Moderating Effect of ICT on Supply Chain Financial Flow Risk and Performance of Manufacturing Firms in Kenya

Abstract

The manufacturing firms in Kenya contribute greatly to the economic development of the country. Developments in ICT are creating possibilities for moderating risks along the supply chain by creating platforms for effective decision support tools. However, the performance of the manufacturing firms has been decreasing in the past few years due to information flow risks that affect their supply chain, thereby undermining the sectors ability to contribute to the Gross Domestic Product (GDP) and attainment of Kenya’s vision 2030. This study sought to investigate the moderating effect of ICT on financial flow risks and performance among manufacturing firms in Kenya. Cross-sectional survey design was adopted as the research design for this study using both qualitative and quantitative approaches. The target population was 94 firms in Kiambu County, Kenya who were both members and potential members of the Kenya Association of Manufacturers (KAM). The study used stratified random sampling to pick a sample size of 76 manufacturing firms which represented 12 industrial sectors in manufacturing firms. Data was collected using questionnaires. Descriptive statistics was used aided by Statistical Packages for Social Sciences version 21 to compute percentages of respondents’ answers. Inferential statistics using linear regression and correlation analysis was applied to assist examining relationship between the research variables. It was established that ICT used moderated the relationship between financial flow risks. Therefore, the study recommends that manufacturing firms should leverage on ICT use to enhance performance of their firms.