Green Supply Chain Management Practices and Performance of Food and Beverage Processing Sector in Kenya

Abstract

Sustainability, a global issue in today’s business world, demands that organizations, in their operations, be mindful of the environment so as to maintain a better image in today’s competitive environment. Manufacturing firms ought to give more focus to green supply chain management practices for a better sustainable environment. The key concern however, is whether the implementation of these practices leads to better performance. The primary objective of this study was to determine the effect of green supply chain management practices on the performance of food and beverage processing firms in Kenya. The specific objectives were to determine the effect of green procurement, green manufacturing, reverse logistics, green packaging and legislations’ moderating effect, on the performance of food and beverage processing firms in Kenya. To achieve these objectives five hypotheses were formulated in line with the study objectives, five theories grounded the study: resource-based theory, transaction cost economics theory, institutional theory, theory of reasoned action and diffusion innovation theory. An explanatory research design was adopted. Data was collected from one key respondent per organization working for the 187 food and beverage processing firms that were registered with the Kenya Association of Manufacturers. The departments of interest were production, supply chain and safety and environment. A census survey was carried out using a structured questionnaire. The study’s response rate was 86.1 percent. Data analysis was conducted using descriptive statistics and inferential statistics by use of hierarchical moderated multiple regression analysis. The study found a coefficient of determination value of 0.633 signifying that all the green supply chain management practices contribute 63.3 % to the performance of food and beverage processing firms in Kenya with legislations as a moderating variable. It can be concluded that proper implementation of green supply chain management practices leads to better performance in food and beverage processing firms. The study recommends that manufacturing firms should implement environmentally sound practices in all phases of the supply chain, beginning with procurement of raw materials to manufacturing, packaging, distribution and end of life disposal of their produce. The study findings are of essence to regulators to enhance the level of implementation of green supply chain management practices through enforcement of stricter environmental regulations and rewarding firms that implement these practices. In conclusion the study findings provide future researchers with a useful conceptual and methodological reference to carry out studies in this area especially in emerging economies like Africa.