Supply Chain Integration and the Competitive Advantage of Food and Beverage Manufacturing Firms in Kenya

Abstract

Integration of the supply chain is generally considered a vital contributor to supply chain efficiency, productivity, competitiveness and performance. However, the disjointed nature of the food and beverage manufacturing sub-sector presents a significant challenge in relation to competitive advantage. This is rooted in the lack of effective linkages in the internal and external supply chains. Consequently, the major aim was to establish the relationship between supply chain integration and the competitive advantage of food and beverage manufacturing firms in Kenya. The study was also guided by specific objectives with variables, namely functional integration, supplier integration, customer integration, and technology integration. The study also established the moderating effect of supply chain adaptability on the relationship between supply chain integration and the competitive advantage of food and beverage manufacturing firms in Kenya. The study adopted a cross-sectional survey. According to the Kenya Association of Manufacturers (2020), there were 270 food and beverage manufacturing firms in Kenya. The study’s target population was 73 food and beverage manufacturing firms in Kenya. A two-stage sampling design was employed. In the initial stage, 73 food and beverage manufacturing firms were selected through stratified random sampling with the aid of the Nassiuma formula (2000). Subsequently, in the second stage, through purposive sampling, two participants were selected from the 73 food and beverage manufacturing firms to give a sample size of 146 respondents. These included the supply chain managers, procurement managers, operations managers, and finance managers. Primary and secondary data was collected through research questionnaires which were both structured and unstructured. The data obtained was analyzed using SPSS version 28. The reliability results showed that all the variables in the study had a Cronbach’s alpha value that was above 0.7, thus indicating adequate convergence and internal consistency. The data collection tool also passed the convergent validity test. The results showed that Kenyan food and beverage manufacturers' competitive advantage was positively correlated with functional integration, supplier integration, customer integration, and technology integration with the inclusion of supply chain adaptability (moderator). The study concluded that the competitive advantage is anticipated to grow for every unit increase in functional integration, supplier integration, customer integration, and technology integration, respectively. The study also concluded that supply chain adaptability moderates the relationship between supply chain integration and competitive advantage for food and beverage manufacturing firms in Kenya. The study recommends that food and beverage manufacturers should leverage expertise to support and manage multiple processes and be able to identify exceptional collaborators internally with expertise and a network that spans several departments.