Abstract
The main objective of the paper is to explore the nature of supply chain management practices and challenges that SMEs, which comprise of about 90% of businesses in the developing countries, face in Africa and more specifically in Kenya. The paper also identified important areas that need to be addressed in order to increase the SMEs long term survival and competitiveness in the business environment. A case study involving a supply chain network of the Small Scale tea Sector in Kenya was studied. Data was collected from forty eight respondents using semi-structured interviews, a structured questionnaire and examination of documents. The study found out that the SME sector appreciates good supply chain management practices, but has not put the same into practice. The sector has not established long term relationships with its suppliers. The sector was found to face several challenges which threaten its long term growth and survival, the most worrying challenge being the continued rising operating costs, adverse climatic changes and unpredictable working environment. This study is limited to the Kenyan small scale tea Industry. To improve generalization, the study could be replicated in other industry sectors of the economy and also in other developing countries. This paper provides a study that can help supply chain managers improve supply chain efficiency. Improved supply chain efficiency may help SME organizations to maintain competitiveness in a rapidly globalizing economy. The paper also gives some suggestions on how SMEs can cope with the challenges that they face. The supply chain management practices suggested in this paper provides a framework for realizing true supply chain efficiency and competitiveness. Different organizations will align their objectives, processes and management focus as per the focal areas of their organization depending on their capabilities and market situation. However, in every case organizations need to act fast to capitalize on these opportunities to be competitive with the world market.
Highlights
World over, Small and Medium Enterprises (SMEs) sector has acquired a significant and pivotal position in the entire development process
The survey analyzed and interpreted responses to questions asked respondents on issues relating to Supply Chain Management practices and challenges for the small scale tea sector in Kenya
The results indicate that Kenya Tea Development Authority (KTDA) Ltd has contracts with suppliers and the small scale tea farmers and it is important to have such supply contracts with players in the supply chains
Summary
Small and Medium Enterprises (SMEs) sector has acquired a significant and pivotal position in the entire development process. Over the years it has played a critical role in the developing economies by generating new employment opportunities and making significant contributions to the national / global economy. An important and comprehensive issue relating to all these factors is the concept and practice of much needed global supply chain, which is yet to find proper place in the SME sector. SME sector can be made globally competitive by enabling it to enter international supply chain
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