Innovative supply chain management practices and organisational performance of oil marketing companies in Kenya

Abstract

Supply chain innovations have received growing attention amongst organizations. Supply chain innovations acts as a catalysts for improved efficiency and competitiveness. To achieve value creation in supply chain management, most oil companies have realized the need for innovation. The objectives of this study were to determine the innovative supply chain practices used by Oil marketing companies in Kenya, to establish the relationship between innovative supply chain practices and performance of Oil Marketing Companies in Kenya and to determine the challenges facing implementation of innovative supply chain management practices by Oil Marketing Companies in Kenya. To achieve these objectives the study used a descriptive survey. The population of the study consisted of oil marketing companies in Kenya. A census approach was used in all the 36 oil marketing companies in Kenya. Data was collected using a structured questionnaire from all the senior procurement officers and their assistants. Out of the 36 questionnaires distributed, 32 were returned to the researcher. This represents a response rate of 89% which was considered sufficient for making generalization of the whole population. Data was analyzed using descriptive statistics and a regression model as per the objectives of the study. The findings found that mass customization, integration, e-procurement, just in time and outsourcing were implemented to a very large extent. Reverse logistics practices were used only to a moderate extent in oil marketing companies in Kenya. The regression results concluded that innovative supply chain management practices led to improved organizational performance of oil marketing companies. Further, it was revealed that the key challenges facing implementation of innovative supply chain management practices by oil companies were; lack of proper training, failure to invest in research and development, failure to invest in modern technologies and lack of commitment by the top management. The limitation of this study was that time factor. Primary data collection consumes a lot of time. The researcher had to prepare in order to handle the different demands of the processes and at the same time, manage time effectively. The study recommends the need for investigating on appropriate ways to increase formalization of research and development programs in the oil industry that will establish a platform to build and nurture innovation in supply chain management in order to enhance value creation.