INFLUENCE OF SUPPLY CHAIN RISK MANAGEMENT STRATEGIES ON PERFORMANCE OF FOOD AND BEVERAGE MANUFACTURING FIRMS IN KENYA

Abstract

The food and beverage industry has a special role in expanding economic opportunity because it is universal to human life and health. The industry strongly influences entire value chains from growers to consumers. Despite this huge influence, the complexity of business transactions, technological advances, globalization, speed of product cycles, and the overall pace of change have made food and beverage manufacturing in Kenya more complex, dynamic and increasingly uncertain, fragile and vulnerable to disruptions. In this context, adopting proactive strategies is needed for dealing with supply chain risks and vulnerabilities for securing supply chain systems to be responsive and effective. This study focused on evaluating the influence of supply chain risk management strategies on supply chain performance of food and beverage manufacturing firms in Kenya. The supply chain risk management strategies include flexibility, supply chain collaboration, supply base rationalisation strategy, risk control and risk avoidance. The study variables were studied with the aim of answering the question: Do supply chain risk management strategies influence supply chain performance of food and beverage manufacturing firms in Kenya? This was an explanatory survey study on the supply chain risk management strategies in food and beverage manufacturing in Kenya. The target population was all food and beverage manufacturing firms in Kenya. The research population was 187 food and manufacturing firms drawn from a KAM directory using a census survey method. A five-point Likert scale questionnaire was administered to seni or-level managers with the knowledge of supply-chain and logistics functions. Both descriptive and inferential analysis was done using SPSS and structural equation modelling (SEM) R-Lavaan 0.5-20 to find out the influence of supply chain risk management strategies on supply chain performance of food and beverage manufacturing firms in Kenya. The study established that supply chain risk management strategies have influence on performance of F& B manufacturing firms. This study concludes that the most important SCRM strategies on the performance of a F& B manufacturing firm are the SC avoidance strategies. The second most influential SCRM strategies on the performance of a F&B manufacturing firm are SC control strategies followed by SC flexibility strategies and SC base rationalisation strategies respectively. Supply chain collaboration strategies have the least influence on F&B manufacturing firms. The study recommends, among others, that the study F& B manufacturing firms must recognize SC flexibility, collaboration and supply base rationalization a score supply chain risk management strategies, and that achieving world-class performance depends on managing supply chains risks. Firms should support supply chain risk management with dedicated employees, resources, investments, and best practices to ensure that firms supply chain efforts satisfy customers in the most productive, cost-effective way possible. Future research may be carried out to establish the capabilities and tailored strategies necessary for building supply chain resilience in businesses and their impact on financial performance. Researchers could also establish the role of risk awareness culture, organizational structure (centralized and decentralized, standardized and customization SC) on organizational performance.