Downstream supply chain performance measurement by the oil marketing companies in Kenya

Abstract

With the rising number of Oil Marketing Companies (OMCs) and increased complexity of the Downstream Supply Chains, there’s a greater interest in the potential of Downstream Supply Chains’ Performance Measurement to function as a feedback mechanism for the continual improvement of a supply chain performance. The objectives of this study were to examine the extent to which Oil Marketing Companies in Kenya measured their Downstream Supply Chain Performance; to identify the Key Performance Indicators used in these measurement and the challenges OMCs faced whilst undertaking the Downstream Supply Chain Performance measurements. Data was collected through questionnaires from a population census of 53 Oil Marketing Companies and was analyzed quantitatively and qualitatively. The findings of the study indicated that many of the OMCs measured their Downstream Supply Chain Performance using KPIs such as unit cost of transportation, and of storage; quality of service, information and quality of products; time for loading, turnaround time, transportation, delivery and time to relay information; and customer feedback. Major challenges faced by the OMCs included infrastructural limitations, high demurrage costs and high operational costs. The study concluded that the Downstream Supply Chain Performance Measurement is vital among the OMCs in Kenya with regard to enhancing the performance of their Downstream Supply Chains. The study recommended OMCs to put in place structured methods of the Downstream Supply Chain Performance Measurement to ensure optimized supply chains and to get more value from the supply chains. Flexibility of the supply chain operations should be enhanced to ensure proper positive feedback from the SCP Metrics are easily adopted to improve on the performance of the supply chains. The study also recommended flawless cross-functional and inter-firm supply chain operations should be encouraged to enhance supply chain performance.