EFFECT OF CIRCULAR SUPPLY CHAIN PRACTICES ON THE PERFORMANCE OF MANUFACTURING FIRMS IN KENYA

Abstract

Over the decades, manufacturing organizations have relied on a linear extraction approach which has enlightened the threat of resources depletion. This has triggered interest from different sectors such as researchers, industrial experts and policy makers on how to transition into a more efficient and un-destructive production approach for a sustainable and circular economic growth. The inception of circular supply chain is vested on the business structural model of producing products and flow of materials along the supply chain members back and forth with well-integrated communication. The inadequacy of literature on circular supply chain in terms of research and the importance of reducing the demand for virgin raw materials provides the gap for this study. The main objective of this study was to investigate the effect of circular supply chain practices on performance of Kenyan manufacturing firms. Specifically, the study sought to determine whether Circular product Design, Circular Procurement, Circular manufacturing and Circular Logistics affect the performance of manufacturing firms in Kenya. The study also sought to determine the moderating effect of policy framework on relationship between circular supply chain practices and organizational performance. Theories used in this novel study includes Natural Resourced Based view, Resource Dependency, Industry 4.0 Model, Industrial Symbiosis and Institutional theory. Data was collected by the use of a questionnaire in the Likert Type Scale format. The target population included all the manufacturing firms registered by KAM. Stratified random sampling was used to ensure a representative sample from each industry, and the appropriate sample size was calculated using Yamane's formula. The hypothesis was analyzed for acceptance or rejection by determining the P-value. Data was analyzed by use of SPSS (V.20) while presentations was done by tables and graphs. The study found out that circular product design, circular procurement, circular manufacturing and circular logistics has significant effect on the performance of manufacturing firms in Kenya. On the policy framework, the study found out that it has a significant only on circular manufacturing as it remains insignificant on other variables. The study recommended further research to consider specific barriers and challenges faced by manufacturing firms in adopting circular supply chain practices in the Kenyan context. Moreover, further research could be carried out to explore financial implications of implementing circular supply chain practices, impact of circular supply chain practices on different dimensions of sustainability, longitudinal studies can be conducted to assess the longterm effects of circular supply chain practices on organization performance and comparative studies across different countries and regions to provide insights into the contextual variations and best practices in implementing circular supply chain practices