Production facility location and supply chain performance of manufacturing companies in Uganda, a case study of Kassanda sugar factory

Abstract

The study examined the relationship between production facility location and supply chain performance of manufacturing companies in Uganda with a case study of the relationship between production facility location and supply chain performance of manufacturing companies in Uganda. Specifically, the study aimed to assess the relationship between proximity to markets and supply chain performance, ii) examine the relationship between proximity to resources and supply chain performance, iii) to evaluate the relationship between road quality and supply chain performance. The study adopted a cross-sectional survey design which employed both quantitative and qualitative methods. The study population was 120 and a sample size of 92 respondents but only 82 provided the data. Correlation results show that proximity to markets and supply chain performance are significantly and positively related (r = .590, p < .05), proximity to resources and supply chain performance are significantly related (r = .766, p< .05), road quality and supply chain performance are significantly related (r = .601, p< .05). The regression results showed that proximity to resources has the greatest effect on supply chain performance given a higher Beta value of Adjusted R Square = .559 compared to that of road quality and proximity to markets with Adjusted R Square = .401 and Adjusted R Square = .316 respectively. The study concluded that despite their significance, these factors alone do not fully explain supply chain performance, indicating that other aspects, such as organizational processes and external business conditions, also contribute. The results also show that the uncertainty regarding road quality and maintenance suggests that transportation inefficiencies may hinder the smooth flow of raw materials and finished products. Poor roads can lead to increased delays, higher operational costs, and supply chain disruptions, affecting overall performance. The study recommended that Kassanda Sugar Factory should consider expanding its market reach by exploring additional regional or international markets to reduce its dependence on a limited number of markets. It is also recommended that the factory should also implement technological solutions, such as inventory management systems, to track resource availability and usage, enhancing decision-making and improving overall efficiency. There is also a need to plan for seasonal challenges, particularly during the rainy season, by considering different transportation vehicles or rerouting deliveries when necessary.