Warehouse location and design decisions among large scale manufacturing firms in Nairobi, Kenya

Abstract

A key decision manufacturing firms must make is the location and design of their warehouses. Warehouse location and design selection problem include both quantitative and qualitative factors. The importance of warehouse location and design has increased during the recent decade and has become value adding centers, meeting customer satisfaction and corporate profitability. The objectives of this study are to determine the factors that influence warehouse location decision; to determine the factors that influence warehouse design decision and to determine the challenges in the location and design of a warehouse among large scale manufacturing firms in Nairobi. Descriptive survey design was used to carry out the study. The population of the study constituted all the large scale manufacturing firms within Nairobi. The sample of this study consisted of 100 large scale manufacturing firms. Self administered drop and pick questionnaires were distributed to warehouse managers currently employed by the large scale manufacturing firms in Nairobi. The data collected was analyzed with the use of means, standard deviation, correlation analysis and factor analysis with the aid of statistical packages for social sciences (SPSS). The factors that influenced warehouse location and design decisions positively aided manufacturing firms possess competitive advantage. Of primary consideration, the factors considered in warehouse location decision included host community, proximity to market, space availability, security and utilities (such as electricity), and for warehouse design factors, available space, accessibility, safety, cost effectiveness and product type. The challenges that the research indicated to be affecting the location and design decisions of warehouses included space availability, lack of expertise, lack of reliable source of information, poor transportation network, and globalization. Globalization is the least with means and standard deviation of 3.8333 and 1.2545. Analysis also indicates that challenges affecting the warehouse design decision were financial resources, lack of expertise, available space and government rules and regulations. Overall warehouse structure has the least means and standard deviation of 4.1333 and 1.0006. The study will be of great importance to the policy makers in the manufacturing industry as they will use strategic factors in determining warehouse location and design decisions in meeting target customers and corporate profitability.