INVENTORY MANAGEMENT CONTROL, MANAGEMENT LITERACY LEVEL AND PROCUREMENT PERFORMANCE OF LEVEL 6 HOSPITALS, KENYA

Abstract

Health facilities aim at ensuring that they have adequate stock in terms of medicines, machines and other related products to operate without any challenges associated with stockouts. The purpose of this study was to analyse the effect of inventory management control and procurement performance of level 6 in Kenya. The study was guided by the following specific objectives: to evaluate the effect of supplier relationship management on the procurement of level 6 hospitals in Kenya, to evaluate the effect of reorder strategy on the procurement performance of level 6 hospitals in Kenya, to assess the effect of compliance and audit readiness on the procurement performance of level 6 hospitals in Kenya, to assess the effect of safety stock on the procurement performance of level 6 hospitals in Kenya, to evaluate the moderating effect of management literacy level on the relationship between inventory management control on the procurement performance of level 6 hospitals in Kenya. The study population included seven level 6 hospitals. Census sampling technique was utilized. Primary data was collected using questionnaires which was distributed to procurement officers, stores personnel, internal auditors and hospital administrators. Pilot study was conducted at Jaramogi Oginga Odinga referral hospital. Reliability and validity of research instrument was conducted to ensure relevant data was collected. The hypotheses were obtained from the objectives of the study. The study was anchored by resource-based theory, Economic Order Quantity theory, agency theory. Cross sectional descriptive research designs were utilized. Simple and multiple regression model was utilized. The significance of each individual predictor variable on procurement performance was tested using t-statistic and the overall significance of the models was tested using f-statistic. Data was presented in tables and figures. The research findings are beneficial to the Kenya Medical Supplies Authority, national government and county government for decision making. The study concludes that procurement performance in level 6 hospitals in Kenya is significantly influenced by various inventory management factors, as evidenced by both correlation and regression results. Supplier relationship management showed a positive correlation (r=0.481) and a significant regression coefficient (β=0.387), indicating that strong supplier collaboration directly improves efficiency and procurement outcomes. Reorder strategy also revealed a positive correlation (r=0.523) and a significant regression coefficient (β=0.294), confirming that structured reorder policies reduce stock-outs and enhance operational continuity. Compliance and audit readiness recorded a positive correlation (r=0.461) with a significant regression coefficient (β=0.315), underscoring its role in strengthening accountability and optimizing resource use. Safety stock, while positively correlated (r=0.377), yielded an insignificant regression coefficient (β=0.109), suggesting that reliance on buffer stock does not substantially enhance procurement performance. Finally, management literacy level, as a moderating factor, revealed a positive correlation (r=0.498) and a significant interaction regression coefficient (β=0.276), showing that managerial knowledge enhances the impact of inventory management controls on procurement efficiency. The findings highlight the critical role of robust stock controls, adherence to compliance frameworks, and effective supplier engagement in enhancing procurement performance. Based on these results, hospitals should prioritize strengthening safety stock systems, regularly review reorder strategies, maintain strong compliance mechanisms, and invest in supplier relationship management. Additionally, management literacy programs should be targeted towards improving stock management decisions, as this area demonstrated the most substantial benefit from higher managerial competence.