Configuring Supply Chain as a Strategy of Enhancing Firm Performance: A study on Manufacturing Sector in Kenya
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Abstract
This paper explored the role played by supply chain configuration on the performance of manufacturing sector in Kenya. Kenya’s manufacturing sector has come a long way in contributing to the country’s economic growth and development. However, the past decade has not been favourable for the sector, as it has recorded a significant decline in performance and growth characterized by loss-making, and declining production. With supply chain taking a huge portion of the industry’s operations, it raises the question on the extent to which supply chain of the manufacturing firms in Kenya has been aligned to suite the interests of suppliers, service providers, and customers as the key stakeholders in the supply chain process. The paper was anchored on the Supply Chain Operations Reference (SCOR) model which describes the essence of organizations to map, measure, and optimize their supply chain processes. Informed by a descriptive research design, primary data was collected from 160 manufacturing firms in Kenya using a questionnaire. Descriptive and inferential statistics were used to analyse the data. The findings revealed that supply chain configuration was significant in determining the performance of the manufacturing industry in Kenya. The findings revealed that configuring supply chain through promoting relationship with customers and suppliers played a significant role in reducing the costs of operations, enhancing quality and productivity thus enhancing profitability of manufacturing firms. A recommendation is therefore drawn that for the Kenya’s manufacturing sector to regain its strength and performance, there is need for the management to put more emphasis on supply chain processes by instigating strategies that enhance configuration of the supply chain network.
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References
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Chi, M., Huang, R., & George, J. F. (2020). Collaboration in demand-driven supply chain: based on a perspective of governance and IT-business strategic configuration. International Journal of Information Management, 52, 102062.
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Huge-Brodin, M., Sweeney, E., & Evangelista, P. (2020). Environmental configuration between logistics service providers and shippers–a supply chain perspective. The International Journal of Logistics Management.
Iranmanesh, M., Maroufkhani, P., Asadi, S., Ghobakhloo, M., Dwivedi, Y. K., & Tseng, M. L. (2023). Effects of supply chain transparency, configuration, adaptability, and agility on blockchain adoption in supply chain among SMEs. Computers & industrial engineering, 176, 108931.
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Narayanan, A., & Ishfaq, R. (2022). Impact of metric-configuration on supply chain performance: a behavioral study. The International Journal of Logistics Management.
Norrman, A., & Naslund, D. (2019). Supply chain incentive configuration: The gap between perceived importance and actual practice. Operations and Supply Chain Management: An International Journal, 12(3), 129-142.
OECD. (2010). Integrity in Public Procurement: Mapping out Good Practices for Integrity and Corruption Resistance in Public Procurement.
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Ott, R.L., & Longnecker, M. (2010). An introduction to Statistical Methods and Data Analysis. 6th Ed. Brooks/Cole, Cengage Learning.
Pagell, M. (2014). Understanding the factors that enable and inhibit the integration of operations and logistics. Journal of Operations Management, 22(5), 459-467.
Quang, H.T. & Castro, R.D., (2017), ‘Impact of supply chain configuration on construction performance: A developed model for Vietnam’, International Journal of Construction Supply Chain Management 7(2), 68–92.
Rogers, P.A. (2015). Optimising supplier management and why co-dependency equals mutual success. Journal of Facilities Management, 4(1), 40-50.
Salam, M. A., & Bajaba, S. (2022). The role of supply chain resilience and absorptive capacity in the relationship between marketing–supply chain management configuration and firm performance: A moderated-mediation analysis. Journal of Business & Industrial Marketing, (ahead-of-print).
Sanders, N.R. & Premus, R. (2015). Modeling the relationship between firm IT capability, collaboration, and performance. Journal of Business Logistics, 26(1), 1-23.
Selviaridis, K. & Spring, M. (2018), "Supply chain configuration as process: contracting, learning and pay-for-performance", International Journal of Operations & Production Management, 38(3), 732-755
Skipworth, H., Godsell, J., Wong, C.Y., Saghiri, S. & Julien, D., (2015). Supply chain configuration for imporved business performance: An empirical study. Supply Chain Management: An International Journal, 20(5), 511–533.
Srivastava, P., Iyer, K. N., & Rawwas, M. Y. (2017). Performance impact of supply chain partnership strategy-environment co-configuration. International Journal of Operations & Production Management.
Storey, J., Emberson, C. & Reade, D. (2015). The barriers to customer responsive supply chain management. International Journal of Operations & Production Management, 25(3/4), 242-260.
Storey, J., Emberson, C., & Harrison, A. (2012). Supply chain management: theory, practice and future challenges. International Journal of Operations & Production Management, 26(7), 7-24.
