Effect of supply chain digitization, supply chain agility on firm performance in state corporations in Nairobi County, Kenya

Abstract

Firm performance is a critical metric for businesses across industries, as it directly impacts efficiency, customer satisfaction, and profitability. Securing firm competitiveness and improved performance, supply chain digitalization are identified as strategic tools for firms to improve their operations. From the previous studies there has been inadequate linkage of supply chain digitalization with other themes. This study sought to establish the moderating effect of supply chain agility on the relationship between supply chain digitization and firm performance of government state corporations in Nairobi County, Kenya. The specific objectives were to determine the effect of electronic tendering, enterprise resource planning, cloud computing, artificial intelligence on firm performance, as well as the moderating effect of supply chain agility on each of the relationships. The study was informed by Resource-Based View Theory, Stakeholder Engagement Theory, and the Technology Acceptance Model (TAM). Anchoring on explanatory research design, the study targeted 411 registered state corporations in Nairobi County under Kenya National Bureau of Statistics. A sample size of 203 firms were selected using stratified and simple random sampling approaches after subjecting the target population to Borg and Gall formula. Data was collected using structured questionnaires and items were anchored on a five-point Likert scale. Data was analyzed using both descriptive and inferential statistics. The hypotheses were tested using hierarchical regression analysis and Hayes process macro for moderation. The regression results indicated that electronic tendering (β=0.636, p<0.05) and enterprise resource planning (β=0.178, p<0.05) and cloud computing (β=0.157, p<0.05) and artificial intelligence (β=0.276, p<0.05) had a positive and significant effect on firm performance. Furthermore, the conditional effect results indicate that supply chain agility moderates the relationship between; electronic tendering (β=0.787, p<0.05, ΔR2=0.002), enterprise resource planning (β=0.247, p<0.05, ΔR2=0.004), cloud computing (β=0.317, p<0.05, ΔR2=0.018), artificial intelligence (β=0.213, p<0.05, ΔR2=0.075) and firm performance. Therefore, this study concludes that electronic tendering, enterprise resource planning, cloud computing and artificial intelligent effectively enhances firm performance. Thus, there is need for firm managers to understand and find ways to effectively manage these interactions between supply chain digitalization and supply chain agility in order to improve performance. Theoretically, the study supported the incorporation of different key dimensions of between supply chain digitalization and supply chain agility where the outcome of the results indicated the strong relationship in achieving superior performance. In addition, the study emphasizes the importance of promoting digital transformation and fostering supply chain agility to enhance operational efficiency and competitiveness in state corporations. Therefore, there is need for building long-term relationships both upstream and downstream in the supply chain, enabling firms to learn, transform acquired knowledge, improve operational processes, and deliver high-quality services that meet customer expectations and satisfaction.