The Impact Of Technology Adoption On The Pharmaceutical Industry’S Distribution Channels In Nairobi County, Kenya

Abstract

The Pharmaceutical industry in Kenya has consistently registered a double digit growth in recent past years. However, adaption of technology at the distribution channel level has been at different rates affecting the cost of distribution and service level delivery thereby impacting drug accessibility and overall industry growth. To gain in depth understanding, this study set up an objective of quantifying the impact of adoption of technology by the pharmaceutical industry’s distribution channels in Nairobi County. The study focus was on the impact of adoption of technology on; the cost of distribution, the efficiency in service delivery and the growth of the industry. Relevant theoretical and empirical literatures were reviewed to assist in the formulation of the conceptual framework. Analyses of previous outcomes of similar studies were carried out to provide comparative information. The study used cross-sectional research design with a questionnaire as the tool for data collection. The study population included all the 2,030 pharmaceutical companies in Nairobi County and used stratified random sampling technique to identify the respondents. A 10% sample was selected from each stratum. The responses were analyzed through descriptive statistics and Pearson’s correlation test. The study results pointed out that technology adoption had a great impact on the cost of distribution with the mean being 3.61 and a moderate negative correlation of -0.425; technology adoption had an impact on service delivery efficiency to a great extent with a mean of 3.70 and a significant positive correlation of 0.605; and finally technology adoption had an effect on distribution channel growth to a great extent of 3.77 mean and a moderate positive correlation of 0.445. From the study results, it was concluded that pharmaceutical companies that embraced new technologies had a competitive edge in sourcing and distribution of drugs due to the reduction in the costs associated with transportation, coordination and storage of products. These companies experienced a reduction in delivery turnaround timelines, reduction in data entry errors and enhanced accuracy in reporting and communication. On the industry growth, adoption of new technologies enhanced strong customer loyalty engagements and enabled quicker penetration of new markets. The outcome of this study also opened doors for regulators to identify gaps and formulate new operational guidelines