EFFECTS OF INTEGRATED SUPPLY CHAIN PRACTICES ON THE

PERFORMANCE OF A MANUFACTURING FIRMS IN KENYA

(A CASE STUDY OF EAST AFRICAN BREWERIES LIMITED)

JUDITH MSINDA MSANZU

DPM/005J/2024

A RESEARCH PROPOSAL SUBMITTED TO THE DEPARTMENT OF

MANAGEMENT SCIENCE IN PARTIAL FULFILLMENT OF THE REQUIREMENT
FOR THE AWARD OF DIPLOMA IN PROCUREMENT MANAGEMENT OF THE
TECHNICAL UNIVERSITY OF MOMBASA

JULY 2025

i
 DECLARATION

STUDENT:

This research proposal is my original work and has not been presented for any degree

in any other university.

Signature: Date:

JUDITH MSINDA MSANZU

DPM/005J/2024

SUPERVISOR:

This research proposal has been submitted for examination with my approval as the university
supervisor:

Lecturer:…………………………………………………….

Signature: Date:

ii
 ACKNOWLEDGEMENT

My special and sincere thanks to my supervisor for the guidance, support,

suggestions, useful comments and constructive critique which were all instrumental to the
successful completion of this research proposal. I also wish to appreciate the support and
encouragement from family and friends during the tough time where I had to balance between
the demand of a rigorous academic program and an equally demanding work environment. My
gratitude to the God Almighty who renewed my strength at every stage of this study.
God bless you all.

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 DEDICATION

I dedicate this to my family for giving me the assistance I needed and the Technical
University of Mombasa for impacting my with the adequate knowledge to complete my research.

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 ABSTRACT

The most successful manufacturers have strategically linked their internal processes to
external suppliers and customer in unique supply chain. The internal integration encompasses
coordination of various functions within the firm, whereas external integration focuses on
collaboration with suppliers and customers. Studies on integrated supply chain and its impact on
an organization overall performance are still unsettled and the area has been extensively
examined. To link the existing gaps, this study will examine the effect of the integrated supply
chain practices on the organization performance of manufacturing firms in Kenya. The study will
be guided by the following objectives: to examine the effects of customer integration of the
performance of manufacturing firms in Kenya, to examine the effects of supplier integration of
the performance of manufacturing firms in Kenya, and to examine the effects of internal
integration of the performance of manufacturing firms in Kenya. The study will adopt a
descriptive research design. The target population will be employees from the top
management, operational employees and external suppliers cutting across all internal and
external factors. The study sample from will a target the population and a sample size of several
respondents selected through simple random sampling technique.
Structured questionnaires and interviews will be the methods used to collect data based on the
research questions.

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 TABLE OF CONTENTS

DECLARATION............................................................................................................................ii

ACKNOWLEDGEMENT...........................................................................................................iii

DEDICATION...............................................................................................................................iv

ABSTRACT....................................................................................................................................v

TABLE OF CONTENTS..............................................................................................................vi

LIST OF TABLES.........................................................................................................................ix

LIST OF FIGURES.......................................................................................................................x

ABBREVIATIONS OR
ACORNYMS……………………………………………………………………………..……..xi

CHAPTER ONE ……………………………………………………………………………..2

1.0 Introduction……...………………………………….……………………………………….2

1.1 Background of the Study……………………………………………………………………2

1.1.1 Supply chain integration………………………………………………………………….3

1.1.2 Manufacturing firms in Kenya……………………………………………………………6

1.1.3 East African Breweries Limited …………………….………………………………………6

1.2 Statement of the problem……………………………………………………………………7

1.3 Objectives of the Stud………………………………………………………………………..8

1.3.1 General objective…………………………………………………………………………..8

1.3.2 Specific objectives………………………………………………………………………….9

1.4 Research questions…………………………………………………………………………..9

1.5 Value of the study………………………………………………………………………..….9

1.6 Scope of the Study……………………………………………………………………………9

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CHAPTER
TWO……………………………………………………………………………………….….…11

LITERATURE REVIEW............................................................................................................11

2.1 Introduction………………………………………………………………………………...11

2.2 Theoretical Review…………………………………………………………………………11

2.2.1 Transaction Cost Economies Theory……………………………………….…………..11

2.2.2 Resource Based Theory………………………………………………………………….11

2.2.3 Porter's Value Chain……………………………………………………………………..12

2.3. Conceptual Framework…………………………………………………………………...12

2.4 Literature Review of the Variables………………………………………………….……13

2.4.1 Customer integration…………………..………………………………………………...13

2.4.2 Internal Integration…………..…………………………………………………………..14

2.4.3 Suppliers integration………………………………….………………………………….15

2.4.4 Performance of manufacturing firms…………………………………………………...15

2.5 Empirical Literature review……………………………………………………………….16

2.6 Critique of the literarure review…………..………………………………………………16

2.7 Research Gaps………………………………………………………………………………17

CHAPTER THREE.....................................................................................................................18

RESEARCH METHODOLODY...............................................................................................18

3.1 Introduction………………………………………………………………………………...18

3.2 Research Design ………………………………….………………………………………..18

3.3 Target Population…..…………………………...…………………………………………18

3.4 Sampling Frame…………………………………………………………….……………..18

3.5 Sample size and sample technique…………………………….………………………...18

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3.5.1 Sample Technique………………….……………………………………………………19

3.5.2 Sample Size…………..…………….…………………………………………………….19

3.6 Data Collection….………………………………………………………………………….22

3.7 Pilot Testing………….……………………………………………………………………..22

3.7.1 Validity of the research instrument…………………….………………………………23

3.7.2 Reliability of the research instruments…………………………………………………22

3.8 Data Analysis ………………………………………………………………………………23

3.9 Diagnostic Test……………………………………………………………………………..23

REFERENCES.............................................................................................................................25

APPENDICES..............................................................................................................................34

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 LIST OF TABLES

Table 3.1 Sample size table…………………….……………………………………….

