LOGISTICS OPTIMIZATION AND PERFORMANCE OF BEVERAGE MANUFACTURING FIRMS IN NAIROBI CITY COUNTY, KENYA
Keywords:
Logistics Optimization Practices, Inventory Optimization, Collaborative Logistics, Performance, Beverage Manufacturing FirmsAbstract
Beverage manufacturing firms operate in a fast-moving consumer goods (FMCG) sector, where demand fluctuations, regulatory constraints, and distribution complexities require effective logistics strategies. However, limited empirical studies have explored how logistics optimization influences performance of firms in the Kenyan manufacturing sector, particularly within the beverage industry. This study, therefore, sought to fill this gap by assessing how logistics optimization practices contribute to beverage manufacturing firms’ performance. The research examined how inventory optimization and collaborative logistics impact performance of beverage manufacturing firms. The study was anchored on Economic Order Quantity Model, and Transaction Cost Economics Theory. The study adopted a descriptive research design to systematically analyse relationships between logistics optimization strategies and performance of firms. The target population for this study comprised 364 supply chain, logistics, procurement, and operations managers from 91 beverage manufacturing firms operating in Nairobi City County, Kenya. Using the Krejcie and Morgan (1970) sample size determination formula, a sample size of 187 respondents was calculated and rounded up to 188 for balance across the four functional areas. The study selected the respondents using stratified random sampling. Primary data was collected using a semi-structured questionnaire comprising both closed-ended Likert scale questions for quantitative data and open-ended questions for qualitative insights. The quantitative data was analyzed using Statistical Package for Social Sciences (SPSS) version 28, applying descriptive statistics such as frequencies, percentages, means, and standard deviations, along with Pearson correlation analysis and multiple regression modeling to establish relationships between logistics optimization strategies and performance of firms. Qualitative data underwent content analysis and be presented narratively to complement and enrich the quantitative findings. Prior to the main data collection, a pilot study involving 19 respondents (10% of the sample) was conducted in beverage manufacturing firms outside Nairobi City County to test the instrument's reliability and validity. Reliability was assessed using Cronbach’s Alpha coefficient, with a threshold of 0.7 or higher considered acceptable for internal consistency. Validity was ensured through expert reviews and feedback from pilot respondents, enabling refinement of the questionnaire to enhance clarity, flow, and relevance for the main study. The study concludes that firms that automate inventory processes, adopt digital technologies, and optimize network structures are more likely to experience improved operational efficiency, profitability, and customer satisfaction.
Key Words: Logistics Optimization Practices, Inventory Optimization, Collaborative Logistics, Performance, Beverage Manufacturing Firms
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