Cost of Quality and Performance of Logistics Firms in Nairobi City County

Abstract

This study investigated factors that effect cost of quality and performance in logistics firms in Nairobi. The cost of quality was found to be critical in the performance of firms by various scholars as corroborated in the field study. Firms can control their performance by taking care of the costs of quality which lies in the main operations of reworkings, recalls, retests and rebuilds. The specific objectives were therefore to establish the cost of quality in logistics firms, establish the performance of logistics firms and to determine the relationship between cost of quality and performance in logistics firms in Nairobi County. To achieve the study objectives, a census of 45 logistics firms that have operated within the last 10 years was conducted. Field data collection used structured questionnaires administered through drop and pick system. Data analysis involved descriptive statistics using mean and standard deviation for cost of quality, while performance used sales volumes. A regression linear model was used to determine the relationship between the cost of quality and performance of logistics firms in Nairobi County. The study identified several factors including re-testing, recalling, rebuilding and reworkings that clearly played a part in the performance of logistics firms. In particular, retests and re-buildings were found to increase the performance while re-works and re-calls caused performance to slow down. Based on the research findings the study recommended that logistics firms should embrace measures that encourage reduction in cost of quality to increase firm performance. It was also recommended that firms getting into partnership would help drive down the cost of quality and raise their performance levels. Finally it was recommended that training special teams and having departments for recalls, reworkings, re-tests and re-builds was appropriate as this reduced the cost of quality and increased the likelihood of better performance