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THE ROLE OF INBOUND LOGISTICS FUNCTION ON COMPETITIVE PERFORMANCE OF A MANUFACTURING COMPANY IN TANZANIA A CASE OF TOL GASES LIMITED
Transcript of THE ROLE OF INBOUND LOGISTICS FUNCTION ... - Mzumbe …
THE ROLE OF INBOUND LOGISTICS FUNCTION ON
COMPETITIVE PERFORMANCE OF A
MANUFACTURING COMPANY IN TANZANIA
A CASE OF TOL GASES LIMITED
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THE ROLEOF INBOUND LOGISTICS FUNCTION ON
COMPETITIVE PERFORMANCE OF A
MANUFACTURING COMPANY IN TANZANIA
A CASE OF TOL GASES LIMITED
By
Noel A. Chami
A Dissertation Submitted in Partial Fulfillment of the Requirements for an
Award Degree of Master of Science in Procurement and Supply Chain
Management (MSc – PSCM) of Mzumbe University
2019
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CERTIFICATION
I, the undersigned certify that, I have read and hereby recommend for acceptance
by the Mzumbe University, a dissertation entitled The role inbound of logistics
function on competitive performance of a manufacturing organization in
Tanzania; A case of TOL Gases Limited as a partial fulfillment of the award of
the Master of science in Procurement and Supply Chain Management of Mzumbe
University.
Signature
___________________________
Major Supervisor
Signature
___________________________
Internal Examiner
Accepted for the Board of
……………………
____________________________________________
DEAN/DIRECTOR,
FACULTY/DIRECTORATE/SCHOOL/BOARD
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DECLARATION AND COPYRIGHT
I, Noel A. Chami, declare that this dissertation is my own original work and that it
has not been presented anywhere or will not be presented to any other institution
for any award.
Signature…………………………………………….
Date…………………………………………………
©
This dissertation is a copyright material protected under the Berne Convention, the
Copyright Act 1999 and other international and national enactments, in that behalf,
on intellectual property. It may not be reproduced by any means in full or in part,
except for short extracts in fair dealings, for research or private study, critical
scholarly review or discourse with an acknowledgement, without the written
permission of Mzumbe University, on behalf of the author.
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LIST OF ABBREVIATIONS
CSCMP Council of Supply Chain Management Professionals
GDP Gross Domestic Product
HOD Head of Department
PAD Pre-Arrival Declaration
PWC Price Water Coopers
RBV Resource Based View
SCM Supply Chain Management
SPSSS Statistical Package for Social Science
TBL Tanzania Breweries Limited
TCE Transaction Cost Economics
TOL TOL Gases Limited
3rd PL Third Part Logistics Provider
4th PL Fourth Party Logistics Provider
USA United States of America
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ABSTRACT
The study conducted to assess the role outbound of logistics function on
competitive performance of a manufacturing organization in Tanzania; A case of
TOL Gases Limited. The study was guided by three objectives which were
examining the role of implementing effective and efficient procurement system on
competitive performance of manufacturing company in Tanzania, identifying the
role of effective warehouse management and materials handling on competitive
performance of manufacturing company in Tanzania and analyzing the impacts of
effective transportation system on competitive performance of manufacturing
company Tanzania. The study applied descriptive research design. The study was
conducted at TOL Gases Limited in Dar es Salaam. The study used interview,
questionnaire and documentary as methods for data collection. The study had a s
sample size of 50 respondents from TOL gases limited employees. The
researcher used simple random and judgmental sampling procedures in obtaining
the sample size. Data was analyzed through descriptive analysis and inferential
analysis. The findings shows that there is high degree of staff competence
involved in the procurement system , also other stakeholders such as suppliers
and user departments are effectively involved in the procurement system at
TOL. As well as proper resource allocation is adhered at the firm. TOL has
wide and modern ware houses in Dar es Salaam as well as in Mbeya. The firm
uses automotive inventory systems such ERP for stock control. Also competitive
performance is influenced by enough transportation fleet followed by cost
reduction Several positive outcomes like productivity, cost reduction, customer
satisfaction and quick responses (JIT) were observed at great extent. Finally the
researcher made some recommendations for further studies in the field of logistic
and supply chain management.
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TABLE OF CONTENT
CERTIFICATION .............................................................................................. ii
DECLARATION AND COPYRIGHT ................................................................ iii
LIST OF ABBREVIATIONS ............................................................................... iv
ABSTRACT ............................................................................................................ v
LIST OF TABLES ................................................................................................. ix
LIST OF FIGURES ................................................................................................ x
CHAPTER ONE ..................................................................................................... 1
INTRODUCTION OF THE STUDY ................................................................... 1
1.1 Introduction ..................................................................................................... 1
1.2 Background to the study ................................................................................. 1
1.3 Statement of the Problem ................................................................................... 3
1.4 Research objective .............................................................................................. 5
1.4.1 General objective ............................................................................................. 5
1.4.2 Specific objectives ........................................................................................... 5
1.5 Research questions ............................................................................................. 6
1.5.1 General questions ............................................................................................ 6
1.5.2 Specific questions ............................................................................................ 6
1.6 Significance of the study .................................................................................... 6
CHAPTER TWO .................................................................................................... 7
LITERATURE REVIEW ...................................................................................... 7
2.1 Introduction ........................................................................................................ 7
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2.2 Definition of key terms ....................................................................................... 7
2.3 Theoretical literature review ............................................................................ 11
2.4 Empirical review .............................................................................................. 14
2.5 Conceptual framework ..................................................................................... 16
2.5.2 Description of variables ................................................................................. 17
CHAPTER THREE ............................................................................................. 19
RESEARCH METHODOLOGY ........................................................................ 19
3.1 Introduction ...................................................................................................... 19
3.2 Research Design ............................................................................................... 20
3.3 Area of the Study .............................................................................................. 20
3.4 Target population .......................................................................................... 21
3.5 Measurement of Variables ............................................................................ 21
3.6 Sample size and sampling technique ................................................................ 22
3.7 Sampling Procedures ........................................................................................ 24
3.8 Data Collection Methods and Approach .......................................................... 25
3.9 Reliability and Validity of Data ....................................................................... 26
3.10 Data management and analysis ...................................................................... 26
CHAPTER FOUR ................................................................................................ 28
PRESENTATION OF FINDINGS ..................................................................... 28
4.1 Introduction ...................................................................................................... 28
4.5 Inferential Analysis ........................................................................................ 33
4.5.1 Correlational Analysis ................................................................................... 33
4.5. 2 Regression Analysis ................................................................................... 35
CHAPTER FIVE .................................................................................................. 38
DISCUSSION OF THE FINDING ..................................................................... 38
5.1 Introduction ...................................................................................................... 38
5.2 Implementation of effective and efficient procurement system on competitive
performance of the company. ................................................................................. 38
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5.3 Impacts of effective materials handling management on competitive
performance of the company .................................................................................. 41
5.4 Impacts of effective transportation system on competitive performance of the
company ................................................................................................................. 43
CHAPTER SIX .......................................................... Error! Bookmark not defined.
SUMMARY, CONCLUSION AND POLICY IMPLICATION ...................... 46
6.1 Introduction .................................................................................................. 46
6.2 Summary of the study ................................................................................... 46
6.3 Conclusion ...................................................................................................... 47
6.4 Recommendations .......................................................................................... 48
REFERENCES ..................................................................................................... 53
APPENDICES ...................................................................................................... 59
APPENDIX I .......................................................................................................... 59
APPENDIX II ......................................................................................................... 62
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LIST OF TABLES
Table 3.1 Sample selection ……………………………………………………...25
Table 3.2 Sampling Technique………………………………………………….26
Table 4.1 Age of respondents…………………………………………………...31
Table 4.2 Gender of respondents………………………………………………..32
Table 4.3 Education level of respondents…………………………………….…33
Table 4.4 Working experience of respondents…………………………….…….34
Table 4.5 Qualification of respondents……………………………………….…36
Table 4.6 Logistics awareness…………………………………………………..37
Table 4.7 Effective procurement system and competitive performance……......39
Table 4.8 Effective warehouse management on competitive performance…......40
Table 4.9 Material handling and storage system on competitive performance....42
Table 4.10 Effective transportation system on competitive performance……....43
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LIST OF FIGURES
Figure 2.1 Conceptual framework……………………………………………….19
Figure 4.1 Age of respondents…………………………………………………...31
Figure 4.2 Gender of respondents………………………………………………..32
Figure 4.3 Education level of respondents…………………………………….…33
Figure 4.4 Working experience of respondents………………………….………34
Figure 4.5 Qualification of respondents……………………………………….…36
Figure 4.6 Logistics awareness…………………………………………………..37
Figure 4.7 Effective procurement system and competitive performance……......39
Figure 4.8 Effective warehouse system on competitive performance……….......40
Figure 4.9 Material handling and storage system on competitive performance....42
Figure4.10 Effective transportation system on competitive performance…….....43
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CHAPTER ONE
INTRODUCTION OF THE STUDY
1.1 Introduction
This chapter is about the background information which consists of the background
to the study, statement of the problem, research questions, research objectives,
significance of the study, scope of the study and organization of the study.
