Effect Of Supply Chain Management Practices On The Performance Of Supermarkets In Luanda Town, Kenya

ABSTRACT

The growth of supermarkets in Luanda town has not come without any challenges. While most retail outlets tend to cherish competition and encourage growth, it is surprising that two third of these firms drop out of the growth curve of the product lifecycle this is according to Vihiga county government in the ministry of trade which stated that in the past years the growth in retail outlets presence dropped by 25% citing reasons among them insufficient attention to SCM practices. Previous studies reviewed have looked at the relationship between inventory management and performance however none has given it the focus of inventory control systems that this study focuses on and information if inventory control systems is considered is therefore lacking. Moreover studies reviewed have looked at the relationship between relationship management and performance, however the reviewed studies have only either focused on supplier relationship management or customer relationship management and information if the two are looked at together is therefore lacking. Studies reviewed have looked at the relationship between outsourcing and performance however the previous studies have only focused on the outsourced activities and not the outsourcing practices and information if outsourced practices are looked at is therefore lacking. The general objective of the study was to determine the effect of supply chain management practices on performance of supermarkets in Luanda Town, Kenya, The study was guided by the following specific objective determine the effect of inventory control practices on performance of the supermarkets in Luanda Town, to establish the effect of relationship management on performance of the supermarkets in Luanda Town and to establish the effect of outsourcing practices on the performance of the supermarkets in Luanda Town. The study has been anchored on resource dependent theory. The study adopts a correlation research design. The study target populations consisted of 92 employees from customer service, stores and procurement departments of the supermarkets in Luanda Town out of which 48 respondents were drawn using Simple randomly sampling technique. The instrument reliability was evaluated using test retest where a coefficient of 0.87 was established indicating high level of reliability. The instrument was reviewed by academicians in the school of business and economics and practitioners from the supermarkets in Kisumu County for the establishment of content validity. Using multiple regression analysis the study established that inventory controls have a significant effect on performance of supermarkets in Luanda Town (β = 0.144, p = 0.006),, Moreover the study established that outsourcing has a significant effect on performance of Supermarkets in Luanda Town (β = 0.989, p = 0.0014), Lastly the study established that relationship management has a significant effect on performance of supermarket in Luanda Town (β = 0.265, p = 0.009).The study recommends that supermarkets should minimize the cost associated with holding stocks and ordering costs to attain their optimum performance level. Secondly Supermarkets should outsource their noncore business to outside providers that can bring great competitiveness. Lastly, the study recommends that supply chain professionals in the supermarket should embrace collaborative relationships with their suppliers so as to optimize their supply chain costs.