Relationship Between Supply Chain Performance and Performance of State Owned Firms in the Energy Sector in Kenya

Abstract

The role of supply chain performance in the success of a firm cannot be exaggerated since it affects strategic, tactical and operational planning and control. This study explored the relationship between supply chain performance and performance of firms in the state owned energy sector. A descriptive study design was adopted. The research was guided by the following goals; to establish the relationship between supply chain performance and performance of firms in the Kenyan state owned energy sector. This study took the form of a census of all the state owned firms in the Kenyan energy sector. A total of 84 questionnaires were administered to purposively selected respondents consisting senior managers and procurement officers. Survey responses were entered into SPSS version 22 for initial descriptive data analysis. Multiple linear regression analysis was used to establish the relationship between supply chain performance and performance of firms of firms in the state owned energy sector in Kenya. The outcome of the multiple linear regression analysis suggest that transport management, order processing management, logistic information system and inventory management significantly predicts firms’ performance (p<0.05) respectively. The model shows that unit increase each of the predictor variables increases the performance of firms by a positive unit of the value of the respective factors. Order processing management was the predictor variable which increases performance of firms by higher value (0.497), followed by transport management (0.487), inventory management (0.428) and logistic information system (0.327). In overall, supply chain performance was found to have an important positive connection or relationship with performance of state owned firms in the energy sector in Kenya. Therefore supply chain performance needs integrated at all levels of the firms’ operations while taking into account transport management, order processing management, logistic information system and inventory management since this will go far in improving the overall performance of the firm.