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RELATIONSHIP BETWEEN HEDGING RISK MANAGEMENT STRATEGY AND SUPPLY CHAIN PERFORMANCE AMONG MANUFACTURING COMPANIES IN KENYA

Dr.David Kiarie, Dr. Patrick Ngugi, Dr. Kennedy Ogollah

Abstract


Purpose: The purpose of this study was to determine therelationship between hedging risk management strategy and supply chain performance among manufacturing companies in Kenya

Methodology:The study adopted a cross-section survey of descriptive nature .The target population comprised of the 412 manufacturing companies within Nairobi County that were registered members of KAM. The fisher et al formula for calculating the sample size was used to yield a sample size of199. Data was collected using questionnaires and analyzed using statistical package of social sciences (SPSS) version 21 as a tool of analysis.

Results: The study findings revealed that the companies that increased buffer stock at various levels in the supply chain. Increasing buffer stock at various levels in the supply chain resulted to decreased lead time, improved quality and reduced cost. Results also showed that most of the companies ‘conducted reduce order cycle times. Conducting reduce order cycle times resulted to decreased lead time, improved quality and reduced cost. Further, the results revealed that most of the companies shared supply chain costs with partners. Sharing supply chain costs with partners resulted to decreased lead time, improved quality and reduced cost.

Policy recommendation:the study recommended that manufacturing companies should put in place a risk analysis and evaluation management strategy to enhance supply chain performance. In particular, companies should consider conducting whole life costing of suppliers and also internal quality of suppliers.



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Keywords


Hedging risk management strategy, performance, manufacturing companies

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