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 LIST OF FIGURES

Figure 2.1 Conceptual Framework………………………………………

x
ABREVIATIONS OR ACRONYMS

EABL East Africa Breweries Limited

GDP Gross domestic Product

KBL Kenya Breweries Limited
UBL Uganda Breweries Limited
SBL Serengeti Breweries Limited
EAML East African Beverages (South Sudan)
Limited and East African Malting
Limited
TCE Transaction Cost Economies Theory
ERP Enterprise Resource Planning
RBV Resource-Based Theory
SCI Supply Chain Integration
SI Supplier Integration
CI Customer Integration
II Internal Integration
VIF Variance Inflation Factor
NACOSTI National Commission for Science
Technology and Innovation
SPSS Statistical Package for Social Sciences
TUM Technical University of Mombasa

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 CHAPTER ONE: INTRODUCTION

1.0 Introduction

The purpose of this study is to determine the effects of integrated supply chain on the
performance of Manufacturing firms in Kenya; East African Breweries Limited (EABL) as an
organization. This chapter will investigate the background, problem statement, objectives and
research questions that will be employed to conduct this research. The chapter will also cover the
importance of the study to the respective parties and the study scope.

1.1 Background of the Study

As today’s markets and global networks continue to become increasingly volatile and disordered,
manufacturing companies find themselves under pressure to outperform their competitors and
develop strategies to enhance their performance. The competition will shift from being between
independent firms to being between entire supply chains, where the organization with superior
capabilities will be the one to thrive and generate more profits. In this era of supply chain
competition, all partners in the chain will need to collaborate, jointly solve challenges, and plan
for the future together. Supply chain integration will be defined as strategic collaboration and
coordination with stakeholders in both intraorganizational and interorganizational operations to
optimize the timely flow of products, services, information, and decisions to deliver value to the
final customer with low costs and higher responsiveness. From a sub-Saharan Africa perspective,
there can be scarce research into supply chain integration, with much of the existing research
coming from a South African perspective.

A recent study examines the supply chain integration process in the South African conveyancing
industry and will conclude that integrating information technology across supply chain partners
will optimize process efficiency in the conveyancing supply chain (Amadi-Echendu & Kruger,
2021). However, very little will have been done from the perspective of developing economies,
including Kenya. Information sharing, central to supply chain integration, will still be considered
risky by most managers due to concerns about information leakage to competitors. This might
lead many managers to remain reluctant to share strategic information with collaborating
partners (Kembro & Naslund, 2017). A Kenyan study finds that sharing information with supply
chain partners can negatively affect firms’ performance by shifting power to competitors

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(Kimitei et al., 2019). According to a study by Kemunto (2019), Kenya has about 226
multinational corporations, as reported by the Kenya Bureau of Statistics, with the majority
seeming to have integrated their supply chains. A manufacturing company’s supply chain will
consist of geographically dispersed facilities where raw materials, intermediate products, or
finished products are acquired, transformed, stored, or sold, and transportation links connecting
these facilities along which products flow. The facilities may be operated by the company or by
vendors, customers, third-party providers, or other firms with which the company has business
arrangements.

This dispersion, if not managed well, can result in a breakdown of the entire chain. Supply
integration will be something that firms cannot ignore if they want to ensure customer
satisfaction. An integrated supply chain will be seamless, with collaborative relationships
supported by unified data and business processes. The aim is to coordinate and harmonize all
elements of the supply chain from raw materials to finished products while achieving higher
levels of overall performance and optimizing costs. Organizations will be able to significantly
improve their performance through supply chain integration; however, despite this, most
organizations facing challenges in integrating all their stakeholders. To achieve an integrated
supply chain, the organization needs to bring their partners out of their independent silos and
develop a cohesive team with shared goals and objectives. All stakeholders within the supply
chain need to agree to work as a team, strive for continuous improvement, and stay well ahead of
competitors, keeping in mind that the failure of one is the failure of all.

1.1.1 Supply Chain Integration

To build alliances, organizations collaborate with supply chain partners to coordinate supply
chain activities. Supply chain collaboration and coordination will a be key elements of supply
chain integration (Leuschner, Rogers, & Charvet, 2013). Collaboration starts with customers and
extend back through the organization to its suppliers, while coordination will involve managing
the forward physical flow of deliveries and the backward flow of information (Frohlich &
Westbrook, 2001). Integration will be defined as the unified control of several successive or
similar economic or industrial processes that are currently carried out independently (Flynn,
Huo, & Zhao, 2019). Organizations will not exist in isolation but will interact with their
surroundings to optimize their potential. Therefore, to gain a competitive advantage,

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organizations will turn to supply chain integration to create trade alliances and networks that
allow them to compete externally as if they were one unit. Integration will exist at both strategic
and operational levels, enhancing process efficiency and effectiveness (Näslund, 2014).

Supply chain integration occur between three or more entities involved in the value-adding
processes required to achieve an efficient and effective flow of products, services, finances,
decisions, and information from the source to the customer, while providing maximum value at
low cost and high speed (Zhao, Huo, Flynn, & Yeung, 2019). SCI require both internal and
external integration. (Schoenherr & Swink, 2012). This research focus on external supply chain
integration and the operational performance of the organization while also considering internal
integration, which will be a prerequisite for both customer and supplier integration based on the
notion that uncertainties in the environment must be internally absorbed by various functional
areas within the organization (Flynn et al., 2010). Therefore, external integration will extend
from internal integration.

