SUPPLY CHAIN INNOVATION STRATEGIES AND PERFORMANCE OF FOOD AND BEVERAGES MANUFACTURING FIRMS IN NAIROBI CITY COUNTY, KENYA

Abstract

Food manufacturing companies in Kenya have been experiencing fluctuations in profitability in their production and inventory management. The food manufacturing sector recorded a significant drop in growth from 4.7% to 1.6% and 2.7% to 0.2% respectively according to the World Bank economic update 2022. The general objective of this study was to determine the effect of Supply chain innovation strategies on performance of food and beverages manufacturing firms in Nairobi City County, Kenya. Specifically, the study sought to find out the influence of technological strategies on performance of food and beverages manufacturing firms in Nairobi City County, Kenya and to explore the effect of improvement strategies on performance of food and beverages manufacturing firms in Nairobi City County, Kenya. The study used descriptive survey design. The food and beverages manufacturing firms in Nairobi City County were the unit of analysis while the management employees were the unit of observation. Therefore, 546 managers in the 91 manufacturing companies were targeted. The Yamane formula was adopted to calculate the study sample size. Therefore, the study sample size was 231 respondents. The stratified random sampling method was adopted to select the study sample size. Data was collected using self-administered structured questionnaire. Descriptive statistical analysis included frequency, percentages, mean and standard deviation and were used to analyze quantitative data. SPSS version 25 was used for analysis. Inferential statistical analysis used were multiple regression and correlation analysis and tested the relationship between the study variables. The findings were displayed in tables and figures. The study found that all supply chain innovation strategies—technological strategies, and improvement strategies—significantly enhance the performance of food and beverages manufacturing firms in Nairobi City County, Kenya. Multiple regression analysis revealed that technological strategies had the strongest impact on firm performance (β = 0.314, p = 0.000), followed by improvement strategies (β = 0.301, p = 0.000). The study concludes that effective implementation of these strategies is crucial for improving operational efficiency, product quality, and overall firm success. Technological strategies, in particular, play a pivotal role in driving firm performance. Firms should prioritize technological advancements, continuous process improvement strategies to enhance performance.