Total Quality Management Practices and Supply Chain Performance among Manufacturing and Allied Companies Listed at Nairobi Securities Exchange, Kenya

Abstract

The state of organizational supply chain performance has attracted great attention to organizations in their endeavour to create superior structures and systems to guarantee shareholder wealth maximization. An efficient and effective supply chain framework will reduce wastages and optimally grasp opportunities in the best interest of investors. Poor supply chain performance represents over 60% of the challenges facing the global and local manufacturing industry and remain a major hurdle in securing superior firm performance. The study assessed the influence of TQM on supply chain performance for manufacturing and Allied firms listed at NSE, Kenya. Specifically, the study sought to assess the effect of strategic quality planning, supplier relations management, management commitment and customer focus on Supply Chain Performance. The guiding theories included Deming’s Quality Improvement Theory, Goldratt’s Theory of Constraints and Supply Chain Operations Reference (SCOR) Model. The descriptive survey research approach was used to carry out the study. A semi structured questionnaire helped in primary data collection. On the other hand, secondary data was reviewed using a document review guide. Data collection covered the period between 2013/2014 and 2017/2018 financial years. Quantitative and qualitative analysis techniques were employed. Quantitative techniques were included descriptive and inferential statistics. In particular, the multiple regression analysis aided in testing the hypotheses. From the regression analysis results, all the null hypotheses were rejected as all the TQM variables were found to influence supply chain performance. The p-value for strategic quality planning (p=0.014) is less than 0.05 level of significance which informs a conclusion that strategic quality planning has a positive effect on supply chain performance. The p- value for supplier relations management (p=0.005) is less than 0.05 level of significance which informs a conclusion that supplier relations management has a positive effect on supply chain performance. The p value for customer focus (p=0.017) is less than 0.05 level of significance which informs a conclusion that customer focus has a positive effect on supply chain performance. The p value for management commitment (p=0.004) is less than 0.05 level of significance which informs a conclusion that management commitment has a positive effect on supply chain performance. The Coefficient of Determination (R Square) stood at 0765. This meant that 76.5% of variation in supply chain performance was influenced by variation in the independent variable that is total quality management practices and its constituent variables: Strategic Quality Planning, Supplier Relations Management, Customer Focus and Management Commitment. To that effect, only 23.50% of variation in supply chain performance was explained by other factors not included in the model. Although supplier relations management was deeply entrenched, the study recommends further improvement of the framework of supplier engagement to quality initiatives which was found to be only moderately practiced. The study recommends further improvement of customer relations management function to ensure timely and effective handling of customers concerns and feedback to suppliers. The study recommends regular market research to effectively monitor and respond to new market needs as they arise.