Supply Chain Management Practices and Operational Performance of SMEs in Nairobi County, Kenya

Abstract

The purpose of this study was to determine the effect of supply chain management (SCM) practices on operational performance of small and medium enterprises (SMES) in Nairobi County. Due to the role of SMEs in economic development, an integrated supply chain management approach is required in attaining desired levels of operational performance based on cost, flexibility and delivery speed. In addition, the study sought to determine the best in class supply chain management practices that SMEs would use as a benchmark against standards. Descriptive research design was adopted for this study where the target population was small and medium enterprises in Nairobi County from where a sample of 45 firms was drawn using stratified sampling. The enterprises were from a cross section of the sub-sectors representing trade and information technology. Data were collected using questionnaires administered by the researcher and analyzed using descriptive statistics of percentages and inferential statistics of regression analysis. The research findings were that supply chain management practices impacts positively on operational performance of SMEs across the sectors of trade and information technology. SMEs were of the opinion that supply chain practices of purchasing, logistics and customer service are significant for business operations hence opportunity to outdo competition. From the findings, it was concluded that SMEs should adopt SCM as part of their business strategy in order to enhance operational performance and the study recommended that awareness about SCM should be raised for SMEs in order to align them with their business strategy.