Thompson, K. N., & Coe, B. J. (1997). Gaining sustainable competitive advantage through strategic pricing: selecting a perceived value price. Pricing strategy and practice, 5(2), 70-79.
van der Westhuizen, C., & Niemann, W. (2022). Strategic supply chain configuration: The role of third-party logistics service providers during disruption recovery. Journal of Transport and Supply Chain Management, 16, 738.
Vonderembse, M.A., & Dismukes, J.P. (2015). Designing supply chains: towards theory development. International Journal of Production Economics, 10(2), 223-238.
Wanyama, J. (2013). The effectiveness of the Procurement Regulations in Kenya. Nairobi: Pr Academics Press.
Wilujeng, S., Sarwoko, E., & Nikmah, F. (2022). Triple-A strategy: For supply chain performance of Indonesian SMEs. Uncertain Supply Chain Management, 10(1), 95-100.
Zimon, D., Tyan, J., & Sroufe, R. (2020). Drivers of sustainable supply chain management: Practices to configuration with un sustainable development goals. International Journal for Quality Research, 14(1).
Aslam, H., Waseem, M., Roubaud, D., Grebinevych, O., Ali, Z., & Muneeb, D. (2023). Customer integration in the supply chain: the role of market orientation and supply chain strategy in the age of digital revolution. Annals of Operations Research, 1-25.
Babbie, E. (2011). The practice of social research (11th ed.). New York: Thompson Learning.
Barratt, M. & Oliveira, A. (2011). Exploring the experiences of collaborative planning initiatives. International Journal of Physical Distribution & Logistics Management, 31(4), 266-289.
Brockhaus, S., Fawcett, S., Kersten, W., & Knemeyer, M. (2016). A framework for benchmarking product sustainability efforts: Using systems dynamics to achieve supply chain configuration. Benchmarking: An International Journal.
Bryman, A. & Bell, E. (2011). Business Research Methods. (3rd ed.). Oxford: Oxford University Press.
Buhner, R. (2012). Increasing shareholder value through human asset management. Long Range Planning, 30(5), 710-725.
Cheptum, F. J. (2019). The Effect of Debtors’approval On Financial Performance Of Manufacturing Firms In Kenya. American Journal of Finance, 4(1), 31-56.
Chhetri, P., Hashemi, A., Lau, K. H., & Lim, M. K. (2022). Aligning supply chain complexity with product demand and design characteristics. International Journal of Logistics Research and Applications, 25(8), 1137-1163.
Chi, M., Huang, R., & George, J. F. (2020). Collaboration in demand-driven supply chain: based on a perspective of governance and IT-business strategic configuration. International Journal of Information Management, 52, 102062.
Christiaanse, E. (2015). Performance benefits through integration hubs. Communications of the ACM, 48 (4), 95-100.
Clark, T.H., Croson, D.C. & Schiano, W.T. (2011). A hierarchical model of supply-chain integration: information sharing and operational interdependence in the US grocery channel. Information Technology and Management, 2(3), 261-275.
dos Santos, I. M., de Miranda Mota, C. M., & Alencar, L. H. (2021). The strategic configuration between supply chain process management maturity model and competitive strategy. Business Process Management Journal.
Dubey, R., Bryde, D. J., Foropon, C., Tiwari, M., Dwivedi, Y., & Schiffling, S. (2021). An investigation of information configuration and collaboration as complements to supply chain agility in humanitarian supply chain. International Journal of Production Research, 59(5), 1586-1605.
Gachanja, I. M., Nga’nga, S. I., & Kiganane, L. M. (2020). Influence of organization learning on innovation output in manufacturing firms in Kenya. International Journal of Innovation Studies, 4(1), 16-26.
Gattorna, J. (2016). Dynamic supply chain configuration: a new business model for peak performance in enterprise supply chains across all geographies. CRC Press.
Gattorna, J. (2017). Strategic supply chain management creating shareholder value by aligning supply chain strategy with business strategy. In Strategic Supply Chain Configuration (pp. 32-52). London: Routledge.
Gligor, D., Feizabadi, J., Russo, I., Maloni, M. J., & Goldsby, T. J. (2020). The triple-a supply chain and strategic resources: developing competitive advantage. International Journal of Physical Distribution & Logistics Management, 50(2), 159-190.
Gölgeci, I., & Kuivalainen, O. (2020). Does social capital matter for supply chain resilience? The role of absorptive capacity and marketing-supply chain management configuration. Industrial Marketing Management, 84, 63-74.
Huge-Brodin, M., Sweeney, E., & Evangelista, P. (2020). Environmental configuration between logistics service providers and shippers–a supply chain perspective. The International Journal of Logistics Management.
Iranmanesh, M., Maroufkhani, P., Asadi, S., Ghobakhloo, M., Dwivedi, Y. K., & Tseng, M. L. (2023). Effects of supply chain transparency, configuration, adaptability, and agility on blockchain adoption in supply chain among SMEs. Computers & industrial engineering, 176, 108931.
