Digitalization and Supply Chains of Dairy Farms in Kiambu County, Kenya

Abstract

Digitalization is fundamentally transforming business operations and redefining how value is created across supply chains. In the dairy industry, this adoption of technology has enhanced the efficiency, visibility, and responsiveness of supply chain functions. This study investigated the effect of digitalization on the performance of supply chains among dairy firms in Kiambu County, Kenya. The study employed the Dynamic Capability Theory, Technology Acceptance Model, and Network Perspective Theory, and adopted a census approach targeting all 17 dairy firms registered with the Kenya Dairy Board in the region. Primary data was gathered using structured
questionnaires, and appropriate diagnostic tests were conducted to validate the data. The study used both descriptive and inferential statistical methods to analyze the relationships between the digitalization practices and supply chain performance. The results indicated a statistically significant positive effect of data management, buyer/supplier collaboration, system management, and billing management practices on supply chain performance. Data management practices ranked highest in terms of impact, followed by billing management, buyer/supplier collaboration, and system management. The model yielded an R-squared value of 0.646, suggesting that 64.6% of the variance in supply chain performance was explained by the digitalization variables examined. The ANOVA test confirmed the model's overall significance (p < 0.001). The study underscores the importance of investing in modern digital infrastructure and recommends the integration of advanced technologies to enhance operational and supply chain performance. The study contributes to digital transformation literature in agri-based supply chains and offers practical insights for decision-makers in the dairy sector. Future research may explore comparative insights across different agricultural sub-sectors to generalize the findings further.