Digital Supply Chain Practices and Performance of Logistics Companies in Nairobi City County, Kenya

Abstract

This study examined the influence of digital supply chain practices on the performance of logistics firms in Nairobi City County, Kenya, focusing on the effects of information technology, warehousing technology, transportation technology, and distribution technology on operational efficiency. Guided by Transaction Cost Economics Theory, the Technology Acceptance Model, and Dynamic Capabilities Theory, the study adopted a descriptive research design targeting 1,248 KIFWA-registered logistics firms, from which a sample of 303 firms was drawn using Yamane’s (1967) formula and stratified random sampling. Data were collected using structured electronic questionnaires, achieving a reliability coefficient of Cronbach’s Alpha = 0.841 and a 73% response rate (221 respondents). The findings established that all four digital supply chain dimensions positively and significantly influence operational efficiency, with the regression model confirming strong explanatory power (R2 = 0.623, F(4,216) = 89.14, p < .001). Information technology emerged as the most influential predictor (β = 0.387), followed by warehousing technology (β = 0.352), distribution technology (β = 0.318), and transportation technology (β = 0.281). The study concludes that digital supply chain practices are critical drivers of operational efficiency and competitive performance among logistics firms in Nairobi. The findings imply that firms that invest in integrated information systems, warehouse automation, and advanced distribution technologies achieve higher efficiency, improved service delivery, and stronger market responsiveness. Policy and managerial implications highlight the need for stronger investment in digital infrastructure, targeted capacity building, and supportive regulatory frameworks that encourage technology adoption. Logistics managers are further encouraged to prioritize system integration, employee upskilling, cybersecurity, and change management to ensure effective utilization of digital tools. Collectively, these measures will enhance operational resilience, reduce transaction costs, and strengthen the long-term competitiveness of logistics firms within Nairobi’s evolving supply chain environment.