roads projects using performance metrics to ensure timely completion.

3. Professionalization and Capacity Building

• Train officers in strategic procurement, contract law, and risk management.

• Example: Mandating CIPS certification or equivalent for senior officers.

4. Centralized Framework Agreements

• Government institutions pool procurement of common goods to gain scale and

reduce cost.
• Example: ICT Authority bulk-procures laptops for schools under a centralized
agreement.

5. Supplier Development and Inclusivity Programs

• Support youth, women, and PWD enterprises to participate in procurement.

• Example: AGPO program (Access to Government Procurement Opportunities).

Page 18 of 42
6. Data-Driven Procurement Decisions

• Use procurement analytics for forecasting, price comparisons, and supplier

performance.
• Example: KRA using data trends to determine optimal timing and pricing for ICT
purchases.

7. Strengthening Legal Compliance and Oversight Mechanisms

• Independent procurement review boards and internal audits ensure integrity.

• Example: Public Procurement Regulatory Authority (PPRA) auditing tenders and
publishing compliance reports.

Conclusion

Strategy, mission, and philosophy provide the direction, purpose, and ethical grounding
for procurement. These are actualized through the 6Rs, which serve as operational
touchpoints. For public institutions, embracing strategic alternatives like digital tools,
capacity building, and supplier development enhances procurement effectiveness,
transparency, and value-for-money service delivery.

QUESTION ONE
a) With relevant examples define the following terms Strategy, strategic supply, strategic
purchasing, purchasing management. Corporate strategy. Show how they influence
effectiveness in procurement management of an institution of your choice. (15 Marks)
b) Analyse with clear examples and support of scholars how the following concepts apply
to strategic purchasing and supply: Strategic planning, levels of strategy, planning process
and business strategy Show how they influence strategic supply and purchasing
management (15 Marks)
C) Using a case studies, establish five major challenges and five risks in setting strategic
Supply and purchasing objectives in both public and private institutions in kenya. (10
MARKS)
2. Analyze with clear examples and support of scholars how the following concepts apply to
strategic purchasing and supply: Strategic planning, Levels of strategy; the planning
process and business strategy. Demonstrate how you can apply each of them if chosen as a
senior procurement officer in an institution to deliver strategic cooperate strategy (20
Marks)

Here's a comprehensive response to the full multi-part question, integrating examples,

scholarly perspectives, and Kenyan institutional context:

Page 19 of 42
QUESTION ONE

a) Definitions and Influence on Procurement (15 Marks)

1. Strategy

A strategy is a long-term plan of action designed to achieve a specific goal. It involves

aligning resources to maximize efficiency and achieve competitive advantage.

• Example: Equity Bank’s strategy includes digital transformation, which influences

procurement of modern IT systems.

2. Strategic Supply

Strategic supply refers to long-term sourcing of goods and services in alignment with
organizational goals, with a focus on building supplier relationships and reducing risks.

• Example: KEMSA strategically partners with WHO-approved suppliers to ensure

continuous medical supplies.

3. Strategic Purchasing

Strategic purchasing focuses on the alignment of procurement activities with long-term

organizational objectives, emphasizing value creation over cost minimization.

• Example: Safaricom’s procurement of green energy solutions aligns with its

sustainability goals.

4. Purchasing Management

Purchasing management involves the operational execution of sourcing, procurement, and

purchasing policies to ensure goods/services meet specifications and timelines.

• Example: Kenya Power uses structured procurement management to purchase

electrical transformers from approved vendors.

5. Corporate Strategy

Corporate strategy defines the overarching scope and direction of an entire organization,
including business unit priorities and investment decisions.

• Example: Vision 2030 directs Kenyan government agencies to use local content,
influencing procurement to favor local suppliers.

Page 20 of 42
Influence on Procurement Effectiveness

In institutions like Kenya Airports Authority (KAA):

• Strategy guides airport expansion, thus procurement includes modern security

systems.
• Strategic supply ensures equipment maintenance parts are pre-contracted for
emergencies.
• Corporate strategy ensures alignment with government goals (e.g., regional
connectivity, trade promotion).

b) Application of Strategic Concepts in Purchasing and Supply (15 Marks)

1. Strategic Planning

This is the structured process of defining long-term goals and determining the best
approach to achieve them.

• Scholars: Johnson & Scholes (2008) describe it as setting direction and scope over
the long term.
• Application: Helps procurement teams anticipate future needs, reduce stockouts,
and optimize costs.

2. Levels of Strategy

• Corporate Level: Overall direction of the organization.

• Business Level: How business units compete in the market.
• Functional Level: Day-to-day operations, including procurement.
• Example: In the Ministry of Education:
o Corporate level: Ensure access to education.
o Business level: Deliver textbooks efficiently.
o Functional level: Use framework contracts for textbook printing.

3. The Planning Process

Includes setting objectives, analyzing environment, formulating strategy, implementing,

and controlling performance.

• Example: County governments apply this to budget and procure medical supplies
each financial year.

