Supply chain management practices, agility and the performance of manufacturing firms in Coast region, Kenya

Abstract

Firms’ performance is a composite construct that indicates the business performance of a company. Kenyan manufacturing sector has experienced negative performance issues this is as a result of trade imbalance, drop in gross domestic product and closure of international manufacturing firms. Supply chain management practices are a set of activities that span enterprise functions from the ordering and receipt of raw materials, manufacturing of products, through to the distribution and delivery to the customer. The general objective of this study was to establish the mediating effect of supply chain agility on supply chain management practices and performance of manufacturing firms in the Coast Region, Kenya. The specific objectives of this study were to determine the effect of customer relationship management practice, supplier relationship management practice, information sharing management practice and the mediating effect of supply chain alertness on supply chain management practice on performance of manufacturing firms in Coast Region, Kenya. The study deployed the systems theory, resource dependency theory and the network theory. The study employed explanatory research design and the target population was 104 manufacturing firms in Coast Region, Kenya. The census method was used due to the small size of the target population. Primary data was collected using a Linkert Type five scale structured questionnaire. Pilot study was conducted and instrument reliability and validity was tested. Descriptive statistics and inferential statistics were generated. The data was presented in tables. The correlation results showed that customer relationship management practice (r=.308, p=.010), supplier relationship management practice (r=.613, p=.000), information sharing management practice (r=.346, p=.004), and the supply chain agility (r=.547, p=.000), were positively and significantly correlated with the performance of manufacturing firms in the Coast Region. The multiple regression results showed that customer relationship management practice (β=.288, p=.011), supplier relationship management practice (β=1.307, p=.000), information sharing management practice (β=.459, p=.000), and the supply chain agility (β=.227, p=.006), were positively and significantly related with the performance of manufacturing firms in Coast Region. The medated multiple regression results showed that supply chain agility positively and significantly moderate customer relationship management practice (β=.452, p=.004), supplier relationship management practice (β=1.333, p=.000), while it positively and significantly moderated information sharing management practice (β=.039, p=.823) and performance of manufacturing firms in Coast Region. The study concluded that supply chain agility positively moderated the relationship between customer relationship management, supplier management practices and information sharing management practice. The study recommended that managers of manufacturing firms should deploy customer relationship management, supplier relationship management, information sharing management practice and supply chain agility so as to improve the performance of manufacturing firms in the Coast Region, Kenya.