Supply Chain Management Practices and Competitive Advantage in the Hotel Industry in Nairobi Region

Abstract

Increasing levels of competition in the hotel industry has made institutions to devise ways in which to remain competitive. One such way for these firms is implementation of supply chain management practices. The key concern is whether implementing these practices actually lead to competitive advantage. The main objective of this study was therefore to examine the relationship between supply chain management practices and competitive advantage among classified hotels in Nairobi region. The study used the primary data that was collected through the use of questionnaire which was administered to 43 heads of supply chain department in each of the classified hotels in Nairobi region. Out of these, 28 questionnaires were received and analyzed using Statistical Package for the Social Sciences. The study revealed that the extent to which each of the practices (lean supply chain practice, strategic supplier partnership, and inventory management and supplier development) had been adopted within the hotel industry varied. While the results showed that lean supply chain practices had been adapted to a small extent, strategic supplier partnership and supplier development had been adopted to a moderate extent with inventory management being adapted to a greater extent. However, none of these practices was a significant predictor of competitive advantage. This could be because the hotels had adopted these practices to moderate extent. The findings further showed that cost leadership and service differentiation contribute to hotel competitive advantage. Some of the major challenges such as lack of proper IT infrastructure to allow integration on the part of the supplier and system incompatibility among the supply chain partners were rated as major impediment to the implementation of supply chain management practices. Hotels therefore should find ways to mitigate these challenges, probably through early supplier involvement