Kitainge, J. M., Bor, G., & Wanza, L. (2019). Channel communication strategy Influence on the performance of cement manufacturing firms in Kenya. European Journal of Management and Marketing Studies.
Lee, H. (2014). The triple-a supply chain. Harvard Business Review, 82(10), 102-112.
Lukhoba, E. J, & Muturi, W. (2015). Effect of Supplier Development on Supplier Performance: A Survey of Food Manufacturing Companies in Kisumu County. International Journal of Economics, Commerce and Management. 3(11), 1146 – 1160.
Mahapatra, S., William, W. S., & Padhy, R. (2019). Configuration in the base of the pyramid producer supply chains: The case of the handloom sector in Odisha, India. Journal of Business Logistics, 40(2), 126-144.
Mokadem, M. (2016). ISO 9000 moderation role over supply chain configuration in manufacturing context. Journal of Manufacturing Technology Management, 27(3), 338-363.
Narayanan, A., & Ishfaq, R. (2022). Impact of metric-configuration on supply chain performance: a behavioral study. The International Journal of Logistics Management.
Norrman, A., & Naslund, D. (2019). Supply chain incentive configuration: The gap between perceived importance and actual practice. Operations and Supply Chain Management: An International Journal, 12(3), 129-142.
OECD. (2010). Integrity in Public Procurement: Mapping out Good Practices for Integrity and Corruption Resistance in Public Procurement.
Osterlund, J. & Loven, E. (2015). Information versus inertia: a model for product change with low inertia. Systems Research and Behavioral Science, 22(6), 547-560.
Ott, R.L., & Longnecker, M. (2010). An introduction to Statistical Methods and Data Analysis. 6th Ed. Brooks/Cole, Cengage Learning.
Pagell, M. (2014). Understanding the factors that enable and inhibit the integration of operations and logistics. Journal of Operations Management, 22(5), 459-467.
Quang, H.T. & Castro, R.D., (2017), ‘Impact of supply chain configuration on construction performance: A developed model for Vietnam’, International Journal of Construction Supply Chain Management 7(2), 68–92.
Rogers, P.A. (2015). Optimising supplier management and why co-dependency equals mutual success. Journal of Facilities Management, 4(1), 40-50.
Salam, M. A., & Bajaba, S. (2022). The role of supply chain resilience and absorptive capacity in the relationship between marketing–supply chain management configuration and firm performance: A moderated-mediation analysis. Journal of Business & Industrial Marketing, (ahead-of-print).
Sanders, N.R. & Premus, R. (2015). Modeling the relationship between firm IT capability, collaboration, and performance. Journal of Business Logistics, 26(1), 1-23.
Selviaridis, K. & Spring, M. (2018), "Supply chain configuration as process: contracting, learning and pay-for-performance", International Journal of Operations & Production Management, 38(3), 732-755
Skipworth, H., Godsell, J., Wong, C.Y., Saghiri, S. & Julien, D., (2015). Supply chain configuration for imporved business performance: An empirical study. Supply Chain Management: An International Journal, 20(5), 511–533.
Srivastava, P., Iyer, K. N., & Rawwas, M. Y. (2017). Performance impact of supply chain partnership strategy-environment co-configuration. International Journal of Operations & Production Management.
Storey, J., Emberson, C. & Reade, D. (2015). The barriers to customer responsive supply chain management. International Journal of Operations & Production Management, 25(3/4), 242-260.
Storey, J., Emberson, C., & Harrison, A. (2012). Supply chain management: theory, practice and future challenges. International Journal of Operations & Production Management, 26(7), 7-24.
Thompson, K. N., & Coe, B. J. (1997). Gaining sustainable competitive advantage through strategic pricing: selecting a perceived value price. Pricing strategy and practice, 5(2), 70-79.
van der Westhuizen, C., & Niemann, W. (2022). Strategic supply chain configuration: The role of third-party logistics service providers during disruption recovery. Journal of Transport and Supply Chain Management, 16, 738.
Vonderembse, M.A., & Dismukes, J.P. (2015). Designing supply chains: towards theory development. International Journal of Production Economics, 10(2), 223-238.
Wanyama, J. (2013). The effectiveness of the Procurement Regulations in Kenya. Nairobi: Pr Academics Press.
Wilujeng, S., Sarwoko, E., & Nikmah, F. (2022). Triple-A strategy: For supply chain performance of Indonesian SMEs. Uncertain Supply Chain Management, 10(1), 95-100.
Zimon, D., Tyan, J., & Sroufe, R. (2020). Drivers of sustainable supply chain management: Practices to configuration with un sustainable development goals. International Journal for Quality Research, 14(1).