Stephen Konene Ketere, Dr. Antony Osoro


Supply chain optimization involves reducing costs and inventories through optimizing a company's R&D, material supply, production, and distribution operations.  The concept of optimization has laid the groundwork for large-scale optimization of a company's supply, production, and distribution activities to minimize costs and inventories. The objective of this study was to examine effect of supply chain optimization on performance of dairy processing firms in Kiambu County, Kenya. The specific objects was to examine effect of; distribution channels, and demand planning on performance of dairy processing firms in Kiambu County, Kenya. The study was anchored on the theory of distribution channel, and rational expectations theory. The study adopted a descriptive research design.  The study population was 78 supply chain managers from the dairy processing firms in Kiambu County. The study adopted census hence all the supply chain managers were sampled. The study used questionnaires for data collection. Pilot was conducted with 10% of the sample size therefore eight supply chain managers. The study used face and construct validity.  The study used Cronbach’s alpha scale to test for questionnaires’ reliability. Data was analyzed quantitatively using SPSS version 28. Quantitative data was analyzed using descriptive and inferential statistics (correlation and regression). Findings were tabulated. Findings showed that; there is a strong significant relationship between distribution channel and performance of dairy processing firms in Kiambu County, Kenya (r = 0.649, p-value=0.000), and a strong significant relationship between demand planning and performance of dairy processing firms (r = 0.637, p-value=0.000). The researcher recommends that; the dairy firms should automate the ordering process to increase accuracy and efficiency of order deliveries, firms should have more distribution agents and warehouses in various shopping centres countywide, firms need to ensure that they have a balanced production where they meet customer demand without overproducing and wasting valuable resources.

Key Words: Supply chain optimization, Distribution channels, Demand planning, Performance of dairy processing firms

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