Effect Of Circular Economy Practices On supply Chain Performance Of Chemical And Allied Sector Firms In Kenya

Abstract

The study sought to determine how circular economy practices affect supply chain performance of chemical and allied companies in Kenya. It equally conducted an assessment of the challenges in adopting circular economy practices.The population of the study was made up of all chemical and allied firms in Kenya (Appendix II). Primary data was used in the study and structured questionnaire was used during collection. To help generate inferential and descriptive statistics, statistical product for social scientists (SPSS) was used. The finding was that circular economy practices significantly affect supply chain performance of the chemical and allied manufacturing firms in Kenya (R2 = 0.882). The F-statistics equally implied that circular supplies, product extension, resource recovery and product development reliably predict supply chain performance. Finally, the regression co-efficients established that resource recovery and product development significantly affect supply chain performance (β=.387, t=4.390, p<0.05; β=.219, t=2.729, p<0.05) respectively while circular supplies and product extension were insignificant on supply chain performance (β=.270, t=1.464, p>0.05; β=.041, t=.243, p>0.05). The study also found out that circular supplies, product extension, resource recovery and product development significantly and positively correlation with supply chain performance (.894; .875, .898, .834) respectively. Regarding the challenges faced by chemical and allied firms in adopting circular economy practices in Kenya, the study found out that 25.5% of the companies experienced the challenge of inadequate technology and cost implications in the short run while 12.8% of the companies faced challenges of lack of appropriate regulations and inadequate government policies. The study also found out that 10.6% of the companies faced the challenge of intense competition while the challenge that was faced by the lowest number of companies was low value of recovered material representing 4.3%.It was concluded that circular economy practices significantly affect supply chain performance of the chemical and allied manufacturing firms in Kenya. Specifically, circular supplies, product extension, resource recovery and product development reliably predict supply chain performance. It equally concluded that resource recovery and product development positively and significantly affect supply chain performance while circular supplies and product extension have positive but insignificant effect on supply chain performance. The researcher recommends that management of chemical and allied manufacturing firms should put in place mechanisms to facilitate improvement of circular economy practices with respect to being environmentally-friendly in terms of operations.