Drivers of change and supply chain strategy in the sugar industry in Kenya

Abstract

Supply chain management has become an important issue in a business organization. Organizations are facing increasing competitive pressure with respect to prices, delivery, quality, variety and innovation of products and services. In order to respond to these challenges in turbulent business environment, organizations require a robust and aligned supply chain strategy. The purpose of this research is to present the drivers of change; the relationship between drivers of change (external uncertainties) and supply chain strategy and finally, the challenges encountered in supply chain strategy formulation and implementation in the sugar industry in Kenya. The data collection instrument used was a questionnaire which was administered to a total sample of 50 senior staff in seven sugar factories in Kenya. Sample selection was based on convenience sampling. The data was analyzed using mean, standard deviation and correlations between independent and dependent variables. The analysis involved statistical methods such as factor analysis and multiple regressions. The study found that new strategic alliances influenced supply chain strategy to a moderate extent. It also found that trading partners shared business knowledge of core business processes with the companies to a great extent. The study concludes that taking all other independent variables at zero, a unit increase in each of the following variables: globalization, IT, organizational consolidation, empowered consumer and government policies and regulations will lead to an increase in the scores of the supply chain strategy in the sugar industry in Kenya. This infers that globalization influences the supply chain strategy in the sugar industry in Kenya most followed by organizational consolidation, information technology and government policies and then empowered consumer. The study recommends that new strategic alliances should be well set as they are the greatest influence on supply chain strategy. The study finally recommends that government policies and regulations should be revised in order to facilitate fair play from all stakeholders