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.