Supply Chain Management Practices and Challenges for the Small Scale Tea Sector in Kenya

Abstract

As the business environment becomes increasingly competitive, companies continuously look for ways to distinguish themselves from their competitors. Companies adapt different Supply Chain Management practices and philosophies to help them become competitive. However, they may face challenges that hinder attainment of the results sought. This study was carried out to establish the supply chain management practices and challenges for the small scale tea sector in Kenya. The study was conducted by taking a stratified random sample of all the categories of staff who work for the managing agent (KTDA Ltd) of the sector in Kenya. The categories of staff include Tea Extension Staff, Logistics staff, Factory staff and Head Office staff. Data was collected from the sample using a questionnaire and face to face interview for a few selected staff at the Head Office. The data collected was analyzed using mainly descriptive statistics for supply chain management practices and factor analysis for the supply chain challenges. The study found out that, although the small scale tea sector appreciates good supply chain management practices, the same has not been put into practice. The sector has not established long term relationships with its suppliers who operate along its supply chains as was evidenced by the frequent seeking of suppliers through tenders. The supply chains in the sector were also found to be too long involving several stages which increase operating costs. The sector was found to face several challenges which threaten its long term growth and survival, the most worrying challenge being the continued rising labor and other operating costs. The sector and the tea industry in general, has always grown and contributed to the development of this country and therefore with some improvements in its supply chains and challenges, the sector can become very stable and competitive in the international markets.