Effect of supply chain information systems on performance of manufacturing firms in Nairobi Kenya

Abstract

In today‟s highly competitive and globalized business environment, manufacturing firms are continuously seeking ways to enhance their overall performance. Supply chain information systems (SCIS) have emerged as a critical tool to achieve this objective, facilitating seamless communication, collaboration, and data-driven decision-making throughout the supply chain. Most organizations have embraced information systems in an effort to improve their performance. However, while existing literature acknowledges the importance of information systems in enhancing supply chain efficiency and overall firm performance, it primarily draws from studies conducted in developed economies. The purpose of the study was to establish the Effect of Supply Chain Information Systems on Performance of Manufacturing Firms in Nairobi Kenya. The specific objectives were to establish the effect of enterprise resource planning (ERP), electronic data interchange (EDI) and warehouse management systems (WMS) on performance of manufacturing firms. The study was grounded by Dynamic Capability theory (DCT) and Resource based view (RBV) theories. Explanatory research design guided the study. Stratified sampling technique was used to select a sample of 254 firms drawn from the target population of 698 manufacturing firms in Nairobi Kenya. Primary data was collected using closed ended questionnaires. Data were analyzed using descriptive and inferential statistics. Descriptive was in the form of frequency distribution, means and standard deviations, while inferential consisted of correlation and multiple regressions. Pearson correlation was used to establish the association among variables while multiple regression was used to establish the effect of independent variables on the dependent variable. The findings indicated that Enterprise Resource Planning (ERP) (β=.274, p=.0.002˂0.05) and Electronic Data Interchange (EDI) (β=0.500, p=0.000˂0.05) had significant effects on performance of manufacturing firms in Nairobi Kenya. While Warehouse Management Systems (WMS) had an insignificant effect β=-0.094 and p- value of 0.342˃ 0.05 on performance. This study therefore concludes that ERP and EDI have significant effects on performance of manufacturing firms. The findings of the study support the Dynamic Capability Theory and the Resource Based View theory. This research study was limited to manufacturing firms in Nairobi hence the state of the effect on the other parts of the country was not known. Further research on WMS such as strategies to enhance their effectiveness in improving performance should be done. Manufacturing firms are encouraged to embrace the utilization of supply chain information systems as a means to enhance long-term performance. They should also consider collaborating with industry peers, trade associations, and governmental bodies to share insights and best practices on the adoption of supply chain information systems (SCIS).