ENHANCING ORGANISATIONAL PERFORMANCE IN THE DAIRY INDUSTRY: SUPPLY CHAIN MANAGEMENT APPROACH
DOI:
https://doi.org/10.47604/ija.1080Keywords:
Supply Chain Management Practices, Organizational Performance, Structural Equation ModellingAbstract
Purpose: The purpose of this paper is to explore the effects of supply chain management practices on the organizational performance underpinned on resource-based view theory (RBV).
Methodology: The study adopts descriptive and explanatory research design with purposive sampling and quantitative methods to collect primary data through crossed ended questionnaires from 109 dairy co-operatives in Kenya. Data collected was organized and cleaned using both excel and statistical package for social scientist (SPSS). Additionally, partial least squares structural equation modelling (PLS-SEM) techniques were used to analyze data in SmartPLS version 3.2 software, and the results for both descriptive and inferential were presented in tables.
Results: The result revealed that SCMPs has a positive and significant impact on Market performance (β=0.558), operational performance (β=0.371) and customer satisfaction (β=0.543). These results reveal that SCM practices are associated with high levels of organizational performance. Thus, SCM practices explain and predict the organizational performance of the dairy industry in Kenya.
Unique contribution to theory, practice and policy: The study provides evidence of the building blocks of supply chain management practices and a framework of their implementation for performance improvement to the managers in the dairy industry. Theoretically, the study contributes to the development and advancement of the theory of supply chain management (SCM) as well as validation of the Resource-based View (RBV). Policy-wise, the study provides directions for coming up with policies geared towards performance improvements in the dairy industry.
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References
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Sundram, V. P. K., Ibrahim, A. R., & Govindaraju, V. G. R. C. (2011b). Supply chain management practices in the electronics industry in Malaysia. Benchmarking: An International Journal, 18(6), 834-855. https://doi.org/10.1108/14635771111180725
Susanty, A., Bakhtiar, A., Purwaningsih, R., & Dewanti, D. F. (2018). Performance measurement of the relationship between farmers-cooperatives-industrial processing milk in a dairy supply chain: A balanced supply chain management scorecard approach. IEEE International Conference on Industrial Engineering and Engineering Management, 2017-Decem, 1387-1391. https://doi.org/10.1109/IEEM.2017.8290120
Tatoglu, E., Bayraktar, E., Golgeci, I., Koh, S. C. L., Demirbag, M., & Zaim, S. (2016). How do supply chain management and information systems practices influence operational performance? Evidence from emerging country SMEs. International Journal of Logistics Research and Applications, 19(3), 181-199. https://doi.org/10.1080/13675567.2015.1065802
Wong, W. P., & Wong, K. Y. (2011). Supply chain management, knowledge management capability, and their linkages towards firm performance. Business Process Management Journal, 17(6), 940-964. https://doi.org/10.1108/14637151111182701
Anatan, L. (2014). Factors Influencing Supply Chain Competitive Advantage and Performance. International Journal of Business and Information, 9(3), 311-334.
Apopa, V. A. (2018). Influence of Supply Chain Management Practices on Performance of Government Ministries in Kenya. Jomo Kenyatta University of Agricultura and technology.
Arham, A. F. (2014). The Relationship Between Leadership Behaviour, Entrepreneurial Orientation and Organisational Performance in Malaysian Small and Medium Enterprises.
Barasa, P. W. (2016). Contributions Of Supply Chain Management Practices On Performance Of Steel Manufacturing Companies In Kenya. Jomo Kenyatta University of Agriculture and Technology.
Chege, P. W. (2017). Influence of Internal Business Value Chain Practices On The Supply Chain Performance Of Large Manufacturing Firms In Kenya. Jomo Kenyatta University Of Agriculture And Technology.
Dikshit, S. K., & Trivedi, S. (2012). Impact of Supply Chain Management Practices on Competitive Edge and Organisational Performance: Study of Cement Industry. Paradigm, 16(2), 67-81. https://doi.org/10.1177/0971890720120207
Garson, G. D. (2016). Partial Least Squares: Regression & Structural Equation Models. G. David Garson and Statistical Associates Publishing.
Gorane, S., & Kant, R. (2017). Supply chain practices and organizational performance An empirical investigation of Indian manufacturing organizations. The International Journal of Logistics Management, 28(1), 75-101. https://doi.org/10.1108/IJLM-06-2015-0090
Gorane, S., Prajapati, H., & Kant, R. (2018). Impact study of supply chain practices on organisational performance for Indian chemical industries. International Journal of Logistics Systems and Management, 31(1), 20. https://doi.org/10.1504/ijlsm.2018.10015223
Hair, Joe F., Howard, M. C., & Nitzl, C. (2020). Assessing measurement model quality in PLS-SEM using confirmatory composite analysis. Journal of Business Research, 109(August 2019), 101-110. https://doi.org/10.1016/j.jbusres.2019.11.069
Hair, Joseph F, Risher, J. J., Sarstedt, M., & Ringle, C. M. (2018). When to use and how to report the results of PLS-SEM. European Business Review, 31(1), 2-24.
Harnowo, A. S. (2015). Roles of Information Technology in Supply Chain Management.
Joseph F Hair, J., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2017). A Primer on Partial Least Squares Structural Equation Modeling (PLS-SEM). Thousand Oaks. Sage.
Kamasak, R. (2013). The contribution of tangible and intangible assets on a firm's profitability and market performance: A resource-based perspective. University of Exeter.
