SUPPLY CHAIN AGILITY AND PERFORMANCE OF DISTRIBUTION FIRMS IN NAIROBI CITY COUNTY, KENYA

Abstract

In today’s dynamic and highly competitive business environment, distribution firms face increasing pressure to enhance responsiveness, reduce operational inefficiencies, and meet ever-evolving customer demands. However, many such firms in emerging economies—such as Kenya—struggle to align their supply chain operations with strategic performance goals, often due to a lack of agility in sourcing, operations, demand planning, and collaboration. This study was conducted to address this gap by examining the influence of supply chain agility on firm performance in the distribution sector within Nairobi City County, Kenya. The study focused on key dimensions of supply chain agility—strategic sourcing, operational flexibility and how they impact four critical performance indicators: profitability, customer satisfaction, operational efficiency, and market position. The research was guided by dynamic capabilities theory, resource dependence theory, theory of constraints, and resource-based view theory. A descriptive and explanatory research design was employed. Data were collected using a structured, self-administered questionnaire distributed to supply chain professionals across procurement, logistics, operations, and finance functions within selected distribution firms. A stratified sampling technique was used to ensure representation across departments, while a sample size of 234 respondents was achieved. The data were analyzed using descriptive statistics to summarize the responses, Pearson correlation to assess the strength of relationships, and multiple linear regression (Ordinary Least Squares) to determine the combined and individual effects of the independent variables on firm performance. The analysis revealed that all four supply chain agility dimensions had positive and statistically significant effects on firm performance. Operational flexibility and strategic sourcing emerged as the most influential predictors. This study contributes to the existing literature by providing context-specific empirical evidence on supply chain agility within the under-researched distribution sector in Kenya. It also offers practical recommendations for managers seeking to build agile, resilient, and customer-focused supply chains. By demonstrating that supply chain agility is not only strategic but also measurable and actionable, the study underscores its role as a key driver of competitive advantage in the modern distribution landscape.

Key Words: Firm Performance, Distribution Sector, Supply Chain Agility, Strategic Sourcing, Operational Flexibility