Logistic capabilities, supply chain linkages and supply chain performance among manufacturing firms in Nairobi, Kenya Ann Gituiya

Abstract

The dynamic and ever-changing nature of today's business landscape presents manufacturing firms with a multitude of challenges, including volatility, uncertainty, complexity, and ambiguity. In this environment, manufacturing firms must navigate these complexities while ensuring they meet the evolving demands of their customers. This includes maintaining product availability, ensuring on-time delivery, and managing inventory and capacity effectively throughout the supply chain. To achieve these goals, manufacturing firms must cultivate strong logistic capabilities. However, the precise relationship between logistic capabilities and supply chain performance remains unclear, particularly in the context of Nairobi, Kenya. This study aims to address this knowledge gap by examining the moderating effect of supply chain linkages on logistic capabilities and supply chain performance of manufacturing firms in Nairobi, Kenya. The specific objectives were; to establish the effect of learning capabilities, process capabilities and logistic information capabilities on supply chain performance of manufacturing firms. The moderation objective was moderating effect of supply chain linkages on relationship between logistic capabilities and supply chain performance of manufacturing firms. This study was guided by Resource Based View Theory, Dynamic capabilities theory, and network theory. The study was conducted through an explanatory survey research design. The study targeted a population of 750 procurement managers from registered manufacturing firms in Nairobi City. The unit of analysis for this study was registered manufacturing firms. The sample size of the study was 261 procurement managers. The study employed stratified random sampling techniques to select the firms and procurement managers respectively. The study used primary data collected through questionnaires (5 Likert scale). The data were analyzed using descriptive statistics, which included frequencies, percentages, standard deviation, and means. The hypotheses were tested using hierarchical regression model. The analyzed data were presented in form tables. The study findings revealed that learning capabilities positively and significantly affected supply chain performance (β 1 =0.458, p<0.05). Process capabilities positively and significantly affected supply chain performance (β 2 =0.219, p<0.05). Logistic information capabilities positively and significantly affected supply chain performance (β 3 =0.183, p<0.05). Supply chain linkages had an enhancing moderating effect on the relationship between learning capabilities (β 4 =0.015, p=0.036), process capabilities (β 5 =0.027, p=0.010), logistic information capabilities (β 6 =0.019, p=0.032) and supply chain performance. Supply chain linkages had an enhancing moderating effect on the relationship between learning capabilities (R 2 change =0.008), process capabilities (R 2 change =0. 009), logistic information capabilities (R 2 change =0.006) and supply chain performance. The study findings from open ended questions revealed that companies that are able to learn and adapt to change are more likely to have high-performing supply chains. Companies that have strong supply chain linkages are able to leverage these linkages to improve their learning capabilities, process capabilities, and logistic information capabilities, which in turn leads to improved supply chain performance. The study concluded that learning, process, and logistic information capabilities positively influence the supply chain performance of manufacturing firms. Supply chain linkages have a positive moderating effect on the relationship between logistics capabilities and supply chain performance. The study recommended that manufacturing firms should implement a company policy that encourages the sharing of information within the company for learning purposes. Manufacturing firms should establish an integrated and coordinated plan between the logistics department and other departments to improve supply chain performance. Additionally, they should develop a logistics development strategy tailored to their target markets and company conditions to enhance customer response.