Adoption of Lean Supply Chain Practices and Performance of Commercial Banks in Kenya

Abstract

This study sought to investigate the lean supply chain practices and impact on performance of commercial banks in Kenya. This study set to achieve three objectives; the first being to determine the effects of lean supply chain practices on the performance of commercial banks in Kenya, to document the extent to which lean supply chain practices have been adopted by commercial banks in Kenya and to find out the challenges faced by commercial banks in Kenya in their efforts to implement lean supply chain practices. The goals for lean supply chain practices are to improve quality and reduce cost. To stay competitive in today’s marketplace, a company must understand its customers’ wants and needs and designs processes that meet their expectations and requirements. Among the areas highlighted include the various lean supply chain practice models that are being adopted; the benefits derived from the adoption of these practices and the challenges encountered in the implementation of the practices Primary data was collected by use of questionnaire with both closed and open ended questions. The closed ended questions enabled the collection of qualitative data for analysis using the Likert scale while the open ended questions enabled the researcher to collect qualitative data on the respondents view on lean supply chain practices in commercial banks in Kenya. The study found out that most commercial banks in Kenya believe that lean supply chain practices enhance the long term business performance and success. The study established less process waste, reduced inventory, reduced lead time, less rework, financial savings and increased process understanding as the benefits emanating from the implementation of lean supply chain practices. The study established the following hindrances to lean supply chain practices implementation: external obstacles, logistic issues, smaller supplier’s difficulties and global issues. These findings should help in encouraging the widespread adoption of lean supply chain practices by commercial banks in Kenya. Due to tight schedules of the top management officers of the commercial banks in Kenya, the study encountered difficulties in gaining access to the respondents and the researcher had to keep rescheduling their time to align with the availability of the respondents.