1.2 Background to the study
Companies strive to utilize the organization’s competitive advantage to improve
their market and profitability (Handfield, 2006). Logistics is increasingly becoming
an area of interest among organizations and academicians, since it may lead to
reduced operational costs, improved delivery performance and increased customer
satisfaction levels.
The Council of Supply Chain Management Professionals (CSCMP) defines
Logistics as set of activities that plans, creates and monitors the efficient, cost-
effective flow of raw materials and storage of goods, semi-finished items and
manufactured products as well as their information between the source to
production through distribution to the point of consumption in order to meet
customers' requirements (Council of Supply Chain Management Professionals-
CSCMP, 2013).
Logistics is key holder in ensuring goods are efficiently reached to the customer
and guaranteed the products delivery are in accordance with customers requirement
and are reached to the recipient in the right condition, at the right time and in the
right place at minimum cost, (Smyth, 2004).
It incorporates the information and material flows in a channel designed by an
organization. It further encompasses all the movement from the movement of a raw
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materials or from a service that needs to be offered, through to the receiving of raw
materials, to the production of goods, the warehouse of storing of finished products,
delivery and after-sales service (Pollitt, 2008).
The range of logistics has absolutely transformed due to the change of new
technologies and strategic partnership so that an organization can contest on
flexibility and responsiveness of service. Globalization is one of the foremost
reason for logistic to rise in order to capture new markets inland and overseas
markets, comprehend greater production competences, and beyond border transfer
of technology (McFarlan, 2004). Currently, logistics activities entail purchasing,
distribution, inventory management, order picking, packing and packaging,
production and customer services, (Bowersox et al., 2010).
Several studies have been conducted globally to determine the roles of logistics and
its impacts on the economies of deferent countries and sustainability of many
organization businesses. As the customer demands for more flexibility and
responsiveness, many companies have turned to logistics in order to reach its
customers effectively and efficiently (Coyle et al., 2006).
In Asia Hong (2017) conducted the study on critical factors affecting logistics
performance in three countries of China, Japan and Korea in Asia and determine
the impact of logistics management in development of these three countries’
economies. The study come to conclude that the logistics system can be used to
improve countries ‘economies when proper systems are coordinated and integrated
to maximize performance of each individual country business.
In Africa, British Research Analytical (2012), make projection on logistics
spending in Africa by manufacturing and retailers to increase by almost $ 28.8
billion or 5.19% in four years span from 128.5 billion in 2012 to 157.3 billion in
2016. The size of logistics function alone will increase by 38.4 % in the period.
This analyses the importance of logistics management in the economy of the
continent.
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In Tanzania Nyemba (2013) did a study on organization performance on how it is
affected by logistics operations. He reached a conclusion that, the effective logistics
activities are vital in the success the organization performance. Monitoring of
logistic cost like delivery cost, movement cost, holding ordering cost and
distribution cost results to efficiency logistics. As said by Fair et al. (1981)
production and distribution processes can be optimize by good logistic practice
through resources management that bring to competitive enterprises
Today, logistics activities accounts for more than 9.5% of U.S. gross domestic
product (GDP). Over $1.3 trillion is spent on transportation, inventory, and related
logistics activities. The concept of the supply chain has now risen in importance to
the extent that commercials on TV extol the virtues of logistics (for example, UPS
“I Love Logistics” commercials) to the point where it is now part of the common
lexicon and very mainstream (Myerson, 2015).
However, beyond supply chain and logistics the public not fully understand the role
and importance that the supply chain plays in gaining and maintaining a
competitive advantage in today’s world. Because supply chain and logistics costs
can range from 50% to 70% of a company’s sales (with trillions spent on it
worldwide), organizations of all sizes both perform and are interested in this
function. Therefore, understanding and implementing an efficient supply chain
strategy can prove critical to both an employee’s and a company’s success
.
1.3 Statement of the Problem
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Currently, the globe is experiencing a fast economic growth; this has been
positively caused by the role of globalization and increasing in sophisticated
technology. Different local and international companies have grabbed the
opportunity in trade due to the reason that, operating a business inside and outside
the country has been made easier through the role of logistic and supply chain
management which in turn led to quick response of customer’s needs (Gera and
Mang, 1998). As such, organization are so aggressive in quality, operating costs
and time to win in a competitive market environment (Ndungu and Were, 2016).
For effective logistics management to be realized then, crucial factors with direct
contacts to the customers and suppliers must be appropriately utilized (Cachon and
Fisher, 2006).
The inclusion of logistics management department in organizations has changed
the daily routines of businesses as well as their survival (Manio, 2002). In the
business environment, logistics either have an internal or external focuses (inbound
such as sourcing, expediting, transportation, receiving and handling or outbound
activities such as warehousing, packing and distribution). Depending upon the
business involved, this part of the chain can be simple or complicated. Most
organization has view logistics as an opportunity to compete in its industry.
In USA, Gunasekaran and Ngai (2003) has argued that, logistics scope has changed
due to emergency of technology and strategic adherence in order to compete on
flexibility and responsiveness. The growing importance of logistics arises from
companies becoming globalized to gain access to new markets, release greater
production efficiencies and tap technological competencies beyond their
geographical borders.
Around the globe, many studies have been done on logistics to determine the impact
of it on organization performance and country wide development. Great emphasize
had been put on the effect and impacts of logistics performance on the entire supply
chain. Ndungu and Were (2016) conducted a study at SAMEER AFRICA
LIMITED “factors affecting logistics management in manufacturing industry in
Kenya”. The research highlights those factors affecting logistics management but
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failed to analyses the roles of logistics function in the competitive environment of
the business.
Nyemba (2013) has conducted a research at Tanzania Breweries Limited (TBL) on
the effect of logistics activities on organization performance in supply chain and
failed to highlight how logistics can be used by a manufacturing firm to attain
competitive position by becoming cost and service leader through efficiency and
customer satisfaction.
In Tanzania few studies has been conducted and many reveal that companies do not
cope with a pace of recognizing the important role that logistics can play in
development of their sustainable business. Hence there is a gap to fill in this study
area on how the roles of logistics function can have on the competitive performance
of the manufacturing firm in Tanzania.
1.4 Research objective
1.4.1 General objective
The general objective of the study is to assess the roles of logistics functions on
competitive performance of the manufacturing company in Tanzania.
1.4.2 Specific objectives
1. To examine the role of implementing effective and efficient procurement
system on competitive performance of manufacturing company in Tanzania.
2. To identify the role of effective warehouse management and materials handling
on competitive performance of manufacturing company in Tanzania.
3. To analyze the impacts of effective transportation system on competitive
performance of manufacturing company Tanzania.
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1.5 Research questions
1.5.1 General questions
What are the roles of logistics function on competitive performance of the
manufacturing company in Tanzania?
1.5.2 Specific questions
1. What are the effects of implementing effective and efficient procurement
activities on competitive performance of the manufacturing company?
2. What are the effects of warehouse management and materials handling on
competitive performance of the manufacturing company?
3. What are the impacts of effective transportation system on competitive
performance of the manufacturing company?
1.6 Significance of the study
Findings of this study can be a good help to the organization of the case study and
the public as a whole by bringing about awareness on how logistics function can
bring the great impact on the competitive performance of any manufacturing firm
in the industry.
The study is also available as a reference material to future researchers undertaking
the similar problem. The study will note the weaknesses which exist during the
management and implementation of logistics activities in manufacturing industry
in Tanzania and recommendations for necessary improvements will be provided.
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CHAPTER TWO
LITERATURE REVIEW
2.1 Introduction
This chapter covers literature reviews which point out different scenarios including
definitions of key terms, theoretical context, practical review and abstract
framework of the study.
2.2 Definition of key terms
This section defines key terms of the study.
2.2.1 Logistics
Logistics are the activities related to the movement of raw materials, semi-finished
good and finished goods and their related information flow from the source to the
origin. Logistic is a strategic field which has a tremendous impact on performance
of the organization. Different organization have realized effective and efficient
logistics enhance organizational profitability (Martin, 2005).
2.2.2 Logistical competency
Logistics competency is a relative assessment of firm’s ability and skills and
knowledge to provide competitively and successfully satisfactory service at the
same time reduce operation cost. Thus, logistics exist to satisfy consumer’s utility
by facilitating efficient and effective operations (Donald et al., 2006).
