Effect of Supplier Consolidation Practice on Operational Performance of Private Hospital Pharmacies: A Case of Oasis Healthcare Group Limited, Kenya

This study examined the effect of supplier consolidation practice on the operational performance of private hospital pharmacies in Oasis Healthcare Group Limited, Kenya. The study was anchored on Transaction Cost Economics Theory, Agency Theory, and Control Theory. A descriptive survey research design was adopted, targeting 104 respondents drawn from pharmacy personnel, procurement officers, hospital administrators, warehouse personnel, and logistics officers across 12 facilities. A census sampling method was employed, and structured questionnaires were used for data collection, achieving a response rate of 84.62% (n = 88). Data were analysed using descriptive statistics, Pearson correlation, and multiple linear regression analysis via SPSS Version 27. The reliability of the instrument was confirmed through Cronbach's alpha coefficients ranging from 0.743 to 0.785, all exceeding the acceptable threshold of 0.7. Content validity was ascertained through expert review, yielding an overall Scale-level Content Validity Index (S-CVI/Ave) of 0.93. Pearson correlation analysis revealed a strong and statistically significant positive relationship between supplier consolidation and operational performance (r = 0.916, p < 0.01). Multiple linear regression analysis identified supplier consolidation a key predictor with a statistically significant and positive effect (B = 0.355, β = 0.423, t = 2.536, p = 0.013); this indicates that a one-unit increase in supplier consolidation results in 0.355 units increase in operational performance. The overall regression model, encompassing bulk purchasing, supplier consolidation, and centralised tendering, jointly explained 86.1% of the variance in operational performance (R² = 0.861, Adjusted R² = 0.856, F = 172.772, p < 0.001). The study concluded that supplier consolidation is a key influential predictor of operational performance in private hospital pharmacies, significantly enhancing supply reliability, cost efficiency, and service delivery. The study recommended that Oasis Healthcare Group prioritise supplier consolidation through structured supplier evaluation frameworks, long-term strategic partnerships, and integrated procurement management strategies to sustain and further improve operational performance across its facilities.