Effect Of Green Supply Chain Management Practices On Performance Of Tea Factories In Central Region Kenya

Abstract

Green Procurement also known as sustainable procurement is one of the emerging issues in procurement and therefore for any business to thrive in today’s competitive business world it has to thrive to align its procurement department well to put in place the three bottom line practices of sustainable procurement which encompasses social, environmental and economic issues. Although some research has been conducted in multinationals that deals with tea in Kenya and further in tea estate in Kericho on environmental performance, very little has been done on the overall performance of a firm and this gives the objective of this study on investigating the effects of sustainable procurement practices on organizational performance using Tea factories in Central region Kenya. The literature review covers green supply chain management, reverse logistics, ecological design and green production in tea supply chain. This study adopted a descriptive research design; the target population of this study are all the factory managers and procurement staff of the tea factories .The researcher used both primary and secondary data. Primary data was collected using a questionnaire as a research instrument, where it was given to a fraction of the staff of the procurement department of the factories that were not used when sampling was done to ensure reliability of the data and a Cronbach’s Alpha test was also conducted to ensure validity where all met the threshold of 0.7. Secondary data was obtained from relevant publications and KTDA website. The target population in this study was the 432 respondents from the 27 Kenya Tea Development Agency managed factories in central region where a sample of 9 factories was chosen using simple random sampling and 144 questionnaires issued. Data was tabulated and analysed for purpose of clarity, using SPSS version 22 software and presented using tables, and pie charts to make them reader friendly. This study also conducted a multiple regression analysis used to establish the relationship between the independent and dependent variables. The study found out that there is a positive relationship on green supply chain management practices and tea factories performance in Central Region in general R Square= 0.126 and R=.356, α=0.02 at 0.05 at significance level. The coefficient of determination indicates that 12.6% of the variation on performance in the tea factories is explained by the green supply chain management adopted by the factories. But unit decrease in performance is explained by 31.4% of ecodesign and 0.9% decrease in reverse logistics. However, unit increase in performance is explained by 29.3% change in green production and 7.8% increase in the green procurement of the tea factories. This means that eco-designs and reverse logistics have negative relationship with the performance of tea factories. The recommendation was that the research gave was more participation of national government on implementation of sustainable agriculture to ensure that the future generation is well taken care of by ensuring the three bottom line of sustainable supply chain are practiced. And embracement of reverse logistics and eco design as emerging factors in green supply chain management and to increase the level of influence.