External integration will be the degree to which a manufacturer partners with its supply chain
partners to structure inter-organizational strategies and practices into synchronized processes. It
will comprise supplier and customer integration (Flynn et al., 2017; Wong, Boon-itt, & Wong,
2017). A close relationship between the organization and its suppliers enables suppliers to
understand the organization’s needs and adapt to changing requirements in a timely manner.
Increased information exchange between the organization and its suppliers will help reduce
waste and improve delivery performance as production planning can be done accurately (Flynn
et al., 2019). Supplier integration therefore involve developing collaboration with suppliers to
better manage inter-firm business processes and enhance collaboration in planning and joint
product development (Wong et al., 2011).

By integrating with its customers, the organization will be able to improve the accuracy of its
demand information, which will assist in the product design process. Increased responsiveness to
customer needs will lead the organization to produce higher quality products at reduced costs and
more flexibly (Flynn et al., 2019). Customer integration involves close collaboration and
information sharing with key customers to provide the organization with strategic insights on
opportunities and market expectations (Wong et al., 2011). Therefore, with external supply chain

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integration, organizations will be able to design products faster, with higher quality, and at lower
costs compared to a single organization on its own (Näslund, 2014).

Previous studies have show that even though integration may exist within the organizations of a
supply chain, this integration might not necessarily extend to the partners of the supply chain
(Lambert, Cooper & Pagh, 2017; Bagchi, Ha, Skjoett-Larsen & Soerensen, 2005; Fabbe-Costes
& Jahre, 2007; Richey, Chen, Fawcett & Adams, 2009). Available literature provides little
empirical evidence that integration exists beyond the dyadic level. Lambert et al. (2017) observes
that there will be limited that supply chains are linked from the source of supply to the end user,
but that there are links between various partners in the supply chain forming two-way
relationships. Bagchi et al. (2005) will discover that in Europe, there will be limited evidence
that companies establish close integration with their supply chain partners, especially if they
have been in business for many years. Fabbe-Costes et al. (2008) will find that only a few studies
document integration beyond the dyadic level.

This study therefore seek to identify whether supply chain integration exists beyond the
organization and between the partners of the supply chain. To determine whether supply chain
integration exists in the organization, an examination of internal integration, supplier integration,
and customer integration in manufacturing organizations will be conducted.

1.1.2 Manufacturing Sector in Kenya

The Kenyan economy is estimated to have contracted by 1 percent in 2020 compared to 5.4
percent growth in 2019 (World Bank, 2020). The share of gross domestic product (GDP) from
manufacturing will remain below 10 percent with its growth rate staying around 5 percent over
the last ten years. Kenya’s economy will continue to be dominated by the service sector,
contributing 49.7 percent to GDP. The most vibrant retail sector in Kenya will be the food and
beverage industry because the country will mainly depend on agriculture for its manufacturing
inputs (Mutunga and Minja, 2014). To underline potential in the sector, East African Breweries
Limited (EABL) will be the second-largest taxpayer in Kenya, behind Safaricom (Marcopolis,
2016). East African Breweries Limited’s local market share will be estimated at 74 percent since
1922. The manufacturing sector’s contribution to GDP will have reduced to 7.5 percent in 2019
from 7.8 percent in 2018, indicating that Kenya will be deindustrializing rather than
industrializing. Although manufacturing firms will support economic growth, wealth creation,

xv
and poverty alleviation, dismal performance will be reported, largely due to tensions from global
markets and changes that will disrupt the entire supply chain. This will prompt multinationals to
devise strategic and effective ways to manage their supply chains, ensuring end-to-end control
and building resilience with all stakeholders involved.

1.1.3 East African Breweries

EABL begun with the creation of Kenya Breweries Limited in 1922. EABL will operate across
East Africa through its subsidiaries, including Kenya Breweries Limited (KBL), Uganda
Breweries Limited (UBL), Serengeti Breweries Limited (SBL) in Tanzania, UDV (Kenya) Ltd,
East African Beverages (South Sudan) Limited, and East African Malting Limited (EAML) in
Kenya. This diversity improves delivery of high-quality brands to East African consumers and
provide long-term value to East African investors. The brands will include a combination of
local beers and international premium spirits, such as Tusker, Kenya Cane, Uganda Waragi,
Guinness, Bell Lager, Serengeti Lager, Johnnie Walker, and Smirnoff. Most of EABL’s
warehouses will be outsourced to third parties, as will other functions such as transport. Hence,
having an integrated, streamlined, and agile logistics network, from the end of the packaging line
to distribution, will be crucial.

1.2 Statement of the Problem

Supply Chain integration and its effects on performance is a widely studied topic worldwide with
various conclusions depending on the level of integration of the organization. Fewer studies have
been done in Kenya as regards SCI and performance, especially on operational performance.
Das, Narasimhan, & Talluri (2006), Stank, Keller, & Closs (2001) and Flynn et al., (2010)
investigated the effects of supply chain integration on performance and concluded that there is
not necessarily a positive relationship, especially on operational performance. Das et al., (2006)
sought to demonstrate that increasing integration beyond a certain threshold did not always result
in enhanced performance but instead decreased performance. By comparing the effects of
various supplier integration practices employed by manufacturing organizations in the United
States on manufacturing performance dimensions of cost reduction, quality improvement, cycle
time reduction, new product introduction time and delivery, they found that the interdependence
created by integration caused rigidity, inflexibility and coordination issues that negatively
affected performance. This implies that organizations have to define the level of integration that

xvi
will optimize their performance. Stank et al., (2001) identified customer and internal integration
to be the most important differentiators of overall firm performance in their study of the
relationship between logistics integration and performance. The research concluded that
customer integration is the most critical competence associated with improved performance. This
is because organizations that are set up to efficiently and effectively integrate with their
customers are better able to meet their expectations in terms of speed of delivery, responsiveness
and order flexibility. Flynn et al., (2010), concluded that supplier integration did not contribute to
operational performance directly, but by interacting with customer integration, operational
performance was improved. The study was conducted in the Chinese manufacturing industry and
concluded that there was a significant direct relationship between internal integration and
operational performance. On considering both supplier and customer integration, customer
integration was more directly related to operational performance unlike supplier integration. In
Kenya fewer studies have been done on supply chain integration in the manufacturing industry
and its effect on operational performance. Barasa, Simiyu and Iravo (2015), studied the, they
found that supply chain collaboration practices significantly contribute to performance of the
companies and that the companies created extensive coordination by involving their suppliers in
joint planning, product development and had clear policies to manage the relationships between
their customers and suppliers. They also found that by standardizing means of communication,
information and resource sharing can be improved. The study focused on steel manufacturing
firms in Kenya, but it is important to determine whether other manufacturing firms that employ
the same practices have improved performance.