4. Business Strategy

Focused on how the organization competes – cost leadership, differentiation, or focus.

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 • Example: A company like Bidco Africa focuses on cost efficiency and uses bulk
procurement to lower raw material costs.

How They Influence Strategic Procurement

• Align procurement with institutional goals (e.g., affordability, sustainability).

• Guide resource allocation.
• Reduce redundancy and wastage.
• Enable vendor alignment with strategic priorities.

c) Challenges and Risks in Strategic Procurement Objectives (10 Marks)

Case Study: Ministry of Health & Private Sector Case – Safaricom

Five Major Challenges

1. Political interference – Affects procurement decision autonomy.

2. Limited capacity/expertise – Inadequate training for procurement staff.
3. Poor forecasting – Leads to overstocking or stockouts.
4. Bureaucracy – Slows down procurement processes.
5. Inadequate ICT systems – Limits adoption of e-procurement in counties.

Five Major Risks

1. Corruption – Inflated contracts and unqualified suppliers.

2. Supplier default – Failure to deliver, especially during emergencies.
3. Price volatility – Fluctuating costs for fuel, commodities.
4. Legal non-compliance – Risks of litigation due to procurement irregularities.
5. Supply chain disruption – Global shortages (e.g., COVID-19 era) affecting essential
items.

QUESTION TWO

Strategic Concepts in Purchasing and Supply (20 Marks)

1. Strategic Planning

• Guides procurement activities to match future demand and budgeting.

• Application as Procurement Officer: Develop 3-year procurement plans aligned
with Vision 2030 and SDGs.

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2. Levels of Strategy

• Corporate: Embrace public-private partnerships to improve service delivery.

• Business: Focus procurement on enabling departments to meet targets.
• Functional: Implement efficient supplier evaluations and framework contracting.

3. Planning Process

• Involves environmental scanning, SWOT, and risk assessment.

• Application: Review procurement trends and supplier market to improve
specifications.

4. Business Strategy

• Choose between cost leadership (economies of scale) or value differentiation (high-

quality supplier base).
• Application: Source high-value IT systems at competitive prices by negotiating
long-term contracts.

Application as a Senior Procurement Officer

In an institution like Kenya Electricity Transmission Company (KETRACO):

• Lead strategic planning of sourcing transmission line components.

• Use a business-level strategy to enhance supply chain resilience.
• Implement ERP tools to track supplier performance.
• Align procurement with national energy policy goals.
• Ensure ethical procurement to maintain donor confidence.

3.Analyze with examples the following statement: "Kenya has clear strategy
implementation, evaluation and control in strategic purchasing and supply management"In
line with,, kenyan vision. What clear steps should government reform to achieve strategic
supply and purchasing management objectives (20 Marks)

4. With the current growth of technology, Explain the impact of information management.
e-Commerce, e-business and e-procurement; e-Market place. Demonstrate how they
influence effectiveness and integrity in an institutions of your choice. Given opportunity to
advice the institution demonstrate five key areas of improvement (20 marks).

5 Demonstrate how the following concepts influences 6RS of procurement strategic supply
base management; partnerships and strategic alliances; current and future trends;
measurement as bench marking, and global sourcing and its strategic impact. Given an

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opportunity as a procurement manager propose best practice on the concepts in a growing
organization (20 marks).

QUESTION 3: Strategy Implementation in Kenya's Strategic Procurement (20 Marks)

Statement Analysis: "Kenya has clear strategy implementation, evaluation and

control in strategic purchasing and supply management in line with Vision 2030."

A. Strategic Implementation in Kenya

Kenya’s Vision 2030 outlines transformation pillars, one of which is the economic pillar,
where procurement plays a key role through infrastructure, education, health, and energy.

Examples:

• IFMIS (Integrated Financial Management Information System): Enhances

procurement transparency and budgeting.
• e-Citizen and Huduma Centres: Procurement linked with service delivery under
digitization goals.
• KEMSA Procurement Strategy: Enables access to essential health products and
reduces reliance on donors.

B. Evaluation and Control Mechanisms

• PPRA (Public Procurement Regulatory Authority): Audits procurement activities

and enforces compliance.
• Public Procurement and Asset Disposal Act (2015): Defines strategy planning,
implementation, and performance monitoring frameworks.
• Internal and External Audits: Ministries are regularly evaluated on procurement
effectiveness.

C. Needed Reforms to Achieve Strategic Procurement Objectives

Reform Step Explanation
1. Professionalization of Make procurement a strictly regulated profession (CIPS
Procurement certification mandatory).
2. Full IFMIS Integration at Ensure counties fully adopt digital procurement to
County Levels eliminate manual processes.
3. Supplier Vetting & Rating Maintain a real-time database with performance scores
System to eliminate underperforming or fraudulent vendors.
4. Decentralized Planning but Counties should plan independently but under national
Central Oversight compliance rules.

