Influence of Contemporary Supply Chain Practices on Performance of Large Manufacturing Firms in Kenya

Abstract

The study sought to determine the influence of contemporary supply chain practices on performance of large manufacturing firms in Kenya. The specific objectives were to determine the influence of green supply chain practices on performance of the large manufacturing firms in Kenya, to assess the influence of supplier relationship practices on performance of the large manufacturing firms in Kenya, to establish the influence of customer relationship management practices on performance of the large manufacturing firms in Kenya, to examine the influence of outsourcing practices on performance of the large manufacturing firms in Kenya, to evaluate the influence of lean supply chain practices on performance of the large manufacturing firms in Kenya and to establish the moderating effect of information technology on contemporary supply chain practices on performance of the large manufacturing firms in Kenya. The study adopted five theories; theory of supply chain constraints, resource based view theory, value chain theory, theory of lean six sigma and transaction cost theory. The study used a descriptive research design. The target population for the study was the key staff in supply chain, operations and finance or equivalent managers in the 563 large manufacturing organizations listed by KAM. The sampling technique was stratified random sampling based on the 14 sectors as identified by KAM. Using Yamane formula, the study sampled 312 respondents. The data collection instrument was a structured questionnaire. To accomplish the six objectives of this study, six hypotheses were developed and tested. Data analysis was done using descriptive statistics and inferential statistics. The statistical tests were also done in the study. Presentation of data was in form of charts and tables as deemed appropriate. The study found out that all contemporary supply chain practices had a positive significant influence on performance. The study found a coefficient of determination value of 0.584 signifying that all contemporary supply chain practices contributed to 58.4% in performance of manufacturing firms in Kenya with information technology as a moderating variable. In addition, technology was found to be an important moderating variable between contemporary supply chain practices and performance as there was a general increase in Beta values across all the contemporary supply chain practices. The study therefore concluded that contemporary supply chain practices; green supply chain, customer relationship management, supplier relationship management, outsourcing and lean supply chain when properly implemented led to higher performance of the large manufacturing firms in Kenya. The study recommended that an argumentation of contemporary supply chain practices and information technology systems was necessary as a way of leveraging on the output in organizations.