ESTABLISH THE IMPACT OF SUPPLY CHAINS ON PURCHASING AND SUPPLIES IN AN ORGANIZATION

ESTABLISH THE IMPACT OF SUPPLY CHAINS ON PURCHASING AND SUPPLIES IN AN ORGANIZATION; A CASE STUDY OF EAST AFRICAN BREWERIES LIMITED.

A RESEARCH PROJECT REPORT SUBMITTED TO MOUNT KENYA UNIVERSITY IN PARTIAL FULFILLMENT FOR THE AWARD OF BACHELORS DEGREE IN BUSINESS MANAGEMENT- PURCHASING AND SUPPLIES OPTION

September 2013

DECLARATION

I hereby declare that this research project submitted for the award of a degree in business management -purchasing and supplies option is my original work and has not previously been submitted to any other university or college for award of diploma or degree. I further declare that all sources cited or quoted are indicated or acknowledged by means of a comprehensive list of references. 1) Student

Signature ……………………..Date……………………..

2) Supervisor

I certify that this project report has been submitted for examination with approval as the university supervisor.

Signatu

i

DEDICATION

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ACKNOWLEDGEMENT

I would like to acknowledge the efforts of my supervisor Solomon who has made the accomplishment of this work possible. I am very grateful to the staff of EABL who took on the challenge of tracking some of the most elusive information. Top of the list is the Logistics Director who ensured that I got the relevant information. I would also like to record my deepest gratitude to my beloved family who has given me guidance and advices in ensuring that I was fully comfortable during the entire period of my studies. Thank you very much for your financial support which made my studies a success. Lastly I would thank all my friends, were it not for their support I would not have reached this far. May God bless them all.

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ABSTRACT

In Kenya the concept of supply chain has been introduced within the manufacturing companies to address the inefficiencies in current methods of purchasing and supplies, contract management, inventory control and obsolescence planning. Although most organizations have commenced with a phased supply chain implementation strategy, a number of challenges are experienced in this domain namely, the lack of the development of a detailed supply chain implementation plan, establishment of bid specification, evaluation, adjudication committees, infrastructure and training of personnel. The value of this research lies primarily in the fact that supply chain is currently still in the process of being implemented by manufacturing organizations. As a result, this research will identify the deficiencies in the existing supply chain process of implementation that will form the basis for improving supply chain practices to comply with international best practices.

This study aimed at establishing the impacts of supply chains on purchasing and supplies in an organization. To establish these factors, this study was conducted through the staff of East African Breweries. The objective of the study was to determine whether organizations are following a structured sequence of events in the implementation of supply chain, to inquire on the kind of training offered to supply chain personnel, to determine whether organizations’ objectives for the introduction of supply chain have been achieved, to establish whether supply chain system implemented by the organizations make provision for; risk management, demand management, acquisition management, disposal management, to determine whether organizations have the necessary infrastructure or facility to manage an effective and efficient supply chain

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system and to establish whether it has promoted the application of international best practices in the organizations. The significance of the study was to give a clear understanding on the effective of supply chain on organizations and what these firms should put into consideration to have a well-managed supply chain network. A random sampling was used. A sample size of thirty (30) respondents was randomly picked from the total population. A survey design was used in the study with well-structured questionnaires, observation and interviews, with an aim of collecting primary data. Data collected was then analyzed using descriptive static and presented in graph, tables and charts.

The findings of the study indicated that manufacturing organizations have adopted an effective supply chain policy; however they have not implemented all of its functionality. While the implementation of supply chain can transform an organization`s procurement and provisioning practices into an integrated supply chain function, it was evident from the survey that East African Breweries and other organizations are still conducting business ‘as usual’, without gleaning the benefit associated with an integrated supply chain function.

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CHAPTER ONE

INTRODUCTION OF THE STUDY

1.1 Background to the Study

Supply chain is the art and science of strategically managing and controlling the flow of goods, energy, information and other resources like products, services and people from the source of production to the marketplace. It is difficult to accomplish any marketing or manufacturing without logistical support. It involves the integration of information, transportation, inventory, warehousing, material handling, and packaging. The operating responsibility of supply chain is the geographical repositioning of raw materials, work in progress and finished inventories where required at the lowest cost possible. The applied methods lacked to manage the key operational functions of the supply chain, this contributed to challenges in procurement, production and distribution (Cooper, 1997).

Supply chain as a concept is considered to evolve from the military’s need to supply themselves as they moved from their base to a forward position. In ancient Greek, Roman and Byzantine empires, there were military officers with the title ‘Logistikas’ who were responsible for financial and supply distribution matters (Lysons 2002).

Supply chain as a business concept evolved only in the 1950s. This was mainly due to the increasing complexity of supplying one’s business with materials and shipping out products in an increasingly globalized supply chain, calling for experts in the field who are called Supply Chain Logisticians. This can be defined as having the right item in the right quantity at the right time for the right price and is the science of process and incorporates all industry sectors. The goal of logistics work is to manage the fruition of project life cycles, supply chains and resultant efficiencies (Lambert 2002).

In business, supply chain may have either internal focus, inbound logistics, or external focus outbound logistics covering the flow and storage of materials from point of origin to point of consumption.

The main functions of a supply chain Manager include Inventory Management, purchasing, transport, warehousing, and the organizing and planning of these activities. Supply chain Managers combines a general knowledge of each of these functions so that there is a coordination of resources in an organization (Ramos 2004).

The term is used for describing supply chain processes within an industry. The purpose of supply chain is to ensure that each machine and workstation is being fed with the right product in the right quantity and quality at the right point in time. The issue is not the supply chain itself, but to streamline and control the flow through the value adding processes and eliminates non-value adding ones. Production can be applied in existing as well as new plants. Manufacturing in an existing plant is a constantly changing process. Machines are exchanged and new ones added, which gives the opportunity to improve the production system accordingly. Production provides the means to achieve customer response and capital efficiency (Lambert 2002).

Supply chain management is very paramount for any business venture which wants to reduce costs and maximize profits. Supply chain is getting more and more important with the decreasing batch sizes. In many industries (e.g. mobile phone) batch size one is the short term aim. In this way even a single customer demand can be fulfilled in an efficient way. Track and tracing, which is an essential part of supply chain due to product safety and product reliability issues is also gaining importance especially in the automotive and the medical industry. the supply chain plans, implements and controls the efficient, effective forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customer and legal requirements (Ravasani,2004).

1.1.1 History of the Company

East African Breweries is a leading consumer goods company in the East African and COMESA region. The company has dominated in the fields of alcoholic and soft drinks. The company plays a great role in the Kenyan economy as it has opened employment opportunities for many Kenyans approximately 800 employees which has resulted into contribution of Kenyan GDP. EABL has also enhanced international trade among many countries across the world where it procures its raw materials across the border. The Company is widely known for its strategic marketing and procurement activities that have made it to achieve a wide marketing share in the country. This might be due to the quality of its products which have resulted to achievement of competitive Edge than its rivals in the market. The company is situated along Thika road Ruaraka. EABL over the years developed into a diversified and dynamic manufacturing concern, producing a range of high quality consumer goods for the domestic Kenyan market, as well as for exportation to the Comesa region.

EABL’s continued success is based on its deep entrenchment in and understanding of the East and Central Africa, while at the same utilizing the technology and know-how transfer through exclusive licensing and cooperation agreements with leading and reputable international consumer goods companies. EABL market has well established international brands and products under EABL (Tusker, Guinness, Alvaro), a territory covering countries; Kenya, Tanzania, Uganda, Rwanda, Burundi and Zambia. These countries are all member state of the common market for eastern and southern Africa (COMESA) and have a combined population in excess of 200 million people. This creates a huge demand of the company product. Mission and Vision

Mission of east Africa breweries limited:

Celebrating life every day, everywhere

Vision:

To be the most celebrated business in Eastern Africa (East Africa – Kenya, Uganda, Tanzania, Ethiopia, Rwanda and Burundi)

Core values of EABL

We are passionate about consumers

Our curiosity and consumer insights drive our growth.

We value each other

We seek and strive for inclusion and diversity, mutually fulfilling relationships and partnerships and respect for people’s lives. Freedom to succeed

We are open to challenges and we respond quickly to the opportunities this creates Proud of what we do

We behave responsibly with the highest standards of integrity and social responsibility Be the best

We are always learning and improving, set high standards and stretch to succeed them. 1.2 Statement of the Problem

Supply chain management involves strategically managing the procurement, movement and storage of materials, production of parts and dispatch of finished products and the related information flows into and through the organization and its marketing channels to meet customer needs for goods and service and to achieve sustained profitability by cost-effective order fulfillment. In today’s competitive business environment, companies seek to have competitive advantage by using their resources as best as they can. Businesses tend to use their resources for getting the optimum value to communicate with their customers and come up with best solutions to their problems (Krames, 2002)

Provision comprises the processes of purchase, produce, dispatch and serves. Provision aims to achieve perfect flow by encompassing all the activities required to source materials from upstream links, to make products and to deliver them to the premises of the next link in the supply chain. It also includes the services which each link company requires to carry out these processes and the concomitant services needed by customers as part of their products, such as training in their use and after-sales service (Ramos, 2004).

Manufacturing companies that have got efficient supply chain management methods enhances smooth flow of materials from the point of acquisition to the production department which favors continuity in production that leads to meeting the customers demand. Recognizing effective supply chain management is the must-have for gaining competitive advantage. Therefore main aim of any manufacturing organization is to manage its supply process to ensure that there is smooth flow of raw materials and services both upstream and downstream to enable the ultimate customer to be satisfied. Most organizations have a problem in managing their supply department, these brings about stock outs, overstocking and poor quality products. With overstocking, companies end up tying up its capital in the inventory whereas this money could have been used in other investments.

There is also a great risk of materials becoming obsolete once they are overstocked and this results to high losses. When materials are under stocked it results to lost sales and as a result it leads to unsatisfied customers. The personnel of EABL need to have the necessary skills in management of effective supplies to be enhancing a smooth flow of materials. EABL and other business firms have tried to address this in several ways including creating an independent supplies department, employee training on supply chain management, introduction of new technologies and partnering with other organizations. After applying all these strategies still there are some weaknesses which need to be addressed. This study therefore, seeks to establish the factors that affect effective supply chain management in the manufacturing industry.

1.3 Objectives of the study

1.3.1 General Objective

The study seeks to establish the impact of supply chains on purchasing and supplies in an organization 1.3.2 Specific Objectives

Specific objectives are as follows;

i. To assess how lead-time affects effective supply chain in an organization. ii. To investigate the impact of technology on effective supply chain in an organization iii. To determine impact of communication in the supply chain of an organization. iv. To establish the extent to which quality affect supply chain in purchasing and supplies.

