Influence of logistics management on performance of manufacturing firms in Kenya

Abstract

This study examined the influence of logistics being the independent variables, on the performance of manufacturing firms being the dependent variable. The study also looked at the effect of the logistics performance as the moderating variable on the relationship between logistics management and firm performance. The specific objectives of the study were to examine the influence of transport management on firm performance, evaluate the influence of inventory management on firm performance, examine the influence of order processing on firm performance, establish the influence of information flow on firm performance, and evaluate the moderating effect of logistics information system on the relationship between the logistics management and firm performance. The study used both descriptive and explanatory research designs. The target population for this study was the manufacturing firms in Kenya. The study population was the manufacturing firms registered by the Kenya Nation Burial of Statistics as at 2010 and the respondents were the designated heads of logistics management of these firms. A semi- structured questionnaire was administered through the e-mail survey and hand delivery. Secondary data was obtained from both published and unpublished records. The questionnaire was tested for validity and reliability. Both quantitative and qualitative techniques were used to analyses the data with the assistance of SPSS software program version 22, Ms-Excel for window 8 and Analysis of Moment Structures (AMOS) version 18. Logistics information system moderating effect was tested by F-test. The study found that transport management; inventory management; order process management and information flow management were individually predictors of firm performance with inventory management being the most significant predictor. The study established that logistics information system was a moderating factor in the study. The results support the current theories related to the study. Consequently, this study provides firms’ managers with insights of how firms can develop a competitive edge through the implementation of logistics management. This study therefore, recommends that factors associated with logistics management need to be considered by firms in their performance strategic plans as they have significant impact on performance. Further, the government should provide incentives to information systems associated with logistics management since they have direct impact on firm performance such as tax rebate on logistics information systems. The study concludes that logistics management has the potential of positively influencing performance on firms in terms of cost reduction, timely delivery, reduced lead time, demand realization, increased market share, quality products and customer service satisfaction.