2.2.3 Competitive performance
Competitive performance is the ability of an organization to meet and attain its
goals and objective in an effective and efficiency manner. To be competitive an
organization must be both cost leader and service leader (Martin, 2005).
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According to Donald et al., (2006) firms that enjoy world- class logistical
competency can gain competitive advantage by providing customer with superior
services. While perfect orders are difficult to achieve, logistically sophisticated
firms seek such lofty performance and are committed to continuous improvements.
2.2.4 Organization performance
Organization performance is the process whereby organizational outputs are
measured against goals and objective. Performance of an organization reflects the
qualitative and quantitative assessment of the outcome of each individual activity
within the company (Richard et al., 2009). Organization performance is an
organizational analysis whereby the actual outputs are measured against objective
or goals.
2.2.5 Supply chain
Networks of connected and interdependent organizations mutually and
cooperatively working together to control manage and improve the flow of
materials and information from suppliers to end users. In today’s global business
environment supply chain is the most important part of an organization decision
making and strategies formulation as it involves other organization working
mutually and cooperative with a focal firm (Martin, 2005).
2.2.6 Logistics and supply chain: how they relate
Logistics refers to the movement of raw material, semi finished goods, final product
and related information from the origin to the end destination or preferred area
while Supply chail is the compressive activities than movement of good s rather it
coordinates all activities that relate to the movement of goods, these are like
customers, manufacturing, finance and marketing throughout the business. (Martin,
2005).
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Firms managed networks as ways of sharing activities in the supply chain defined
as ‘a network of firms’ logistics systems intermingling to deliver product or
services to the end consumer (Ellram,1991).
2.2.7 Supply chain management
Supply chain management is a set of approaches utilized to efficiently integrate
suppliers, manufactures, warehouses and stores; so that merchandize is produced
and distributed at the right quantities, to the right locations, and at the right time, in
order to minimize system wide costs while satisfying service level requirements
(Simchi et al., 2003).
2.2.8 Functions of logistics
According to Cooper et al. (1997) the relative activities of logistics are described
below;
Procurement; is the process of accuring organizational materials or goods to be
used by an organization is started by initiated receiving requirement from user by
identifying specification to send to supplier as a purchase order. To perform this a
purchasing, or procurement, section look for a suitable suppliers who can supply
goods, negotiates terms and conditions is made after getting a supplier, the supplier
will organize delivery, insurance and payment is arranged as well, and ensure the
needed materials are delivered to the organization.
Inward transport or traffic; is the movement of raw materials from outside of
organization to be transformed into finished product before conveying to
customers. All activities associated with inward transport including packaging,
transportation vessel, handling equipment should be used during loading and
unloading of materials. It’s important for supervisor to arrange for mode of
transport used and the route to be used that allow delivery safely and effectively,
time bound and of convenient cost of transport (Cooper et al.,1997).
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Receiving; To Involve activities that ensure delivered goods matches with an order
issued to supplier, accept the receipts that include invoice and delivery note,
unloads delivery vehicles, inspection of delivered goods with a team selected
whereby it looks for specification as well as damage, and sorts them (Cooper et
al.,1997).
Warehousing or stores; It involves storing of raw materials, semi finished and
finished goods for different reasons include be responsive to consumer demand,
catch low price advantage, avoid out of stock as well as uninterrupted production.
Warehousing are established to obtain place utility, they also facilitate order
picking and packaging and maintaining them in good condition. This is particularly
important with, say, frozen, food, drugs, and alcohol in bond, chemicals, animals,
and dangerous goods (Cooper et al., 1997).
Order picking; Means removing items from warehouse to fulfill customer’s
requirement or order. Normally, items needed for a customer order are positioned,
recognized, checked, removed from shelves, put together in one place and sent to a
exit area for loading onto delivery vehicles (Cooper et al., 1997).
Packaging; is a process of protecting goods by covering with an outside box to
avoid damage, contamination with unwanted materials, easy storing and protection
during transportation.
Outward transport; this is a suppliers cost of delivering materials to the customer
or buyer. Further can involve sending goods from production area or warehousing
to the distribution centers or to the final buyer (Cooper et al.,1997).
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Physical distribution refers to the set of activities that concerned with efficiently
and effectively delivery of finished goods from the final operations areas to
customers, including outward transport. (Cooper et al., 1997).
2.3 Theoretical literature review
This section introduced the theories related to the study. A theoretical part focused
on the adoption theories and concepts that were presented by distinguished authors
in relation to logistic practices and organizational performance. It also shows
different perspective from various literatures cited by the researcher. It shows the
importance of logistics, logistics system of the organizational, conceptual approach
to formulating logistics strategy, functions of logistics and logistics hypothesis.
Therefore, the study adopted three (3) common theories. These theories include
institutional theory, resource-based view and customer service theory.
2.3.1 Transaction Cost Economics (TCE)
This theory accounts for the authentic cost of purchasing products or services
including searching cost, contracting and negotiation costs and coordination costs.
It further supports the successful procurement where transaction costs have been
significantly reduced. It has been extensively documented in the literature (Bakker
et al., 2008).
Transaction Cost Economics (TCE) had been developed to facilitate analysis of
comparative costs of planning, adapting, and monitoring task completion under
alternative governance structures” (Williamson, 1985). Transaction cost economics
(TCE) support the role of supply chain management in the organizations as it act
as an economic theory that provides an analytical framework for investigating the
governance structure of contractual relations within a supply chain
(Garfamy,2012).Furthermore, the Transaction cost economics (TCE) has been the
most utilized theory of outsourcing. TCE is perceived to provide the best decision
making tools to help organizations to decide to outsource and to prepare themselves
for forthcoming outsourcing arrangements (Perunović and Pedersen, 2007).
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2.3.2 Resource-based view theory (RBV)
The resource-based view of the firm (RBV) is a managerial framework used by a
firm efficiently aim to achieve competitive advantage by allocate strategic
resources where its production cost remain minimum or uniqueness. This has been
seen in 20 years ago, some element of performance and institutional
competitiveness has been analyzed under the angle of where a firm can allocate
resources that’s gives it competitive advantage (resource based view (Ibrahim and
Hamid, 2014). The RBV is an hypothetical viewpoint that depict, explicate, and
forecast, how firms can realize a constantly competitive advantage through
possession of technology (Arifin and Baihaqi, 2012).
Organization resources can be simply categories into three areas, that is, physical
assets (example: technological equipment, plant), human assets (example
employment, capability and ability recourses), and organizational assets (example:
culture, operation process, and management resources) (Shamsuddin et al., 2013).
The resources are also analyzed as tangible or intangible (Curado, 2006).
2.3.3 Customer Service Theory
The theory of customer service is based on identifying and fulfilling your
customers' needs and over and above their expectations. A business must be
absolutely devoted to delivering constantly high values of service to increase and
retain customer trustworthiness. one and all from top administration on downward
must be tuned into what the client needs. Creating a client service customs within
a corporation can help put up success. Customer happiness and trustworthiness are
inextricably allied to the excellence of customer service and, ultimately, to the
company’s profitability (Mbuthia and Rotich, 2014). Key assumptions of the theory
are; build a customer service culture, know your customers, set customer
expectations and communication (Mbuthia and Rotich, 2014).
2.3.4 Transport System
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Transportation is significantly important in logistic activities, because without a
proficient movement of finished goods and materials the entire system would not
be able to function at its full potential (Green et al., 2008).
A study by Wiendahi (2009) established that transportation is the operational
ground of logistic activities that makes inventory to move from one place to another
(Cohen and Roussel, 2005). Because of its essential importance and observable
cost, transportation has highly been looked significantly by managerial attention.
Nearly all enterprises, big and small, have managers accountable for transportation.
Rapidity and reliability combine to create the excellent aspect of transportation. In
designing a logistical system, there must be a balance to be maintained between
transportation cost and service quality. In numerous circumstances low cost, slow
transportation is reasonable. In other situations, faster service may be fundamental
to achieving operating goals.
2.3.5 Material Handling and Warehousing
According to Mandrish (2005) Material handling is a whole process that concerns
physical movement of raw materials and goods in short distance, protecting, and
storage from production to the warehouse or finally to the ultimate consumer.
Material handling can be used to create time and place utility, in other words,
accessibility and its objectives are like any other marketing goals: consumer’s
satisfaction and profit for the firms (Mandrish, 2005).
Due to continuously changing in manufacturing industry due to technological
innovation and manufacturing process it gives a chance to get better the production
logistics system for that reason. Material handling provides the means to achieve
customer response and capital efficiency (Simchi-Leviet al., 2007).