1.4 Research Questions

The study seeks to answer the following questions:

i. How does lead-time affects effective supply chain in an organization? ii. In what ways does technology affect supply chain management in the organization? iii. Why does communication affect supply chain management in the organization? iv. To what extent does quality affect supply chain management in the organization?

1.5 Significance of the Study

1.5.1. Management

The Management of East African Breweries Limited Company who oversees the daily operations of their organization, they will be in a position to make informed decisions on the aspect of costs in relation to the company’s profitability. 1.5.2. Directors and Share Holders

The Directors and the Shareholders of the East African Breweries Limited company who have investments and are expecting a return in terms of optimum profit for every business started has one objective which is to make profits. 1.5.3 Other Researchers

Researcher will gain an insight on the various factors that affect supply chain management in the organization. The Management, new researchers and stake holders will have an insight on what factors affect effective supply chain management in the organization which shall endeavor to increase the performance of their firm in future. The research will help them make informed decisions about supply chain management. The study will have a great impact on those students pursuing purchasing and supplies management course as it will add literature in the area of supply chain management in the organizations. This study shall be availed at the library after completion. In this regard it will be a source of reference to other researchers. It will also be a guiding benchmark to other researchers carrying out studies in areas related to the field of study.

1.5.4 Suppliers

These are individuals and organizations which provide services and inputs to the organization. Suppliers are actively involved in marketing their products, application for tenders, competitive bidding for contracts among others. The knowledge on supply chain management can help them make improvements regarding their products and services.

1.5.5 Distributors

Distributors are part of the organization’s supply chain function fulfilling the place utility. A study on factors affecting effective logistics management is important to distributors in understanding their role in the supply chain. Outsourced distributors will also be able to understand areas of their services which need improvement. 1.6. Limitations

The researcher anticipates the following challenges;

1.6.1 Confidentiality

The researcher may have difficulties in accessing the respondents due to the rules and regulations of the company about its operations. The researcher shall have to administer questionnaires which he shall back to collect after sometime. Respondents will not be required to indicate their names on the questionnaires. The researcher shall also present a letter from her learning institution to prove that she is actually a student collecting data for her research.

1.6.2 Respondent Attitudes

The attitude of the workers may make the research reliability and validity to be jeopardized because of their attitude towards researchers from outside. The delimitation for this would be to lay the foundation from the onset of the project, that the researcher is just a student doing research for the purpose of completion of a course in purchasing and supplies management. 1.6.3 Susceptibility and hostility

Procurement and purchasing are indeed susceptible areas thus the data collection process faced a certain level of resistance, suspicion and hostility especially from respondents who might be skeptical about the motive behind the study.

1.7 Scope of the Study

Scope in research refers to the area where the study shall be focused. An investigation is one sub-problem contributing to a research problem. The scope should be limited to a problem that can be investigated. The problem identified should provide the student with the opportunity to demonstrate his/her research abilities and report writing skills. Scope covers logical problem formulation and analysis, design or development of a process/ fieldwork/ implementation or evaluation of an intervention and/or invention, the drawing of logical conclusions or diagnosis, as well as the capacity to address or eliminate a problem.

A good research investigates several sub-problems in order to make a valuable contribution to the body of knowledge in the specific field. The research must be original, and make a significant contribution to the discipline. It can include design, development, implementation and evaluation of an intervention and/or invention. This study shall be conducted at the EABL located along Thika road in Ruaraka to establish the factors affecting effective supply chain management in manufacturing firms. The target population shall be 117 and the 25% of the population shall be used as a sample using stratified random sampling method.

CHAPTER TWO

LITERATURE REVIEW

2.1 Introduction

Review of related information is very important because it provides the needed support to the researcher’s rationale for undertaking research in a certain area. A literature review is a researcher’s critique of findings from other studies done in related areas. In this chapter the researcher will examine whether the problem links to any other research study that has been written in the same area or research and will derive its literature from the books, journals, research papers, and websites on the internet. The chapter presents theoretical review, empirical review and conceptual framework. 2.2 Review of Theoretical Literature

2.2.1 Resource Based Theory

The resource-based view (RBV) argues that firms possess resources, subsets of which enable them to achieve competitive advantage, and a subset of those that lead to superior long-term performance. Resources that are valuable and rare can lead to the creation of competitive advantage. That advantage can be sustained over longer time periods to the extent that the firm is able to protect against resource imitation, transfer, or substitution. In general, empirical studies using the theory have strongly supported the resource-based view (Donovan, R. 2006).

The resource-based view (RBV) as a basis for a competitive advantage of a firm lies primarily in the application of the bundle of valuable resources at the firm’s disposal .

To transform a short-run competitive advantage into a sustained competitive advantage requires that these resources are heterogeneous in nature and not perfectly mobile .Effectively, this translates into valuable resources that are neither perfectly imitable nor substitutable without great effort If these conditions hold, the firm’s bundle of resources can assist the firm sustaining above average returns. (Halldorsson, & Tage, 2003) A resource must enable a firm to employ a value-creating strategy, by either outperforming its competitors or reduce its own weaknesses .Relevant in this perspective is that the transaction costs associated with the investment in the resource cannot be higher than the discounted future rents that flow out of the value-creating strategy .To be of value, a resource must be rare by definition. In a perfectly competitive strategic factor market for a resource, the price of the resource will be a reflection of the expected discounted future above-average returns.

If a valuable resource is controlled by only one firm it could be a source of a competitive advantage This advantage could be sustainable if competitors are not able to duplicate this strategic asset perfectly (Peteraf, 2003)Even if a resource is rare, potentially value-creating and imperfectly imitable, an equally important aspect is lack of substitutability.

If competitors are able to counter the firm’s value-creating strategy with a substitute, prices are driven down to the point that the price equals the discounted future rents resulting in zero economic profits (Halldorsson,2007).

2.2.2 Transactional Theory

Transaction cost refers to the cost of providing for some good or service through the market rather than having it provided from within the firm. In order to carry out a market transaction it is necessary to discover who it is that one wishes to deal with, to conduct negotiations leading up to a bargain, to draw up the contract, to undertake the inspection needed to make sure that the terms of the contract are being observed, and so on. One important reason for explaining the existence of multinational companies is transaction costs and internalization. According to the internalization approach multinational companies arise because companies tend to internalize transactions for which the transaction cost in the market is high. One way to reduce the transaction costs is to carry out these transactions within one and the same company rather than between independent companies (Hines, 2004).

More succinctly transaction costs are: search and information costs, bargaining and decision costs policing and enforcement costs .without taking into account transaction costs it is impossible to understand properly the working of the economic system and have a sound basis for establishing economic policy. Market prices govern the relationships between firms but within firm decisions are made on a basis different from maximizing profit subject market prices. Within the firm decisions are made on through entrepreneurial coordination.

There are a great variety of arrangements in producing goods. In agriculture often most of the labor force works on a day-to-day basis. In other industries the labor force may be permanent, tied to the firm with long-term contracts. Repair services in some firms may be supplied by an internal organization; in others it is provided by specialized firms from outside. A firm is a system of long-term contracts that emerge when short-term contracts are unsatisfactory (Hines, 2004).

The unsuitability of short term contracts arises from the costs collecting information and the costs of negotiating contracts. This leads to long term contracts in which the remuneration is specified for the contractee in return for obeying, within limits, the direction of the entrepreneur. The economic theory of the production level of a plant in the short run and long run are well worked out, but the theory of the size of the firm is not well developed. This is clear in the matter of acquisition of companies by other companies. There are inconveniences of market transactions, but if transactions are not governed by the price system there has to be an organization. The object of an business organization is to reproduce the conditions of a competitive market for the factors of production within the firm at a lower cost than the actual market (Butler, 2001).

2.2.3 Agency Theory

In economics, the principal-agent problem treats the difficulties that arise under conditions of incomplete and asymmetric information when a principal hires an agent. Various mechanisms may be used to try to align the interests of the agent with those of the principal, such as piece rates/commissions, profit sharing, efficiency wages, the agent posting a bond, or fear of firing. The principal-agent problem is found in most employer/employee relationships, for example, when stockholders hire top executives of corporations (Kallrath, 2006).

Agency theory is directed at the ubiquitous agency relationship, in which one party (the principal) delegates work to another (the agent), who performs that work. Agency theory is concerned with resolving two problems that can occur in agency relationships.

The first is the agency problem that arises when (a) the desires or goals of the principal and agent conflict and (b) it is difficult or expensive for the principle to verify what the agent is actually doing. The problem here is that the principal cannot verify that the agent has behaved appropriately. The second is the problem of risk sharing that arises when the principal and agent have different attitudes towards risk. The problem here is that the principle and the agent may prefer different actions because of the different risk preferences (Kallrath, 2006).

2.3 Empirical Review

2.3.1 Lead time

Lead time can be explained as that period between planning to release an order, work in progress until the order is completed. Lead time is the time required to complete an operation on a component, Kaushik & Cooper, M. (2005) further described manufacturing lead time as the total time required to manufacture an item. It is the elapsed time between different events that may occur. Ketchen and Hult, (2006).

States that it is important to recognize the length a product takes with MRP and JIT techniques. Events such as receipts, defective material and stoppage of delivery dates requires constant scrutiny to ensure that manufacturers maintain consistency lead-time, which is that interval between the time an item is ordered for production and the time it becomes available for shipment . According to Martin (2007) order processing is the enterprise critical linkage to the customers. The order management cycle itself is a process that involves pre- order and post – order activities. That is the basic function of the logistics management.

Lead time is the period of time between the initiation of any process of production and the completion of that process. Thus the lead time for ordering a new car from a manufacturer may be anywhere from 2 weeks to 6 months. In industry, lead time reduction is an important part of lean manufacturing. We have several types of lead time depending on the industry this includes: Lead time in journalism: – Lead time in publishing describes the amount of time that a journalist has between receiving and writing assignment, and submitting the completed piece. Depending on the publication, lead times can be anything from a couple of hours to many months (Blythe, 2006).

Lead time in Supply Chain Management: – A more conventional definition of Lead Time in the Supply Chain Management realms is the time from the moment the supplier receives an order to the moment it is shipped. In the absence of finished goods or intermediate (Work In Progress) inventory-it is the time it takes to actually manufacture the order without any inventory other than raw materials or supply parts (Chapman, 2006).

