Factors affecting the performance of distribution logistics among manufacturing firms in Kenya: a case study of Kibos Sugar Company limited

Abstract

ABSTRACT Empirical studies shows that distribution logistics impact tremendously on performance of an entire organization as it links the organization to the customers. Kibos sugar company report in 2016 revealed that there was a performance drop from 56% in 2014 to 47% in 2015 and this was attributed to distribution logistics. Therefore this study established factors affecting performance of distribution logistics among production firms in Kenya: a case of Kibos Sugar Company limited and allied industries. The study specifically; determined the effect of product nature on performance of distribution logistics and the effect of distribution structure on performance of distribution. The conceptualization of the study was guided by game theory. The study applied descriptive approach through survey design. The target population comprised 26 employees. The sample size of the study was 24 respondents sampled using census sampling technique. Data analysis was done by descriptive statistics. The study realized that accuracy of data collected, size of data base and ability of management information system to predict future decisions are significant elements of information systems that has got vast influence on the performance of distribution logistics. This study filled the gap in empirical studies which reported that there is no existing relationship between information systems and distribution performance which the present study finds to be existing. The study therefore concludes that management information system coupled with various information technology are key in managing every distribution aspect for sure performance. The study also revealed that distribution structure is a factor which influences distribution performance through availability of regional depots which enables customers to easily reach the products limiting stock outs which in the long run translates to positive distribution performance. Besides, route-planning if considered, enables timely deliveries of products, cost reduction in regard to time, fuel and vehicle maintenance. The present study filled the gap in previous studies which reported that in logistics system, distribution cost is typically the highest single expense. That is, through implementing proper distribution structure, nearly all the avoidable costs may be limited. It is concluded that distribution structure used by a manufacturing firm have an impact on the ability of its Distribution Logistics to perform. The study recommends need of embracing modern and current technology which can help various users of organization information to collect, analyze, interpret and come up with various useful decisions affecting the organization. Further study needs to be done on the same topic but in other smaller institutions especially nationally so as to spur development in the country Kenya and in Africa at large.