Effect of Supply Chain Management Practices on Performance of Tea Subsector Industry in Kenya

Abstract

The general objective of this study was to assess the effect of supply chain management practices on performance of tea subsector industry in Kenya. The specific objectives of the study were to establish the effect of supplier relationship management practice on performance of tea subsector industry in Kenya; to determine the effect of value chain management practice on performance of tea subsector industry in Kenya; to assess the effect of customer relationship management practice on performance of tea subsector industry in Kenya; to evaluate the effect of logistics management practice on performance of tea subsector industry in Kenya and to determine the moderating effect of supply chain integration on supply chain management practices and performance of tea subsector industry in Kenya. The theoretical framework of the study was guided by Resource Based View Theory (RBV), Porter’s Value Chain Theory, Supply Chain Network Theory and Supply Chain Integration Theory. A positivism research philosophy, a quantitative nonexperimental research method and a cross-sectional research design was adopted to address the formulated hypotheses. Stratified random sampling technique was used to select a sample size of 155 firms from the target population of 254 firms in the tea subsector industry in Kenya. The study selected 2 respondents from every firm sampled of 155 firms each drawn from top management and middle level management to make a sample size of 310 respondents. Primary data was collected by use of self-administered structured questionnaires which were distributed through the drop and pick method. Secondary data collected from various tea subsector bodies websites, in annual and published financial statements, in national newspapers, during annual general meetings and in-house magazines, important business disclosures in journals, manuals and the various firm’s documents were used to cross validate the primary data information collected. A total of 229 questionnaires were completed, returned, and used for analysis. Data was analyzed by use of descriptive statistics and inferential statistics using Statistical Package for Social Sciences (SPSS) version 24. The Pearson’s product moment correlation analysis and standard multiple regression analysis were used for hypotheses testing. The data was presented using tables, and figures for the purpose of giving a pictorial view of the results. The findings indicated that supplier relationship management practice had a statistically significant and positive effect on performance of tea subsector industry in Kenya; value chain management practice had a statistically significant and positive effect on performance of tea subsector industry in Kenya; customer relationship management practice had a statistically significant and positive effect on performance of tea subsector industry in Kenya; logistics management practice had a statistically significant and positive effect on performance of tea subsector industry in Kenya and supply chain integration had a statistically significant and positive moderating effect on supply chain management practices and performance of tea subsector industry in Kenya. The study recommended for the adoption of supply chain management practices by the tea subsector industry in Kenya in order to enhance the performance of tea subsector industry in Kenya.