The Effect of supply chain integration on operational performance of manufacturing organizations in Kenya

Abstract

Supply Chain Management is an approach to satisfy customer needs for products and services by integrating the business process of the firm with the entire value chain from raw material procurement to the product or service delivery to customers. The main objective of this study was to examine the effect of supply chain integration on operational performance of manufacturing organizations in Kenya. The specific objectives of the study were to examine the effect of internal integration on operational performance of manufacturing organizations in Kenya, to examine the effect of supplier integration on manufacturing organizations in Kenya and to explore the effect of customer integration on manufacturing organizations in Kenya. The study is part of literature which seeks to increase knowledge in the field of supply chain integration especially from the manufacturing perspective in Kenya.The study utilized three theories: Resource Based View Theory, Social Exchange Theory and Information Processing Theory. Proportionate stratified random sampling technique was used to select a sample of 232 respondents from a total population of 553 manufacturing organizations while purposive sampling was used to select a manager or supervisor in the supply chain department to discuss in-depth information regarding the organizations supply chain. Data was analyzed using SPSS and descriptive statistics, correlation analysis and regression analysis conducted. A total of 232 questionnaires were administered but only 164, about 71% response rate was achieved. The findings showed that supplier integration had a positive influence on operational performance followed by internal integration. Customer integration was determined to have a negative influence on operational performance. There was an association between both supplier integration and customer integration with internal integration. Based on the findings, it can be concluded that supply chain integration has a positive impact on operational performance. The organizations management should therefore invest more on integrating with their supply chain partners so as to improve operational performance of the organization.