Kant, S. G. R. (2017). Supply Chain Practices and Organizational Performance- An Empirical Investigation of Indian Manufacturing Organizations. International Journal of Logistics Management, 28(1), 1-46.
Kumar, A., & Kushwaha, G. S. (2018). Supply Chain management practices and operational performance of fair price shops in India: An empirical study. Scientific Journal of Logistics, 14(1), 85-99.
Kumar, R. (2016). Organizational performance through dairy supply chain management practices: A winning approach. Innovative Solutions for Implementing Global Supply Chains in Emerging Markets, 84-96. https://doi.org/10.4018/978-1-4666-9795-9.ch005
Kumar, R., & Mohan, A. (2014). Antecedent of Dairy Supply Chain Management Practices: A Conceptual Framework. Journal of Supply Chain Management Systems, 3(1), 48-67.
Memia, F. K. (2018). Influence Of Contemporary Supply Chain Practices On Performance Of Large Manufacturing Firms In Kenya. Jomo Kenyatta University of Agriculture and Technology.
MoALF. (2017). Kenya' S Dairy Nationally Appropriate Mitigation Action (NAMA).
Mor, R. S., Singh, S., & Bhardwaj, A. (2018). Exploring the causes of Low-Productivity in Dairy Supply Chain using AHP. Jurnal Teknik Industri, 19(2), 83. https://doi.org/10.9744/jti.19.2.83-92
Muhammad, Z., Akhter, S. N., & Kafayat Ullah, M. (2014). Dairy Supply Chain Management and Critical an Investigations on Dairy Informal Channel Partners in Pakistan. IOSR Journal of Business and Management, 16(3), 81-87. https://doi.org/10.9790/487x-16358187
Mutuerandu, M. N., & Iravo, D. M. (2014). Impact of Supply Chain Management Practices on Organizational Performance: A Case Study of Haco Industries Limited (Kenya). IOSR Journal of Business and Management, 16(4), 62-64. https://doi.org/10.9790/487X-16436264
Rasoolimanesh, S. M., & Ali, F. (2018). Guest editorial. Journal of Hospitality and Tourism Technology, 9(3), 238-248. https://doi.org/10.1108/JHTT-10-2018-142
Rose, R. C., Abdullah, H., & Ismad, A. I. (2010). A Review on the Relationship between Organizational Resources, Competitive Advantage and Performance. The Journal of International Social Research, 3(11), 488-498.
Saqib, S., & Rashid, S. (2013). Resource-Based View of the Firm"¯: The Nature of Resources Required for Competitive. International Journal of Management and Organizational Studies, 2(1), 92-95.
Sarstedt, M., & Cheah, J. H. (2019). Partial least squares structural equation modelling using SmartPLS: a software review. Journal of Marketing Analytics, 7(3), 196-202. https://doi.org/10.1057/s41270-019-00058-3
Shmueli, G., Sarstedt, M., Hair, J. F., Cheah, J. H., Ting, H., Vaithilingam, S., & Ringle, C. M. (2019). Predictive model assessment in PLS-SEM: Guidelines for using PLSpredict. European Journal of Marketing, 53(11), 2322-2347. https://doi.org/10.1108/EJM-02-2019-0189
Spina, D., Di Serio, L., Brito, L., & Duarte, A. (2015). The Influence of Supply Chain Management Practices in the Enterprise Performance. American Journal of Management, 15(2), 54.
Sukati, I., Hamid, A. B., Baharun, R., & Yusoff, R. M. (2012). The Study of Supply Chain Management Strategy and Practices on Supply Chain Performance. Procedia - Social and Behavioral Sciences, 40, 225-233. https://doi.org/10.1016/j.sbspro.2012.03.185
Sundram, V. P. K., Ibrahim, A. R., & Govindaraju, C. (2011a). Supply chain management practices in the electronics industry in Malaysia Consequences for supply chain performance. An International Journal, 18(6), 834-855. https://doi.org/10.1108/14635771111180725
Sundram, V. P. K., Ibrahim, A. R., & Govindaraju, V. G. R. C. (2011b). Supply chain management practices in the electronics industry in Malaysia. Benchmarking: An International Journal, 18(6), 834-855. https://doi.org/10.1108/14635771111180725
Susanty, A., Bakhtiar, A., Purwaningsih, R., & Dewanti, D. F. (2018). Performance measurement of the relationship between farmers-cooperatives-industrial processing milk in a dairy supply chain: A balanced supply chain management scorecard approach. IEEE International Conference on Industrial Engineering and Engineering Management, 2017-Decem, 1387-1391. https://doi.org/10.1109/IEEM.2017.8290120
Tatoglu, E., Bayraktar, E., Golgeci, I., Koh, S. C. L., Demirbag, M., & Zaim, S. (2016). How do supply chain management and information systems practices influence operational performance? Evidence from emerging country SMEs. International Journal of Logistics Research and Applications, 19(3), 181-199. https://doi.org/10.1080/13675567.2015.1065802
Wong, W. P., & Wong, K. Y. (2011). Supply chain management, knowledge management capability, and their linkages towards firm performance. Business Process Management Journal, 17(6), 940-964. https://doi.org/10.1108/14637151111182701
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Published
2020-05-22
How to Cite
Maina, C., Njehia, P. B. K., & Eric, D. B. K. (2020). ENHANCING ORGANISATIONAL PERFORMANCE IN THE DAIRY INDUSTRY: SUPPLY CHAIN MANAGEMENT APPROACH. International Journal of Agriculture, 5(1), 25 – 38. https://doi.org/10.47604/ija.1080
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