Factors Affecting Supply Chain Integration in Large Manufacturing Firms in Kenya

Abstract

Business integration entails linking the various functions of a business or organization. This integration is made possible through technologies such as the Enterprise Resource Planning (ERP) systems that enable various departments in an organization to link and share information. Contemporary business organizations are finding it essential to integrate their functions if they need to reduce costs and remain competitive. One of the most important achievements of business integration is the reduction of supply chain costs and real time transaction processing that has largely enhanced the performance of supply chains. The objectives of this study was to determine the extent of supply chain integration in large manufacturing firms in Kenya, to establish the factors affecting supply chain integration on large manufacturing firms in Kenya, and to determine the effect of the identified factors on the implementation of SCI on large manufacturing firms in Kenya. The study was based on cooperative game theory and systems theory. The study adopted a descriptive research design. A survey method was used to collect primary data. The survey approach was proposed because it provides a quick, inexpensive, efficient and accurate means of assigning information about the population. This study targeted all large manufacturing firms in Kenya that were members of KAM. The main reason for this choice was that these firms are likely to exhibit an elaborate SCM philosophy and make use of supply chain integration. Primary data was used in this study. Data collection was done through the use of closed-ended questionnaires. Closed-ended questions were conclusive in nature as they were designed to create data that was easily quantifiable. The data were summarized and tabulated using descriptive measures. Factor analysis was used to identify the underlying factors. Descriptive statistics were used to summarize the results for each of the main variables. The study concludes that there exists strategic partnerships between large manufacturing firms and their suppliers and that they consult their suppliers when values of their firm are being developed. In addition, the study concludes that manufacturing firms provide their suppliers with information so that they can improve their quality and responsiveness, they maintain long term relationships between their firm and their suppliers, and that their firm seeks assurance of quality from suppliers. In addition, the study concludes that cross-functional integration is very significant for all supply chain initiatives. The study also concludes that supplier integration reduces the materials total costs, SCM integration has provided the organization ability to quickly and easily relate with suppliers. Further, SCM integration has assisted in improving the quality of goods, works and services offered to the beneficiary. , the study recommends that there is need to establish independent compliant units within the firms to ensure that rules and regulations are adhered to in order to curb malpractices that reduce effectiveness of supply chain performance. The study also recommends there is need for establishment of stronger networking and collaboration platform that facilitates sharing of real-time information between supply chain partners.