ABSTRACT

Kenya motor vehicle assemblers face several challenges following liberalization of the economy in the last decade of the 20th century. Domestic industries have been suddenly exposed to competition from imported products. On one hand there are prospects for faster development of manufacturing capabilities, but on the other, imports provide consumers with affordable alternatives. Despite adoption of remanufacturing to gain a competitive edge, the performance of the motor vehicle assembly in Kenya is still on a downward trend. The aim of the study was the effect of re-manufacturing and to establish the effect of organizational policies on the relationship between remanufacturing and supply chain performance of the motor vehicle assemblers in Kenya. The study was anchored on Institutional theory. The study used descriptive survey research design. The target population was 32 respondents from 8 firms in the motor vehicle assembly in Kenya comprising of staff from; logistics departments, sales departments, stores departments and factory departments. Census sample was adopted. Primary data was collected using structured questionnaires and secondary data through downloaded published audited financial statements. Pilot test was done on Associated Vehicle Assemblers. The study used Cronbach’s alpha to measure degree of reliability. The validity was tested through expert analysis and factor analysis. Both descriptive and inferential statistics were used to analyze the data. Descriptive statistics included mean, standard deviation and variance. Inferential statistics consisted of multiple linear regression analysis and Correlation analysis. Findings were presented in tables, graphs and charts. Regression analysis indicated that remanufacturing had a significant effect on supply chain performance with a coefficient of 2.105 without moderating effect of organizational policies and 2.851 with moderating effect organizational policies. The study depicted remanufacturing explains 32.7% and 34.9% variation in supply chain performance without and with moderating effect of organizational performance respectively. The empirical results of this study would assist policy makers including the Kenya association of manufacturers to identify challenges that still affect the motor vehicle assemblers particularly in the area of reverse logistics. Therefore, the study concluded that remanufacturing had a positive and significant effect on supply chain performance. The study recommended that motor vehicle assemblers should provide a mechanism on how to evaluate degree of damage on the products for refund.