Logistics Management Practices and Operational Performance of Online Retail Firms in Nairobi, Kenya

Abstract

Logistics management practices have emerged as relatively new concept in the field of supply chain around the world. Sound logistic management practices have been associated with reduction in costs, improved quality, flexibility, effectiveness as well as efficiency within supply chains of organizations. In fact, proper logistics management has been recognized as a strategic asset that helps an organization have a competitive advantage. This is made possible by optimizing the measures that determine performance of the supply chain including reduction of costs. The study sought to determine the impact of practices in management of logistics on operational performance in online retail companies in Nairobi. A descriptive design was adopted in this research and a total of 30 online retail firms in Nairobi, Kenya were targeted. Census was used on all the 30 online retail firms. Collection of primary data was done by use of questionnaires with regression analysis, mean, and standard deviation employed in analysis. The findings indicated that the online retail firms have adopted order processing practices, transportation management practices, information flow management, warehousing practices and packaging are the key logistics management practices and they have a significant positive correlation with operational performance. Implementation of the logistics management practices has been affected by various challenges including insecurity in the firm’s operation and lack of proper training. Recommendation of the study are that all online retail businesses in Nairobi, Kenya should improve on these logistics management practices. There is also need for organizations to have in place sufficient space for storage and access financial services from lending institutions so as to fully implement and operationalize logistics management practices.