Strengthening Supply Chain Relationships for Enterprise Growth: The Case of Micro and Small Enterprises in Kenya

Abstract

The core goal of any enterprise is to grow both in assets and profitability. Such growth is critical to the wellbeing of individual firms and the economy in general. Sound supply chains that offer strong reliable relationships have been found to play a critical role in the growth and sustainability of firms. Studies show that enterprises that exploit the benefits of supply chain management improve performance by up to 80 percent depending on the extent of adherence to key supply chain requirements. However, Small firms have largely remained far removed as far as structured growth and development of supply chain relationships is concerned. Although significant levels of success has been reported among larger firms with regard to supply chain relationships, such success has not been widely replicated among smaller firms. It is largely appreciated that competition is no longer based on just the bare company-versus-company business models but also on the extended virtual enterprise of supply chain-versus-supply chain. This underpins the importance of optimizing an enterprise’s performance within the wider context of strong inter-firm and firm-market relationships. Many studies have been conducted to try and understand the supply chain scenario. Most of these studies have concentrated on European and American firms. However, the social, economic, cultural and other fundamentals that influence the success of supply chains for small firms in developed economies are largely different from those in developing countries and on this account these studies, although important as reference points for further study, may not be representative of the scenario in developing economies.There is, therefore, need to examine the supply chain relationship gaps that characterize small firms in developing economies. This would help develop recommendations that can be used to strengthen these relationships and so improve business performance among small firms in these economies.