Effect of Supply Chain Management Practices on the Perfomance of Companies in EPZ, Kenya

Abstract

Purpose:  The  aim  of  the  study was  to  assess  the  influence  of  supply  chain  management  practices  on  performance  of  companies  in  EPZ,  Kenya  with  an  aim  of  making  recommendations  on  proper  use  of  supply  chain  management  practices Methodology:  To achieve  this,  the  study  reviewed  both  theoretical  and  empirical  literature  and  then  proposed  the  research  methodology  that  addressed  the  gaps  identified  in  literature  as  well  as  answer  the  stipulated  research  questions.  The study used the  following  theories,  supply  chain  network  theory,  goal  setting  theory,  resource-based  theory  and  stewardship  theory.  This research study adopted  a  descriptive  research  design  approach.  The  study  prefers this method because  it  allowed  an  in-depth  study  of  the  subject.  The  target  population was  heads  of  procurement  in  the  EPZ  companies  in  Kenya.  The study was  conducted  in  EPZ,  Athi  River,  Kenya.  The population of the study consisted  of  enterprises  in  the  five  (5)  major  categories.  There exist five  (5)  categories  of  sectors,  namely;  food  and  beverage,  pharmaceuticals,  textile  and  apparel,  and  leather  products  in  Athi  River  EPZ.  The sample was one  hundred  and  four  (104)  heads  of  procurement.  Semi structured  questionnaires  were  used  to  collect  data.  Pilot study was  carried  out  to  establish  the  reliability  and  validity  of  research  instruments.  Data gathered  from  the  questionnaires  administered  was  analysed  by  the  help  of  SPSS  and  Microsoft  Excel.  The  outputs  were  presented  inform  of  statistical  diagrams,  tables  and  charts. Findings:.  The regression results revealed that  supply chain management practices  identified  in  the  study,  that  is,  inventory  management,  supply chain planning,  vendor management and  contract  management  combined  could  explain approximately  72% of  the  variations  in  the  performance  of  companies in EPZ. The other 28% may  be attributed  to  other  strategies  not  explained  by  the  model  or  the  variables.  The  strongest  correlation was  established  between  inventory  management and  performance  of  companies in EPZ. All  the  independent  variables  were  found  to  have a  statistically  significant association  with  the  dependent  variable at  ninety-five  percent  level  of  confidence Unique contribution to theory, practice and policy: Based on the  study  findings,  the  study  concludes  that  performance  of  companies in EPZ  can  be  improved  by  inventory  management,  supply chain planning,  vendor management and  contract  management.  The  study  recommended  that  companies  in  EPZ  should  embrace  procurement  practices  so  as  to  improve  their  performance  and  further  researches  should  to  be  carried  out  in  other  institutions  to  find  out  if  the  same  results  can  be  obtained.