Supply Chain Alignment and Performance of Large Manufacturing Firms in Kenya

Abstract

Given that modern businesses face continuous changes in both internal and external environmental factors, supply chain management requires intense alignment through integration and collaboration in the value chains. This study seeks to investigate the relationship between supply chain alignment and performance of manufacturing firms in Kenya. This study was guided by the following specific objectives: to establish the relationship between relational behavior, supplier relationship management, inventory visibility and operations and processes and performance of manufacturing firms in Kenya. The study was anchored upon the theoretical foundation of the partnership theory, networks theory, transaction cost theory, SCOR model and the lean theory. The study reviewed both theoretical and empirical literature. Descriptive research design was adopted. The researcher preferred this method because it allows an in-depth study of the subject. The 2017 KAM directory has listing of members (firms) by sectors which contains a register of 12 sectors of those in manufacturing firms spread all over the country. KAM membership comprises of small, medium and large enterprises. The size is measured by their total assets. Large sized firms are the firms with total assets of above Kshs100 Million, medium-sized have between Kshs.40 Million and Kshs100 Million; whereas small firms have assets under Kshs40 Million. This study used the large sized firms only. The population of the large sized registered members as per the directory is 461. This study employed Cochran’s formula to sample 160 large manufacturing firms from the total population. A semi-structured questionnaire was administered to collect qualitative and quantitative data. The questionnaire was tested for validity and reliability using 10% of the total sample respondents. Quantitative data was analyzed using both descriptive and inferential statistics and with the help of SPSS version 26 while qualitative data was analyzed descriptively. Multiple regression models was used to show the relationship between the dependent variable and the independent variables. The information was presented using tables, charts, frequencies, percentages and graphs. The finding revealed that supply chain alignment through relational behaviour (P=0.000; β =0.491), supplier relationship management. Inventory visibility and operations and processes influenced the performance of the manufacturing firms in Kenya. The findings further revealed that quality control determined the extent to which supply chain alignment influenced the performance of the manufacturing firms in Kenya. The study concluded that through adoption of supply chain alignment aspects, the operational costs were reduced as well as the reduction of lead time. Therefore, the study recommended the need for supplier chain managers and other management team in the manufacturing firms to uphold relational behaviour, supplier relationship management, inventory visibility and effective process and control in order to steer their firms’ performance.