Supply Chain Management Practices, Process Formalization and Organizational Performance of Cargo Handling Facilities in Kenya

Abstract

The study sought to find out the effect of adopting Supply Chain Management (SCM) practices on the performance of cargo handling/storage facilities. The specific objectives of the study included: to establish SCM practices adopted by cargo handling/storage facilities in Kenya; to determine the correlation between SCM practices and organizational performance of cargo handling/storage facilities in Kenya; and to establish the mediating effects of process formalization on the relationship between SCM practices and organizational performance of cargo handling/storage facilities in Kenya. The resource-based view, the stakeholder theory and the strength of weak ties theory guided the study. The study used the descriptive cross-sectional survey. The study employed a census which consisted of 48 firms. Data was collected using questionnaires and analyzed using SPSS. The study had a response rate of 62.5% (30 firms). The study concluded that SCM practices employed by the facilities are inventory management, supplier chain network design and strategic supplier partnership. The study further concluded that SCM practices have a statistically significant effect on the organizational performance of cargo handling/storage facilities in Kenya. The results indicated that the mediating variable has a statistically significant effect on the organizational performance of cargo handling/storage facilities in Kenya. The study recommended that industry players need to make sure that they embed process formalization in their operations. These process formulation strategies are geared towards upholding the SCM practices to improve industry performance and growth.