Impact of Logistics and Transportation Practices on Performance of Kenya Cooperative Creameries

Abstract

Recent changes in business dynamics necessitates organizations to recognize the importance of strategically re-looking at their business processes. This has seen entrepreneurs and managers constantly coming up with strategies aimed at minimizing operational costs and boosting returns. Particularly, logistics and transportation has emerged to have huge potential in enhancing production and distribution of goods and material in firms. Understanding this is very important especially in the milk industry where each and every part of supply chain is essential for the profitability of the entire organization. The study sought to determine the impact of logistics and transportation on operational performance of Kenya Cooperative Creameries (KCC). The company was chosen because it has not been performing well as expected despite its renationalizing in June of 2003 and repurchase to New KCC. The study was guided by the following specific objectives; to establish the level of implementation of logistics and transportation strategies by KCC, to determine the challenges in implementation of logistics and transportation strategies to operations at KCC and to determine the relationship between logistics and transportation and operational performance at KCC. This study adopted the descriptive research design in obtaining information about the study topic. The study’s population comprised of all the 17 licensed processing factories of KCC which were selected using a census sampling approach. The data was collected using questionnaire and analysed using descriptive and inferential analysis. The study found out that transport management practices were implemented to a large extent, logistics information practices were implemented to a low extent, and inventory control was implemented to a moderate extent while distribution management was implemented to above average extent. The study further found out that there exist a strong positive relationship between transportation and logistics and performance at KCC. The study also found out that there are challenges that limit the effectiveness of the implementation process with lack of adequate funds being the most experienced. The study thus concludes that increase in the transport and logistics operations would result in enhanced performance. The study thus recommends that the management at KCC conduct an evaluation of these strategies, and how exactly they are implemented. The study also recommends that proper budgetary considerations and plans be considered before undertaking any transportation and logistics practices.