Supply Chain Integration Practices and Organizational Performance of Multinational Firms in Kenya

Abstract

Successful supply chain management relies on organizations working together and collaborating effectively. As organizations become more specialized and global, it becomes critical for organizations to manage the entire network of supply to optimize overall performance. Supply chain integration practices are considered a powerful weapon to gain competitive advantages and linking performance measurement systems to supply chain integration practices can lead to increased success of supply chain initiatives. Organizations need to integrate their supply chains to secure maximum support for competitiveness in their market. The objective of this study was to determine the supply chain integration practices adopted by the 226 Multinational firms in Kenya. A cross-sectional type of survey was conducted, which was appropriate for the large number of the foreign Multinational firms in the country. A sample of 40 Multinational firms was drawn from the 226 Multinationals through simple random sampling out of which 28 responded. Primary data was collected using structured questionnaires. It was determined that without considering the vendor (supplier) managed inventory practices, collaboration planning, forecasting and replenishment, efficient consumer response practices, customer relationship and management practices and enterprise resource planning practices, performance of the multinationals is constant at 1.794. However by introducing vendor (supplier) managed inventory practices, the firms’ performance improves by 0.420, collaboration planning, forecasting and replenishment leads to 0.196 improvement in the multinational performance, efficient consumer response practices leads to 0.195 improvement on performance of the multinationals, customer relationship and management practices leads to 0.016 improvement on performance of multinationals in Kenya, while enterprise resource planning practices leads to 0.049 improvement on performance of the multinationals.