ABSTRACT
Distributor SMEs provide employment, jobs and support economies. They represent the interest of exporters in their specified territories for agreed range of products. However, a 2016 survey indicated that in 2015 and 2016, distributor SMEs had anticipated growth of 58% and 70% respectively. Yet, 11% was the reported growth totally in line with the plans in 2015. Further, a 2013 report by the ministry of industry and commerce in Kericho County indicated that the distributor SMEs in the county have to contend with issues of changing relationships, employee retention and customer expectations. An attempt to solve this problem focused on enforcing legislation on local content for public projects, establishing ‘buy Kenya, build Kenya’ policies in public procurement, research and development support and increased contributions to funds such as Uwezo. The problem continues to exist. There are no efforts directed towards investigating the issue of streamlining physical distribution for these SMEs with a direct bearing on their viability, competitive advantage and growth. Empirical literature has failed to address the issue of streamlined physical distribution in this context. Therefore, no empirical information is available on extent of adoption of streamlined physical distribution, factors contributing to effectiveness of streamlined physical distribution and challenges to streamlining physical distribution among distributor SMEs in Kenya and Kericho County. The study thus sought to establish the contribution of streamlined physical distribution among distributor SMEs in Kericho County, Kenya. Specifically, the study sought to determine the extent of adoption of streamlined physical distribution, factors affecting effectiveness of streamlined physical distribution and challenges to streamlining physical distribution among the distributor SMEs. The study was guided by systems approach theory. The study adopted descriptive cross sectional survey design and targeted 48 owner managers of distributor SMEs although only 42 responded to the questionnaires. Census sampling was applied. Primary data was used and the data was collected by means of structured questionnaire. Construct validity and test-retest reliability was employed to determine the validity and reliability of the questionnaire. Descriptive statistics like frequencies, mean and standard deviation were used to analyze the three objectives of the study. The findings were presented in tables. The study revealed that streamlined physical distribution had been adopted by distributor SMEs majorly on order processing (71.4%) by setting deadlines for order processing completion. Physical distribution has least been streamlined on stock management (54.8%) as these distributors least understand their safe inventory levels (35.3%). Further, the study revealed that the greatest challenges these distributor SMEs face while streamlining their physical distribution are political interference (85.7%) followed by unreliable market conditions (78.6%) then unfair regulations and high taxes (76.2%). The study thus concluded that distributor SMEs have adopted strategies that streamline their physical distribution mainly on faster order processing. They need to improve on transportation, distribution planning, customer service and inventory management too for sustainability, growth and competitive advantages. These results may be used by policy makers dealing with distributor SMEs and researchers who may wish to further their research based on this study.