2.3.6 Procurement variable
For efficient procurement performance to occur Hamza et al (2016) discovered that
workers proficiency and supply management were the mainly factors distressing
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procurement excellence in an organization. Armstrong and Baron (1995) explain
that competency is the use of innovative mind, knowledge and skills, performance
delivery to get things done very well.
According to Basheka (2008), procurement planning is an importantly tool that sets
a ground for successive procurement activities. Likewise, James (2004) explained
that the philosophy of development can be achieved in an atmosphere of absolute
accord. Smith and Conway (1993) recognized seven key achievement factors which
influence procurement, namely: an unambiguous procurement strategy, helpful
management information and control systems, development of skills and
knowledge, a responsibility in corporate management, an commercial and proactive
approach, co-ordination and focused efforts.
2.4 Empirical review
Goodwin (2005) notes that empirical review is the author’s review of different
study concerning the topic done by other researchers in order to get more
understand of the topic under study. The researcher will search theories and
information that are existing so that can demonstrate a clearly understanding of the
topic. Moreover, explains the topic understudy had not been done or has not been
done before in the way proposed by researcher.
Srivastava (2006) examined the situation in management of supply chain and
logistics practices in India. He found that, there is no necessary infrastructures
available for seamlessly integration of business operations, although managers in
India are well understand the need to develop buyer supplier partnerships, integrate
and coordinate the flow of goods and services from supplier’s place to the buyer.
Nowadays there is a rapidly change in the business operations where by
organization at large extent adopt logistics and supply chain integration practices
to enable them to compete globally and adopt competitive advantage.
Kenneth et al., (2008) did a study about organizational performance as the impact
of logistics activities, he concluded that logistics performance is optimistically
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impacted with supply chain management strategy and that both logistics
performance and supply chain management strategy they both have an impact on
marketing performance, were by the impact goes as well to the fiscal performance.
In the business market performance is an important pointer of the business
performance which the author didn’t explain how logistic function affect business
through its customer service, so, researcher will go to cover the role of outbound
logistic function in organization performance.
The report of CSCMP in (2010) at Ryder supply chain solution showed how
logistics correlate with organization performance in issue of inventory carrying
cost. To invest on inventory it is expensive and it needs high capital to manage and
organization to work properly. The Retail supply chain is laden with $450 Billion
in inventory, according to the US Census Bureau in April of 2011. In addition,
inventory carrying costs across all sectors increased 10.3% in 2010.
They estimated that at least 10%, or about $45 Billion, of these inventories are
associated with the execution of the logistics network, which we call “Logistics
Inventory”. Rapid change of customer demand and longer supply chain due to
global sourcing inventory is more important than to take out this excess logistics
inventory from supply chain. This repot based on the cost incurred during investing
on inventory so as to save customer without run out of stock but author doesn’t
discuss the costs in other logistics activities like transportation, packaging, and
purchasing which may affect organization profitability.
Lai et al.,(2003) discussed the importance of a supply chain in organizational
performance focus on the part of transport logistics service providers as they
function to link suppliers, manufacturers, sellers, and customers throughout the
supply chain. They argue that transport logistics service providers must focus on
supply chain performance in addition to organizational performance. Although
author shows how transport logistic service provider link supplier and customer
which relate to the appropriate choice used to select mode of transport but failed to
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analyze how determinants such as cost, reliability, speed and service can affect
supply chain performance which will be covered in my study.
Despite of the fact that customer value determined by integration alternatives of
collaborative closeness and operational excellence researcher doesn’t show how the
different function/department integrate in order to facilitate customer satisfaction.
Hence, the study will cover how inter- department coordination with logistic
activities affects organization performance.
Kitilita (2010) conducted his study in Tanzania mainland. He assessed how can
logistics activities affected by inferior packaging and poor designing alongside
logistic activities in Tanzania The researcher failed to explain the effect of
warehouse, packaging and packing which may impact other logistic operations in
case of damage of goods due to poor packaging, not only cost caused by poor
packaging but also cost incurred during packaging design like canning, wrapping,
information labels and items brand names. Researcher covers the role of
warehousing, material handling, purchasing and transportation in the case study.
2.5 Conceptual framework
Figure 2.1 A causal loop diagram showing relationship between variables
Independent variables Dependent variables
Procurement Systems
Staff competence
17
Source:
Researchers
Constructs
(2019)
2.5.1 Underlying assumptions
The basic assumption from figure 2.1 above is that, competitive performance of
any manufacturing organization depends on role or activities under logistics
function. The outcome of the competitive performance of any manufacturing firm
is the satisfaction of customers’ needs. All other variables such as procurement,
warehouse, and transportation systems must be planned, integrated and coordinated
to bring competitive performance of a company so as to meet customer
requirements effectively and in timely manner.
2.5.2 Description of variables
2.5.2.1 Procurement and competitive performance
Hamza et al (2016) discovered that staff capability and resource allotment were the
key factors impacting procurement excellence. Staff capability factor was measured
in terms of knowledge, motivation, procurement negotiation techniques,
Resource Allocation
Stakeholder involvement
Warehouse Management and
Materials handling
Storage space
(Warehouse)
Stock Availability
Automotive Inventory
System
Competitive Performance
of the Company
Productivity
Cost Reduction
Customer satisfaction
Quick responses (JIT)
Transportation System
Availability of
Transportation Fleet
Transportation Cost
Transportation
Infrastructure
18
innovation, interpersonal and analytical abilities and deployment of staff based on
their skills. Resource allocation factor was considered in terms of availability of
resources, fund allocation to fit changes in the economic atmosphere. Armstrong
and Baron (1995) explain that proficiency is the ability of using knowledge and
ability, experience and capability and the behavior required to perform activities
perfectly.
According to Basheka (2008), procurement planning is an activity identifies
procurement activities consolidating and set timeframe that will be performed.
Likewise, James (2004) analyzed that the principles of planning can basically be
done in an atmosphere of complete harmony. Smith and Conway (1993) described
seven important success factors which manipulate procurement, namely: effective
and efficient management information and control systems, a conscious corporate
management, development of procurement actors, an ambiguous procurement
strategy, a proactive approach strategy, co-ordination and focused efforts. All these
will bring about sourcing at the right price, from the right source at the right
specification that meets user’s needs in the right quantity for delivery at the right
time.
2.5.2.2 Material handling and warehousing and competitive performance
Material handling finishes this by giving time and place utility, in other words,
accessibility and its objectives are like any other marketing goals: consumer’s
satisfaction and profit for the firms (Mandrish, 2005).
Effective inventory management is therefore about implementing strategies to meet
or exceed customer expectations by obtaining and storing of products make them
available by maintaining a sufficient stock, which will also maximize customer
service and organizations profits realization. Automation of inventory will
effectively maintain a sufficient buffer stock for the smooth running of the
organization.
19
CHAPTER THREE
RESEARCH METHODOLOGY
3.1 Introduction
This part consists of type of the study, description of the study area, unit of analysis,
variable and their measurements, sample size and sampling techniques, types and
sources of data, data collection methods, validity issues and data analysis methods.
Research methodology enabled the researcher to focus on his objectives and
questions of the study by providing a systematic way of conducting the research.
20
3.2 Research Design
This study adopted a descriptive research design which is normally intended to
describe and report the way things are in their natural state. Descriptive research
studies are concerned with describing the characteristics of a particular individual,
or of a group, the researcher will use descriptive research design to collect relevant
information (Kothari, 2004). The research problem was to get better understanding
role of logistic function on organizational competitive performance. This method
has been selected because helped researcher to choose the reliable data collection
tool that helps to formulate relevant hypotheses along with data testing.
3.3 Area of the Study
The research was conducted at TOL Gases Limited head quartered in Dar es
Salaam. The researcher chosen this area because it provide him a clear picture on
understanding roles of logistics function of manufacturing industry in Tanzania, it
made it easier for the researcher to find insight and details of the study and easy to
obtain relevant information with regard to the study.
TOL Gases Limited is a manufacturer and distributor of medical and industrial
gases in Tanzania; it is the first company to be listed in Dar es salaam capital market
also is an ISO certified company FSSC 22000. It is producing a variety range of
gases include oxygen for industrial and medical oxygen for hospitals, carbon
dioxide as preservative gas used in beverages company and food packaging,
nitrogen as purging gas in industrial and food factories, Acetylene gas for cutting
and welding as well as importing other specialized gases for resale; these are Argon,
Helium, Ammonia, Nitrous oxide and Hydrogen.