Lead time in Manufacturing: – In the manufacturing environment, Lead Time has the same definition as that of Supply Chain Management, but it includes the time required to ship the product to the purchaser. The shipping time is included because the manufacturing company needs to know when the parts will be available for Material Requirements Planning. It is also possible for lead time to include the time it takes for a company to process and have the part ready for manufacturing once it has been received. The time it takes a company to unload a product from a truck, inspect it, and move it into storage is non-trivial. With tight manufacturing constraints or when a company is using Just In Time manufacturing it is important for supply chain to know how long their own internal processes take (Chapman, 2006).

Lead time is the period between a customer’s order and delivery of the final product. A small order of a pre-existing item may only have a few hours lead time, but a larger order of custom-made parts may have a lead time of weeks, months or even longer. It all depends on a number of factors, from the time it takes to create the machinery to the speed of the delivery system. Lead time may change according to seasons or holidays or overall demand for the product. (Chapman, 2006).

According to Palin (2001) Manufacturers are always looking for ways to improve the lead time on their products. Lead time can mean the difference between making the sale and watching a competitor sign the contract.

If a company can deliver the product weeks ahead of the competition, it stands a better chance of receiving future orders. Because of this, logistics management and labor teams routinely hold meetings to discuss lead time improvements. Lead time comes in a variety of form, the lead time for some common materials used in production are as follows, throughout time or time to flow through the production, suppliers lead time or actual for material to be transformed by suppliers arrive from the planning of lead time which adds considerable to lead times and customer lead times problems affects the organization. These expressions often indicate that the process is seen as a reactive one, where a problem of lateness arises. Thus logistics management affects lead-time in the manufacturing industry (Kouvelis et al, 2006).

2.3.2. Technology

Underlying any economic environment is its technological base; the technical skills and equipment that affect the economic resources are converted into output. Technological development affects the manufacturing industry in various ways According to Bartol and David (2000), technology involves the knowledge, tools, equipment and work techniques used by an organization in delivering its products or services. Technology change is reflected by new services e.g. e-mail order or e- shopping. Larson and Halldorsson, (2004),defines technology as “know how” or some knowledge, experience and skills necessary to establish enterprise that will manufacture and market a product economically. Other researchers view technology as various types of knowledge and expertise necessary for planning, establishment and operation of a manufacturing plant and associated enterprises.

Technologies are evolutionary. Technology change includes any application of new ways to transform resources into the product or service. These include new machines/equipment e.g. computers and new techniques and methods of work procedures e.g. the management of information system (MIS).

The adoption of new technology involves the current decision to adopt the organization design to that technology. Entrepreneurs decide at the enterprise level which technologies to use, the main factors influencing their choice of technology include the objectives of the firm, the resources available, technologies. Moreover, the skills to choose adopt and effectively use technology in order to survive. One would be in a better position to choose a technology if one were able to assess the demand for the firm’s products, estimate the rate of change in the market that may call for change in technology, gather information about alternative technologies and estimate the potential return on the investments for each alternative. (Kouvelis, 2006).

Creative technological adoption can suggest possibilities for new products or for improvements in existing products or in manufacturing and marketing techniques.

A technological breakthrough can have a sudden and dramatic effect on a firm’s environment and performance, the survival of an enterprise in the age of knowledge-based economy depends on how to improve their technological innovation capability. Many studies have found that adopting technological innovations is the most important tool for enterprises to keep their competitive advantage. Therefore, the innovation in logistics technologies is a key variable and means of differentiation between logistics service providers .Some studies revealed that to fully satisfy the diversifying requirements of customers, logistics service providers should improve their service efficiency by continuous adoption of information or automation technologies (Larson, and Halldorsson, 2004).

Movahedi (2009) suggested that logistics service providers should employ new information technologies to raise their service capability in the e-commerce age. Logistics companies could increase their performance by employing new technologies. The logistics industry should pay more attention to innovation in logistics service and the innovation in logistics can be implemented through technology, knowledge and relationship networks. Adopting innovative logistics technologies might enable logistics service providers to enhance their service abilities.

However, most research about technology adoption and innovation focused on manufacturing industries though increasing attention has been paid to technological innovation in service industries recently. According to Aristle (2007) defines technology as know how or some knowledge, experience and skills necessary to establish enterprise that will manufacture and market a product economically. Other researchers view technology as various types of knowledge and expertise necessary for planning, establishment and operation of a manufacturing plant and associated enterprises. Technologies are evolutionary. According to Sergio (2000), technology change includes any application of new ways to transform resources into the product or service. These include new machines/equipment e.g. computers and new techniques and methods of work procedures e.g. the management of information system (MIS).

The adoption of new technology involves the current decision to adopt the organization design to that technology. According to Kotler (2000) technology is becoming critical as a competitive tool. Retailers are using computers to produce better forecasts, control inventory costs, order electronically from suppliers and e-mails between stores and even to sell to customers within stores. They are adopting check out scanning systems, electronic fund transfer, electronic data interchange, in store television and imported merchandise handling systems and smart cards. New technologies have created important industries that didn’t exist years ago.

Many of the big advances in business have come from early recognition of new ways to do things. The rapid pace of technology change opens up new opportunities but it also poses challenges to the telecommunication industry in terms of performance. Lack of new technology affects the firm’s profitability and performance According to Lavassani (2009) Technological advances do not go smoothly and when they do acknowledge of consumers is still an advantage to securing a success Technological change can also pose threat to those company gradually find they cannot compete effectively with their more advance rivals. Companies are discovering that old solutions do not work with new problems. The business parameters have changed technology enables the service to be faster hence customer satisfaction. Organizations today are operating in a very complex, dynamic and competitive business environment. Organizations are facing many challenges and are constantly adapting and responding to the changing environmental conditions. These challenges are: increased customer awareness, rapid advices in technology, increased product ranges, shorter product life cycle and competition. Hence technological advancement is affects logistics management. (Butler, 2001).

2.3.3. Communication

Communication is the means whereby people in organisation exchange information regarding the operations of an enterprise. It is the interchange of ideas, facts and emotions by two or more persons .Simchi-levi (2007) stressed the need for communication to occupy a central place in an organisation theory, because the structure extensiveness and scope of organisation are almost entirely determined by communication techniques. Communication can be regarded as foundation upon which organisation and administration must built because it links various parts of the system for a smooth flow of material and services in the supply chain.

Communication is a process whereby information is encoded and imparted by a sender to a receiver via a channel or medium. The receiver then decodes the message and gives the sender a feedback. Communication requires that all parties have an area of communicative commonality. Communication is thus a process by which we assign and convey meaning in an attempt to create shared understanding. This process requires a vast repertoire of skills in intrapersonal and interpersonal processing, listening, observing, speaking, questioning, analyzing, and evaluating (Ramos, 2004).

According to Taylor (2005), communication as giving receiving or exchanging information, opinions or ideas by writing, speech or visual means, so that the message communicated is completely understood by the recipient. The effective communication ensures that the message is understood and stimulates the recipient to take appropriate action.

Successful organisations understand that if they are be successful in today’s business world good communication at all level is essential. Effective communication helps organisation make stronger decision-making and problem solving, upturn in productivity, convincing and compelling corporate materials clearer and more streamlined workflow, enhanced professional image, sound business relationships and successful response ensured. (Barnard 2004).

Organisations function by means of the collective action of people yet each individual is capable of taking independent action which may not be in line with policy or instruction or may not be reported properly to other people who ought to know about it. Good communications are required to achieve coordinated results. Organisations are subject to the influence of continuous change which affects the work employee do, their well-being and their security. Changes can be managed only by ensuring that the reasons for and the implication of changes are communicated to those affected in terms which they can understand and accept. Armstrong (2006), indicate that above all good two-way communications are required so that management can keep employees informed of the policies and plans affecting them, and employees can react promptly with their views about management’s proposals and actions.

Armstrong (2001) has identified various communication areas and objectives they reflect to the organisation. The following are some of the communication areas, the communication downwards and sideways of the corporate or functional objective, policies plans and budgets to those who have implement them, these ensure that managers and supervisors receive clear, accurate and prompt information on what they are expected to achieve to further the company’s objectives.

The communication downwards or direct instruction from a manager to subordinate these ensures that the instruction is clear and precise and provides necessary motivation to get people on action. The communication upwards and sideways of proposals suggestions and commitments on corporate or functional objectives, policies and budgets from those who have to implement them, this ensure that managers and supervisors have adequate scope to influence corporate and functional decisions on matters about which they have specific expertise and knowledge.

Communication upwards and sideways of management information on performance and results to enable management to monitor and control performance in order that as necessary , opportunities can be exploited or swift corrective action taken. The receipt and analysis of information from outside which

affects the company’s interest , to ensure that the company is fully aware of all the information on legislation and marketing , commercial , financial and technological matters that affect its interests.

The presentation of information about the company and its product to the government, customers and the public at large, to exert influence in the interests of the company, to present a good image of the company and to persuade customers to buy its products or services. Communications should be about values, plans, intentions and achievements and results. Customer service is an important factor in logistics management. The way the customer value the product of a given organisation and the perceptions or image customers has concerning a given organisation is very important (Carter, 2005).

Consumers usually face a broad array of products and services that might satisfy a given need but they make choices based on their perception of the value and satisfaction that various product and services deliver. (Armstrong 2006).

Kotler, (2004), defines customer values as the differences between the value customer gains from owing and using a product and the cost of obtaining the product. Customers form expectations about the value of various marketing offers and buy accordingly. Customers’ expectations are based on the past buying experiences, the opinions of friends, marketers and competitors’ information and promise.

Customer satisfaction with a purchase depends on how well the product’s performance lives up to customer’s expectations. Customer satisfactions a key influence on fortune buying behaviour. Satisfied customers buy again and tell others about their good experiences. Dissatisfied customers often switch to competitors and disparage the products to others. Organisation must be careful to set the right level of expectations if they may satisfy those who buy but fail to attract enough buyers. If they raise expectations to high, buyers will be disappointed. Customer value and customer satisfaction are key building block for developing and managing customer relationship. Lysons, (2006), explains that supplier’s appraisal may arise when a prospective vendor applies to be placed on the buyers approved list or in the course of negotiation when the buyer wishes to assure himself or herself that the supplier can meet the requirements reliably.

