Logistics Management Practices and Supply Chain Performance of Pharmaceutical Manufacturing Companies in Kenya

Abstract

The current globalized and interconnected business environment has made organizations to become increasingly dependent on well-organized supply chains, which involve sophisticated logistics, as they develop and expand locally, regionally, or internationally. Manufacturing firms encounter hurdles in today's operating environment, such as increase rivalry among enterprises, and adapting to changing client needs and thus require a supply chain that is effective. The research’s main objective was to determine the influence of logistics management practices (LMPs) on supply chain performance (SCP) of pharmaceutical manufacturing companies in Kenya. The research’s specific objectives were to determine the prevalent logistic management practices, determine the influence of LMPs on supply chain practices of pharmaceutical manufacturing companies in Kenya, and to explore the challenges experienced by pharmaceutical manufacturing companies in Kenya in adoption of LMPs. Transaction cost theory and network theory informed this research and the descriptive research methodology was adopted. The study population targeted in this research was the 37 companies engaged in pharmaceutical manufacturing. Primary data acquired through a questionnaire was used in the study. The gathered data was analyzed using regression and descriptive analysis. The research results determined that best practices in inventory management, transportation, logistics automation and packaging were prevalent in the pharmaceutical manufacturing companies. The study also found that transportation, inventory management, packaging and logistic automation substantially affected the various aspects of the supply chain management of pharmaceutical manufacturing companies. Further findings indicated that inadequate sensitization and training of staff regarding logistics management practices, failure to link logistics management practices with key performance indicators, and high risks in logistics pertaining to pharmaceutical products were the key challenges experienced. The recommendation provided by the research is that the management of pharmaceutical manufacturing companies should have refrigeration and "high-risk" product storage facilities. Besides, senior management should operationalize inventory and warehousing management systems to track replenishment points and reorder points, and also ensure that the warehouses are routinely cleaned and sanitized. Additionally, senior management of Kenyan pharmaceutical manufacturing enterprises should ensure interconnectedness of their intranet and extranet in their logistics processes. Moreover, management of the pharmaceutical manufacturing companies should adhere to all rules pertaining to the shipment of pharmaceutical items. Lastly, the manufacturing firms should always follow carefully all pharmaceutical packaging rules and also enhance their packaging efficiency through automation.