REVERSE LOGISTICS PRACTICES AND SUPPLY CHAIN PERFORMANCE OF MOTOR VEHICLE ASSEMBLERS IN KENYA

Abstract

Kenya motor vehicle assemblers face several challenges following liberalization of the economy in the last decade of the 20th century. Domestic industries have been suddenly exposed to competition from imported products. On one hand there are prospects for faster development of manufacturing capabilities, but on the other, imports provide consumers with affordable alternatives. Despite adoption of reverse logistics to gain a competitive edge, the performance of the motor vehicle assembly in Kenya is still on a downward trend. The aim of the study was to establish the effect of reverse logistics management practices on supply chain performance of the motor vehicle assemblers in Kenya. Specifically, the study seeks to; to assess the effect of re-manufacturing, repackaging and recycling on supply chain performance of the motor vehicle assemblers in Kenya and to establish the effect of organizational policies on the relationship between reverse logistics and supply chain performance of the motor vehicle assemblers in Kenya. The study applied Institutional theory, Supply Chain Network theory and Theory of Constraints. This study was guided by positivism Philosophy. The study used descriptive survey research design. The target population was 32 respondents from 8 firms in the motor vehicle assembly in Kenya comprising of staff from; logistics departments, sales departments, stores departments and factory departments. Census sampling was employed. Primary data was collected using structured questionnaires and secondary data through downloaded published audited financial statements. Pilot test was done on Associated Vehicle Assemblers. The study used Cronbach’s alpha to measure degree of reliability. The validity was tested through expert analysis and factor analysis. Both descriptive and inferential statistics were used to analyze the data. Descriptive statistics included mean, standard deviation and variance. Inferential statistics consisted of multiple linear regression analysis and Correlation analysis. Findings were presented in tables, graphs and charts. Regression analysis indicated that remanufacturing, repackaging, recycling had a significant effect on supply chain performance with a coefficient of 2.105, 2.621 and 2.310 respectively without moderating effect organizational policies and 2.851, 2.813 and 2.955 respectively with moderating effect organizational policies. The study depicted reverse logistics explains 62.9% and 67.9% variation in supply chain performance without and with moderating effect of organizational performance respectively. Results would assist policy makers including the Kenya association of manufacturers to identify challenges that still affect the motor vehicle assemblers particularly in the area of reverse logistics. Reverse logistics had a positive and significant effect on supply chain performance. The study recommended that Subsequently, motor vehicle assemblers should provide a mechanism on how to evaluate degree of damage on the products for refund, motor vehicle assemblers in Kenya should provide refund to products that are retuned due to wrong packaging and motor vehicle should practice recycling to prevent the environment from pollution.