Muchemi, A. W.Maina, Esther Wangui2014-07-232014-07-232014-07-23http://ir-library.ku.ac.ke/handle/123456789/10579Department of Business Administration,78p. 2013, HD 39.5 .M3This study is set to establish the strategic supplier related factors affecting the performance of the procurement function in the service industry. A strategy includes all the organization's moves and managerial approaches that can be taken to achieve the organizations objectives. The major objective for any organization is to secure competitive advantage and elevate the organizations performance. A well functioning procurement function is an asset to any forward looking company .This is because the all important task of acquisition of the required materials or services as well as their management once acquired is the responsibility of the procurement function. Specifically, the research attempted to establish the effect of financial stability, quality aspects, past performance and reliability of suppliers on the performance of the procurement function. The research findings are of benefit to Mathira Water and Sanitation Company and other water and sanitation service providers across the nation since they can implement the recommendations that have been advanced by the study. The research findings are of benefit to others researchers since they can carry out further research on areas left out by the researcher. The research findings contribute to literature in the area of study which can be of use to scholars. The researcher has related the study with other past studies carried out related to similar topic. The research has criticized studies carried in advance in relation to its findings under the critical review section. The research has come up with recommendations, conclusions and gaps to be filled by the study. The research has used a case study research design. This was found appropriate because it allowed a detailed study of the area in question. The case study research design was found suitable for this study because all the water and sanitation companies in the country were started at the same time after the water sector reforms of 2002.Furthermore, the companies have similar mandate and are governed the same way. As such, findings of a study carried out in one company can be generalized to a very large extent. The target population comprised of 104 employees of Mathira water and Sanitation Company consisting of the senior management, permanent staff and those under contract. Purposive sampling was used to ensure that only those involved in the procurement process were used in the study. Data was collected using a questionnaire with both open and close ended questions. The questionnaires were administered using drop and later pick method. Data has been presented using tables, graphs, and percentages. Statistical package for Social Sciences (SPSS) was used to generate data array for subsequent analysis. Data analysis has been done using descriptive statistics. Findings of the study show that financial stability of suppliers, quality management aspects of suppliers, past performance and reliability of suppliers have a significant effect on performance of procurement function. The study recommends that suppliers should be evaluated to establish their financial stability, quality management aspect, their past performance and reliability before awarding them with contracts to supply goods or services. The study further recommends that orders should be placed with suppliers who have been evaluated on the given parameters and found to be satisfactory and included in the approved vendors list. The study Suggests that further research be carried out by other scholars on other variables affecting performance of procurement function not addressed by the studyenThesis