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 Reform Step Explanation
Link procurement spending to outcomes in public
5. Value-for-Money Audits
service delivery.

QUESTION 4: Impact of Technology on Procurement and Institutional Integrity (20

Marks)

A. Impact of Technology Tools

Tool Impact
Information
Enhances decision-making, contract tracking, spend analysis.
Management
Expands access to global markets and suppliers, increasing
e-Commerce
competition.
Integrate procurement with finance, HR, and operations for end-
e-Business
to-end automation.
Reduces paperwork, speeds approvals, increases transparency
e-Procurement
(e.g., IFMIS in Kenya).
Enables comparison of shopping and dynamic pricing (e.g.,
e-Marketplace
Amazon Business, Alibaba).

B. Influence on Institutional Effectiveness and Integrity

Case Institution: Kenya Ports Authority (KPA)

• Effectiveness: E-procurement streamlined sourcing of maintenance parts, reducing

vessel repair delays.
• Integrity: Real-time audit trails in e-tendering reduce corruption opportunities.

C. Five Key Areas of Improvement (Advice to the Institution)

1. End-to-End Automation: Integrate all procurement steps digitally from requisition

to payment.
2. Real-Time Analytics Dashboard: Monitor budget usage, supplier lead times, and
contract KPIs.
3. Procurement Officer Training: Regular capacity building in digital tools and
ethics.
4. Supplier Relationship Management (SRM) Tools: Automate performance review
and dispute resolution.
5. Cybersecurity Protocols: Protect sensitive procurement data from manipulation or
leaks.

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QUESTION 5: Concepts Influencing the 6Rs of Procurement (20 Marks)

A. Conceptual Influence on the 6Rs

Influence on 6Rs of Procurement (Right quality, quantity,
Concept
place, time, price, source)
Strategic Supply Base Ensures supplier diversification — improves reliability (Right
Management Time/Source).
Partnerships and Promote shared logistics or inventory management — impacts
Strategic Alliances Right Quantity and Time.
Current and Future Aligns procurement to innovation and sustainability —
Trends impacts Right Quality and Price.
Measurement as Uses performance data to improve vendor quality and delivery
Benchmarking metrics — improves all Rs.
Accesses global markets for cost efficiency and innovation —
Global Sourcing
enhances Right Price and Quality, but risks lead time.

B. Best Practices as a Procurement Manager in a Growing Organization

1. Develop a Supplier Scorecard: Benchmark delivery, quality, pricing, and

communication.
2. Implement a Strategic Sourcing Framework: Analyze total cost of ownership
before choosing suppliers.
3. Engage in Joint Ventures or Supplier Development: Especially for local SMEs, as
seen in AGPO.
4. Adopt Predictive Analytics Tools: Forecast demand and manage inventory
dynamically.
5. Establish a Global and Local Sourcing Mix: Balance risk and price by blending
offshore and domestic suppliers.

Conclusion

In today’s environment, strategic procurement concepts such as benchmarking, global

sourcing, partnerships, and digital tools are not optional — they are essential to
achieving the 6Rs and maximizing institutional performance.

QUESTION ONE a) Advise Sifcon how it can manage the outsourcing process and the
difficulties that may be encountered. (10 marks)
b) TIK does not currently have a strategic procurement function. Advise TIK how it can
develop a strategic procurement function and explain the benefits of doing so (10 Marks)

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c) Evaluate the current and planned corporate strategies of both Sifcon and TIK. (10 marks)

QUESTION TWO
a) Procurement at a large leading footwear company, which sources its products from low-
cost countries, is in the midst of reorganisation. The nine purchasers previously worked in
one centralised team, but are now moving towards a 'network model'. The procurement
function has also been made responsible for overseeing corporate social responsibility
(CSR) for the group. Demonstrate how these changes might benefit the organisation. (10
marks)

b) Outline what is meant by the term 'strategic drift', and explain how effective change
management can address strategic drift. (10 marks)

QUESTION THREE
a) A leading housebuilder recently threatened to terminate suppliers' contracts unless
they agreed to a 15% reduction in their rates. It justified this action by citing the 'significant
economic downturn' which shows 'absolutely no sign of improvement'. Identify the
relationship approach taken by the housebuilder in dealing with its suppliers, and analyse
alternative ways of managing supplier relationships in the construction industry. (10
marks)
b) Explain how an organisation can achieve a fully integrated supply chain, and
demonstrate the benefits of doing so. (10 marks)

QUESTION FOUR Discuss the emerging issues in procurement management strategy

today (20 Marks)

QUESTION ONE

a) Advising Sifcon on Outsourcing Management and Challenges (10 Marks)

Key Steps in Managing Outsourcing at Sifcon:

1. Needs Assessment: Identify non-core functions to outsource (e.g., IT, logistics,

facility management).
2. Vendor Selection: Use competitive bidding or benchmarking to choose cost-
effective and capable vendors.
3. Service-Level Agreements (SLAs): Define quality, timelines, and performance
expectations clearly.
4. Risk Management: Identify legal, operational, and reputational risks and mitigate
through robust contracts.
5. Relationship Management: Build a collaborative model with KPIs and regular
performance reviews.

