Supply chain integration and organizational performance of commercial banks in Kenya

Abstract

The world economy continues to be globalized and firms are exploring ways to survive in a competitive world. One of the ways to survive this intense competition is to have an efficient supply chain. The level of uncertainty in the business environment also continues to increase and one of the greatest challenges to a firm is responding to uncertainty, caused by a highly volatile demand and short product life cycle. Implementation of strategic integration in a firms supply chain has been advocated as one of the means of increasing competitiveness of a firm. The objective of this study is to determine the effect of supply chain integration on organizational performance of commercial banks in Kenya. The study adopted a cross sectional research design. The population of the study were all the 42 commercial banks currently operating in Kenya. The study used primary data which was collected using a questionnaire. The data was analyzed using the Statistical Package for Social Sciences (SPSS) software and presented using tables and figures. Regression analysis was used to find out the relationship between the demographics and use of integration in the supply chain by the banks, supply chain integration and organizational performance. The study found out that reverse logistics, knowledge management, top management support, information technology adoption, customer orientation and customer service affect performance of commercial banks. The study recommends that management in commercial banks should embark on information sharing so as to respond to customer requirement, enhance the product availability, and efficiently coordinate processes in order to lower the costs, offer better customer service, improve revenues, and have properly guided capacity plans. The study recommends that a further study should be carried out to establish ways through which public institutions could enhance supply chain integration so as to improve their performance and service to the public. A further study should be carried out to establish the challenges of integrating supply chain in public institutions and consequently how this impacts on their performance and service delivery in the public sector.