Supply chain management practices and performance of cement companies in Kenya
Abstract
Supply chain management has emerged as a common practice across industries because it
encompasses long-term strategic alliance, supplier-buyer partnerships, crossorganizational
logistics management, joint planning, control of inventory, and
information sharing. The study sought to investigate supply chain management practices
and organizational performance among cement companies in Kenya. The study adopted a
cross-sectional design and was guided by the following objective: to establish the
relationship between supply chain management practices and performance of cement
companies in Kenya. Both primary and secondary data was utilized in the study. Primary
data was collected using a semi-structured questionnaire while secondary data was
obtained from the annual financial reports of the respective companies. A census
approach was adopted with the sampling frame consisting of all the cement firms in
Kenya. A 5-point Likert scale was used to measure the output of each item answered by
the participants. Both descriptive and inferential statistics were used to describe (and
analyse) the variables numerically. Descriptive statistics were used to describe (and
analyse) the variables numerically. Using SPSS version 21 package, a Multivariate
regression model was used to analyse the relationship between supply chain management
and organizational performance among the cement firms in Kenya. The regression
outcome indicates that supply chain management practices have had a significant
influence on the organizational performance of cement firms in Kenya during the period
under study. The outcome of the study thus establishes a near perfect positive relationship
between supply chain management practices and the organizational performance of the
cement firms in Kenya with the regression analysis yielding Coefficient of Multiple
Determination (R2) of 0.803 implying that up to 80.3% of the variation in the
organizational performance of the cement firms in Kenya can be attributed to the supply
chain management practices they have adopted over time. The p-value of 0.001 indicates
that there impact of supply chain management practices on the organizational
performance of cement firms in Kenya is significant at the 95% confidence level. Given
the fact that 16.7% of the firms have are yet to establish a supply chain management
framework the study recommends that management of all cement companies in Kenya
consider establishing a supply chain management framework to enhance their
competitiveness. The study further recommends that firms in Kenya foster collaborative
private and public research in designing the scope and functionality of a supply chain
management framework specifically tailored to the Kenyan macro-environment to
enhance supply chain and overall organizational performance. The study was limited to
the extent that, a study of this magnitude should have included a survey of a sizeable
number of firms. However time and material resources did not make this feasible. On the
other hand, the study period was a little bit narrow for a study of this nature. According to
the study, research efforts involving confirmatory factor analysis need to be carried out to
further test the model so established and to confirm the findings of the study. Further
studies can be conducted to test and confirm the factor loadings in different industrial
firms so as to establish the validity and strength of the model. In the same context, there
is need for further research to focus on the critical success factors in the adoption of best
practice supply chain management models.
Publisher
University of Nairobi