This study therefore sought to establish how the aspects of supply chain integration affected
performance of manufacturing organizations and whether manufacturing organizations in Kenya
undertake practices that support supply chain integration. This enabled the study to determine the
effect of supply chain integration on performance of manufacturing firms.

1.3 Objectives of the Study

This section will cover the general and specific objectives of the study.

1.3.1 General Objectives

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The general objective of this study will be to establish the extent to which integrated supply
chain practices affect the performance of manufacturing firms in Kenya, using East African
Breweries as a case study.

1.3.2 Specific Objectives

This study will be guided by the following objectives:

i. To examine the effect of internal integration on the performance of manufacturing

firms in Kenya.
ii. To examine the effect of customer integration on the performance of manufacturing
firms in Kenya.
iii. To examine the effect of supplier integration on the performance of manufacturing
firms in Kenya.

1.4 Research Questions

i. What will be the effect of internal integration on the performance of manufacturing

organizations in Kenya?

ii. What will be the effect of supplier integration on the performance of manufacturing
organizations in Kenya?

iii. What will be the effect of customer integration on the performance of manufacturing
organizations in Kenya?

1.5 Value of the Study

Manufacturing companies will benefit immensely from the findings of this study. This study
offers greater insight into supply chain managers on the implementation and a deeper
understanding of supply chain integration for organizations to achieve efficiency in their
operations. Supply chain integration plays an important role in the success of many organizations
and can help increase a firm’s ability to be competitive. Additionally, scholars and researchers
benefit from this study, as it may provide relevant information and literature on the broader area
of supply chain integration in supply chain management, an area which has not been adequately
explored. The studies done on supply chain integration in manufacturing firms in Kenya, a
developing country, are limited and inclusive as to whether firm performance is affected

xviii
positively or negatively; therefore, this study seek to contribute to the knowledge bank on supply
chain integration and its effect on the performance of manufacturing firms in Kenya.

1.6 Scope of the Study

This study seeks to determine the effect of supply chain integration practices on the performance
of manufacturing firms in Kenya, using East African Breweries as a case study.

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 CHAPTER TWO: LITERATURE REVIEW

2.1 Introduction

This chapter describe theoretical framework, conceptual framework, literature review on

variables, empirical literature review, critique of the literature review, research gaps and overall
summary of the literature review.

2.2 Theoretical Framework

This section discusses various theories advanced by scholars that are relevant to the study.
Establishing a theoretical foundation is essential as it aids in the detailed understanding of the
concepts reviewed. This study will be anchored on Transaction Cost Economics Theory,
Resource-Based View Theory, and Porter’s Value Chain Theory.

2.2.1 Transaction Cost Economics Theory

Ronald Coase’s Transaction Cost Economics (TCE) theory, further developed by Oliver
Williamson, suggests that the optimal organizational structure and strategy are those that
minimize exchange costs to achieve economic efficiency. The theory argues that each type of
transaction incurs coordination costs related to managing, monitoring, and controlling these
exchanges. Decision-makers compare these transaction costs with internal production costs to
determine whether to employ a firm structure or source from the market. Thus, cost becomes the
primary factor in such decisions. Supply chain integration is associated with enhancing
organizational financial performance, as the cost considerations are crucial before deciding to
integrate internal and external processes.

2.2.2 Resource-Based View Theory

The Resource-Based View (RBV) theory is a significant framework in strategic management that
emphasizes the importance of a firm’s internal resources in achieving and sustaining a
competitive advantage. According to Barney (2017), resources that are valuable, unique, difficult
to imitate, and non-substitutable can lead to a competitive edge. This theory explains how a firm
can achieve a sustained competitive advantage by leveraging its unique internal resources and
capabilities (Wernerfelt, 2017). In today’s competitive landscape, internal resources alone are not

xx
sufficient; firms must also acquire and effectively exploit external resources and capabilities to
enhance their competitive advantage (Lai, 2012).

This theory helps the researcher understand productivity gains in the supply chain that are
possible when trading partners undertake relation-specific investments that combine their
resources in unique ways (Dyer & Singh, 2014). Relation specific investments include creating
networks with supply chain partners who may provide the organization with access to resources,
markets, information and technologies which enables them share risks and allows them to focus
on their core business. By integrating with suppliers and customers, the organization creates
unique skills, knowledge and joint capabilities that are not easily replicated. This leads to
improved product quality as there is faster identification and communication of challenges, joint
problem solving and better understanding of capabilities of the supply chain partners (Deming,
1982). Joint idea generation and evaluation with both suppliers and customers can lead to
improved product designs which also impacts on product quality (Schoenherr & Swink, 2012).

2.2.3 Porter’s Value Chain Theory

Porter’s Value Chain Theory, introduced by Michael Porter (1985), posits that a business
comprises a series of activities from raw material procurement to product distribution and after-
sales service. To create value and achieve cost savings, a business must focus on optimizing each
link in this value chain. Organizational performance is influenced by strategic choices, which
determine the performance measures implemented. This theory is relevant to this study as it
provides insights into how manufacturing firms in Kenya can enhance their performance through
effective value chain management.