Supplier appraisal is necessary when a potential suppliers do not hold BS EN ISO 9000:2000, when purchase of strategic high-profit, high risk items. expenditure on capital items, including plant, machinery and computer systems, when entering into Just –In – Limit arrangements, when engaging in global sourcing, when negotiating TQM and quality in relation to high – profit or high – risk items and when negotiating service-level agreement. For purposes of supplier development that is what needs to be done to bridge the gap between the present resources and competence of a supplier or potential supplier and the standard required by the purchaser. The supplier can be appraised on its financial position, production capacity and facilities, human resources and innovation and design. (Garry, 2006)

2.3.4. Quality

Total Quality Management (TQM) is an approach that seeks to improve quality and performance which will meet or exceed customer expectations. TQM looks at the overall quality measures used by a company including managing quality design and development, quality control and maintenance, quality improvement, and quality assurance. Total Quality Management (TQM) is an approach that seeks to improve quality and performance which will meet or exceed customer expectations. This can be achieved by integrating all quality-related functions and processes throughout the company. TQM looks at the overall quality measures used by a company including managing quality design and development, quality control and maintenance, quality improvement, and quality assurance. TQM takes into account all quality measures taken at all levels and involving all company employee (Cooper, 2007).

Total quality management has evolved from the quality assurance methods that were first developed around the time of the First World War.

The war effort led to large scale manufacturing efforts that often produced poor quality. To help correct this, quality inspectors were introduced on the production line to ensure that the level of failures due to quality was minimized. TQM can be defined as the management of initiatives and procedures that are aimed at achieving the delivery of quality products and services. A number of key principles can be identified in defining TQM, including: Executive Management – Top management should act as the main driver for TQM and create an environment that ensures its success. Training – Employees should receive regular training on the methods and concepts of quality. Customer Focus – Improvements in quality should improve customer satisfaction. Decision Making – Quality decisions should be made based on measurements.

Methodology and Tools – Use of appropriate methodology and tools ensures that non-conformances are identified, measured and responded to consistently. Continuous Improvement – Companies should continuously work towards improving manufacturing and quality procedures. Company Culture – The culture of the company should aim at developing employees ability to work together to improve quality. Employee Involvement – Employees should be encouraged to be pro-active in identifying and addressing quality related problems .Total quality management is a way of managing an organization so that every job, every process is carried out right, first time and every time. Each stage of manufacture or service is totally 100% correct before it proceeds (Halldorsson,2007).

Joseph Juran (2004), he emphasized the importance of achieving annual improvements in quality and reduction in quality related costs. He termed any improvements that take organisation to levels of quality performance that have previously not achieved as a breakthrough. Breakthroughs are focused on improving or eliminating chronicle losses.

Halldorsson, (2007) found out that quality is not determined by the capabilities of the workers but by the system of work that determines how work is performed. If the worker have attained process stability i.e. removal of all the variations that could occur within the work process and output is still unacceptable the redesign of the system is warranted. There are five approaches to quality and they all have an impact to the customers. These approaches include: Value based approach in these approach the customers create confidence when he buys an item at the high cost than when buying at lower cost.

The high price shows that the item meet the quality the customer wanted Manufactured based approach Every company has set up some specifications which their product must meet this specification are considered to be of good quality , these enables the customer to create confidences in such products. If it is not meeting the specification of that product then it is not of good quality hence customer loses confidences. User based – The product is said to be of good quality if it meets the requirement of the user therefore if a product meets the customer requirement then it is of good quality.

Product based approach here every product in the market has got its own specification then it is of good quality but if it misses some requirements then it is of poor quality. The transcendent an item of good quality can be general be recognised by even looking at the items. These clearly create confidence. Product with bad impression gives negative altitude to customers hence loose of confidence in customers. (Kotler, 2006)

According to Kaushik (2005) many companies chose to pay for the poor quality in what he referred to as the “Price of Non-conformance”. The costs are identified in the Prevention, Appraisal, and Failure (PAF) Model. Prevention costs are associated with the design, implementation and maintenance of the TQM system. They are planned and incurred before actual operation, and can include: Product Requirements – The setting specifications for incoming materials, processes, finished Products/services. Quality Planning – Creation of plans for quality, reliability, operational, production and inspections. Quality Assurance – The creation and maintenance of the quality system. Training – The development, preparation and maintenance of processes.

Appraisal costs are associated with the vendors and customers evaluation of purchased materials and services to ensure they are within specification. They can include: Verification Inspection of incoming material against agreed upon specifications. Quality Audits Check that the quality system is functioning correctly. Vendor Evaluation – Assessment and approval of vendors. Failure costs can be split into those resulting from internal and external failure. Internal failure costs occur when results fail to reach quality standards and are detected before they are shipped to the customer. These can include: Waste .Unnecessary work or holding stocks as a result of errors, poor organization or communication. Scrap – Defective product or material that cannot be repaired, used or sold. Rework – Correction of defective material or errors. Failure Analysis is required to establish the causes of internal product failure (Kouvelis, 2006).

Material requirement planning (MRP) is a product- oriented computerised technique aimed at minimising inventory and maintaining delivery schedules. It relates the dependent requirements for the material and components comprising an end product to time periods over a planned horizon e.g. one year on the basis of forecasts provided by marketing or sales and other input information (Larson, 2005).

The aim of MRP is to enable an organisation to synchronize ordering and delivery of materials and components with production requirements. It will also enable an organisation to achieve planned and controlled inventories and ensure that required items are available at the time of usage. MRP will promote planning between the purchaser and the supplier to the advantage of each. The forward projection of orders will assist suppliers to reduce lead time and production costs and minimise the inventory costs of the purchaser (Birkland, 2001).

Just In Time (J.I.T) means that all materials and products become available at the very moment when they are needed at exactly on time and in the right quality. The major objective underlying this approach is to continuously tackle and solve manufacturing bottlenecks within and interface problems between consecutive steps in the manufacturing process (Movahedi, 2009).

Just In Time implies that nothing is produced if there is no demand. The production process is pulled by customer’s orders. In order for this process to work all parts must arrive where they are needed, when they are needed and in exact quantity needed and all parts that arrive must be usable parts. All these can be achieved i.e. when there is liaison with the design function, suppliers, purchasing department, production department and sales and marketing department. An organisation benefit by part cost i.e. low scrap costs, low inventory carrying costs. The quality of the products will be high and very fast to discover quality issue and rectify it. It is easier to respond to engineering changes requirement and designs or outlook. It enables administrative efficiency i.e. fewer suppliers minimal expediting and order release work, simplified communication and receiving activities. Just in time reduces rework, inspection parts related delays and reduces capital requirements i.e. reduces inventories of purchased parts, raw materials work – in- progress and finished goods. Therefore J.I.T concept should be adopted by the whole team on the supply chain so that it can work on effectively (Arjan, Van Weell, 2006).

Economic order quantity (EOQ) is the size of order that minimises the total cost of acquiring and holding stock. Factors influencing economic order quantities are cost of acquisition, holding costs and cost of stock outs. The cost acquisition comprises preliminary cost e.g. preparing the requisitions, vendor selection and negotiation, placement cost e.g. order preparation stationary and postage lastly post placement costs e.g. progressing, receipt of goods, inspection and payment of invoices (Lavassani, 2009).

Holding costs comprises financial costs e.g. interest on capital tied in inventory, losses in value through deterioration, obsolescence and pilferage, storage cost e.g. storage space, cost of handling and inspection stores, heat, power and overheads also clerical costs i.e. stores records and documentation. Cost of stock-outs comprises the loss of production output, cost of the idle time and of fixed overheads spread over a reduced output. Cost of action taken to deal with the stock-out e.g. buying from a stockist at an enhanced price, switching production, obtaining a substitute materials. Lastly, loss of customer goodwill through the inability to supply or late delivery ((Movahedi, 2009).

2.4 Conceptualization

The conceptual framework showing the independent and dependent variables is as in the figure below; Figure 2.1 Conceptual Frameworks

Independent VariablesDependent Variable

Independent Variables

Source: EABL (2011)

2.4.1. Lead Time

Lead time is the period of time between the initiation of any process of production and the completion of that process. In any industry, lead time reduction is an important part of lean manufacturing. If the lead time is long, the cost of production will be high; hence logistics management will enable the lead time to be shortened which shall increase efficiency and profitability of the organization (Hines, 2005).

In the manufacturing environment, lead time has the same definition as that of Supply Chain Management, but it includes the time required to ship the parts from the supplier.

The shipping time is included because the manufacturing company needs to know when the parts will be available for material requirements planning. It is also possible for lead time to include the time it takes for a company to process and have the part ready for manufacturing once it has been received (Blthe,2000) The time it takes a company to unload a product from a truck, inspect it, and move it into storage is non-trivial. With tight manufacturing constraints or when a company is using Just In Time manufacturing it is important for supply chain to know how long their own internal processes take (Ramos, 2004) 2.4.2. Technology

Birkland (2005) defines technology as know how or some knowledge, experience and skills necessary to establish enterprise that will manufacture and market a product economically. Other researchers view technology as various types of knowledge and expertise necessary for planning, establishment and operation of a manufacturing plant and associated enterprises. Technologies are evolutionary. Hence technology will affect the operation in the procurement procedures and thus the logistics management. Supply chain networks and e-supply chain networks may be designed for services or manufacturing and be global or domestic in scale. They encompass the functions of procurement, production, distribution, and customer service and have a diverse range of styles and structures. Logistics automation is the application of computer software and/or automated machinery to improve the efficiency of logistics operations.

Typically this refers to operations within a warehouse or distribution center, with broader tasks undertaken by supply chain management systems and enterprise resource planning systems. Logistics automation systems can powerfully complement the facilities provided by these higher level computer systems. The focus on an individual node within a wider logistics network allows systems to be highly tailored to the requirements of that node (Oen, 2005).

Logistics automation systems comprise a variety of hardware and software components. Automated cranes (also called automated storage and retrieval systems): provide the ability to input and store a container of goods for later retrieval.

Typically cranes serve a rack of locations, allowing many levels of stock to be stacked vertically, and allowing far high storage densities and better space utilization than alternatives. Automated conveyors allow the input of containers in one area of the warehouse, and either through hard coded rules or data input allows destination selection. The container will later appear at the selected destination. Similar to conveyors but typically have higher capacity and can divert containers more quickly. Typically used to distribute high volumes of small cartons to a large set of locations. Industrial Robots include four to six axis industrial robots, e.g. palletizing robots, are used for palletizing, depalletizing, packaging, commissioning and order picking (Whitehead, 2005).

2.4.3. Communication

Communication is the means by which people in organization exchange information regarding the operations of an enterprise. It is the interchange of ideas, facts and emotions by two or more persons. Chester Barnard (2004) stressed the need for communication to occupy a central place in an organization. These members of the logistics and supply chain need to know what is happening, what is needed and when it is needed. Logistics is a complex process and involves several functions such as procurement or purchasing, inward transport, receiving, warehousing, stock control, order picking, materials handling, outward transport, physical distribution management, recycling, and returns & waste disposal functions (Blythe ,2006).

