Supply Chain Management Practices and Performance of Tea Factories in Kenya

Abstract

Tea factories play a crucial role in adding value to agricultural products, contributing significantly to the industry's high Gross Domestic Product ranking. The primary focus of this study revolves around examining the productivity of Kenyan tea producers and their strategies for SCM. The objective is to understand how the integration of the SC, outsourcing, supplier relationship management, and information exchange influences the efficiency of Kenyan tea producers. To investigate this, the research adopted a descriptive approach, specifically targeting the 54 tea enterprises governed by the Kenya Tea Development Agency. A census approach was employed due to the subdivided nature of the population. Data gathering involved both primary and secondary sources. Semistructured questionnaires were utilized for primary data collection, while secondary data was gathered from publications and annual reports from KTDA. The semi-structured questionnaires facilitated the collection of both quantitative and qualitative data, which were analyzed using diverse techniques. Thematic analysis was applied to interpret qualitative data, presenting findings in prose form. For quantitative data, both descriptive and inferential statistics, including regression analysis, were employed with the support of SPSS version 25. Descriptive statistics encompassed frequency distribution, mean, percentages, and standard deviation. The study findings showcased a positive and significant relationship among Supplier Relationship Management (SRM), Outsourcing (OTS), Supply Chain Integration (SCI), Information Sharing (IS), and the Performance of Tea Factories. To compete effectively in both local and global markets, tea factories should establish effective supply chain management systems. Building mutually beneficial relationships with suppliers is crucial, as it enables successful competition, cost reduction, free flow of information, flexibility in handling change, and wise resource consumption. The strategy of process-specific outsourcing significantly enhances organizational performance. For effective integration, tea factory managers should prioritize information and operational integration to improve supply chain outcomes. Relationship integration, grounded in long-term commitments and trust, requires careful handling. The type of information shared should be assessed, and associated risks outlined. Information sharing should be based on principles that promote trust and confidentiality, with management being cautious not to disclose details that may jeopardize the firm's competitive gain.