Distribution Network Economy and Logistics Performance of Fresh Milk Processing Firms in Kenya

Abstract

The study investigated how the distribution network economy influenced the logistics performance of fresh milk processing firms in Kenya. Determining the adoption levels of distribution network economy by fresh milk processing firms in Kenya and to establishing the relationship of distribution network economy and logistics performance of fresh milk processing firms in Kenya were the study objectives. The research design applied for the study was descriptive design and the target population was all the 42 licensed milk processing firms in Kenya as listed by the Kenya Dairy Board (2021). Primary data which acquired through the application of questionnaires was used. Questionnaires were administered through electronic mail and also dropped off at respondents premises and later picked up. For data analysis, descriptive statistics was used for objective one whilst regression analysis was used for objective two. On the first objective, it was established that distribution network collaboration and transport management were adopted to a large extent while distribution information technology optimization, backhaul management and omni-channel distribution management were moderately adopted by the fresh milk processing firms in Kenya. On the other hand, with p values of less than five percent, the findings indicate that distribution network economy - distribution network collaboration, transport management, distribution information technology optimization, backhaul management and omni-channel distribution - has a positive and significant relationship on logistics performance (logistics cost and timeliness) of fresh milk processing firms in Kenya. It is recommended that distribution information technology optimization, backhaul management and omni-channel distribution management be embraced to a larger extent as they were found to be moderately adopted. Future studies should also focus on distribution network economy strategies in other sectors – pharmaceutical firms, franchise outlets, retailers or even county governments - and not limit this to milk processing firms in Kenya. The context can also be decentralized from Kenya to the county levels like Uasin Gishu, Trans-Nzoia or Nairobi counties among others.