Strategic procurement in the 21st century business and its impact on corporate performance of firms in the Nigerian manufacturing sector
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Date
2024-10-10
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Lutsk National Technical University
Abstract
Procurement plays a crucial role in every business organisation, yet many local enterprises in Nigeria face
significant challenges in implementing efficient procurement strategies. The purpose of this study was to examine
the effects of strategic procurement on the performance of Lafarge Cement Plc., a prominent manufacturing firm
in Nigeria. Data from the study was analysed using the structural equation modelling and the findings revealed a
significant relationship between the variables of interest. Specifically, the path analysis revealed that e-procurement
plays a crucial role in enhancing operational performance. With strong path coefficients for key components such
as data visibility (0.853), cycle time (0.816), and supplier relationships (0.822), e-procurement had a total effect
coefficient of 0.623 on operational performance, which suggested that 63% of Lafarge Cement Plc. operations
could be improved, if adequate consideration was given to e-procurement system like electronic Purchase Orders
and procurement through other digital Sourcing Platforms. In a similar context, procurement integration was also
found to substantially influence the competitive advantage, with a total coefficient of 0.703. This showed that by
focusing on procurement efficiency such as cost savings and time reductions, Lafarge Cement Plc. can strengthen its
market position to improve responsiveness to market demands. Supplier integration (0.907) was shown to positively
influence service delivery quality. The analysis confirmed that strong supplier relationships, supported by effective
contractual agreements and feedback mechanisms can enhance consistency and superior service delivery of the
institution. The practical implications of this study were that by integrating e-procurement and supplier’s integration
into its procurement system, Lafarge Cement Plc. can efficiently adapt to changing market conditions in Nigeria, such
as the everyday fluctuations in the cost of raw materials, thereby minimising supply disruptions and ensuring greater
stability in its production
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Citation
Yusuf, I., Saka, K.A., & Yisa, Yu.O. (2024)