Fourth Party Logistics Service and Performance of Food and Beverage Manufacturing Firms in Kenya

Abstract

Most food and beverage manufacturing firms in Kenya operate at a declining technical efficiency compared to their counterparts in South Africa and Malaysia. Notably, the life span of food and beverage manufacturing firms in Kenya has been declining, where most of the firms have been winding up at notable percentage indices. Poor logistics outsourcing was cited as the main reason. The aim of this study was to establish the relationship between fourth party logistics services and performance of food and beverage manufacturing companies in Kenya. Specifically, the study sought to establish the relationship between freight management, logistics information systems, customer relations management, product Packaging and Internal policy framework on performance of food and beverages manufacturing firms in Kenya. To achieve this, the researcher reviewed both theoretical and empirical literature and then proposed the research methodology that addressed the gaps identified in literature as well as answer the stipulated research questions. This research study adopted a descriptive and cross-sectional research designs. The designs were preferred since they allowed both in-depth study of the subject and comparison of the relationship between variables. Data was collected using self-administered questionnaires. The data collected was analyzed by use of descriptive and inferential statistics. Multiple regression model was used to show the relationship between the dependent variable and the independent variables. The quantitative data generated was keyed in and analyzed by use of Statistical Package of Social Sciences (SPSS) version 27 to generate information which was presented using tables, charts, frequencies and percentages. The findings from the study revealed that freight management, logistics information systems management, customer relations management and product Packaging had a significant influence on the performance of food and beverage processing firms. Internal policy framework was also found to significantly moderate the relationship between fourth party logistics services and performance of food and beverage processing firms. The study concluded that fourth party logistics through freight management, logistics information system, customer relations management and product Packaging were critical in enhancing the performance of food and beverage processing firms in Kenya. The study recommends that the management of food and beverage processing firms ought to embrace fourth party logistics services by having a freight management framework, enhancing use of logistics information systems, bringing customers on board and embracing effective and innovative ways of Packaging the products in order to gain performance.