Logistics Management Practices, Logistics Information Systems, Logistics Service Quality and Customer Satisfaction of Selected Shippers in Kenya

Abstract

One of the main challenges for any organization is to focus its logistics management strategies of satisfying the customer needs of ensuring products are delivered when and where they are needed. The key objective of this study was to establish the influence of Logistics Management Practices (LMPs), Logistics Information Systems (LISs) and Logistics Service Quality (LSQ) on customer satisfaction of shippers in Kenya. The four specific objectives were to assess the effect of LMPs on customer satisfaction of shippers in Kenya; establish the effect of LISs on the relationship between LMPs and customer satisfaction of shippers in Kenya; determine the effect of LSQ on the relationship between LMPs and customer satisfaction of shippers in Kenya; and determine the joint effect of LMPs, LISs and LSQ on customer satisfaction of shippers in Kenya. Subsequently, four hypotheses were formulated to achieve these objectives which were LMPs has no significant effect on customer satisfaction; LISs has no significant moderating effect on the relationship between LMPs and customer satisfaction; LSQ has no significant mediating effect on the relationship between LMPs and customer satisfaction; LMPs, LISs and LSQ do not have a significant joint effect on customer satisfaction. The positivism philosophical foundation and descriptive cross-sectional research design were adopted, and primary data collected from senior managers in the logistics department of the shippers. A census method was used. A response rate of 59 percent from the population of 63 shippers was acquired. Shippers Council of Eastern Africa (SCEA) was the sampling frame of the study. Customer satisfaction had loyalty and expectations met as the sub-constructs, while LMPs used inventory management, transportation, warehousing, packaging, materials handling, order processing and information flow maintenance. The LISs sub-constructs were Enterprise Resource Planning (ERP), Global Positioning System (GPS), Electronic Cargo Tracking System (ECTS), Radio Frequency Identification (RFID) and bar codes; while LSQ was assessed by functional and technical quality. The study findings were statistically significant and there was positive relationship between LMPs and customer satisfaction; the relation between LMPs and customer satisfaction was not moderated by LISs but was mediated by LSQ; and the joint effect on the relationship between LMPs, LISs and LSQ on customer satisfaction was significant. The study further found that the seven LMPs as a composite had a statistically significant effect on customer satisfaction, while only inventory management was found to be significant when LMPs were regressed individually. The ranking on the extent of implementation of LISs by the Logistics Service Providers (LSPs) was found to be ERP, GPS, ECTS, bar codes, with RFID being the least implemented. The study further found that the shippers in Kenya were more concerned with the benefits accrued from LISs than the type implemented. On LSQ, the shippers indicated that they were more satisfied with the functional quality than the technical quality of their logistics service providers. The study concludes that LSPs ought to implement all LMPs, consult with their shippers on benefits and type of LISs to use and put emphasis on both functional and technical service quality. The study recommends that logistics service providers implement the seven LMPs to a greater extent especially materials handling and packaging which are fundamental in the actual logistics’ movements. The study supported and contributed to the theories it was grounded on, namely material flow theory, expectancy disconfirmation theory, network design theory and systems theory. Further, the study contributed to knowledge, policy and practice in the logistics management sector, to the logistics service providers, the shippers in the region and beyond and their advocacy bodies, especially SCEA, the relevant government agencies and future researchers and academicians. The Chartered Institutes of Logistics and Transportation (CILT) will find this study relevant in their advocacy for both academic and professional applications of logistics and transportation management.