Supply chain management practices, competitive advantage and organizational performance of textile firms in Nairobi Kenya

Abstract

Textile firms in Kenya face numerous challenges, including high raw material costs, inadequate transportation infrastructure, heavy taxation, price fluctuations, and expensive energy, which hinder their ability to compete effectively. Despite the importance of supply chain management in enhancing organizational performance, its effectiveness is often compromised. Therefore, the main aim of this study was to assess moderating effect of competitive advantage on the relationship between supply chain management practices and organizational performance of Textile Firms in Kenya. The specific objectives of the study were: to determine the effect of green procurement practices on organizational performance; to examine the effect of reverse logistics on organizational performance and to establish the effect of outsourcing on organizational performance of textile firms in Kenya. The objective on moderation were: to determine the moderating effect of competitive advantage on the relationship between green procurement and organizational performance; to examine the moderating effect of competitive advantage on the relationship between reverse logistics and organizational performance and to establish the moderating effect of competitive advantage on the relationship between outsourcing and organizational performance. This study was guided by Just in time Theory, Theory of constraints and Resource Based View Theory. Explanatory research design was used in this study. The unit of analysis for this study was department heads from logistics and procurement. The target population was 468 respondents. The sample size 216 respondents were calculated using Yamane formulae from the 52 textile firms in Kenya. To select employees from each firm for the study, simple random sampling was employed. A questionnaire was utilized to gather the primary data required for the research. A pilot test was conducted in Uasin Gishu County to ensure the research instruments were valid and reliable. Data analysis involved both descriptive and inferential statistics. Descriptive statistics included percentages, frequencies, measures of central tendency (mean), and measures of dispersion (standard deviation). Inferential statistics involved correlation and regression analysis. The study was presented in form of tables. The study finding showed that green procurement had a positive and significant effect on organizational performance (β1=0.282, p<0.05). Reverse logistics had a positive and significant effect on organizational performance (β2=0.287, p<0.05). Outsourcing had a positive and significant effect on organizational performance (β3=0.331, p<0.05). Competitive advantage had a negative and significant moderating effect on the relationship between green procurement and organizational performance (β=-0.069; p<0.05). The competitive advantage had a negative and significant moderating effect on the relationship between reverse logistics and business performance (β=-0.137; p<0.05). Competitive advantage had a negative and significant moderating effect on the relationship between outsourcing and business performance (β=-0.122; p<0.05). The study concludes that textile firms should focus on enhancing competitive advantage alongside effective supply chain management practices. It recommends that firms prioritize developing sustainable supply chain strategies while addressing the challenges posed by competitive pressures. This study contributes to managerial practice by highlighting the importance of balancing supply chain management with competitive strategies. It informs policy by emphasizing the need for regulatory support to enhance competitiveness in the textile sector. Future research should explore how different competitive strategies can be aligned with supply chain management practices to maximize organizational performance in the textile industry.