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2.3 Conceptual Framework

Independent variable. Dependent variable

Internal Integration
 Demand
management
 Inventory
management

Supplier Integration
 Order fulfilment
Organization performance
 Supplier
development  Market performance
 Early supplier  Financial performance
involvement
 Strategic supplier
relationship

Customer Integration

 Order
management
 Customer service
management
 Customer
relationship

Figure 2.1 Conceptual Framework

xxii
2.4 Literature Review on Variables

2.4.1 Customer Integration

Customer integration measures the level of interaction and cooperation between a firm and its
customers. This involves acquiring technological, production, marketing, and inventory
information from customers, which manufacturers can use to produce products that meet user
needs. Essentially, customer integration encompasses the downstream aspect of supply chain
integration—focusing on the outgoing products and services and the incoming data from
customers to suppliers. From the customer’s perspective, it involves the organization’s ability to
deliver quality goods and services, effective delivery, and overall satisfaction.

Supported by the Resource-Based View (RBV) theory, customer integration enhances

competitive advantage by presenting a product offering that aligns with customer desires
(Leuschner et al., 2013). Information sharing through customer feedback can improve product
and service quality, leading to greater flexibility and responsiveness (Narasimhan et al., 2010).
This increased interaction helps organizations refine products and adapt to customer
requirements, resulting in benefits such as improved pricing, quality, availability, and brand
value propositions, ultimately leading to increased customer acquisition and retention (Gekonge,
2011). The emphasis on customer focus and satisfaction is reinforced by recent management
philosophies (Chabrow, 2002; Holloway, 2002; Needleman, 2003).

2.4.2 Internal Integration

Internal integration refers to how well a firm structures its organizational strategies, practices,
and processes into a collaborative, synchronized system to meet customer requirements and
efficiently interact with suppliers (Flynn et al., 2014). This concept is also known as cross-
functional integration (Foerstl et al., 2023; Frankel & Mollenkopf, 2015).

Schoenherr and Swink (2012) highlight that internal integration is crucial for achieving overall
supply chain integration, which in turn improves organizational performance. High levels of
internal integration are characterized by well-established rules, procedures, and strong inter-
departmental relationships, facilitating better utilization of external knowledge. Conversely,
inadequate internal management systems can obstruct effective information and material flow
across the supply chain (Romano, 2003). Pagell (2004) identifies several factors that influence

xxiii
internal integration, including organizational structure, culture, facility layout, job rotation, and
cross-functional teams. Mollenkopf et al. (2022) found that including integration in strategic
plans and cross-training can foster integration, although rewards were not significant in their
study.

Internal integration is pivotal for enhancing operational and financial performance, competitive
adaptation, and overcoming barriers to transparent data flow. By integrating internal supply
chain components with external activities, organizations can better align manufacturing,
logistics, procurement, sales, and production.

2.4.3 Supplier Integration

Supplier integration, a subset of supply chain integration, involves the degree of cooperation
between a manufacturer and its key suppliers to fulfill customer requirements. This cooperation
includes shaping inter-organizational structures, strategies, and practices into collaborative
processes (Flynn, 2014). Supplier integration leverages core competencies related to
collaboration with critical suppliers.

Ellis, Henke, and Kull (2023) highlight several advantages of early supplier involvement, such as
reduced development costs, standardization of components, consistent supplier performance,
fewer technical changes, higher quality, and improved manufacturing processes. Effective
supplier integration contributes to a streamlined procurement and supply chain process, reducing
risks and enhancing overall business performance by optimizing supplier evaluation,
communication, and cooperation.

2.4.4 Performance of Manufacturing Firms

Successful manufacturers effectively link their internal processes with external suppliers and
customers within a dynamic supply chain. The integration of e-business and supply chain
processes plays a crucial role in gaining a competitive advantage. Studies suggest that supply
chain process integration improves firm performance by developing necessary capabilities
(Koufteros et al., 2014; Wang et al., 2015).

Manufacturers face significant challenges in balancing demand and supply amidst intense
competition. Orientation towards customer satisfaction highlights the importance of strategic and
cooperative buyer-supplier relationships. Efficiency and effectiveness in supply chain systems

xxiv
are critical performance indicators, with cost containment and supply chain reliability being key
metrics. Organizations must excel in key business processes to meet objectives and customer
expectations. Financial performance is often considered a primary measure of company
performance (Das et al., 2006; Koufteros et al., 2007).

2.5 Empirical Literature Review

Research on the relationship between supply chain integration and organizational performance
reveals varied findings. Schoenherr and Swink (2018) have explored internal, upstream
(supplier), and downstream (customer) integration dimensions. Leuschner (2013) defines supply
chain integration in terms of process linkages across organizations, emphasizing information,
operational, and relational integration. Koufteros et al. (2014) and Wang et al. (2015) argue that
supply chain integration responds to chaos and uncertainty through improved collaboration,
coordination, and control.

Wu and Barnes (2016) note that supply chain members must develop capabilities to respond
swiftly to changing conditions. Despite extensive research, conceptual vagueness in supply chain
integration persists (Gimenez & Ventura, 2015; Lau et al., 2010). Kongogo (2012) identifies
natural disasters as a major cause of supply chain disruptions in Kenya’s floriculture industry.
Moenga (2011) highlights that the small-scale tea sector in Kenya values strong supplier
relationships.