The company came into existed since 1950 during the era British administration
were it was producing Oxygen and Acetylene gas only. Its headquarters are in Dar
es Salaam city and has two more branches in Mwanza and Mbeya. Its ASU (Air
Separation Unit) plant that produces Oxygen and Nitrogen at capacity of 31 tonnes
per day as well as Acetylene pant are located in dare s salaam, whereas Carbon
21
dioxide plants with capacity of 65 tonnes per day are located on the slopes of
Rungwe mountains in Mbeya and in Mwanza the company has installed Oxygen
filling unit for compressing oxygen in cylinders.
TOL Gases Limited adopted a strategy that offers safe and high quality products
that add value to its customers. It further posses a number of fleet making to
distribute its products to different customers located inside and outside the country,
Moreover it has established several management system and controls that enabled
smooth operation of its business.
3.4 Target population
The targeted population of the study was employees of TOL Gases Limited, which
include all head of departments and their subordinate. Mugenda and Mugenda
(1999) define population as individuals, cases or objects that had some common
observable characteristics that can be used to select sample. The total number of
sample selected was fifty (50) and was used to represent views of other employees.
3.5 Measurement of Variables
Parametric and non-parametric are used to measure variables. Kothari, (2004)
defines measurement as the process of assigning numbers to objects or
observations, the level of measurements being a function of the rules under which
the number are assigned. Normally, there are two types of measurements, which
are parametric and non-parametric; this study will use non - parametric
measurement.
The use of non -parametric methods is necessary when data is ranked but no clear
numerical interpretation such as when assessing preference. Measurements are
categorized into four types of scales which are nominal scale, ordinal scale, interval
scale, and ratio scale. In this study the researcher used ordinal scale due to nature
of this study which is quantitative and qualitative. The ordinal scale used because
22
it ranks data from lowest to highest and give the researcher some idea of where data
lie in relation to each other (Kothari, 2004).
At this level numbers was assigned to cases specify only the order of cases
permitting greater than and less than distinctions (Engel and Schutt, 2014).
Therefore, the study used a five-point Likert scale to measure variables since it
supports such relationship. Also is commonly used in studies that employs
questionnaire. The Likert scale used in this study will be considered as categories,
not numerical points (that is, 1 – strongly agree, 2 – to agree, 3 - to a neither agree
nor disagree, 4 - to a disagree 5 - to strongly disagree).
3.6 Sample size and sampling technique
3.6.1 Sample Size
Sample size refers to a portion number in a population that will be used as a sample
in conducting research. Normally the size of the sample should neither be
excessively large, nor too small. It should be optimum. An optimum sample size is
one which fulfills the requirements of efficiency, representativeness, reliability and
flexibility (Kothari, 2004).
The computation of sample size is done by using the following formula
n = N
1 + N(λ)2
Where:
N = is targeted study population (180)
n = is a sample size
λ = is a level of accuracy prediction (12%)
23
180
1+ 180(12)2
180
1+ 180 (0.12)2
n = 50
The researcher concentrated on small number of employees due to cost and time
limit.
Table 3.1: Sample selection
S/No Sample Unit Population Sample
size
Percentage
1. Technical department 9 3 5%
2. Procurement department 15 10 16.7%
3. Production department 25 10 16.7%
4. Packaging department 30 8 13.3%
5. Human resource depart 6 3 5%
6. Marketing & sales
department
25 9 15%
24
7. Engineering department 20 3 5%
8. Transport & distribution
department
35 9 15%
9. Finance 15 5 8.3%
10 Total 180 50 100%
Source; company’s data (2018)
As per above table 3.1, shows sample size of different departments in taken during
the study.
3.7 Sampling Procedures
Sampling procedure is the process of selecting a number of individual from
population mentioned earlier (Kombo et al., 2006). In the study researcher used
probability and non- probability sampling technique. The researcher used random
probability sampling technique for the reason of giving same chance to employees
involved. Also the researcher used purposive or judgmental sampling design to
identify respondents who are expert or having experiences about the problem under
investigation.
Table 3.2 Sampling Technique
Category TOL Employees Head of Department
Population All TOL Employees TOL HOD’s
Sampling
technique
Random sampling Purposive sampling
25
Author own construction (2019)
The purpose of using these sampling techniques was to ensure accurate data are
collected.
3.8 Data Collection Methods and Approach
Different methods and tools of data collection employed to obtain primary and
secondary data, these methods included interviews and questionnaire. For this study
questionnaire involved both closed ended questions and open ended questions.
Under interview, the researcher engaged on both closed and open ended questions
whereby he conducted a face to face conversation with the respondents to obtain
enough information for qualitative judgment (Kothari, 2004).
3.8.1 Interview
The researcher used interview to solicit information from employees of TOL Gases
Limited through an oral or verbal communication between the researcher and the
respondents to ensure concrete information on the study are collected. Non-
structured interview were used, whereby no any set format but in which the
interviewer may have some key questions formulated in advance. This method used
to gather information from different staff of different department in the organization
(Kothari, 2004) see appendix I.
3.8.2 Questionnaires
A questionnaire is a series of written down questions, which prepared by the
researcher for data collections and it has been answered by a responding to the
series of questions (Kothari, 2004). In this study were collected through prepared
questionnaires. See appendix II. These questionnaires were administered to the
26
employees of TOL Gases Limited in order to collect information to answer the
questions under the study.
3.9 Reliability and Validity of Data
3.9.1 Data Reliability
Kirk (2005), described reliability as referring to whether the instrument/ index is
measuring consistently the phenomena. This is producing the same results in
various measurements to ensure validity of the instruments the researcher
conducted a pilot study to three assistants managers and five sales officers of TOL
Gases Limited to verify the consistency of the instrument to the study by using
Cronbach's alpha to measure internal consistency of a closely related a set of items
are as a group.
3.9.2 Validity
Janny (2005) describes validity as referring to whether the information is describing
what is intended to be described or measured. It is the ability to which the results
of a study can be verified against the stated objectives. The researcher was able to
provide the questionnaires to all employees from all departments to go through and
confirm that all expressions used have the equivalent meaning to all respondents.
3.10 Data management and analysis
3.10.1 Data Management
This involved systematically establishing of raw data collected in during the study
so that they can be used in analysis. After data collection the researcher was able to
categorize all responses and assign numbers to them respectively (Kothari, 2004)
27
3.10.2 Data Analysis
Data analysis refers to the computation of certain measures along with searching
for patterns of relationship that exist among data-groups (Kothari, 2004). The data
was analyzed by the help of two sets of statistics namely, descriptive and inferential
statistics. Descriptive statistics used to describe, present and summarize
quantitative information in the form of measures of central tendency (mean used to
describe the central position) and measures of spread (standard deviation was used
to describe the spread of score). Furthermore, tabulated description (that is, tables)
and graphical description (that is, charts) used to analyze preliminary data.
Inferential statistics will be used to test statistical hypotheses so as to make
conclusions, whereby on parametric tests such as chi-square test will be used to test
for significance of differences between the observed and the expected distributions
of data, while Spearman’s rank correlation will be used to measure the direction
and strength of relationship between the research variables. Moreover, Kruskal-
Wallis test will be used to test significance (effect) of such relationship of the
dependent variable (organizational performance) from independent variables
inbound logistics.
The researcher analyzed both qualitative and quantitative data in quantitative data
analysis was done by use of Statistical Package for Social Sciences (SPSS) version
20 software in which the case of frequency analysis will be computed. The
qualitative approach involved manipulation of numbers, use of table, figures and
percentage
28
CHAPTER FOUR
PRESENTATION OF FINDINGS
4.1 Introduction
In this chapter the researcher presented the main findings from which the analysis
was made. The arrangement and study of data is done in line with the objectives
and research questions of the study from chapter one. The findings are presented
in thematically order while reflecting the objectives of the study. The findings
are presented in descriptive analysis and inferential analysis so as to bring
more concreteness of results.
4.2 Descriptive analysis
29
Descriptive analysis was done so as to clarify and explain on what the data
results mean to the research with regard to the study objectives. Descriptive
statistics is the analysis of data that used to define or illustrate data in a meaningful
way. Descriptive statistics do not, however, permit making conclusions beyond
what has been collected and analyzed, furthermore any conclusion regarding to the
hypothesis made.
Descriptive statistics are significantly imperative for the reason that it helps to
visualize a huge quantity of data that presenting raw data obtain from field.
Therefore it helps to depict field data in more consequential way to enable simple
and efficient interpretation of the data. The results of descriptive analysis are
presented in the subsequent sections below.
4.3. The role of implementing effective and efficient procurement system on
competitive performance of manufacturing company in Tanzania.
The first objective to this study was to assess the role of effective and efficient
procurement system on competitive performance of manufacturing company in
Tanzania. The analysis was done by looking on Staff competence , Resource
Allocation and Stakeholder involvement The analysis was done by
measuring the central tendencies through mean and standard deviation. The
results are presented in the table 4.1
Table 4.1 The role of implementing effective and efficient procurement
system on competitive performance of manufacturing company in Tanzania.
