Effect of electronic logistics practices on supply chain performance of logistic companies in Nairobi, Kenya.

Abstract

In every ideal situation supply chain performance objective is to increase productivity, lower costs and fulfill the demands of the customers in emerging markets. Therefore, effective management of the supply chain can lead to organizations to gain market share, reduce costs, and deliver more value to their shareholders. The main aim of this study was to assess the effect of electronic logistics on supply chain performance of logistic companies in Nairobi, Kenya. The study specific objectives were: To examine the effect of: E- tendering on supply chain performance of logistic companies, automated warehousing operations systems on supply chain performance of logistic companies, electronic order processing on supply chain performance of logistic companies and to determine the effect of enterprise resource planning on supply chain performance of logistic companies in Nairobi. The study used the innovation diffusion theory, technological determinism theory, queuing theory and resources-based view theory. The study adopted explanatory research design and simple random sampling techniques in collecting data using a structured questionnaire from a sample size of 323 picked from a target population of 1672 logistic companies in Nairobi County. Cronbach Alpha and factor analysis were used to test for reliability and validity of the instrument. Multiple regression model was used to test for the hypotheses. The study findings revealed that E- tendering (β 1 =0.333, p<0.05), automated warehousing operations systems (β 2 =0.112, p<0.05), Electronic order process (β 3 =0.308, p<0.05) and enterprise resource planning (β 4 =0.191, p<0.05) were all found to have a positive and significant influence on supply chain performance. The study concludes that E- tendering can enable logistic companies to reduce the time for tender processing. Automation of storage information, retrieval of warehouse information and automation in warehousing can enhance accuracy and efficiency of logistic companies. Electronic order can enhance capturing and administering data electronically which reduces paperwork and time wastage and makes tracking of shipping goods and products easily thus giving clients confident on logistic companies. Dissemination of logistic information to customers through electronic order enhances the performance of logistic companies. The study recommends that organizational managers should focus directly on supply chain functions such as logistics to bolster the competitiveness of the supply chains in which their organizations are integral partners. The study also recommends that the companies should use a strategic approach to logistics management practices through embracing modern technology and employee training. The study finally recommends that adoption of electronic order process. This will reduce operational costs, improves process efficiency, delivers greater centralized control over purchasing and may increase negotiating power with suppliers through order consolidation.