Influence of Supply Chain Collaboration on Performance of Dairy Processing Firms in Kenya

Abstract

The purpose of the study was to analyze the influence of supply chain collaboration on performance of dairy processing firms in kenya.Specific objectives were:To determine the influence of Supply chain information sharing on performance of dairy processing firms in kenya, examine the influence of supply chain decision synchronization on performance of dairy processing firms in kenya, investigate the influence of supply chain incentive alignment on performance of dairy processing firms in kenya,assess the influence ofsupply chain teamwork on performance of dairy processing firms in kenya and evaluate theinfluencemediating of policies and regulations on the relationship between supply chain collaboration and performance of dairy processing firms in kenya.Milk processing firm performance was measured by market share, client satisfaction, profitability and competitive advantage.The study was guided by the following theories: Supply Chain Network Theory, Transaction Cost Economics Theory, Collaborative Network Theory and Strategy-Structure Theory. The target population comprised dairy farmers who supply fresh milk to Kenya Cooperative Creameries Limited and customers of processed milk products buying at Nakumatt retail supermarket. The study adopted a mixed research design which covered qualitativeand quantitative research.Qualitative research design applied to qualitative data in analysis of interviewed and quantitative research design was applied on quantitative data on the questionnaires.The study targeted 10,488 fresh milk suppliers and 13,906 customers of processed milk products.The sample size was 384 suppliers and 384 customers. Stratified sampling was used to select the suppliers of fresh milk and customers of the processed milk. The survey was carried out in top ten milk supplies of dairy processing firms . The study adopted Mugenda’s formula to calculate the sample size. Structured questionnaire was used to collectprimary data while secondary data was obtain from published sources such books, journals and research done by other scholars. Data was analyzed with SPSS version 20. The research instrument was tested for reliability using Cronbach alpha. Data was analyzed using descriptive and inferential statistics. The correlation analysis was used to determine the strength and directions of association between two variables while Multiple Regression was used to determine whether a group of independent variables together predict a given dependent variable. Regression model summary with respect to supplier R=.634 (without mediator), R=.642 (with mediator). With respect to customer R=.627 (without mediator), R= .639 (with mediator). The coefficient of determination or measure of amount of variability (R2) with respect to supplier R2=.402(without mediator) and R2=.413 (with mediator); with respect to customer R2=.393 (without mediator) and R2=.399 (with mediator). All study variables had a positive and significant correlation with performance of dairy processing firms . The study recommends that dairy processing firms should exploit supply chain information sharing, incentive alignment, teamworkand mediation dairy boardpolicies and regulations as it proved to be crucial in the performanceof the dairy processing firms.The study also recommends realignment of dairy processingfirms policies with other collaborative partners as is driving force behind performance.