Supply chain management practices and organizational performance of supermarkets in Nairobi

Abstract

The main aim of the study was to establish supply chain management practices and organizational performance of supermarkets in Nairobi. The study was guided by the following specific objectives; to establish the supply chain management practices commonly used by supermarkets in the Kenyan retail chain sector and to determine the relationship between supply chain management practices and organizational performance of supermarkets in the Kenyan retail chain sector. The study used cross-sectional survey research design. The population for this study was all 110 supermarkets in Nairobi. The population census was conducted of all 110 supermarkets. There was no need for sampling since the number of supermarkets is small. The study used both primary and secondary data which was largely quantitative and descriptive in nature. Secondary data was on the other hand acquired from the inspectorate of listed major supermarkets in Nairobi County. After data collection, the filled-in and returned questionnaires were edited for completeness, coded and entries made into Statistical package for social sciences (SPSS version 18). Descriptive and inferential analysis was conducted. Descriptive analysis involved the use of frequencies in their absolute and relative forms (percentage). Mean and standard deviations were used as measures of central tendencies and dispersion respectively. The study findings indicated that Information sharing among the supply chain partner is related to the degree of critical and proprietary information shared among each other‟s. Information sharing involved information related to logistics, customer orders, forecasts, schedules, market and so on. As part of supply chain practice the researcher concludes that outsourcing enable costs reduction activities, improve productivity and reemphasize the organization to relook into their core business, refocus the organizations strategy, reexamine the investment and help the organization to improve their efficiency and improve their performance. Conclusions are made that strategic partnerships with suppliers enable organizations to work more effectively with a few important suppliers who are willing to share responsibility for the success of the products. Suppliers participating early in the product design process can offer more cost effective design choices, help select the best components and technologies, and help in design assessment. Strategically aligned organizations can work closely together and eliminate wasteful time and effort. An effective supplier partnership can be a critical component of a leading edge supply chain. The study recommendS that Supermarkets in Nairobi County and outside Nairobi should be advised to embrace the concept so that they can be able to reap the benefits of adopting these practices. Supermarkets are also advised to adopt the practices that are currently adopted at a very small extent because they can significantly improve organization performance from the current position. They include practices like outsourcing, lean practices and postponement which have proven to have tremendous results in other Supermarket like Nakumatt Supermarket for example.