2.6 Critique of the Literature Review

The literature on supply chain management and logistics reveals a scarcity of clear definition for
supply chain integration, often conflated with related concepts like cooperation and
collaboration. Theoretical foundations are underdeveloped, and some components of supply
chain integration remain underexplored. Most studies focus on relational, environmental, and
interorganizational antecedents, with limited research on firm-specific resources and capabilities
(Vijayasarathy, 2015; Lockstorm, 2010). Inconsistent descriptions of SCI dimensions and their
relationships further complicate understanding (Zhao et al., 2011).

Empirical evidence is scarce on how different SCI dimensions simultaneously impact company
performance. While studies address the role of supplier or customer integration in isolation (Das

xxv
et al., 2006; Koufteros et al., 2007), or focus on internal integration (Pagell, 2004),
comprehensive analyses of all dimensions together are limited.

2.7 Research Gaps

Various research has been done on supply chain integration and its effects on performance of the
manufacturing firms. The focus may have been varied depending on type of integration either
internal, supplier or customer integration but the results are in agreement that SCI improves
performance (Stank et al, 2001; Saeed et al, 2005; Zailani & Rajagopal, 2005; Wong et al, 2011).
Others claim that internal integration is the basis of external integration which in turn improves
performance of the organization (Vickery et al, 2003; Flynn et al, 2010; Zhao et al, 2011;
Williams et al, 2013). They state that internal integration ensures that there is a smooth flow of
information and materials through the organization to the supply chain partners and that the level
of integration determines performance practices in a manufacturing firm.

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 CHAPTER THREE: RESEARCH METHODOLOGY

3.1 Introduction

This chapter presents the methodology used to carry out the study. This includes the research
design, the target population, data collection instruments used, data collection techniques, pilot
test, data analysis method and presentation. This research methodology aimed at enabling the
researcher to obtain the data, process it and interpret the results.

3.2 Research Design

This study employs a descriptive research design, which is crucial for understanding and
documenting the characteristics of a phenomenon. According to Easterby-Smith, Thorpe, and
Jackson (2015), a research design is a structured plan for collecting and analyzing data to meet
research objectives. The information collected is then quantified in order to draw conclusions on
the subject under study. The research aimed at finding out the effects of supply chain integration
practices on the performance of manufacturing Firms in Kenya.

3.3 Target Population

As defined by Denscombe (2014), the population encompasses the entire group of individuals
that the research is aimed at studying. For this study, the target population consists of the
employees of East African Breweries Limited (EABL), with a total number of 528 employees.
This population includes a diverse range of employees across different levels of the organization,
ensuring that the study captures a comprehensive view of the company’s workforce.

3.4 Sampling Frame

The sampling frame for this study includes 528 professional employees selected from various
levels within EABL: top-level management, middle management, and operational management.
This selection is crucial for obtaining a representative sample that reflects the different
hierarchical levels within the organization. By including employees from all these levels, the
study aims to capture a wide range of perspectives and insights related to the research objectives.

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3.5 Sample Size and Sampling Techniques

3.5.1 Sampling Techniques

The study will utilize a combination of simple random sampling and stratified random sampling
techniques to select participants.

Simple Random Sampling: This technique involves selecting respondents from the target
population in a manner that each individual has an equal chance of being chosen. This helps in
achieving a representative sample without bias. For this study, simple random sampling will be
used to ensure that every employee within the defined strata has an equal opportunity to be
included in the sample.

Stratified Random Sampling: To enhance the representativeness of the sample, the population
will be divided into strata based on different management levels (top-level, middle-level, and
operational). Within each stratum, participants will be selected randomly. This approach ensures
that each management level is adequately represented in the sample, allowing for more detailed
analysis and comparison between different levels of the organization.

3.5.2 Sample Size

Determining the sample size is a crucial step in ensuring that the research findings are both
reliable and generalizable. For this study, the sample size of 528 respondents has been selected
from the target population of 1,138 employees at East African Breweries Limited (EABL).

Rationale for Sample Size:

Statistical Power: A sample size of 528 is chosen to provide sufficient statistical power to detect
meaningful differences or relationships within the data. This sample size helps in achieving a
balance between accuracy and practicality, ensuring that the results are statistically significant
and can be generalized to the broader population.

Confidence and Precision: With a sample size of 528, the study aims to achieve a high level of
confidence in the results, with a reduced margin of error. This size is large enough to ensure that
the estimates and inferences drawn from the sample are close to what would be found if the
entire population were surveyed.

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Stratification: By selecting this sample size, the study accommodates the stratified sampling
approach, where respondents are categorized into different management levels (top-level,
middle-level, and operational). This stratification ensures that each level is adequately
represented, allowing for more nuanced analysis and comparisons across different managerial
strata.

Resource Constraints: Practical considerations such as time, cost, and availability of resources
also influence the sample size. The chosen sample size strikes a balance between these
constraints and the need for robust data collection and analysis

The sample size of the study was determined using Yamane’s Formula (Yamane, 1997):

n= N____

1 + N (e 2)

85 questionnaires were used to collect data for the study as had been determined by Yamane
1997 formulae with a confidence interval of 90% and a 0.05 margin of error as shown below;
Sample size formulae;

n= N = 528 = 528 = 85 Respondents

1 + N (e 2) 1+ 528(0.12) 6.28

Where;

n= Optimum Sample size

N= Target population

e= margin of error

Stratified random sampling aims to achieve the desired representation from various sub-groups
in the population with the subjects being selected in such a way that the existing sub-groups in
the population are represented in the sample. This was calculated as shown below;

N h = N h x nf

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 N

Where;

N h =sample size for strata h (where h = 1, 2, 3)

N h = population size for strata h

N = Total Population

n f = Final sample size under Yamane’s formula

Therefore,

3
= X 85 = 1 (Sample size for Top Management Level)
528

175
= X 85= 28 (Sample size for Middle Management Level)
528

350
= X 85= 56 (Sample size for the Operational level of Management)
528

Table 3.1: Sample size

Population category Target Sample size

population

Top management level 3 1

Middle management level 175 28

Operation management level 350 56

Total 526 85

3.6 Data Collection

A questionnaire will be used as the data collection instrument for this study. A questionnaire is a
printed self-report form designed to elicit information that can be obtained through the written

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responses of the subjects. Primary data was collected by use of questionnaires which was
constructed in likert scale and comprised of both closed and open ended questions which
included all possible answers/prewritten responses where the respondents are asked to choose
among them. Questionnaires were chosen as the data collection instrument because it ensures a
high response rate, does not require a lot of time and energy to administer and is considered
confidential because respondents are not required to disclose their identity. It reduces
opportunity for bias because they are consistent and most questions in the questionnaire were
closed ended, making it easy to compare the responses received from the respondents.