Effective logistics management requires that the actual status of goods and services be communicated in real-time to the various groups of people involved in the logistics process. This helps logistics service providers to improve their service by keeping a closer watch on inventory and taking the steps necessary to avoid losing customers. Communication using satellite technology and sophisticated devices makes it possible for the various players involved in the logistics chain of processes to remain in constant communication with one another and with the end customer (Armstrong, 2003).

Technology is playing a key role in communication as well as in other processes in the logistics function and helping logistics firms to attain a competitive advantage.

The various types of technology being implemented in logistics activities include Electronic Data Interchange, artificial intelligence, expert systems, communication technology in the form of satellite and wireless communication, and bar coding and scanning (Blythe ,2006).

It is necessary to streamline the logistics process to maintain the efficiency of the logistics network. In addition to integrating information technology and advanced logistical approaches into their business operations, businesses are beginning to realize the need to focus on their logistics strategy in order to efficiently maintain their supply chain capabilities. A logistics strategy examines logistical operations and activities and provides logistical firms with a sense of unity, direction, and purpose. It helps firms involved in the business to attain a competitive advantage over others by allowing them to promptly respond to the opportunities and threats in the business environment.

In their efforts at logistical management, firms face several challenges, which may be local or global in their scope. While the need for integration of logistics activities and lack of qualified personnel are the primary challenges faced in logistics management at the local level, the global challenges include challenges arising due to greater distance, modes of transport, documentation, coordination of intermediaries, cultural and political differences, globalization, need for flexibility and speed, need to integrate supply chain activities, and challenges due to emphasis of companies on green logistics (Birkland T ,2001).

2.4.4. Quality

Quality is the degree of excellent of a product. Most organizations believe that majority of defective or poor products produced in the processes are directly traceable to poor quality input materials, parts and components. These are often the result of poorly co-ordinated design specification and the poorly managed process after the design in the production. From logistics management perspective this means that better co-ordination with suppliers in the specification, development and usage improves quality

(Whitehead, 2005)

Quality has been defined in various ways to link with various changes and challenges in the industrial environment. Such definitions include among others as fitness for use (Juran, 2006) and conformance to requirements It has also been defined as the degree to which a set of inherent characteristics fulfill requirements .The requirements are the needs and expectations that are stated, generally implied or obligatory.

Therefore, several aspects clearly stand out in the definition of quality, i.e customer determination, meaning that it is only customers who can decide if and how well a product or service meets his/her needs. Actual experience, meaning that the customer will judge the quality of a product or service based on actual experience either during purchase or after, and requirements which are an aspect of the product or service required by the customer may be stated or unstated, conscious or merely sensed.(Birkland ,2001).

2.5 Research Gap

Various studies have been conducted in the field of logistics. According to Bethany (2005) Logistics is the one important function in business today. No marketing, manufacturing or project execution can succeed without logistics support. For companies, 10 per cent to 35 per cent of gross sales are logistics cost, depending on business, geography and weight/value ratio. Wisner, Leong and Tan (2005), in their work stressed that for an organisation to compete successfully in any business; it requires companies to become much more involved in how their supplies and customers do business. As global competition increases, making products and services that consumers want to buy, means that business must pay close attention to where materials come from, how their supplier’s products and services are designed and assembled , how finished products are transported and stored, and what consumers or end- product users are really asking for.

According to the Institute of Supplies (2007) what organisations are doing today is an effort to focus more on core capabilities while trying to create alliances or strategic partnerships with suppliers, transportation and warehousing companies, distributors and customers who are good at what they do. This team approach to making and distributing products and services to customers is becoming the most effective and efficient way for businesses to stay successful, and is central to the practices of logistics management. While various contributions have been made previous authors did not conduct their studies at EABL. This study seeks to establish the lead time reduction approaches, technologies, communication systems and quality systems at EABL and how they affect logistics management in manufacturing firms.

2.6 Summary of Variables

Lead time comes in a variety of form, the lead time for some common materials used in production are as follows, throughout time or time to flow through the production, suppliers lead time or actual for material to be transformed by suppliers arrive from the planning of lead time which adds considerable value to lead times and customer lead times problems affects the organization. These expressions often indicate that the process is seen as a reactive one, where a problem of lateness arises. Thus logistics management affects lead-time in the manufacturing industry Companies are discovering that old solutions do not work with new problems. The business parameters have changed technology enables the service to be faster hence customer satisfaction. Organizations today are operating in a very complex, dynamic and competitive business environment. Organizations are facing many challenges and are constantly adapting and responding to the changing environmental conditions.

These challenges are: increased customer awareness, rapid advices in technology, increased product ranges, shorter product life cycle and competition. Hence technological advancement is affects logistics management Communication is a process whereby information is encoded and imparted by a sender to a receiver via a channel or medium. The receiver then decodes the message and gives the sender a feedback. Communication requires that all parties have an area of communicative commonality. Communication is thus a process by which we assign and convey meaning in an attempt to create shared understanding. This process requires a vast repertoire of skills in intrapersonal and interpersonal processing, listening, observing, speaking, questioning, analyzing, and evaluating.

Quality is the degree of excellent of a product. Most organizations believe that majority of defective or poor products produced in the processes are directly traceable to poor quality input materials, parts and components. These are often the result of poorly co-ordinated design specification and the poorly managed process after the design in the production. From logistics management perspective this means that better co-ordination with suppliers in the specification, development and usage improves quality.

CHAPTER THREE

RESEARCH DESIGN AND METHODOLOGY

3.1 Introduction

This chapter refers to the entire process of planning and carrying out research activities undertaken by the study. It consists of the research design, target population, sample size, data collection instruments, data analysis and ethical issues. 3.2 Research Design

According to Mugenda and Mugenda (2001) research design refers to the overall strategy that you choose to integrate the different components of the study in a coherent and logical way, thereby, ensuring you will effectively address the research problem; it constitutes the blueprint for the collection, measurement, and analysis of data. The research problem determines the type of design The function of a research design is to ensure that the evidence obtained enables you to effectively address the research problem as unambiguously as possible. In social sciences research, obtaining evidence relevant to the research problem generally entails specifying the type of evidence needed to test a theory, to evaluate a program, or to accurately describe a phenomenon (Bryman and Bell 2003).

However, researchers can often begin their investigations far too early, before they have thought critically about what information is required to answer the study’s research questions. Without attending to these design issues beforehand, the conclusions drawn risk being weak and unconvincing and, consequently, will fail to adequate address the overall research problem (Dooley, 2005).

Research designs can vary considerably, but any sound design will do identify the research problem clearly and justify its selection, review previously published literature associated with the problem area, clearly and explicitly specify hypotheses [research questions] central to the problem selected, effectively describe the data which will be necessary for an adequate test of the hypotheses and explain how such data will be obtained, and describe the methods of analysis which will be applied to the data in determining whether or not the hypotheses are true or false. Descriptive study will be the best for the study because it is a design that is concerned with answering the questions of who, what, which, when or how much (cooper and scheduler, 2001).

According to Kothari (2004) it will help to generalize the findings provided that due care is taken while designing the questionnaire, selecting the sample size and using appropriate statistical method in analyzing data. A descriptive study is appropriate if description is informative. Secondly, descriptions are the starting point for identifying variables and building hypothetical constructs that can be tested using other methods. Thirdly, description is the only way to study a behavior or situation, because it is either physically or ethically impossible to produce it in an experiment. 3.3 Target Population and Sample Size

A sample size is a unit of analysis in a study. It is a shortcut method for investigating a whole population .Data is gathered on a small part of the whole parent population or sampling frame, and used to inform what the whole picture is like. The sample size chosen is a balance between obtaining a statistically valid representation, and the time, energy, money, labor, equipment and access available A sampling strategy made with the minimum of bias is the most statistically valid Most approaches assume that the parent population has a normal distribution where most items or individuals clustered close to the mean, with few extremes (Mugenda and Mugenda, 2004).

In the context of this study, the target population will be defined as the totality of objects or individuals under consideration of which the statistical attributes may be estimated by the study of a sample or samples draw from it (Kothari, 2004).The target population defines those units for which the findings of the survey are meant to generalize. The population will be 117 employees from EABL. 25% shall be regarded as the sample as in table 3.1 below.

Table 3.1 Target Population and Sample

Category

Target Population

Sample size

(25%)

Percentages

Top Management

6

3

5

Middle Management

15

3

13

Subordinate staff

96

24

82

Total

117

30

100

Source; EABL (2013)

3.4 Sample Design

According to Mugenda and Mugenda (2003), a sample is a smaller group procedurally selected from the population to represent it. A sample is a subset of the population being studied. It represents the larger population and is used to draw inferences about that population. It is a research technique widely used in the social sciences as a way to gather information about a population without having to measure the entire population. is a subset of the population being studied. It represents the larger population and is used to draw inferences about that population. Sampling is a research technique widely used in the social sciences as a way to gather information about a population without having to measure the entire population. It’s a subset of the population being studied. It represents the larger population and is used to draw inferences about that population.

It is a research technique widely used in the social sciences as a way to gather information about a population without having to measure the entire population. is a subset of the population being studied. It represents the larger population and is used to draw inferences about that population. It is a research technique widely used in the social sciences as a way to gather information about a population without having to measure the entire population. It’s a subset of the population being studied. It represents the larger population and is used to draw inferences about that population. It is a research technique widely used in the social sciences as a way to gather information about a population without having to measure the entire population (Bryman and Bell ,2003).

A sample design is the framework, or road map, that serves as the basis for the selection of a survey sample and affects many other important aspects of a survey as well. A sample is a subset of the population being studied. It represents the larger population and is used to draw inferences about that population.

It is a research technique widely used in the social sciences as a way to gather information about a population without having to measure the entire population (Mugenda and Mugenda, 2003).

In a broad context, survey researchers are interested in obtaining some type of information through a survey for some population, or universe, of interest. One must define a sampling frame that represents the population of interest, from which a sample is to be drawn. The sampling frame may be identical to the population, or it may be only part of it and is therefore subject to some under coverage, or it may have an indirect relationship to the population. The sample design provides the basic plan and methodology for selecting the sample (Kothari, 2004).

The sampling procedure comprises several stages namely defining the population of concern, specifying a sampling frame, a set of items or events possible to measure, specifying a sampling method for selecting items or events from the frame, determining the sample size, implementing the sampling plan and sampling and data collecting (Bryman and Bell ,2003).