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Challenges:

• Loss of Control: Over core aspects of performance.

• Hidden Costs: Transition, legal, and monitoring costs.
• Data Security Risks: Especially if outsourcing IT.
• Vendor Dependence: Lock-in risk due to long-term contracts or unique vendor
capabilities.
• Cultural/Communication Barriers: If vendors are offshore.

b) Developing a Strategic Procurement Function at TIK (10 Marks)

Steps to Develop Strategic Procurement:

1. Leadership Buy-in: Procurement must be part of strategic planning.

2. Capability Assessment: Train staff in CIPS/CILT certifications.
3. Digital Transformation: Adopt procurement tech like ERP and spend analytics.
4. Category Management: Group spending into strategic categories.
5. Supplier Relationship Management (SRM): Move beyond price to total value.
6. CSR & Risk Integration: Build sustainability and risk resilience into sourcing.

Benefits:

• Cost Savings: Through strategic sourcing and demand aggregation.

• Risk Mitigation: With structured planning and supplier diversification.
• Innovation: Strategic suppliers can bring in innovation.
• Efficiency: Leaner, faster, and value-driven procurement processes.

c) Evaluation of Corporate Strategies at Sifcon and TIK (10 Marks)

Aspect Sifcon TIK
Current Cost leadership, possibly
Tactical buying, operations-led
Strategy outsourcing-focused
Planned Diversification through strategic
Developing strategic procurement unit
Strategy outsourcing
Must align outsourcing with core Strategic function will enhance
Evaluation competencies to avoid erosion of competitiveness, reduce waste, and
strategic assets add long-term value

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QUESTION TWO

a) Reorganization to a Network Model and CSR Oversight (10 Marks)

Benefits of Reorganization to Network Model:

• Decentralized Decision-Making: Faster responses to local needs.

• Category Expertise: Purchasers can specialize in particular categories or regions.
• Resilience: More adaptable and less dependent on central decision bottlenecks.

Benefits of CSR Integration:

• Brand Reputation: Ensures ethical sourcing, especially from low-cost countries.

• Risk Reduction: Prevents association with poor labor/environmental practices.
• Compliance: Meets stakeholder and regulatory expectations globally.

b) Strategic Drift and Managing It (10 Marks)

Definition of Strategic Drift:

A slow misalignment between an organization’s strategy and its external environment.
Often caused by a failure to adapt to technological, market, or policy changes.

Effective Change Management Solutions:

• Environmental Scanning: Regular PESTEL and SWOT analyses.

• Inclusive Planning: Engage internal and external stakeholders.
• Continuous Improvement Culture: Encourage agility and innovation.
• Leadership Communication: Clear, transparent, and aligned with goals.

QUESTION THREE

a) Supplier Relationship Strategy in Construction Industry (10 Marks)

Approach Taken:

• Adversarial Approach: Short-term, cost-cutting focus, likely to strain relationships.

Alternative Relationship Models:

1. Collaborative/Partnering Model: Share risks and innovations (e.g., joint design,

JIT deliveries).
2. Framework Agreements: Long-term relationships with volume discounts.
3. Performance-Based Contracts: Pay for value delivered, not just deliverables.

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 4. Supplier Development Programs: Invest in supplier capabilities to increase
mutual value.

Example: Lafarge Cement Kenya partners with key contractors on supply planning.

b) Achieving Fully Integrated Supply Chain (10 Marks)

How to Achieve Integration:

• Digital Integration: ERP systems, shared data platforms.

• Process Integration: Shared planning (e.g., CPFR), forecasting, and logistics.
• Organizational Integration: Cross-functional teams and shared KPIs.

Benefits:

• Reduced Lead Times

• Inventory Optimization
• Better Demand Planning
• Transparency and Accountability
• Improved Supplier Relationships

QUESTION FOUR

Emerging Issues in Procurement Management Strategy (20 Marks)

1. Sustainability and Green Procurement

o Focus on carbon footprint, recyclability.
o Example: Kenya’s ban on plastic bags influencing supplier choices.
2. Digital Transformation
o E-procurement, AI, blockchain for transparency and automation.
3. Global Supply Chain Risks
o Geopolitics, pandemics, and climate disruptions affecting sourcing.
4. Ethical and Social Responsibility
o Increasing pressure for ethical sourcing and labor practices.
5. Data Analytics and Big Data
o Forecasting trends, tracking compliance, spend analysis.
6. Supplier Diversity
o Governments promoting inclusion of SMEs, women-owned businesses.
7. Circular Procurement
o Procurement designed for reuse and recycling in product life cycle.
8. Cybersecurity Risks
o Protecting procurement data and financial transactions.
9. Regulatory Compliance
o Evolving laws (e.g., PPD Act 2015) requiring greater transparency.

