Supply chain design practices and business performance among milk processing firms in Kenya

Abstract

Many firms who have implemented the use of various Supply Chain Design practices have had nothing short of enjoying the fruits of their investments. This project set out to establish the relationship between SC design practices and business performance among milk processing firms in Kenya. It also sought to determine the SC design practices commonly used by milk processing firms in Kenya. The research adopted a descriptive cross-sectional survey of Milk Processing Firms in Kenya. The descriptive approach was used to determine the various SC design practices used by Milk Processing Firms in Kenya. A census study of 42 Milk Processing Firms was carried out. Data was collected from the field through use of questionnaires and then analyzed using Statistical Package for Social Scientists (SPSS) and presented in tables and figures with the results well interpreted and discussed. The study revealed that the milk processing firms had invested resources towards the SC and used it as a strategic weapon to beat competition. The researcher concluded from the findings of the study that SC design helped companies to understand where value is being created and destroyed. The regression model on the relationship between SC Design Practices and overall firm‟s performance indicated that SC Design Practices contributed by 30% towards the performance of the firms. Despite this being a small percentage it should be noted that it was positive and so had positive contribution towards business performance. However, a T-test showed no significant relationship between the dependent variable and the independent variables. The researcher concluded that SC Design Practices contributed positively towards a firm‟s overall performance. The study recommends that in order to have a successful SC in terms of total SC costs and service performance to the customer, companies need to design their SCs such that they match the type of products they are selling with the type of distribution channels delivering them. It also recommends that it is important to measure performance to determine achievement of goals and alignment of objectives with organizational strategy.