Information Technology and supply chain integration strategy at British American Tobacco Kenya Ltd

Abstract

To stay competitive, companies have strived to achieve greater coordination and collaboration among supply chain partners in an approach called supply chain integration. B.A.T (Kenya) has undergone tremendous changes in the past in an effort to leverage its presence globally and also benefit from synergies within its factories. Some of the changes included initiating and implementing Above Market Business Model in Africa in this Model SCM is a critical performance indicator. Therefore the overall objective of this study was to examine information technology and supply chain integration strategy at British American Tobacco Kenya Limited. This study will be important to the manufacturing industry players in Kenya as it will enable them to assess their supply chain management strategies and realign them with the emerging IT trends to be able to benefit and identify areas of opportunities especially those relating to, cost reduction and efficiencies within SC. Chapter two looked at theories around SCM, detailing past studies on supply chain management strategy, IT and integration in the manufacturing sector. The research design adopted the case study approach as its research design, in this case British American Tobacco Ltd. Primary data was collected by conducting focused interviews with middle level management from Supply Chain, Finance, IT and Manufacturing who are currently directly involved in Supply Chain process. While the primary data was analysed qualitatively, secondary data provided additional information that was not practically to obtain from the primary sources due to the time frame within which this research has to be carried out. Content analysis was used to analyse the data since the study seeks to solicit for data that is qualitative in nature. The findings support the RBV theory which attributes improvement in firm performance to valuable resources or resource bundles. From the RBV, one lens through which to look at IT value creation is “an indirect role for IT in firm performance. The basic logic is that IT affects other resources or processes which, in turn, lead to competitive advantage this is why British American Tobacco Kenya Ltd investment in ICT is 56% and above. From the responses the study was able to document at least 13 technologies used by British American Tobacco Kenya Ltd under supply management information system. In conclusion the adoption of ICT at British American Tobacco Kenya Ltd has increased the information processing capabilities of suppliers, thereby enabling or supporting greater relationship in addition to reducing uncertainty. ICT has enabled British American Tobacco Kenya Ltd to more quickly institute EDI information programs with her customers. One of the recommendations is that BAT ltd should employ industry standards – this will be towards common methods of communicating business transactions and data sharing reduces cost for the entire supply chain. Just as we have standardized logistics such as pallet size, truck dimensions from a supply chain perspective, automating business transactions will also drive down costs of the manufacturer/supplier relationship.