Effect of Integrated Supply Chain Practices on the Performance of Fast-Moving Consumer Goods Firms in Kenya: A Case Study of Unga Limited

Abstract

The most successful manufacturers have strategically linked their internal processes to external suppliers and customers in unique supply chains. Manufacturers now recognize the potential of supply chain integration to improve their performance but the lack of deep understanding of supply chain integration to achieve strategic importance is a major challenge to supply chain managers making it hard to be implemented with most confusing supply chain integration with partnerships and collaborations of business partners. Studies on integrated supply chain and its impact on an organization’s overall performance are still unsettled and the area has not been extensively examined. To bridge this research gap, this study examined the effect of integrated supply chain practices on the performance of Fast-Moving Consumer Goods firms in Kenya. The study was guided by the following objectives: to establish the effect of customer integration on the performance of fast-moving consumer goods firms in Kenya, to determine the effect of internal integration on the performance of fast-moving consumer goods firms in Kenya and to examine the effect of supplier integration on the performance of fast-moving consumer goods firms in Kenya. The study was anchored on the following theories: transaction cost economies theory, contingency theory, and the resource-based view theory. The study adopted a descriptive research design, and the target population was 261 employees from 8 departments. The sample size was 158 respondents who were selected through stratified and simple random sampling technique. The study used questionnaires to collect primary data. Data analysis was done using the SPSS software v.25. A multivariate regression model was used to determine the relative importance of each variable of the study and correlation analysis was carried out to find the relationships between the variables under the study. The study concluded that integrated supply chain practices had a positive and significant effect on the performance of fast-moving consumer goods firms in Kenya at Unga limited. The study recommended that FMCG firms enhance the utilization of supplier integration practices to improve organizational performance. Further, the study recommends that internal integration and customer integration be strategically used as policy tools for coordination, production planning and scheduling, customer order management, and demand planning as this will enhance the overall organizational performance.