Logistics Practices and Operational Performance of Fast-moving Consumer Goods Manufacturing Firms in Nairobi County

Abstract

As a result of the challenges posed by e-commerce and the "last mile," logistics management has become an increasingly essential issue for professionals in the relevant industry. The purpose of this study was to gain a deeper understanding of the logistics management practices employed by fast-moving consumer goods manufacturers in Nairobi County, as well as the impact those practices have on the manufacturers' operational performance. The study was hinged on resource based view theory, institution theory and unified theory of logistics and was guided by a descriptive research strategy. A sample size of 255 respondents from different strata of fast-moving consumer goods manufacturers in Nairobi County was administered with questionnaires for quantitative data. Data was analysed through descriptive statistics of mean, standard deviation, frequency and percentages, while multiple regression analysis was used to analyse the relationship between the variables. The study found that logistic practices used by the fast-moving consumer goods manufacturers in Nairobi County fast-moving consumer goods manufacturers in Nairobi County were order Process management, inventory management practices, transportation practices, information flow practices, warehousing practices and packaging practices. All these practices were found to be statistically and significantly related with the operational performances of these firms at (p<0.05). Additionally, the study identified the following challenges faced by fast moving manufacturing businesses when applying logistics management practices: the risk of service interruption, the high cost of product transportation across the country, and the limited holding capacity for FMCGMs at Mombasa port. Likewise, the study revealed that the primary challenges faced by fast-moving manufacturing companies when implementing logistics management practices were the following: poor road conditions for product movement, insufficient storage capacity to cope up with future customer demand across the firm's service network. The study recommended that Kenya Ports Authority management should act swiftly to expand product storage capacity at the Mombasa port to boost the operational performance of fast-moving industrial enterprises. Fast-moving manufacturing firms in Kenya should implement an integrated ICT-controlled system in their logistic operations as this will enable clear monitoring and administration of logistical activities, hence increasing the firm's total efficiency