PROCUREMENT-CENTRIC VALUE CHAIN PRACTICES AND PERFORMANCE OF FOOD AND BEVERAGE FIRMS IN NAIROBI CITY COUNTY, KENYA
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Abstract
Value chain analysis is a strategic process where a firm evaluates its internal activities to identify how each contributes to the firm's competitive advantage. Food and Beverages Manufacturing Firms in Kenya have always faced with supply chain disruptions as a result of increase in material costs resulting to a sales fall of, a reduction of operating income, and a reduction of return on assets. The general objective of the study was to determine the effect of procurement-centric value chain practices on performance of food and beverage firms in Nairobi City County, Kenya. The specific objectives was to examine effect of; distribution planning, warehouse optimization on performance of food and beverage firms in Nairobi City County, Kenya. The study was guided by; Theory of Constraints and The theory of storage. This study employed a descriptive research design. The target was 40 Food and beverage manufacturing companies in Nairobi City County. The unit of observation was 200 comprising of the procurement managers, operations managers, finance managers, stores and, and sales and marketing managers. The study used census hence the target was considered as the study sample. The study used questionnaires for data collection. The sample for piloting was 20 management staff representing 10% of the sample. This study used content and construct validity. Cronbach's Alpha Coefficient was used to measure questionnaires’ reliability. Data was analyzed using SPSS Version 28. Findings were presented in tables. The content of the questionnaire was validated by the supervisor and professionals in management of Food and beverage manufacturing companies. From the regression analysis, distribution planning had the highest impact (B = 0.412, p < 0.000), followed by warehouse optimization (B = 0.369, p < 0.000). This confirms that efficient logistics, optimized storage significantly enhance firm performance. Based on the findings, the study concludes that value chain management is key to improving firm performance. Efficient distribution and optimized warehousing enhance cost efficiency, operational effectiveness, and market competitiveness. The study therefore recommends that firms should invest in digital logistics, AI-driven inventory tracking, warehouse automation. Policymakers should improve transport infrastructure and support technology adoption to boost industry competitiveness.
Key Words: Procurement-Centric Value Chain Practices, Distribution Planning, Warehouse Optimization, Food and Beverage Firms
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