The study will use stratified random sampling which is method of sampling that involves the division of a population into smaller groups known as strata. In stratified random sampling, the strata are formed based on members’ shared attributes or characteristics. A random sample from each stratum is taken in a number proportional to the stratum’s size when compared to the population. These subsets of the strata are then pooled to form a random sample.

3.5 Data Collection Instruments

According to Kothari (2004) data collection is the process of gathering and measuring information on variables of interest, in an established systematic fashion that enables one to answer stated research questions, test hypotheses, and evaluate outcomes. The data collection component of research is common to all fields of study including physical and social sciences, humanities, business, etc. While methods vary by discipline, the emphasis on ensuring accurate and honest collection remains the same. Regardless of the field of study or preference for defining data (quantitative, qualitative), accurate data collection is essential to maintaining the integrity of research. Both the selection of appropriate data collection instruments (existing, modified, or newly developed) and clearly delineated instructions for their correct use reduce the likelihood of errors occurring. Data collection usually takes place early on in an improvement project, and is often formalized through a data collection plan which often contains Pre collection activity involving agreeing on goals, target data, definitions, methods, data collection and Present findings usually involving some form of sorting analysis and/or presentation.

Prior to any data collection, pre-collection activity is one of the most crucial steps in the process. It is often discovered too late that the value of their interview information is discounted as a consequence of poor sampling of both questions and informants and poor elicitation techniques. After pre-collection activity is fully completed, data collection in the field, whether by interviewing or other methods, can be carried out in a structured, systematic and scientific way. A formal data collection process is necessary as it ensures that data gathered are both defined and accurate and that subsequent decisions based on arguments embodied in the findings are valid.

The process provides both a baseline from which to measure from and in certain cases a target on what to improve (Bryman and Bell ,2003).

Data collection will be through questionnaires. Specific questions will be incorporated in the questionnaires which will aim at capturing specific information. These questionnaires will then be sent back for evaluation. Some of the questions asked will be closed ended while others will be open ended. A pre-test will be done on the questionnaires by using them to interview selected sample respondents and evaluating the data acquired. A pilot study will be taken to pretest the methods and tools of data collection. The questionnaires will be administered on a drop and pick basis whereby respondents will be issued with questionnaires and be given adequate time to fill them out before they are collected back. 3. 6Data Analysis

Analysis of data is a process of inspecting, cleaning, transforming, and modeling data with the goal of highlighting useful information, suggesting conclusions, and supporting decision making. Data analysis has multiple facets and approaches, encompassing diverse techniques under a variety of names, in different business, science, and social science domains. The most important distinction between the initial data analysis phase and the main analysis phase, is that during initial data analysis one refrains from any analysis that are aimed at answering the original research question. The quality of the data should be checked as early as possible (Kothari, 2004).

The choice of analyses to assess the data quality during the initial data analysis phase depends on the analyses that will be conducted in the main analysis phase.

The quality of the measurement instruments should only be checked during the initial data analysis phase when this is not the focus or research question of the study. One should check whether structure of measurement instruments corresponds to structure reported in the literature. (Mugenda and Mugenda, 1999).

After the field work, the questionnaires will be checked to ensure that they were properly administered. Data analysis will be done as per the questions given. The data collected will first be sorted, categorized and tabulated. This will be followed by data interpretation. To achieve good results certain descriptive statistics will be used during data analysis; these will include percentages and frequencies. To enable description of the distribution of dependent and independent variables, the findings will be presented in tables and pie charts (Dooley, 2005).

3.7 Ethical Issues

There are several reasons why it is important to adhere to ethical norms in research. First, norms promote the aims of research, such as knowledge, truth, and avoidance of error. For example, prohibitions against fabricating, falsifying, or misrepresenting research data promote the truth and avoid error. Second, since research often involves a great deal of cooperation and coordination among many different people in different disciplines and institutions, ethical standards promote the values that are essential to collaborative work, such as trust, accountability, mutual respect, and fairness. Research ethics involves the application of fundamental ethical principles as follows; 3.7.1 Data Confidentiality

The researcher shall not misuse any of the information discovered, and there shall be a certain moral responsibility maintained towards the participants. There is a duty to protect the rights of people in the study as well as their privacy and sensitivity. The confidentiality of those involved in the observation shall be carried out, keeping their anonymity and privacy secure. 3.7.2 Equitable Selection of Respondents

It demands avoiding participant populations that may be unfairly coerced into participating, such as prisoners and institutionalized children. The principle of justice also requires equality in distribution of benefits and burdens among the population group(s) likely to benefit from the research. 3.7.3 Honesty

Honestly reporting data, results, methods and procedures, and publication status. Do not fabricate, falsify, or misrepresent data and not deceiving colleagues, granting agencies, or the public. 3.7.4 Objectivity

Striving to avoid bias in experimental design, data analysis, data interpretation, peer review, personnel decisions, grant writing, expert testimony, and other aspects of research where objectivity is expected or required and avoiding or minimize bias or self-deception. 3.7.5 Respect for Intellectual Property

Honoring patents, copyrights, and other forms of intellectual property and not using unpublished data, methods, or results without permission. Also, giving proper acknowledgement or credit for all contributions to research.

CHAPTER FOUR

DATA ANALYSIS, FINDINGS AND INTERPRETATIONS

4.1 Introduction

This chapter discusses data analysis and presentation of the research findings, the chapter gives a detailed explanation of the processes, techniques and procedures applied to analyze and present data acquired through the use of the questionnaires. The chapter begins with the analysis of the response rate where the actual number of respondents who participated in the study was determined. The data obtained under each research variable was analyzed independently through the use of quantitative analysis and qualitative analysis to enhance high data validity. 4.2 Quantitative Analysis

This analysis applies to responses from closed ended questions. They are presented in form of tables and charts showing frequencies and percentages. 4.2.1 Analysis of Response Rate

Table 4.1: Response Rate

Response

Frequency

Percentage

Returned Questionnaires

52

88

Unreturned Questionnaires

7

12

Total

59

100

Source; Researcher (2013)

Fig 4.1 Response Rate

Source; Researcher (2013)

The table 4.1 and figure 4.1 above shows the relationship between the respondents who actively participated in the study and those who did not participate. Out of the 59 questionnaires that were issues, 52 representing 88% were returned while 7 representing 12% were not. Therefore the response rate was high. 4.2.2 Gender of Respondents

Analysis on gender was as follows;

Table 4.2 Gender of Respondents

Response

Frequency

Percentage

Female

23

44

Male

29

56

Total

52

100

Source; Researcher (2013)

Fig 4.2 Gender of Respondents

Source; Researcher (2013)

The above table 4.2 and figure 4.2 shows the gender of respondents. Respondents (56%) were male while 44% were female. Therefore most of the respondents were male.

4.2.3 Age Brackets

Response

Frequency

Percentage

20 years and below

0

0

20-25 years

11

21

26-30 years

21

40

31-35 years

10

19

36-40 years

7

14

41-45 years

3

6

46-50 years

0

0

51-55 years

0

0

Total

52

100

Source; Researcher (2013)

Figure 4.3 Analysis of Age of Respondents

Source; Researcher (2013)

The above table 4.3 and figure 4.3 shows the age of respondents who participated in the research study whereby 21% had 20-25 years, 40% had 26-30 years, 19% had 31-35 years, and 14% had 36-40 years while 6% had 41-45 years. Majority were aged 26-30 years representing a young and energetic workforce.

4.2.4 Highest Level of Education

Table 4.4 Highest Level of Education

Response

Frequency

Percentage

Certificate

5

10

Diploma

24

46

Bachelor’s Degree

19

36

Master’s Degree

4

8

Doctorate

0

0

Others

0

0

Total

52

100

Source; Researcher (2013)

Fig 4.4 Highest Level of Education

Source; Researcher (2013)

The above table 4.4 and figure 4.4 shows the education level of respondents who participated in the research study. 10% had certificate, 46% diploma, 36% bachelor’s degree and 8% masters’ degree. Majority had at least diploma implying educated and informed respondents. 4.2.5 Working experience of Respondents

Table 4.5 Working Experience of Respondents

Response

Frequency

Percentage

Less than 1 year

10

19

1-3 years

24

46

3-5 years

18

35

5-10 years

0

0

Total

52

100

Source; Researcher (2013)

Fig 4.5 Working Experience of Respondents

Source; Researcher (2013)

Table 4.5 and figure 4.5 above shows the years of experience that respondents had served in the organization. Respondents (19%) had less than 1 year, 46% had 1-3 years while 35% had 3-5 years. Majority had 1-3 years of experience which is average working experience in the organization. 4.2.6 Department at Work

Table 4.6 Department at Work

Response

Frequency

Percentage

Finance and Accounting

6

19

Human Resource Management

4

17

Information Technology

8

29

Manufacturing

15

15

Logistics

9

8

Sales and Marketing

10

12

Total

52

100

Source; Researcher (2013)

Fig 4.6 Department at Work

Source; Researcher (2013)

Table 4.6 and figure 4.6 above presents the departments for the various respondents. Respondents (19%) were from sales and marketing, 17% logistics, 29% manufacturing, 15% information technology, 8% human resource management and 12% finance and accounting. Majority thus were from manufacturing department. 4.2.7 Analysis of Lead Time

Table 4.7 Allocation of Enough Time for Tasks

Response

Frequency

Percentage

Yes

48

92

No

4

8

Total

52

100

Source; Researcher (2013)

Fig 4.7 Allocation of Enough Time for Tasks

Source; Researcher (2013)

The table 4.7 and figure 4.7 above shows whether respondents were being given enough time to complete allocated assignments. Respondents (92%) agreed being allocated enough time while 8% disagreed. This shows that they were being given enough time for their assignments. 4.2.8 Extent to which lead time affects Effective Logistics management Table 4.8 Extent of Lead Time Effect

Response

Frequency

Percentage

Very great extent

22

42

Great extent

10

19

Average extent

16

31

Low Extent

4

8

Very low extent

0

0

Total

52

100

Source; Researcher (2013)Fig 4.8 Extent of Lead Time Effect

Source; Researcher (2013)

The above table 4.8 and figure 4.8 illustrates the extent to which lead time affects effective management of logistics in the manufacturing industry. Respondents (42%) were for very great extent, 19% great extent, 31% average extent and 8% low extent. Therefore the effect of lead time on logistics management is very great. 4.2.9 Analysis of Technology

Table 4.9 Application of Technology in Goods and services

Response

Frequency

Percentage

Yes

52

100

No

0

0

Total

52

100

Source; Researcher (2013)

