Logistics Retooling Strategies on Performance of Manufacturing Firms in Nairobi City County, Kenya
Abstract
Manufacturing firms in Nairobi City County face persistent logistics inefficiencies, including long lead times, high operational costs, poor supplier coordination, and inadequate warehousing systems, which hinder production efficiency, competitiveness, and profitability despite national efforts to modernize supply chains. These challenges are further compounded by low adoption of digital technologies, fragmented supplier networks, and structural barriers to logistics modernization, limiting the sector’s contribution to Kenya’s Vision 2030 industrialization targets. To address this gap, the study investigated the influence of logistics retooling on the performance of manufacturing firms in Nairobi City County, Kenya. Specifically, it examined the effects of process optimization and technology upgrade on firm performance. The study was anchored on the Theory of Constraints and the Technology Acceptance Model, and adopted a descriptive research design. The unit of analysis comprised manufacturing firms registered with the Kenya Association of Manufacturers, while the unit of observation included heads of supply chain and operations departments. The target population consisted of 762 department heads from 381 manufacturing firms within Nairobi City County. The sample size was determined using Yamane’s formula, and stratified random sampling was employed to select the respondents. Data were collected via semi-structured questionnaires and analysed using descriptive and inferential statistics with SPSS version 28. Results revealed that both process optimization (B = 0.619, p < 0.001) and technology upgrade (B = 0.712, p < 0.001) had positive and statistically significant influences on manufacturing firm performance, explaining 46.8% and 57.2% of variance in firm performance respectively. The study recommends strategic investment in transport management systems, real-time tracking technologies, warehouse management systems, automated order processing, and KPI-driven performance frameworks to enhance manufacturing firm competitiveness and align with national development goals.
Keywords: Logistics Retooling, Process Optimization, Technology Upgrade, Manufacturing Firms, Supply Chain Management, Firm Performance, Nairobi, Kenya
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