Effect of Supply Chain Processes Automation on the Performance of Financial Intermediaries in Kenya

Abstract

The purpose of the study was to investigate the effect of supply chain processes automation on performance of financial intermediaries in Kenya. Specifically, the study sought; to establish the effect of material flow on the performance of financial market intermediaries in Kenya; to determine the effect of information flow on performance of financial market intermediaries in Kenya; to establish the effect of supervision and control on performance of financial market intermediaries in Kenya; to establish the influence of relationship management on performance of financial market intermediaries in Kenya; and to determine the moderating effect of supply chain automation on performance of financial market intermediaries. The study reviewed existing literature related to the study variables. The study adopted a cross sectional approach, with study population being 218 employees in 109 financial market intermediary firms. The study used a census approach. The study employed both primary and secondary data. Primary data was collected through questionnaire while secondary data was obtained from the firm‘s financial records. A pilot study was conducted to measure the research instruments reliability and validity. Descriptive and inferential analysis was conducted to analyze the data while multiple and simple regression analysis were used to measure firms‘ performance as influenced by supply chain automation. The data was presented using tables, graphs and charts. The study findings indicated that material flow, information flow, supervision and control and relationship management have positive and significant association with firm performance. This implied that supply chain processes and performance of financial market intermediaries change in the same direction. Further, the study found out that material flow and performance of financial intermediaries are positively and significant related (r=0.426, p=0.000), information flow and performance of financial intermediaries are positively and significant related (r=0.169, p=0.000). It was further established that supervision and control and performance of financial intermediaries were positively and significantly related (r=0.221, p=0.000), also relationship management and performance of financial intermediaries are positively and significantly related(r=0.333, p=0.000). This implied that supply chain processes have a positive and significant effect on performance of financial market intermediaries. Results also showed that automation had a significant moderating effect on the relationship between supply chain processes and performance of financial intermediaries in Kenya (p=0.000). Based on the study findings, the study concluded that all the supply chain processes had a positive a significant influence on the performance of financial intermediaries in Kenya. Further, the study concluded that automation had a significant moderating effect on the relationship between supply chain processes and performance of financial intermediaries in Kenya.The study recommended that financial intermediaries should fully automate their supply chain processes (material flow, information flow, supervision and control and relationship management). Further, the firms should develop new supply chain models, which are compatible with automation. In addition, the study recommended that data should be accurate and objective and the decision maker should have a single version of the information. The implication of the study is that supply chain processes play a significant role in the performance of financial market intermediaries in Kenya. For these organizations to realize their goals and objectives, they need to adopt the use of modern technology in their systems, especially, the supply chain processes.