Figure 4.9 Application of Technology in Goods and services

Source; Researcher (2013)

The table 4.9 and figure 4.9 above was used to present the application of technology in goods and services. All the respondents acknowledged application of technology in gods and services. 4.2.10 Extent to which Technology affects effective Logistics Management Table 4.10 Extent of Technology Effect

Response

Frequency

Percentage

Very great extent

14

27

Great extent

18

34

Average extent

15

29

Low Extent

5

10

Very low extent

0

0

Total

52

100

Source; Researcher (2013)

Fig 4.10 Extent of Technology Effect

Source; Researcher (2013)

The table 4.10 and figure 4.10 above were used to establish the extent to

which technology affects logistics management in manufacturing firms. Respondents (27%) indicated very great,34% great extent,29% average extent and 10% low extent. Technology therefore greatly affects logistics management in manufacturing firms. 4.2.11 Analysis of Communication

Table 4.11 Forms of Communication

Response

Frequency

Percentage

Formal

16

31

Informal

10

19

Both

26

50

Total

52

100

Source; Researcher (2013)

Fig 4.11 Forms of communication

Source; Researcher (2013)

The above table 4.11 and figure 4.11 was used to establish the forms of communication applied in the organization. Respondents (31%) were for formal, 19% informal and 50% both. Majority thus acknowledged use of both formal and informal communication. 4.2.12 Extent to which Communication affects effective Logistics Management Table 4.12 Extent of Communication Effect

Response

Frequency

Percentage

Very great extent

11

21

Great extent

18

35

Average extent

15

19

Low Extent

8

15

Very low extent

0

0

Total

52

100

Source; Researcher (2013)

Fig 4.12 Extent of Communication Effect

Source; Researcher (2013)

As in table 4.12 and figure 4.12 above shows the extent to which communication affects logistics management in the manufacturing industry. Respondents (21%) were for very great, 35% great extent, 29% average extent and 15% low extent. Majority thus were for great extent. Communication thus greatly affects logistics management in the manufacturing industry. 4.2.13 Analysis of Quality

Table 4.13 Offer of High Quality Products

Response

Frequency

Percentage

Yes

52

100

No

0

0

Total

52

100

Source; Researcher (2013)

Fig 4.13 Offer of High Quality Products

Source; Researcher (2013)

The above table 4.13 and figure 4.13 was used to ascertain whether the organization products are of high quality all respondents acknowledged that the organization’s products are of high quality. 4.2.14 Extent to which Quality affects effective Logistics Management Table 4.14 Extent of Quality Effect

Response

Frequency

Percentage

Very great extent

15

29

Great extent

17

33

Average extent

12

23

Low Extent

5

9

Very low extent

3

6

Total

52

100

Source; Researcher (2013)

Fig 4.14 Extent of Quality Effect

Source; Researcher (2013)

Table 4.12 and figure 4.12 above shows the extent to which quality affects logistics management in the manufacturing industry. Respondents (29%) were for very great extent, 33% average extent, 9% low extent and 6% very low extent. Quality thus greatly affects logistics management. 4.3 Qualitative Analysis

This section applies to responses generated from open ended questions. They are aimed at giving explanations to the quantitative analysis. 4.3.1 Lead Times

Lead time in logistics management comes in a variety of form, the lead time for some common materials used in production are as follows, throughout time or time to flow through the production, suppliers lead time or actual for material to be transformed by suppliers arrive from the planning of lead time which adds considerable to lead times and customer lead times problems affects the organization. 4.3.2 Technology

Various technologies support logistics management. For example, logistics automation systems comprise a variety of hardware and software components. Automated cranes (also called automated storage and retrieval systems): provide the ability to input and store a container of goods for later retrieval. Typically cranes serve a rack of locations, allowing many levels of stock to be stacked vertically, and allowing far high storage densities and better space utilization than alternatives. Automated conveyors allow the input of containers in one area of the warehouse, and either through hard coded rules or data input allows destination selection. The container will later appear at the selected destination. Similar to conveyors but typically have higher capacity and can divert containers more quickly.

4.3.3 Communication

Effective logistics management requires that the actual status of goods and services be communicated in real-time to the various groups of people involved in the logistics process. This helps logistics service providers to improve their service by keeping a closer watch on inventory and taking the steps necessary to avoid losing customers. Communication using satellite technology and sophisticated devices makes it possible for the various players involved in the logistics chain of processes to remain in constant communication with one another and with the end customer.

4.3.4 Quality

Quality is the degree of excellent of a product. Most organizations believe that majority of defective or poor products produced in the processes are directly traceable to poor quality input materials, parts and components. These are often the result of poorly co-ordinated design specification and the poorly managed process after the design in the production. From logistics management perspective this means that better co-ordination with suppliers in the specification, development and usage improves quality.

CHAPTER FIVE

SUMMARY, CONCLUSIONS AND RECOMMENDATIONS

5.1 Introduction

The chapter discusses the summary of findings, conclusions and recommendations of the research study. The answers to the research questions were discussed from the study findings and as an effort to provide a solution. Recommendations of the study were discussed and suggestions for further studies were made. 5.2 Summary of Findings

5.2.1 Lead Times

Concerning the extent to which lead time affects effective management of logistics in the manufacturing industry, respondents (42%) were for very great extent, 19% great extent, 31% average extent and 8% low extent. Therefore the effect of lead time on logistics management is very great. Time in logistical operations is a critical factor as it influences utility and satisfaction when the product gets to the customer. Lead time in logistics management comes in a variety of form, the lead time for some common materials used in production are as follows, throughout time or time to flow through the production, suppliers lead time or actual for material to be transformed by suppliers arrive from the planning of lead time which adds considerable to lead times and customer lead times problems affects the organization. 5.2.2 Technology

When asked about the extent to which technology affects logistics management in manufacturing firms, respondents (27%) indicated very great,34% great extent,29% average extent and 10% low extent. Technology therefore greatly affects logistics management in manufacturing firms. Various technologies support logistics management. For example, logistics automation systems comprise a variety of hardware and software components. Automated cranes (also called automated storage and retrieval systems): provide the ability to input and store a container of goods for later retrieval.

Typically cranes serve a rack of locations, allowing many levels of stock to be stacked vertically, and allowing far high storage densities and better space utilization than alternatives. Automated conveyors allow the input of containers in one area of the warehouse, and either through hard coded rules or data input allows destination selection. The container will later appear at the selected destination. Similar to conveyors but typically have higher capacity and can divert containers more quickly.

5.2.3 Communication

Regarding the extent to which communication affects logistics management in the manufacturing industry, respondents (21%) were for very great, 35% great extent, 29% average extent and 15% low extent. Majority thus were for great extent. Communication thus greatly affects logistics management in the manufacturing industry. Effective logistics management requires that the actual status of goods and services be communicated in real-time to the various groups of people involved in the logistics process. This helps logistics service providers to improve their service by keeping a closer watch on inventory and taking the steps necessary to avoid losing customers. Communication using satellite technology and sophisticated devices makes it possible for the various players involved in the logistics chain of processes to remain in constant communication with one another and with the end customer.

5.2.4 Quality

To establish the effect of quality on logistics management, respondents (29%) were for very great extent, 33% average extent, 9% low extent and 6% very low extent. Quality thus greatly affects logistics management. Quality is the degree of excellent of a product. Most organizations believe that majority of defective or poor products produced in the processes are directly traceable to poor quality input materials, parts and components. These are often the result of poorly co-ordinated design specification and the poorly managed process after the design in the production. From logistics management perspective this means that better co-ordination with suppliers in the specification, development and usage improves quality.

5.3 Conclusion

Lead time in logistics management comes in a variety of form, the lead time for some common materials used in production are as follows, throughout time or time to flow through the production, suppliers lead time or actual for material to be transformed by suppliers arrive from the planning of lead time which adds considerable to lead times and customer lead times problems affects the organization. Firms aim at reducing lead times to enhance customer responsiveness. Various technologies support logistics management. For example, logistics automation systems comprise a variety of hardware and software components. Effective logistics management requires that the actual status of goods and services be communicated in real-time to the various groups of people involved in the logistics process. From logistics management perspective quality means that better co-ordination with suppliers in the specification, development and usage improves quality. 5.4 Recommendations

5.4.1 Lead Time

Lead time reduction involves the rapid fulfillment of customer orders and the rapid transformation of raw materials into quality products in the shortest amount of time possible. There is need to redefine product strategies, reconfigure chain of resources to produce product, and re-deploy those resources needed to produce the product. The organization should strive towards operations system flexibility both manufacturing and service which is ability to configure assets and operations to react to emerging customer trends namely product changes, volume and mix at each node of the supply chain

5.4.2 Technology

Logistics service providers should employ new information technologies to raise their service capability in the e-commerce age. Logistics companies could increase their performance by employing new technologies. The logistics industry should pay more attention to innovation in logistics service and the innovation in logistics can be implemented through technology, knowledge and relationship networks. Adopting innovative logistics technologies might enable logistics service providers to enhance their service abilities. 5.4.3 Communication

The presentation of information about the company and its product to the government, customers and the public at large, to exert influence in the interests of the company, to present a good image of the company and to persuade customers to buy its products or services. Communications should be about values, plans, intentions and achievements and results. Customer service is an important factor in logistics management. The way the customer value the product of a given organisation and the perceptions or image customers has concerning a given organisation is very important.

5.4.4 Quality

The organization must be careful to set the right level of expectations if they may satisfy those who buy but fail to attract enough buyers. If they raise expectations to high, buyers will be disappointed. Customer value and customer satisfaction are key building block for developing and managing customer relationship. Supplier’s appraisal may arise when a prospective vendor applies to be placed on the buyers approved list or in the course of negotiation when the buyer wishes to assure himself or herself that the supplier can meet the requirements reliably. There is need for Quality Audits Check that the quality system is functioning correctly. Vendor Evaluation or assessment and approval of vendors may also be conducted. 5.5 Suggestion for Further Studies

Logistics management is key to any successful organization both small-scale and large-scale .The study was carried on the private sector, it is suggested that a further study to be carried in the public organizations which are majority in our country to find out how best they can manage their logistic process. This study has focused on factors affecting logistics management in the manufacturing industry with specific reference to EABL. Studies may be extended to other companies as well as the service sector to compare the trend. The positive side of logistics in terms of how it can contribute to competitive advantage may also be explored.