Statements N Mean Std.
Deviation
Staff competence is high enough to
ensure effective procurement system
50 5.132 0.31
There is proper allocation of resource
for effective procurement system
50 7.34 1.44
30
There is high procurement stakeholders
involvement in the procurement system
50 6.01 1.14
Source: Field Data (2019)
The findings presented in the table 4.1 above shows that staff competence
received an average mean of 5.132 with the standard deviation of 0.31. The
analysis shows that mean reached is large enough to conclude that there is
high competence of staff on procurement systems. It has been noted that
all of the procurement staff at firm under study are qualified procurement
professionals from being certified by the board of procurement. Therefore the
findings an impression that procurement activities at the company are
undertaken professionally and accordingly.
Moreover, the results showed that the allocation of resources had an average
score of 7.34 with the standard deviation of 1.44. the average mean received
is large enough to show that there is proper allocation of resources at the
firm. It has been noted that the procurement do prepare annual procurement
plan to be executed in the whole of the year, the plan is always followed
and the cost of products of services always reflects the economy or the
market price. Also the fund needed are always delivered on time as demanded.
Lastly , the researcher was eager to find out if there is high procurement
stakeholders involvement in the procurement system. The analysis shows
that the construct had an average mea of 6.01 with the standard deviation of
1.41. The average mean obtained is large enough followed with a minimal
standard deviation , therefore it creates an impression that procurement
stakeholders are always involved. It has been found that in the execution of
procurement activities there are number of stakeholders being involved such
as suppliers, contractors as well as user departments
4.4 The warehouse management and materials handling on competitive
performance of manufacturing company in Tanzania.
31
The second objective to this study was to assess the roles warehouse
management and materials handling on competitive performance of manufacturing
company in Tanzania. The analysis was done by looking on storage space
availability, stock availability and automotive inventory system. The analysis
was done through central tendency. The outcomes are shown in the below table
Table: 4.2 The warehouse management and materials handling on competitive
performance of manufacturing company in Tanzania.
Statements N Mean Std.
Deviation
There are enough storage space
(warehouse) at the firm
50 6.32 1.01
There is always stock availability 50 7.56 1.04
The firms utilizes Automotive
inventory system
50 8.11 0.18
Source: Field Data (2019)
The first construct was storage availability , whereas the researched wanted
to find out if there is enough storage space at the firm under study. The item
received the average mean of 6.32 with standard deviation of 1.01. The average
mean was large enough with a minimal deviation, therefore creating an
impression that the firm has large ware house where the stock can be
accommodated and handled with care to facilitate performance at the
manufacturing industry.
On top of that , the researcher analyzed if there is always stock availability,
the results showed that the item scored the average mean of 7.56 with
standard deviation of 1.04. Therefore, the results gives an impression that there
is high stock availability so as to ensure effective production flow at the
32
industry. It has been noted that firm has enough warehouses located at
Chang’ombe for storing its raw materials, products and other related items.
The last item in the second objective is automotive inventory system. The
construct received the average mean of 8.11 with a standard deviation o.18
hence creating an impression that automotive inventory systems is applied
at the industry. The analysis showed that the firm uses software in order to
have effective stock control. Together with the software the firm always
uses different models such as JIT , ABC analysis and EQO model for effective
inventory control.
4.5 The transportation system on competitive performance of manufacturing
company Tanzania
The last objective to this study was to assess the transportation system on
competitive performance of manufacturing company Tanzania. The analysis was
done by looking three constructs which are availability of transportation fleet,
transportation cost and transportation infrastructure. Central tendency was
utilized in the analysis. The results are presented in the table 4.3 below.
Table 4.3 The transportation system on competitive performance of
manufacturing company Tanzania
Statements N Mean Std.
Deviation
There is high availability of
transportation fleet
50 8.72 0.07
There is low transportation cost 50 5.76 1.00
There are effective and connected
transportation infrastructure
50 0.14 9.19
Source : Field Data ( 2019)
The first item in the last objective was availability of transportation fleet at
the firm. The construct received the average mean of 8.72 with a standard
33
deviation of 0.07. The average mean was large enough to conclude that there
is enough fleet for transportation. It has been found that the firm has
enough motor vehicles for transporting raw materials from feeder areas, as
well as for distribution of end products to different cities and regions in
Tanzania and out of Tanzania. It is estimated that there are almost 190 vehicles
for transportation task only.
Also the findings shows that there is low cost on transportation of items
at the firm hence it received that average mean of 5.76 with a standard
deviation of 1.00. There are costs being incurred for transportation including
fuel, maintenance.
Lastly, the researcher made analysis on the effectiveness and connectedness
transportation infrastructure in Tanzania for facilitation of effective transportation.
The results shows that item had an average mean of 0.14 followed by standard
deviation of 9.19. the average mean scored was so low. Therefore; the analysis
showed that there are poor transportation infrastructure such as poor roads,
therefore transportation of products for competitive performance becomes a
challenge.
4.5 Inferential Analysis
Inferential analysis uses statistical tests to see the relationships between patterns are
detected due to chance, program or intervention effects. Inferential analysis is
normally used to determine if there is an effect between an intervention and an
outcome as well as the strength of that relationship. In this study inferential
analysis was by beginning on correlational analysis followed by multiple
regression.
4.5.1 Correlational Analysis
Correlation is a bivariate analysis that measures the strength of association between
two variables and the direction of the relationship. In terms of the strength of
34
relationship, the value of the correlation coefficient varies between +1 and -1. The
results of analysis are shown in the presented in table 4.4 below
35
Table 4.4 Correlation Analysis
Procure
ment
System
Procurement
System
Procurement
System
Procurement System 1
Warehouse Management .336** .137 .372**
Transportation system
1
1
Source: Research Findings (2019)
Table 4.13 presents correlation values as depicted from the analysis, it has been
noted that all of the variables have positively correlated to each other
hence have the value closer to 1 or 1 itself . Despite the reality on the ground
that the correlation is significant at .000; the coefficient on the other hand is highly
minimal which indicates that there is no multicollinearity. This is an issue of great
importance which is best sorted using multiple regression analysis.
4.5. 2 Regression Analysis
Regression analysis is a set of statistical techniques used for the assessment of
relationships between a dependent variable and one or more independent variables.
The strength of the relationship between variables and for modeling the future
relationship between them can also be assesses by regression. In this study multiple
regressions was applied.
Table 4.6 : Model Summary
Model R R Square Adjusted
R Square
Std. Error of the Estimate
1 .672(a) .987 .899 .2345
36
Source: Study Findings (2019)
Adjusted R is a factor that tells us how far has the variation of the
dependent variable is the result of independent variables. In the table 4,6
above shows that R square was 0.987. which is equal to 98.7 on competitive
performance due to changes in methods of supplier selection and procedures of
supplier selection at 95% confidence interval.
Table 4.7: Analysis of Variance (ANOVA)
Model Sum of
Squares
df Mean
Square
F Sig.
1
Regression 0.896 4 .224 2.213 .000(a)
Residual 5.184 48 .108
Total 6.08 52
Source: Study Findings (2019)
From the ANOVA statistics in table above, the processed data, which is the
population parameters, had a significance level of 0.000 which shows that the data
is ideal for making a conclusion on the population’s parameter as the value of
significance hence all of the variables received the p- value less than 0.5
37
Table 4.8: Coefficients
Unstandardized
Coefficients
Standardized
Coefficients
t Sig.
B Std.
Error
Beta
Constant .0316 .154 1.708 .043
Procurement System .011* .112 .205 1.453 .026
Warehouse Management .021* .231 .027 1.787 .036
Transportation system .000* .323 .413 1.565 .076
Source: Research findings
The findings presented in the table 4,8 above shows all of the independent
variables had positive statistical association with dependent variables of the
study. Whereas procurement system would influence competitive performance
by 0.11, warehouse management by 0.021 and transportation system by 0.00.
Therefore competitive performance could be accounted by the variables above.
38
CHAPTER FIVE
DISCUSSION OF THE FINDING
5.1 Introduction
This chapter made some discussion on research findings as presented in chapter
four so as to extract meaningful information behind such outcomes. Discussion was
made possible with the help of cross-referencing to other relevant previous studies.
Centre of discussion based on research specific objectives, whereby the first section
focused in on the effects of implementing effective and efficient procurement
activities, the effects of warehouse management and materials handling and the
impacts of effective transportation system on competitive performance of the
manufacturing company
5.2 Implementation of effective and efficient procurement system on
competitive performance of the company.
