eERP SYSTEM USAGE AND SUPPLY CHAIN PERFORMANCE IN MANUFACTURING FIRMS IN KENYA

Abstract

This study aimed at establishing the effect of eERP system usage on supply chain performance (SCP)
in manufacturing firms in Kenya. The study was anchored on positivism philosophy. The dependent
variable, SCP was measured through quality, time, reliability, cost savings and market share. eERP
system as the independent variable was measured through extent of integration and extent of usage.
Using a descriptive research design approach, the study gathered primary data; the collection tool
used being a semi-structured questionnaire. Both variables used categorical approach and a 5-point
Likert scale. The hypothesis was tested using a logistic regression because it was able to handle
categorical data in establishing the relationship between dependent and independent variables. The
logit model, probit model and linear regression were used in testing the study hypothesis. The study
findings proved that eERP system usage had an effect on SCP as shown by the three different predictive
equations SCP = 2.892 + 0.473eERP from logit analysis; SCP = 1.637 + 0.243eERP from probit
analysis; and SCP = 2.756 + 0.272eERP from linear regression analysis. This paper expanded the
body of research on eERP system usage by demonstrating that there is a significant relationship
between eERP system usage and supply chain performance with a conclusion that integrating eERP
system among supply chain partners would improve SCP of various manufacturing firms in Kenya.
This research shows that manufacturing firms that are most successful in the market have a great
extent of eERP system usage across their supply chain. Therefore, manufacturing firms in Kenya must
atleast have a mechanism of ensuring that their eERP system usage is fully operationalized within their
supply chain environment. This study only looked at the manufacturing firms in Kenya yet the eERP
system is used across many sectors of the economy. Future studies should investigate the relationship
between eERP system usage and SCP in other sectors of the economy in Kenya.
Keywords: eERP, SCP, manufacturing firms, Kenya.