SUPPLY CHAIN COST OPTIMIZATION, INFORMATION SHARING AND COMPETITIVENESS OF FOOD AND BEVERAGE MANUFACTURING FIRMS IN UASIN GISHU COUNTY, KENYA

Abstract

The food and beverage processing sector in Kenya are vital to the national economy due to its role in job creation and its contribution to GDP. However, its competitiveness has faced challenges stemming from high operational costs and inefficient supply chain processes. This study examined the moderating effect of information sharing on the relationship between supply chain cost optimization and the competitiveness of food and beverage manufacturing firms in Uasin Gishu County, Kenya. Specifically, the study investigated how inventory management, strategic sourcing, adoption of technology, and logistics costs influence firm competitiveness, and how information sharing moderates these relationships. The study was guided by the Resource-Based View Theory, Lean Manufacturing Theory and Information Sharing Theory. An explanatory research design was adopted, targeting 924 departmental staff across 22 food and beverage firms. A sample of 279 respondents was selected using Yamane’s formula and simple random sampling employed. Data was collected through structured, closed-ended questionnaires, and a pilot study in Nakuru County was conducted to validate the research instrument. Data analysis was performed using SPSS version 25, incorporating both descriptive and inferential statistics, including correlation and hierarchical regression analyses. Findings revealed that inventory management (β1 = 0.152, p = 0.004), strategic sourcing (β2 = 0.173, p = 0.001), adoption of technology (β3 = 0.232, p = 0.001), and logistics cost (β4 = 0.300, p = 0.000) significantly and positively influenced competitiveness. Furthermore, information sharing significantly moderated the relationships between inventory management (β = -0.103, p = 0.002), strategic sourcing (β = 0.059, p = 0.010), technology adoption (β = 0.087, p = 0.009), and logistics cost (β = -0.182, p = 0.002) and competitiveness. The study concluded that effective supply chain practices, enhanced by robust information sharing mechanisms, play a critical role in strengthening firm competitiveness. The study recommends that food and beverage firms adopt modern inventory systems, invest in advanced technologies with adequate employee training, foster long-term supplier relationships, and optimize logistics through lean practices. Importantly, firms should institutionalize information sharing to enhance coordination, responsiveness, and strategic alignment across supply chain functions, ultimately boosting competitiveness and performance. The study's findings would be valuable to food and beverage manufacturing firms by informing managers on optimizing limited resources for competitive advantage through supply chain cost efficiency, guiding the Ministry of Trade in policy formulation within Kenyan borders, and contributing to the broader academic discourse in supply chain management.