The findings showed that effective procurement system influenced by staff
competence, resource allocation as well as stakeholders involvement. The
findings has also indicated that apart from bringing positive impact on competitive
position of the company, procurement can also be involved in costs management
and product design by making sure that only required materials are purchased from
sources. During the interview one of the respondents elaborated that;
…“Well-structured and designed procurement system can become
a competitive weapon of the company by reducing costs on
inventories and increase quality on products since only required
materials will be acquired just in time from reliable sources…”
Thus from the findings, strongly agreed respondent on effective procurement have
positive impact on competitive performance of the company were majority.
39
Head of departments were further interviewed and revealed how logistic activities
are managed to make sure that the company achieves all corporate, business and
functional strategies in order to achieve its goals.
For example some of interviewees have argued that, procurement ensure constant
supply of goods and raw materials as an input for constant production. The
procurement unit within supply chain department always ensures the adequate
company’s requirements are delivered within planned time, quality and optimum
costs.
During the study the researcher was able to find that, purchases of raw materials
are centralized in the head office and being transferred to other branches by logistics
section. Procurement of other supporting items like spare parts, and gas welding
consumables are decentralized in order to ensure items required are delivered in
full and on time.
Procurement at TOL is not only done on goods, but also it dealt with the purchase
of different services like technical services, security, cleaning, canteen, travel and
transportation services of heavy equipment.
So efficient and effective procurement, among roles of logistics function has a
greater impact on competitive performance of TOL as the manufacturing company
in Tanzania
The arguments reflects to Gao (2017) Procurement, as an activity, is an
unavoidable aspect of all business function. Business need to outsource certain
goods to external suppliers so that it can operate and optimization of the
performance in businesses.
Likewise, the local suppliers are very essential for a business organization if it
wants to harness the power of globalization; they help organization to get the best
possible price to satisfy their requirements of external goods and services. This
provide to the procurement function fundamental for business functioning and
helps an organization achieves its tactical as well as strategic goals
40
Procurement is very essential and its more than just purchasing materials and
services for an organization. An effective procurement process involves proper
identification of need by understanding the user requirement well, identify vendor
who can effectively provide goods or service needed by organization, evaluation of
right supplier performance, and set a table for negotiating contracts that provide a
win-win situation at minimum or lowest total cost ( Jope, 2017).
Organization use different techniques in carrying out functioning in their
departments. One of the techniques is procurement management that helps and
organization to acquire goods and service from vendors efficiently and smoothly.
Procurement management helps organization to reduce purchasing as well as
organization costs spend in its activities which brings about increase in profit.
Organizations realizes much benefits by adopting procurement management some
of the benefits are they can save purchasing time, helps organization to run
procurement process effectively and efficiently, fund savings, quality assurance in
each purchase, shorter delivery times, management of warranties management,
savings based on operational efficiencies, saving in fix costs, transparency,
enhanced strong supplier-buyer relationships, and so on.
Buyer-suppliers relationship is the most important includes the covenant that has
been made by both parties. This will absolutely cause sustainability of organization
business and supplier’s business. All of these steps will assist to solve problem
jointly and get goods and service smoothly and quickly.
Procurement management goes hand in hand supply chain management in its
execution . To manage business uncertainties in the supply chain project
management, The supply chain management concept used as a strategic gear tro
curb business operation efficiently. Outstanding procurement strategies and well
accomplished supply chains bring about an organization to carefully focus on
developing and delivering products and services that meet and exceed customer
expectations.
41
Supplier should be observed and make a number of follow ups in order for the
procurement processes to work effectively. Contract management is very essential
by making sure everything works well and the goods or services are delivered on
time as per contract. Good and constant communication with suppliers, jointly
problem solving is an important tool that operations are on the truck and letting
them know if there is any issues and channel a suitable method of addressing it
smoothly as decided on the contract before. An efficient process need the
organization to change and updating itself form olden ways of doing business. To
achieve significant outcome, an organization should acquire competent staff, with
required skills, innovative and creative personnel with high spirit of success to deal
jointly with the suppliers. Each team will have the expertise required to deal with
the relevant areas of buying.
5.3 Impacts of effective materials handling management on competitive
performance of the company
The findings shows that effective warehouse management at TOL is
attributed by enough storage space , it has been noted the firm uses
modern warehouses. The Modern Warehouse—in—a Box [WiB] frameworks
with present day working instruments the nation over have pushed MSD to Center
of Excellence [CoE]. The WiB are developed utilizing universal measures, which
empower MSD to have ultra-present day distribution centers with tremendous
storage room. The WiB are immense as well as fuse essential production network
stockpiling framework, for example, racks, cool chain, bundling unit and office
space (Dubois, and Gadde, 2012),.
As per Kabendela (2015) Innovative Warehouse-in-a Bo (WiB) is a turnkey
arrangement that conveys the framework, gear and bolster administrations to
quickly erect a completely practical, prepared to-utilize, pharmaceutical
distribution center and operational administration that can without much of a stretch
be found nearer to the purposes of care. Our WiBs, which can remain solitary or
supplement existing framework, give completely agreeable, world class stockpiling
and operational offices.
42
Warehouses are the facilities used for keeping products waiting for customer order,
transportation and distribution process. In the warehouse value added services can
be applied to the products in order to increase the value to intended customers. The
process like packaging and packing can be done in these warehouses. At TOL gas
products are packed in different sizes depending on customer requirements and they
are labeled with company’s logo to officially and ensure the originality of the
products.
The company has three warehouses in Dar es Salaam, Mbeya and Mwanza. These
warehouses are used to keep all company products like Carbon Dioxide, Oxygen,
Acetylene and imported gases like Argon, hydrogen, Argo shield, Ammonia and
Nitrous Oxide. Warehouse management as one of the role of logistics function is
important for this manufacturing company as a system which controls; order
picking, order assembly, stock rotations, receipt of products (finished and WIP
inventories) as well as issuing of products. Effective warehouse management is
essential for production storage and sales of products as it made possible for these
departments to utilize the capacities effectively.
At TOL inventories are held at different levels of production and facilities.
Inventories can be held as raw materials, finished products, WIP, spare parts,
consumables etc. The effective flow of inventory must be accompanied with
effective flow of information from one department to another. Hence the need for
well-equipped sophisticated inventory control system is inevitable. The company
liquidity depends on the level of inventory in its facilities such that only optimum
amount of required materials and products are held at the required time. For
example to minimize the risk of outdated products, “stock outs”, theft etc. the
company must make sure it possess only the inventory enough to keep the business
running and avoid all sots like carrying costs, holding costs etc.
The interview conducted with respondent elaborated that,
“Inventory control system is recorded and displayed in ERP computerized
system where all information regarding the level of inventory either finished
43
products, raw materials, resalable are made available to all departments
for records and evaluation”
At TOL headquarter there are three storage facilities which are for raw materials
like Carbide for production of Acetylene, storage facility for equipment like
engineering spare parts and storage facility for resalable and consumables. The
warehouses are well designed and got ample space to store raw materials and
finished products meanwhile allow free movement of people and handling
equipment such as folk lift and simple crane.
However after observation, the researcher was able to reveal that, the company is
still facing some challenges like proper stores records that will always reflect the
value of the goods stored and the book value. Also there is no adequate
communication between user department - stores – and procurement department
that might reduce the risk of “stock out” of raw materials, consumables and spare
parts or “buffer inventory” of resalable which increase cost to logistics activities
and affect company liquidity.
Despite of TOL having three store/warehousing with adequate facilities still facing
challenge to add more storage facilities for finished product and materials which
are imported for anticipating production in order to avoid shortages of materials for
production which are very costing. From Wikipedia storage need to be well
designed for the loading and unloading of goods direct from transporter, the stored
goods includes any raw materials, packing materials, spare parts, components or
finished goods which associate with manufacturing.
5.4 Impacts of effective transportation system on competitive performance of
the company
Logistics involves the movement of products (raw materials, parts, products and
WIP) from point of origin to the point of consumptions. There is no value to the
product at its origin until it is in the hand of ultimate customer (Martin, 2005).
Effective transportation system achieves this movement. The researcher wanted to
44
identify the effectiveness of transportation system on competitive performance of
the company
The company transports main products (Carbon dioxide and Oxygen) in bulk using
its own trucks and tankers. This increases the importance of transport activities for
the company because it is managed and controlled in the house. With the slogan of
“we deliver” which is used by the company to reach out its customer and assurance
of delivering the products to their premises there is no room for error about this
activity.
