Determinants of adoption of digital supply chain technologies among fast moving consumer goods manufacturers in Nairobi County, Kenya

Abstract

The fast-moving consumer goods manufacturer companies are facing numerous challenges in their performance. Key among these challenges are stock outs, poor attainment of lead times, and overproduction thereby indicating an inefficient supply chain. Digitalization has highly been recommended as a means for companies to enhance efficiency of their supply chains while overcoming such challenges. However, it is unclear whether manufacturers of Kenyan FMCGs are using the available digital technologies in an effort to improve performance of their supply chain. Therefore, this research examined the demand-side determinants of digital supply chain adoption among FMCG manufacturers in Nairobi County. Its objectives were to: establish effect of performance expectancy on digital supply chain adoption manufacturers; establish influence of effort expectancy on digital supply chain adoption among FMCG manufacturers; establish influence of social influence on digital supply chain adoption among FMCG manufacturers; and establish effect of facilitating conditions on digital supply chain adoption among FMCG manufacturers. The unified theory of acceptance and use of technology and diffusion of innovation theories guided the study. The positivist research philosophy and a descriptive cross-sectional research design were adopted. The 146 FMCG manufacturing companies in Nairobi County represented the unit of analysis while units of observation were three supply managers selected from top, middle, and low-level of management. This made for a target population of 438 participants. Out of this, 205 participants were selected as the sample size and the research was able to receive back 132 responses from the administered questionnaire. The statistical package for the social sciences was used to analyse the data first using descriptive statistics to summarize data and thereafter testing for linear associations and relationships between variables. The correlation and regression analysis were performed at the 95% confidence level. This data was presented in tables supported by interpretations and discussion. The study findings revealed a positive and significant relationship between performance expectancy and social dimensions of the UTAUT with digital supply chain adoption. Then again, positive but non-significant relationships were observed between facilitating conditions and effort expectancy dimensions of the UTAUTwith DSC adoption. It is the study’s conclusion that performance expectancy and social influence are important components that managers should consider in their DSC adoption journey. Therefore, the study recommends for government policy on funding for digital hubs that provide innovation and creativity of digital supply chain technologies while providing education and training for FMCG companies to integrate these into their supply chains. In addition, the study recommends for FMCG manufacturing management companies to provide awareness and sensitization of emerging digital technologies in supply chains so as to promote familiarization of these technologies with the existing supply chain system. This study was limited to self-reported data which poses a threat to the internal validity of its findings. Second, a cross-sectional design means it missed out on the opportunity to show how different digital technologies have transformed the supply chains of FMCG manufacturing companies.