INFLUENCE OF SUPPLY CHAIN MANAGEMENT PRACTICES ON THE PERFORMANCE OF MANUFACTURING FIRMS IN NAIROBI CITY COUNTY, KENYA

Martin Njoroge Njeri, Dr. Charles Ndeto

Abstract


The business dynamism environment is characterized by intense competition, diminishing resources and internationalization among other factors. As a result, many fast moving manufacturing firms are forced to produce goods at lower costs. Most manufacturing companies are adopting supply chain management control techniques which minimize operational costs hence maximizing profits. A supply chain management practice improves efficiency on the supply chain and hence it plays an important role among manufacturing firms. In fast moving manufacturing firms, too much stock could lead to tied capital, increase in holding cost, theft and deterioration of materials. In addition, materials shortage in manufacturing firms can lead to production process interruption, underutilization of machines and poor customers’ relations. This study therefore seeks to identify the influence of supply chain management practices on the performance of goods manufacturers in Nairobi. Specifically the study deliberated to analyze the influence of purchasing and distribution on the performance of goods manufacturers in Nairobi. The study used descriptive survey design and the target population was 51 fast moving manufacturers in Nairobi County, Kenya. Primary data was collected by use of a structured questionnaires through drop and pick method. The research instrument generated quantitative data, which was analyzed by the use of descriptive and inferential statistics. Purchasing had a positive influence on the performance of FMCG manufacturers in Nairobi County (β1=0.521, p-value=0.000). Secondly, distribution had a positive influence with (β2=0.345, p-value=0.001). The study recommends that all FMCG should align purchasing agendas with the overall objectives of the company to gain competitiveness. The manufacturers should focus on floor, distribution, and logistics management in a bid to enhance their performance.

 

Keywords: Supply Chain Management Practices, Purchasing, Distribution, Performance 

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