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 10. Talent Management in Procurement

• Upskilling needed for strategic roles and digital tools.

Question One (25 marks)

Analyze the short case study on strategic supply chain and answer the questions that follow:
The corona virus and strategic supply chain operations When the corona virus first emerge
in China, the supply chain focus was on the supply side, as thousands of Chinese factory
closed, workers were slow coming back after the China's New Year's celebrations in January,
and port activity for exports slowed dramatically. In the US the focus has now shifted
dramatically to the demand side impact, as almost everything outside of food and related
consumer packaged goods is seeing huge drops in demand, starting with forced store
closures of most department and specialty stores, then what is sure to be a big drop in
demand for many industrial products, a huge fall in automobile sales and much more. But as
companies grapple with how hard and how long demand will fall, it is important for
companies to not forget about the lessons on the supply side. Notably, another tough lesson,
as with the 2011 earthquake and tsunami in Japan, on the need to map a company's multi-
echelon supply chain. So say Dr. Thomas Choi, Dr. Dale Rogers and Bindiya Vakil in a recent
article in the Harvard Business Review on-line. Choi and Rogers are at Arizona State
University, while Vakil is CEO of Resilinc, a supply chain risk management services provider.
Most firms do not well map their full supply chains, the trio say. However, "A small minority
of companies that invested in mapping their supply networks before the pandemic emerged
better prepared" Chol, Rogers and Valik say. "They have better visibility into the structure of
their supply chains. Instead of scrambling at the last minute, they have a lot of information
at their fingertips within minutes of a potential disruption. They know exactly which
suppliers, sites, parts, and products are at risk, which allows them to put themselves first in
line to secure constrained inventory and capacity at alternate sites." That does sound like a
lot better place to be. If the benefits are so strong, why don't more companies do it? The
simple answer is that the process is hard, takes a long time, and is potentially expensive. Add
to that disruptions of a huge magnitude where the map is really needed are arguably relative
rare. Executives of a Japanese semiconductor manufacturer told the authors that it took a
team of 100 people more than a year to map the company's supply networks deep into the
sub-tiers following the earthquake and tsunami in 2011. That is a very expensive effort. "Yes,
supply network mapping can be resource intensive and difficult. However, there is no way
around it," the authors say, adding that "Companies will discover the value of the map is
greater than the cost and time to develop it."

Questions
a) Discuss the tools of supply chain mapping. [5 marks]
b) Identify and examine the strategies of enhancing supply chain visibility. [10 marks]
c) Identify factors that enhance an organization's resilience and mitigate supply chain
shocks such as Covid-19. [10 marks]

Page 31 of 42
Question Two (25 Marks)
a) Define the term supply chain excellence and expound on the principles of supply chain
excellence. (10 marks)
b) Efficiency and responsiveness are two aspects that influence the supply chain strategy
and model adopted. Using a matrix illustrate the supply chain-product matching and
explain the variables. (5 marks)
c) Distinguish between deliberate strategies and emergent strategies (4 marks)
d) As the Managing Director of a supply chain management consortium, Discuss the main
strategic approaches applicable in procurement and supply chain management that would
you use to ensure success of the organization (6 marks)

Question Three (25 Marks)

a) In the field of supply chain management, discuss how the 7s model can be used to
achieve a synergistically effect. (10 Marks)
b) Using relevant examples, discuss the supply chain management methods that can be
incorporated to strategy implementation. (15 marks)
Question Four (25 Marks)
a) Critically discuss the PESTLE analysis in the context of the supply chain environment
and strategy formulation. Give relevant strategy implications for each factor. (15 marks)
b) Define the term global supply chain strategy and discuss the global supply chain
strategies in the 21" century. (10 marks)

QUESTION ONE (25 Marks)

The Coronavirus and Strategic Supply Chain Operations

a) Tools of Supply Chain Mapping (5 Marks)

Supply chain mapping tools help visualize and understand multi-tier supply chains.
Common tools include:

1. Value Stream Mapping (VSM):

o Used to chart product flows, information flows, and lead times.
o Example: Toyota uses VSM to trace parts and identify waste.
2. Supplier Mapping Software:
o Tools like Resilinc, SAP Ariba, and Llamasoft help companies map supplier
networks and track risks.
o They provide dashboards for real-time monitoring.
3. Network Diagrams:
o Visual diagrams showing relationships between tier 1, 2, and 3 suppliers,
transportation routes, and distribution centers.
4. GIS Mapping Tools:
o Use geographic information systems (GIS) to display the physical locations of
supply sources and routes.
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 o Example: Apple tracks component manufacturers across Asia using GIS
maps.
5. ERP Systems with SCM Modules:
o Systems like Oracle, SAP provide integrated views across procurement,
inventory, and suppliers.

b) Strategies for Enhancing Supply Chain Visibility (10 Marks)