3.7 Pilot Testing

According to Kothari (2004), a pilot test is a preliminary phase in the data collection process. It
will be conducted to identify and address any errors that may arise from improper questionnaire
construction, misinterpretation by respondents, difficulties in answering questions, and
ambiguities. The core objective of pilot testing is to detect potential issues before they become
costly mistakes. It will also provide insight into the estimated duration of the actual research.
Bobbie (2007) notes that a pilot study involves issuing the questionnaire to a small group of
people to pre-test the questions.

Pilot testing will be conducted before the actual research begins. Its purpose will be to validate
the research instruments. Bryman (2003) recommends carrying out a pilot study before
administering the questionnaire to the study sample. This will help obtain sufficient feedback on
the questionnaire’s effectiveness and ensure that respondents understand the questions. A 1
percent sample of the study population is considered adequate for testing research instruments
(Kothari, 2004). The pilot study participants will be drawn from the target population but will
not be part of the main study sample. Ten employees from the EABL Mombasa distribution
center will use the research instruments to ensure that the data collected aligns with the study's
objectives.

3.7.1 Validity of the Research Instruments

According to Mugenda and Mugenda (2003), validity refers to the extent to which the data
collected by the research instruments accurately represent the study variables and theoretical
concepts. Confirming validity ensures that the inferences and conclusions drawn from the data
are accurate and meaningful. Greener (2008) argues that expert judgment is used to determine

xxxi
content validity. University supervisors with significant expertise in research will assist in
evaluating the validity of the data collection instruments.

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3.7.2 Reliability of Research Instruments

Kothari and Garg (2014) note that reliability refers to the consistency of results obtained from a
research measuring instrument. To be reliable, each data collection instrument must consistently
measure the factors it was intended to measure (Greener, 2008). The reliability of the measures
in the data collection instruments will be tested using Cronbach’s alpha. This statistic measures
internal consistency by examining whether a particular item consistently measures the same
construct. An alpha value above 0.7 is deemed acceptable for reliability (George & Mallery,
2003). Cronbach’s alpha will be calculated for each objective of the study to ensure that similar
results will be obtained if the research is conducted again.

3.8 Data Analysis

The study will analyzed the data collected using regression analysis. This model of analysis
examines the simultaneous effects of the independent variables on a dependent variable.
Quantitative data from the questionnaire will be coded and analyzed using The Statistical
Package for Social Sciences (SPSS). SPSS was used to run descriptive statistics such as
frequency and percentages to present the quantitative data in form of tables and graphs based on
the major research questions.

A multiple regression model will used to measure the effects of external supply chain integration
on operational performance with only one dependent variable and three independent variables.
The regression model will take the form as shown below:

Y = α ❑ + b 1 bX 1+ b 2 bX 2 + b 3 X 3 + ε

Where:

Y = predicted value of the dependent variable y (Organization performance)

α = Constant term

b 1 , b2 , b3 are the sample estimates of the coefficients

X 1= Internal integration (independent variable).

X 2 = Supplier integration (independent variable).

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X 3 = Customer integration (independent variable).

The data analysed will be presented and interpreted using charts, graphs and simple frequency
tables. The qualitative data generated from open ended questions were categorized in themes in
accordance with research objectives and reported in narrative form along with quantitative
presentation

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 REFERENCES

Anderson, T. (2016). Theories for learning with emerging technologies. Emergence and
innovation in digital learning: Foundations and applications. Edmonton, AB: Athabasca
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Alvarez, S. A., & Busenitz, L. W. (2001). The entrepreneurship of resource-based theory. Journal
of Management, 27(6), 755-775.

Bagchi, P. K., Chun Ha, B., Skjoett‐Larsen, T., & Boege Soerensen, L. (2005). Supply chain
integration: a European survey. The international journal of logistics management, 16(2),
275-294.

Barasa, P. W., Namusonge, G. S., & Iravo, M. A. (2015). Contributions of green supply chain
management practice on performance of steel manufacturing companies in
Kenya. Journal of Developing Country Studies, 5(19), 44-52.

Boon-Itt, S., Wong, C. Y., & Wong, C. W. (2017). Service supply chain management process
capabilities: Measurement development. International Journal of Production
Economics, 193, 1-11.

Basnet, C., & Wisner, J. (2012). Nurturing internal supply chain integration. Operations and
Supply Chain Management: an International Journal, 5(1), 27-41.

Barasa, P. W., Simiyu, G. M., & Iravo, M. A. (2014). The Impact of Supply Chain

An empirical study. International Journal of Production Economics, 137(2), 250-262.

Collaboration Practice on the Performance of Steel Manufacturing Companies in Kenya.

European Journal of Logistics Purchasing and Supply Chain Management, 3(2), 28-39.

Closs, D. J., & Savitskie, K. (2003). Internal and external logistics information technology
integration. The International Journal of Logistics Management, 14(1), 63-76.

Cagliano, R., Caniato, F., & Spina, G. (2006). The linkage between supply chain integration and
manufacturing improvement programmes. International Journal of Operations &
Production Management, 26(3), 282-299.