References

Armstrong M. (2005), The Handbook of Management Techniques Edition. Kogan Page Publishers, London. Birkland T (2001/2005) Introduction to Economics Edition. Pitman Publishing Company, Cambridge Bryman .N and T.Bell (2003) Scientific Research, Prentice hall, London, UK. Carter, J.R. (2000) Human Resource Management. Parkland Publishers. Stockholm Cooper, M.C., Lambert, D.M., & Pagh, J. (2007) Supply Chain Management: More Than a New Name for Logistics. The International Journal of Logistics Management Vol 8. Haag, S., Cummings, M., McCubbrey, D., Pinsonneault, A., & Donovan, R. (2006), Management Information Systems For the Information Age (3rd Canadian Ed.), Canada: McGraw Hill Ryerson. Halldorsson, A., Kotzab, H., Mikkola, J. H., Skjoett-Larsen, T. (2007).

Complementary theories to supply chain management. Supply Chain Management: An International Journal, Volume 12. Halldorsson, Arni, Herbert Kotzab & Tage Skjott-Larsen (2003).

Inter-organizational theories behind Supply Chain Management – discussion and applications, In Seuring, Stefan et al. (eds.), Strategy and Organization in Supply Chains, Physica Verlag. Hines, T. (2005).

Supply chain strategies: Customer driven and customer focused. Oxford: Elsevier. Kallrath, J. Maindl, T.I. (2006): Real Optimization with SAP® APO. Springer ISBN 3-540-22561-7. Kaushik K.D. & Cooper, M. (2005).

Industrial Marketing Management. Volume29. Ketchen Jr. G. & Hult, T.M. (2006).

Bridging organization theory and supply chain management: The case of best value supply chains. Journal of Operations Management. Kothari (2004) Social Research Methods,Prentice Hall,India.

Kouvelis, P.; Chambers, C.; Wang, H. (2006): Supply Chain Management Research and Production and Operations Management: Review, Trends, and Opportunities. In: Production and Operations Management, Vol. 15. Larson, P.D. and Halldorsson, A. (2005).

Logistics versus supply chain management: an international survey. International Journal of Logistics: Research & Application, Vol. 7. Lavassani K., Movahedi B., Kumar V. (2009) Developments in Theories of Supply Chain Management: The Case of B2B Electronic Marketplace Adoption, The International Journal of Knowledge, Culture and Change Management, Volume 9. Movahedi B., Lavassani K., Kumar V. (2009) Transition to B2B e-Marketplace Enabled Supply Chain: Readiness Assessment and Success Factors, The International Journal of Technology, Knowledge and Society, Volume 5. Mugenda and Mugenda, (2003).Research Methods, Nairobi University Press, Nairobi, Kenya. Ramos MM (2004) ‘Change in the logistics management style through performance indicators: Simchi-Levi D.,Kaminsky P., Simchi-levi E. (2007), Designing and Managing the Supply Chain, third edition, Mcgraw Hill Whitehead JP and Jones DT (2005) Lean Thinking, Simon and Schuster, New York.

TABLE OF CONTENTS

Declaration……………………………………………………………………..

i

Dedication………………………………………………………………………

ii

Acknowledgement…………………………………………………………….

iii

Abstract……………………………………………………………………….

Table of contents………………………………………………………………

iv

List of tables…………………………………………………………………..

vi

List of figures …………………………………………………………… …..

vii

Operational definition of terms…………………………………. …………….

ix

Abbreviations…………………………………………………………………..

x

CHAPTER ONE

INTRODUCTION OF THE STUDY

1.1 Background of study ……………………………………………………… 2 i

ii

iii

v

vii

viii

ix

x

xii

1.2 Statement of Problem ………………………………………………………. 5

1.3 Objective of Study…………………………………………………………… 6

1.4 Research Questions …………………………………………………………. 7

1.5 Significance of Study……………………………………………………….. 8

1.6 Limitations of Study ………………………………………………………… 8

1.7 Scope of Study ……………………………………………………………… 9

vi

CHAPTER TWO

LITERATURE REVIEW

2.1 Introduction ………………………………………………………………….. 10

2.2 Theoretical Review ………………………………………………………… 12

2.3 Empirical Review………………………………………………………….. 25

2.4 Conceptual Framework………………………………………………………… 29

2.5 Research Gap…..…………………………………………………..……….. 2.6 Summary …………………………………………………………………….. 30

32

CHAPTER THREE

RESEARCH DESIGN AND METHODOLOGY

3.1 Introduction……………………………………………………………………. 33

3.2 Research Design ….……………………………………………………….. 33

3.3 Target Population ………………………………………………………….. 34

3.4 Sample Design And Procedure ……………………………………………. 36

3.5 Data Collection Instrument and Procedures…………………………………. 37

3.6 Data Analysis Methods…………………………………………………….. 38

3.7 Ethical Principles in the research……………………………………………….. 40

CHAPTER FOUR

DATA ANALYSIS AND PRESENTATION OF FINDINGS

4.1 Introduction……………………………………………………………………. 41

4.2 Quantitative Analysis ….…………………………………………………… 41

4.2.1 Analysis of Response Rate ………………………………………………… 43

4.3 Qualitative Analysis ……………………………………………………… 57

CHAPTER FIVE

SUMMARY OF FINDINGS,CONCLUSION AND RECOMMENDATIONS

5.1 Introduction……………………………………………………………………. 58

5.2 Summary of findings ….…………………………………………………… 59

5.3 Conclusion ………………………………………………………………….. 60

5.4 Recommendations ………………………………………………………… 61

5.5 Suggestions for further research…………………………………………………. 62

References………………………………………………………………………… 64 APPENDICES

Appendix I: Questionnaire

AppendixII: Study Plan

Appendix III: Study Budget

vii LIST OF TABLES

Table 3.1 Target Population …………………………………………………………..35 Table 3.2 Sample Size ………………………………………………………………35 Table 4.1 Response Rate ……………………………………………………………41 Table 4.2 Gender Of respondents Analysis …………………………………………42 Table 4.2 Analysis of Age Respondents ……………………………………………43 Table 4.4 Highest Level of Education ………………………………………………45 Table 4.5 Working Experience of Respondents……………………………………..46 Table 4.6 Department at Work………………………………………………………47 Table 4.7 Allocation of Enough Time for Tasks……………………………………48 Table 4.8 Extent of lead Time affect Effective logistics management ……………..49 Table 4.9 Application of Technology in Goods and services……………………….50 Table 4.10 Extent to which Technology affects effective Logistics Management……51 Table 4.11 Forms of Communication……………………………………………….52 Table 4.12 Extent of Communication Effect ………………………………………..53 Table 4.13 Offer of High Quality Products………………………………………….54

Table 4.14 Extent of Quality Effect …………………………………………………57

viii

LIST OF FIGURES

Figure2.1 Schematic Conceptual Framework………………………………………20 Table 4.1 Response Rate ……………………………………………………………42 Table 4.2 Gender Of respondents …………………………………………………..43 Table 4.2 Analysis of Age Respondents ……………………………………………44 Table 4.4 Highest Level of Education ………………………………………………45 Table 4.5 Working Experience of Respondents……………………………………..46 Table 4.6 Department at Work………………………………………………………,47 Table 4.7 Allocation of Enough Time for Tasks…………………………………….48 Table 4.8 Extent of lead Time affect Effective logistics management ……………..49 Table 4.9 Application of Technology in Goods and services……………………….50 Table 4.10 Extent to which Technology affects effective Logistics Management…..51 Table 4.11 Forms of Communication……………………………………………….52 Table 4.12 Extent of Communication Effect ………………………………………..53 Table 4.13 Offer of High Quality Products………………………………………….54

Table 4.14 Extent of Quality Effect …………………………………………………57

ix

OPERATIONAL DEFINITION OF TERMS

Lead time

Lead time is the period of time between the initiation of any process of production and completion of that process. The lead time for ordering a new car from a manufacturer may be anywhere from 2 weeks to 6 months. Technology

The know-how or some knowledge, experience and skills necessary to establish enterprise that will manufacture and market a product economically. Other researchers view technology as various types of knowledge and expertise necessary for planning, establishment and operation of a manufacturing plant and associated enterprises. Technologies are evolutionary. Communication

Communication is the means by which people in organization exchange information regarding the operations of an enterprise. It is the interchange of ideas, facts and emotions by two or more persons. Quality

Quality is the degree of excellent of a product. It refers to conformance to specifications. Total Quality Management is an approach that seeks to improve quality and performance which will meet or exceed customer expectations.

x

LIST OF ABBREVIATIONS

TQM-Total Quality management

MIS-Management information systems

COMESA-Common Market for Eastern and Southern Africa

EABL- East African Breweries Limited

xi

APPENDIX I

RESEARCH QUESTIONNAIRE

Section A. (Personal Information)

Please give the answers in the space provided.

1. Gender: Male

Female

2. Age: 18-30

31-40

Above 40

3. Number of years worked

Less than 5

6-11

Above 12

4. Highest level of Education

Secondary

College

University

Others (specify) ………………………………………………………………………. Section B.

5. In your own opinion does lead time affect Logistics Management in the manufacturing industry?

Yes

No

6. Explain why………………………………………………………………………

7. To what extent does it affect logistics management in the manufacturing industry? Very great Great

Low Very low

8. Does Technology affect Logistics Management in the manufacturing industry?

Yes

No

10. To what extent does technology affect logistics management in the manufacturing industry?

Very great GreatModerate

LowVery low

11. Explain how…………….…………………………………………….………….

12. In your opinion does communication affect Logistics Management in the manufacturing industry? Yes

No

13. State and explain how it affects………………………………………..……………….

14. To what extent does communication affect the logistics management in the manufacturing industry?

Very great Great

Low Very low

15. Does quality affect Logistics Management in the manufacturing industry?

Yes

No

16. Explain how……………………………………………………………………….

17. To what extent does quality affect logistics management in the manufacturing industry?

Very high High

Low Very low

APPENDIX II: TIME FRAME

Activity

Time

Responsible Party

Expected

Outcome

Formulation of research proposal / topic. Begin write-up and literature review to Chapter three March 2013 –May 2013

Researcher

Gathering appropriate theoretical, empirical materials and write-up reviewed with supervisor and revisions done. Collect data in the field work

June 2013

Researcher

Raw data

Data analyses and interpretation

June 2013-August 2013

Researcher

Draft report

Defense and

Submit final report

September 2013

Researcher

Final research report

APPENDIX III RESEARCH BUDGET

ACTIVITY

COST IN KSH

Proposal writing-Computer typing, Stationery, Printing, Proposal binding 7,000

Questionnaire preparation-Typing, Editing, Printing

3,000

Full report writing-Field work, Computer time (typing),Stationery, Editing, Printing and binding

8,000

TOTAL

Ksh 18,000