1. End-to-End Digitization:
o Use of IoT, RFID, and barcoding to track goods from source to delivery.
o Example: Walmart uses RFID to manage inventory visibility across global
suppliers.
2. Real-Time Data Sharing:
o Cloud-based platforms and EDI (Electronic Data Interchange) enable instant
information exchange.
3. Supplier Collaboration Platforms:
o Tools like Coupa or Ariba improve supplier engagement and communication.
4. Inventory and Logistics Monitoring Tools:
o GPS and blockchain-based tracking for real-time delivery status.
5. Data Integration:
o Centralizing data from multiple systems for a single source of truth.
6. Use of Predictive Analytics:
o Anticipates disruptions using historical and current data.
7. Tiered Supplier Visibility:
o Ensuring visibility beyond Tier 1 to Tier 2 and 3 suppliers.
8. Performance Dashboards:
o KPI-based dashboards for on-time delivery, quality levels, and lead times.
9. Artificial Intelligence & Machine Learning:
o AI tools forecast demand and flag anomalies in supplier behavior.
10. Standardized Processes and Documentation:

• Ensures uniformity in supplier inputs and reduces miscommunication.

c) Factors that Enhance Resilience and Mitigate Shocks (10 Marks)

1. Supply Chain Diversification:

o Avoid reliance on a single supplier or region.
o Example: Apple diversified from Chinese suppliers during COVID-19.
2. Multi-Echelon Inventory Planning (MEIO):
o Maintains buffer stock at various points in the chain.
3. Supplier Redundancy:
o Having backup suppliers for critical components.
4. Scenario Planning and Simulations:
o Stress-testing the supply chain against hypothetical disruptions.

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 5. Agile and Flexible Operations:
o Ability to pivot manufacturing or sourcing in response to changes.
6. Digital Twin Technology:
o Virtual replicas of supply chains help simulate and predict failures.
7. Localization Strategies:
o Regionalizing supply chains to reduce dependency on global logistics.
8. Strong Governance and Risk Frameworks:
o Clear escalation protocols and decision-making systems.
9. Investment in Technology:
o Enhances real-time communication, tracking, and predictive capabilities.
10. Cross-functional Crisis Management Teams:

• Enables rapid response and business continuity.

Strategic Supply Chain Case Study

Great, I’ll start working on detailed answers to these four comprehensive questions based
on the case study and strategic supply chain topics you've provided. Given the length and
complexity, I’ll present responses one question at a time for clarity and structure.

QUESTION ONE (25 Marks)

The Coronavirus and Strategic Supply Chain Operations

a) Tools of Supply Chain Mapping (5 Marks)

Supply chain mapping tools help visualize and understand multi-tier supply chains.
Common tools include:

1. Value Stream Mapping (VSM):

o Used to chart product flows, information flows, and lead times.
o Example: Toyota uses VSM to trace parts and identify waste.
2. Supplier Mapping Software:
o Tools like Resilinc, SAP Ariba, and Llamasoft help companies map supplier
networks and track risks.
o They provide dashboards for real-time monitoring.
3. Network Diagrams:
o Visual diagrams showing relationships between tier 1, 2, and 3 suppliers,
transportation routes, and distribution centers.
4. GIS Mapping Tools:
o Use geographic information systems (GIS) to display the physical locations of
supply sources and routes.
o Example: Apple tracks component manufacturers across Asia using GIS
maps.
Page 34 of 42
 5. ERP Systems with SCM Modules:
o Systems like Oracle, SAP provide integrated views across procurement,
inventory, and suppliers.

b) Strategies for Enhancing Supply Chain Visibility (10 Marks)

1. End-to-End Digitization:
o Use of IoT, RFID, and barcoding to track goods from source to delivery.
o Example: Walmart uses RFID to manage inventory visibility across global
suppliers.
2. Real-Time Data Sharing:
o Cloud-based platforms and EDI (Electronic Data Interchange) enable instant
information exchange.
3. Supplier Collaboration Platforms:
o Tools like Coupa or Ariba improve supplier engagement and communication.
4. Inventory and Logistics Monitoring Tools:
o GPS and blockchain-based tracking for real-time delivery status.
5. Data Integration:
o Centralizing data from multiple systems for a single source of truth.
6. Use of Predictive Analytics:
o Anticipates disruptions using historical and current data.
7. Tiered Supplier Visibility:
o Ensuring visibility beyond Tier 1 to Tier 2 and 3 suppliers.
8. Performance Dashboards:
o KPI-based dashboards for on-time delivery, quality levels, and lead times.
9. Artificial Intelligence & Machine Learning:
o AI tools forecast demand and flag anomalies in supplier behavior.
10. Standardized Processes and Documentation:

• Ensures uniformity in supplier inputs and reduces miscommunication.

c) Factors that Enhance Resilience and Mitigate Shocks (10 Marks)

1. Supply Chain Diversification:

o Avoid reliance on a single supplier or region.
o Example: Apple diversified from Chinese suppliers during COVID-19.
2. Multi-Echelon Inventory Planning (MEIO):
o Maintains buffer stock at various points in the chain.
3. Supplier Redundancy:
o Having backup suppliers for critical components.
4. Scenario Planning and Simulations:
o Stress-testing the supply chain against hypothetical disruptions.
5. Agile and Flexible Operations:
o Ability to pivot manufacturing or sourcing in response to changes.

