In Kenya, there has been a challenge on cost of manufacturing. At the same time, there has been a decrease in sugar cane production from 6.7 million tons in 2013 to 6.5 million tons in 2014 as reported in Economic Survey done in 2014. Moreover, despite reporting increased cane delivery in 2015, value addition by the sugar firms remained dismal indicating inefficient firm processes and overall poor performance. This has been attributed to high cost of production. Its argued that supply chain (SC)s may use Electronic data interchange integration(EDII) to mitigate on cost which in turn can improve firm performance. The objective of the study was to established the effect of electronic data interchange integration on supply chain performance. This study was anchored on resource based theory. This study used correlation research design. The target population was 300 supply chain employees from the 10 sugar manufacturing firms in western Kenya. A sample size of 169 was drawned using cluster, purposive and simple random sampling. Structured and semi structured questionnaire and interview guide was used to collect primary data. Secondary data on the other hand was obtained from the company’s records. Multiple, regression analysis established that that all the four EDI practices, e-sourcing (β = 0.170, p<0.05); e-invoicing (β = 0.255, p<0.05), e-ordering (β = 0.208, p<0.05), and e-payment (β = 0.264, p<0.05) were positive and significant predictors of supply chain performance. On the basis of the t-values, e-payment (t = 3.111) had the larger impact on supply chain performance, followed by e-invoicing (t=2.986); e-ordering (t = 2.885), and e-sourcing (t=2.202) respectively. The study concluded that Electronic data interchange integration has an effect on supply chain performance and therefore the null hypothesis was rejected. The study recommended that stakeholders should embrace integration of EDI since it improves performance of the sugar industry.
KEYWORDS: Relationship, Manufacturing, Performance, Integration
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