Warehouse management practices and performance of logistics firms in Mombasa County

Abstract

Organizational performance of logistics firms in Mombasa County has been greatly affected by inefficient and ineffective warehouse management practices. As a result, these firms have recorded poor performance in terms of return on investment and customer satisfaction. Lack of an automated system within the warehouse has led to inaccuracies in inventory management, as well as inefficiencies that have slowed down operations and increased costs. Poor layout of the warehouse has also resulted to slow loading process which has ended up creating a backlog in labour allocation and dock-door scheduling. The general objective of this study therefore was to evaluate the warehouse management practices and performance of logistics firms in Mombasa County. The specific objectives of the study were: to determine the effect of order processing on organizational performance, to determine the effect of tracking of goods on organizational performance, to investigate the effect of receiving process of goods on organizational performance and to investigate the effect of physical storage facilities on organizational performance. The theories encompassed in the study included Channel Coordination Theory, Theory of Constraints and Revealed Preference Theory. The study adopted an explanatory research design. The sample was drawn using stratified random sampling. Primary data was collected using a structured questionnaire from a sample of 228 firms out of a target population of 532 comprising of clearing and forwarding firms, shipping agents and transport companies. The data collected was analyzed using both descriptive and inferential statistics. Descriptive analysis was conducted using frequencies, percentages, mean and standard deviation. Inferential analysis was conducted using multiple regression model to test the relationship between order processing, tracking of goods, receiving process of goods and physical storage facilities and organizational performance of logistics firms. Descriptive results indicated that the respondents agreed that warehouse management practices affected organizational performance. This was supported by Pearson’s correlation results which indicated that order processing, tracking of goods, receiving process of goods and physical storage facilities had significant associations with organizational performance. Regression analysis was done to estimate the relationship between warehouse management practices and organizational performance. The results of the regression indicated that the predictor variables could only explain 19.2% of organizational performance (adjusted R squared=.192, p<0.05). It was further found out that order processing had significant and positive effect on organizational performance (β = .041, p<0.05) as was tracking of goods (β = .210, p<0.05) as was receiving process of goods (β = .245, p<0.05) as was physical storage facilities (β = .113, p<0.05). The study concluded that order processing, tracking of goods, receiving process of goods and physical storage facilities had statistical significant and positive effect on organizational performance. The study recommended that the management of logistics firms should improve on order processing, tracking of goods, receiving process of goods and physical storage facilities in order to improve the organizational performance of their firms. Also, the national government should review the existing policy and regulatory framework to ensure effective warehouse management practices among logistics firms in order to improve logistics processes in the country.