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 6. Digital Twin Technology:
o Virtual replicas of supply chains help simulate and predict failures.
7. Localization Strategies:
o Regionalizing supply chains to reduce dependency on global logistics.
8. Strong Governance and Risk Frameworks:
o Clear escalation protocols and decision-making systems.
9. Investment in Technology:
o Enhances real-time communication, tracking, and predictive capabilities.
10. Cross-functional Crisis Management Teams:

• Enables rapid response and business continuity.

Would you like me to move to Question Two next or turn this into a downloadable
document for easier review?
Question Five (25 Marks)
a) As the Managing Director of a public institution discuss the strategy
formulation process that you would employ in developing market
growth strategies (10 marks)
b) Discuss the value chain activities and explain their importance in
ensuring strategic supply chain management (15 marks)

Question Six (25 Marks

a) Critically expound on the strategic planning models applicable in the field of supply
chain management (15 marks)
b) Considering the lean thinking as a supply chain strategy. Discuss the possible areas of
waste along the supply chain in an effort to ensure Lean supply chain management. (10
marks) Give detailed Answers

QUESTION FIVE (25 Marks)

a) Strategy Formulation Process for Developing Market Growth Strategies (10

Marks)

As a Managing Director of a public institution, formulating effective market growth

strategies involves the following structured process:

1. Environmental Scanning:
o Analyze internal and external environments using SWOT, PESTLE.
o E.g., assess procurement regulations and supplier base constraints in Kenya.
2. Setting Strategic Objectives:
o Define measurable goals like expanding supplier diversity, reducing costs by
15%, or increasing e-procurement use.
3. Strategy Formulation:

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 o Choose from market penetration, market development, product/service
development, or diversification.
o Example: Introduce digitized procurement systems to tap into new e-market
platforms.
4. Evaluation and Selection:
o Assess each strategy based on cost, risk, alignment with Vision 2030 and
feasibility.
5. Implementation Planning:
o Allocate resources, assign responsibilities, and establish timelines.
6. Monitoring and Control:
o Use KPIs like cost savings, lead times, supplier performance to track
progress.
7. Feedback and Continuous Improvement:
o Conduct periodic reviews and incorporate lessons into future strategies.

b) Value Chain Activities and Their Importance in Strategic Supply Chain

Management (15 Marks)

Value chain activities are categorized into primary and support activities:

Primary Activities:

1. Inbound Logistics:
o Efficient receipt, warehousing, and inventory control.
o Critical in public institutions for transparency in goods received.
2. Operations:
o Transform inputs into outputs; e.g., packaging, processing.
o Standard procedures ensure quality and compliance.
3. Outbound Logistics:
o Distribution of goods/services to users.
o Use of e-tracking improves delivery accountability.
4. Marketing and Sales:
o Promoting transparency in tenders and supplier awareness.
o Drives competitiveness.
5. Services:
o After-sale services like maintenance in public projects (e.g., roads, health
equipment).

Support Activities:

1. Procurement:
o Strategic sourcing to reduce cost and improve service delivery.
2. Technology Development:
o E-procurement platforms enhance efficiency.
3. Human Resource Management:
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 o Training procurement officers enhances ethical compliance and
performance.
4. Firm Infrastructure:
o Policies, regulations, legal compliance ensure strategic alignment.

Importance:

• Enhance efficiency, transparency, value for money, and accountability.

• Ensures alignment with public sector reforms and Vision 2030 goals.

QUESTION SIX (25 Marks)

a) Strategic Planning Models in Supply Chain Management (15 Marks)

1. Porter’s Five Forces Model:

o Assesses supplier power, buyer power, competition, threat of substitutes,
and new entrants.
o Informs sourcing and negotiation strategies.
2. SWOT Analysis:
o Identifies internal strengths/weaknesses and external opportunities/threats.
o Helps in prioritizing procurement areas for reform.
3. Balanced Scorecard:
o Tracks financial, customer, internal process, and learning outcomes.
o Useful for performance management of procurement functions.
4. PESTLE Analysis:
o Political, Economic, Social, Technological, Legal, and Environmental factors
guide strategy formulation.
5. BCG Matrix:
o Analyzes procurement spend categories (stars, cash cows, dogs, question
marks).
6. McKinsey 7S Framework:
o Aligns structure, systems, style, staff, skills, strategy, and shared values.
7. Ansoff Matrix:
o For public institutions, helps decide between current vs. new supplier bases
and services.

b) Lean Thinking as a Supply Chain Strategy – Areas of Waste (10 Marks)

Lean supply chain aims at minimizing waste (Muda) in various forms:

1. Overproduction:
o Procuring more than necessary leads to waste—use demand forecasting.
2. Waiting Time:
o Delays in approval or delivery increase lead times.