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Christopher, M., & Towill, D. (2001). An integrated model for the design of agile supply chains.
International Journal of Physical Distribution & Logistics Management, 31(4), 235-246.

Chang, W., Ellinger, A. E., Kim, K. K., & Franke, G. R. (2016). Supply chain integration and
firm financial performance: A meta-analysis of positional advantage mediation and
moderating factors. European Management Journal, 34(3), 282-295.

Das, A., Narasimhan, R., & Talluri, S. (2006). Supplier integration—finding an optimal
configuration. Journal of operations management, 24(5), 563-582.

Droge, C., Vickery, S. K., & Jacobs, M. A. (2012). Does supply chain integration mediate the
relationships between product/process strategy and service performance?

Das, A., Narasimhan, R., & Talluri, S. (2006). Supplier integration—Finding an optimal
configuration. Journal of Operations Management, 24(5), 563–582.

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 APPENDICES

APPENDIX I: QUESTIONNAIRE

Title: Effects of integrated supply chain practices on the performance of manufacturing firms in
kenya: A case study of east african breweries limited.
Instructions: Please answer the following questions based on your experience and knowledge.
Your responses will be kept confidential and will only be used for academic purposes. Kindly
indicate your level of agreement with each statement by ticking (✓) the appropriate box.

SECTION A: ORGANIZATION INFORMATION (Tick where appropriate)

1. Please indicate the name of your organization (optional)
………………………………………………………………………………………..
2. How many years has the organization been in operation?
Less than 5 years ( ) 6 -10 years ( ) 11 – 20 years ( ) 21 – 30 years ( ) Over 30 years ( )
3. What is the size of the organization (total number of employees)?
Below 99 employees ( ) 100 -200 ( ) 201 - 400 ( ) 401 - 600 ( ) Above 600 ( )
4. What is the ownership status of the organization?
Wholly foreign owned ( ) Wholly locally owned ( ) Joint venture ( )
Other ……………………………………………
5. What is the target market of the organization in percentage?
Mainly foreign ( ) Mainly local ( ) Both foreign and local ( )

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SECTION B: INTERNAL INTEGRATION
6. To what extent do you agree with the following statements: - Where 1= Strongly Disagree , 2=
Disagree, 3= Neutral , 4 = Agree and 5 = Strongly Agree

Statement 1 2 3 4 5

There is data integration among internal functions

Use of enterprise system to integrate activities of

various departments

There is a high level of responsiveness within the

organization to meet other department needs

Utilization of periodic interdepartmental meetings

among internal functions

Use of cross functional teams in new product

development

Real time integration and connection among all

internal functions from raw material management,
through production to sales

Generally how do you describe the relationship between company integration and external
supply chain integration---------------------------------------------------------------
------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------

xxxviii
SECTION C: SUPPLIER INTEGRATION
7. To what extent do you agree with the following statements as regards customer integration:-
Where 1= Strongly Disagree , 2= Disagree, 3= Neutral , 4 = Agree and 5 = Strongly Agree

Statement 1 2 3 4 5

Have a high degree of strategic partnerships with

suppliers

Have a high degree of joint planning to obtain rapid

response in the ordering process with suppliers

Our suppliers provide information to us in the

production and procurement processes

Our suppliers are involved in the product

development and design process

Does supplier integration improve or hamper performance in your organization?

…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………..
Explain your answer ……………………………………………………………………………..
………… ………………………………………….……………………………………………

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SECTION D: CUSTOMER INTEGRATION
8. To what extent do you agree with the following statements as regards supplier integration:-
Where 1= Strongly Disagree , 2= Disagree, 3= Neutral , 4 = Agree and 5 = Strongly Agree

Statement 1 2 3 4 5

Decisions about a customer’s order acceptance or

rejection are made on a stable long-term
predetermined supplier structure

Use information technology to exchange information

with major customers

Have a high degree of joint planning and forecasting

with major customers to anticipate demand visibility

Customers are involved in the product development

process

Customers provide information to assist in the

procurement and production processes

Does customer integration improve or hamper performance in your organization?

…………………………………………………………………………………………………
…………………………………………………………………………………………………
…………………………………..
Explain your answer …………………………………………………………………………….
………………… ………………………………….
…………………………………………………………… ………………………………

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SECTION E: ORGANIZATIONAL PERFORMANCE
9. State the extent to which the following statements are true as regards the performance of your
organization (Where 1= Strongly Disagree, 2= Disagree, 3= Neutral, 4 = Agree and 5 = Strongly
Agree).

Statement 1 2 3 4 5

Product Costs

The organization produces products with low

material costs

The organization is able to rapidly change production

volume

The organization has lower prices than competitors

The organization produces products with low

inventory holding costs

The organization produces high quality products that

meet customer needs

Production Flexibility

The organization produces consistent quality

products with low defects

Product Quality

Delivery Reliability

Conclusion

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Thank you for your time and insights. Your responses will contribute significantly to
understanding the impact of integrated supply chain practices on the performance of
manufacturing firms in Kenya.

xlii
 APPENDIX II: WORKPLAN

WORK PLAN/RESEARCH SCHEDULE

Time MAY JUNE JULY AUG

Action 2024 2024 2024 2024

Research topic
development

Proposal writing
Chapter one

Proposal writing
chapter two

Proposal writing
chapter three

Proposal
correction

Proposal
presentation

xliii
 APPENDIX III: FINANCIAL BUDGET

ITEM DESCRIPTION AMOUNT BUDGETED

Stationery and documentation 10,000/-

Transport Expenses 11,000/-

Data processing (typing, printing and binding) 15,000/-

Internet Browsing 5,500/-

Miscellaneous Expenses (Airtime) 9,000/-

Total 50,500/-

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