Effect of Supply Chain Management on Organization Performance: A Case of East Africa Bottling Share Company

Abstract

This study was conducted with an objective of identifying the effect of supply chain management on performance of an organization in the case of East African Bottling Share Company. Supply chain management has become a valuable way of securing competitive advantage by improving organizational performances since competition is no longer between organizations, but among supply chains. This research conceptualizes and develops five dimensions of supply chain management practices which are strategic supplier partnership, customer relationship, level of information sharing, quality of information sharing, and internal lean practices and tests the relationships between supply chain management practices and organizational performance. The researcher used descriptive and explanatory research design. The data for the study was collected from 97 employees of East African Bottling Share Company. The relationships proposed in the framework were tested by Pearson correlation and the causal relations were analyzed by ordinary least square regression method by using SPSS Software. From the result of the analysis it is concluded that there is a strong relationship between supply chain management practices and organizational performance. Supply chain management practices have shown a positive and significant effect on performance of organization, all except internal lean practices. Therefore, in order to achieve growth in organizational performance, it is frugal for the organization to give due emphasis to the constructs of supply chain management practices.