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 3. Transportation:
o Unnecessary movement of goods—optimize routing.
4. Over-Processing:
o Excess bureaucracy or paperwork—digitization can help.
5. Inventory:
o Excess stock tying up capital—apply JIT or VMI models.
6. Motion:
o Redundant tasks—streamline workflow.
7. Defects:
o Poor-quality procurement leads to rework and cost—improve supplier
evaluation.

Application:

• Implement Kaizen (continuous improvement), 5S, Six Sigma, and value stream
mapping to drive lean culture in procurement departments.

QUESTION TWO (20 Marks)

a) Sustainable Value Chain and Its Application in Procurement and Logistics (10
Marks)

A sustainable value chain integrates environmental, social, and economic concerns into
procurement and logistics practices to create long-term value.Application:

1. Green Procurement:
o Sourcing environmentally friendly products (e.g., recycled materials, energy-
efficient equipment).
2. Ethical Sourcing:
o Engaging suppliers with fair labor practices and ethical standards.
3. Supplier Audits:
o Ensuring compliance with sustainability standards (e.g., ISO 14001).
4. Eco-friendly Logistics:
o Use of electric vehicles, route optimization to cut emissions.
5. Lifecycle Costing:
o Total cost approach rather than just purchase price.
6. Local Sourcing:
o Reduces carbon footprint and supports local economies.

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b) Solutions to Integrity Issues in African Procurement Departments (10 Marks)

1. E-Procurement Systems:
o Digitization reduces human interference and corruption.
2. Transparent Tendering:
o Public access to procurement opportunities and awards.
3. Whistleblower Protection:
o Encourages reporting unethical behavior.
4. Capacity Building:
o Training on ethics, governance, and professional conduct.
5. Independent Oversight:
o External audits and procurement oversight bodies.
6. Performance Contracts:
o Clear accountability for procurement officers.
7. Automation of Approvals:
o Limits manual influence and irregularities.

QUESTION THREE (20 Marks)

a) Process to Craft Procurement and Logistics Strategy (10 Marks)

1. Needs Assessment:
o Identify procurement and logistics needs aligned with goals.
2. Market Analysis:
o Study suppliers, costs, and market risks.
3. Define Objectives:
o Set KPIs like cost savings, lead times, supplier quality.
4. Develop Sourcing Plan:
o Select suppliers, logistics providers based on capability.
5. Risk Analysis:
o Identify disruptions and mitigation plans.
6. Execution & Monitoring:
o Implement with performance tracking tools.
7. Review & Adapt:
o Update strategy regularly for relevance.

b) Effects of COVID-19 on Procurement and Logistics Strategies (10 Marks)

1. Disrupted Supply Chains:

o Closed borders and delayed shipments.
2. Stockouts & Delays:
o Panic buying and supplier bottlenecks.
3. Remote Procurement Operations:
o Shift to digital platforms.

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 4. Supplier Insolvency:
o Financial instability among SMEs.
5. Increased Costs:
o Freight surcharges and delays.
6. Shift to Local Sourcing:
o To reduce dependency on global supply chains.
7. Greater Emphasis on Resilience:
o Multi-sourcing and inventory buffers.

QUESTION FOUR (20 Marks)

a) Factors for Successful Strategy Implementation in Procurement & Logistics (10

Marks)

Key Factors:

1. Leadership support.
2. Skilled procurement team.
3. Proper IT systems.
4. Supplier collaboration.
5. Monitoring KPIs.

Challenges:

• Resistance to change.
• Poor stakeholder engagement.
• Inadequate funding.

Panacea:

• Change management, training, stakeholder buy-in, and strong governance.

b) Gaining Competitive Advantage in Procurement (10 Marks)

1. Strategic Sourcing:
o Long-term supplier relationships and volume leverage.
2. Use of Technology:
o Automation and data analytics.
3. Cost Leadership:
o Reducing procurement costs through bulk buying and VMI.
4. Supplier Innovation:
o Co-developing new solutions with suppliers.
5. Agile Procurement:
o Rapid adaptation to market changes.

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QUESTION FIVE (20 Marks)

a) Change Management in Procurement Strategy Execution (10 Marks)

Why Critical:

• Ensures stakeholder alignment and minimizes disruption.

Example:

• Transitioning from manual to e-procurement: training, phased rollout, stakeholder

communication critical to success.

Key Tools:

• Kotter’s 8-step change model.

• ADKAR (Awareness, Desire, Knowledge, Ability, Reinforcement).

b) Stakeholder Mapping and Application (10 Marks)

Matrix Used:

• Power-Interest Grid:
o High Power–High Interest: manage closely.
o Low Power–High Interest: keep informed.

Practical Application:

• In launching a centralized procurement system:

o Engage IT, procurement officers (high interest, high power).
o Inform suppliers and regulators (medium power).

Outcome:

• Minimizes resistance, ensures smoother implementation and policy acceptance.

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