INFLUENCE OF SUPPLY CHAIN ECONOMIC SUSTAINABILITY ON PERFORMANCE OF MINING AND EXTRACTION FIRMS IN KENYA
Abstract
Purpose of the study: The study investigated the influence of supply chain economic sustainability on the performance of mining and extraction firms in Kenya. This study focused on how practices like cost efficiency, local sourcing, and financial risk management affect both operational and financial outcomes in these firms.
Short introduction of problem statement: Mining and extraction firms in Kenya operate in a challenging environment marked by regulatory uncertainty, inefficiencies, and underperformance. Despite the sector’s potential, its GDP contribution remains below expectations. This research addressed the gap in empirical evidence regarding how economic sustainability in supply chains influences firm performance in this critical sector.
Method/methodology: The study employed a descriptive research design targeting 402 mining and extraction firms in Kenya. Using stratified random sampling, a sample of 201 firms was selected. Data collection was done through semi-structured questionnaires administered to supply chain and operations managers. Quantitative data were analyzed using SPSS through correlation and regression techniques to determine relationships between economic sustainability practices and firm performance.
Results of the study: The study found a significant positive relationship between supply chain economic sustainability and firm performance. Practices such as local supplier development, cost-saving technologies, and resource optimization directly enhanced profitability, efficiency, and competitive advantage. Firms that adopted continuous improvement techniques, quality control, and risk management measures performed better overall.
Conclusion and policy recommendation: The study concludes that economic sustainability within supply chains significantly contributes to the improved performance of mining and extraction firms in Kenya. It recommends that firms invest in digital transformation, cost-sharing models, risk management practices, and quality improvement strategies. Policymakers should support these efforts by offering incentives and strengthening regulatory frameworks to promote sustainable economic practices aligned with national development goals.
Keywords: Supply Chain, Economic Sustainability, Firm Performance, Mining Industry, Kenya, Sustainable Practices
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