This process apply to goods transported from suppliers or distributors to the
company production or storage centers for production or return basis, Raw
materials for production of certain gases are purchase overseas and transported by
shipping vessel stored in containers. After production and filling of gas in cylinders
are then transported directly to customers or distributors. Cylinder controllers are
accountable to manage and balance the filled stocks and empty cylinders from
Distribution Centers to warehouse with refilled cylinders from production to
warehouse for distribution process to recycle, failure to balance the stock level will
results to poor market performance as product will not be able to reach in the hands
of ultimate customer on time i.e. “the time based competition theory and utility
theory will both be violated”
TOL decided to reduce transportation and distribution costs by using recommended
Distribution Centers allocated in different regions like Dodoma, Mtwara, Mwanza,
Morogoro, Arusha, Kilimanjaro and Dar Es Salaam where customers will purchase
from there. However, they decided to use some distributor’s trucks in order to
reduce risk of monitoring, cost of recruiting drivers, and cost of fuel charges,
maintenances as well as traffic jam which is the problem due to poor infrastructure
system. As argued by Ngelula (2009) poor infrastructure contributes to poor
performance dimension of supply chain.
45
As argued by Martin (2005) that, we have shifted from business environment were
the seller possess the power often through their ownership of resources, expertise
and trademarks to the situation where the customer is now in the driving seat.
46
CHAPTER SIX
SUMMARY, CONCLUSION AND POLICY IMPLICATION
6.1 Introduction
This chapter gives the summary, conclusion and recommendation based on the
research conducted on specific objectives under the study. The study was conducted
on roles of logistics function and the researcher was able to study the following
roles; procurement, order processing, customer service, warehouse management,
inventory control, storage system, transportation, distribution and information flow.
After the study data were analyzed to identify and analyze the impact of these roles
on competitive performance of manufacturing company in Tanzania.
6.2 Summary of the study
The main objective of the study was to assess the roles of logistics function on
competitive performance of manufacturing company with specific reference of
TOL GASES LIMITED head office in Dar es Salaam.
Specifically the researcher intended to analyze the impacts of procurement, order
processing and customer services, also to identify the extent to which inventory
control and storage system as well as to analyze the extent to which transportation
system, distribution channels and information flow affects competitive
performance of manufacturing company.
The findings from the study revealed that there is positive impacts of effective
procurement, order processing system and customer service on competitive
performance of TOL GASES LTD as stipulate in chapter four. Secondly researcher
was able to analyze the extent of the impact of warehouse management, inventory
control and storage system on competitive performance of the company.
Furthermore, researcher revealed the impact of transportation system, distribution
channels and information flow management on competitive performance of the
company.
47
Nevertheless researcher revealed TOL has modern warehouses with specific
features which categorized according to the nature and types of materials kept for
production, spare parts, resalable and empty cylinders.
6.3 Conclusion
To achieve a competitive performance of an organization effective and efficient
logistic activities are very essential, by having good combination and management
of operations in the business. Procurement, order processing, customer service,
warehouse management, inventory control, storage system, transportation,
distribution channels and information flow results to competitive performance of
the company. As argued by Fair (1981) effective and competitive enterprise is the
result of optimizing the supply chain existing in the organization as well as
management of resources.
As observed by the researcher, the company does not have adequate storage
facilities for finished products in order to meet unexpected demand from customers.
For example the storage tanks in Dar Es Salaam for loading CO2 from Mbeya plant
can only take two distribution tankers and hence if there is overflow of products
from Mbeya to Dar Es Salaam and few customers have placed order then it cause a
queue for offloading the gas hence tankers must wait for customer orders to offload.
But also, there is a poor cylinder control which results to insufficient supply to meet
customer requirements when orders exceed packaging and supply capacity.
But also the researcher have managed to observe production breakdown which
caused by shutting down of plant for production of O2 gas. The incapacity of
production results into unavailability of products in the market to meet customer
demand/ requirements and the company incur significant cost and losing market
share to competitors for example giant companies from Kenya.
In order for the TOL GASES LTD to have competitive advantage over its rivals by
performing well and have sustainable development in the industry, it must establish
48
a well-organized logistics system to manage, control and coordinate all activities
within the company’s departmental functions.
As revealed from analysis of data in chapter four, for a business to remain
competitive in the market an effective and efficient logistic management is of a
paramount important to achieve business competency as said by Fair (1981) e-
business with logistics must be integrated in order for logistics function to be
economical, that will assist the company to become a market leader and build a
totally and reliant relationship connection with other supply channel within the
industry. The connection with other network will help to reduce time consuming
activities and create “visibility “ which will deliver product to customer at less cost
and minimum time and increase reliability from both ends of the pipeline.
6.4 Recommendations
6.4.1 To the government
The significance of logistics and supply chain management for Tanzania economy
was re-emphasized by the findings of the PWC in 2007. Annual state of logistics
Survey shown that to meet current and future demands, logistics innovation is
unescapable in the country this is to say through invention and utilizing expertise
knowledge, effective and efficient logistic activities will be born. The research
itinerary for logistics needs must be modern and wider like using of technology
than focusing on the traditional practices. Effort to find ways of improving
traditional and non-functional areas that cause inefficiency and chain break down
are needed to be check again and executed in improved way, e.g. the incorporation
of rural and small scale activities, government service delivery, sector
collaboration, and alternative logistics need to be addressed.
Logistics practitioners in the country’s economy centers around addressing
systemic inadequacies practices framework that influence export attractiveness,
providing infrastructure and services that support both the micro and macro
49
economies, and finding advanced means of evolving supply chains that can deal
wider range of resources.
The economy is comprised of different range of players that execute logistic and
supply chain in their respective position that is from large institution with
sophisticated technology and their visibility capacity to integrate their operations
to small institution with less advantage of access to sophisticated infrastructure and
their capacity to utilize and integrate their logistic activities systems. There is also
a challenge in the access to logistics infrastructure and services due to geographical
dispersion in the country. Economic change needs equitable access to the logistics
system by developing strategies that will provide access to small and large players
in the supply chain.
In the context of the EA and central region, Tanzania is second largest economy
behind Kenya with relatively strong economic growth which position country to
demands more sophisticated and well established logistics system from freight
forwarders to transporters to the upgrade of national railways and the buildup of
new SGR railways. This especially when most centralized countries uses
Tanzania’s harbor to import most of their goods for foreign countries the need for
cross docking and emergency support is required.
6.4.2 To policy makers
Policy makers should improve and develop new policies which encourage logistics
management process in Tanzania. It is important that logistics management
decisions to be made in the context of the entire manufacturing industry. This is
because the effective use of logistics function in the company has positive impact
on competitive performance as revealed by the study. By aligning roles of logistics
function with strategic plan, the executive management team becomes committed
to implementation of strategies and effective control of the position of the company
in the market.
50
6.4.3 To TOL Gases Ltd
The company should continue to practice logistics management as the findings
indicate that roles of logistics function has a positive impacts on competitive
performance of the company. The firm should strongly support logistics section by
making sure innovations and sophisticated logistics programs are introduced from
effective coordination of material and information flows.
For example for TOL GASES LTD to achieve its vision which is “to be the leading
manufacturer of industrial and medical gases in Eastern and Southern Africa by
becoming the choice of investment, the employer of choice and choice business
partner.” To become the manufacture of example in gas industry it must achieve
the two peaks of excellence i.e. to have both costs advantage through economies of
scale and value advantage through service differentiation. And the competitive
advantage can only be achieved through the implementation of and managements
of logistics related activities for entire company’s operations. (Annual report 2015)
But also researcher recommend that, procurement unit must be involved at early
stages of production for example product design in order to adhere to specifications
and standards for quality and reliable supplies through effective procurement
process which have to think and practice JIT approach in order to minimize
inventory levels by making sure materials are only available when needed by
production department and those materials meet specifications an standards in
terms of quality and costs and related services.
6.4.4 To future researchers
Further research should be done by researchers on how roles of logistics function
affect the competitive position of the company in manufacturing industry. As this
will helps to drive more thought and knowledge to feed many practitioners with
limited knowledge of the impact of logistics management in their daily activities.
But also it will help to value the importance of logistics activities in relation to other
51
company’s operations as it will stipulate the coordination role through effective
information flow throughout the entire chain of the company.
6.4.5 To the practitioners
For logistics, procurement and SC practitioners, they should observe integrity,
ethics and professionalism when engaging in logistics practices so as to progress
competitive performance of the company.
But the study has a number of implications to practitioners as they will gain a
greater understanding of how logistics and SCM are carried out in Tanzania
specifically in manufacturing industry and the type of issues that have been
addressed. Furthermore, practitioners will be able to identify areas that need
greater research attention in manufacturing industry in Tanzania.
6.5 Suggestion for further studies or research
Logistics management presents a huge opportunity for manufacturing companies
to be more competitive in the industry. Many companies have recognized the
importance of logistics to allow the formulation of logistics strategies and linking
it to corporate strategy. Hence the researcher suggest that, many researches should
conducted in the area so as to get and create more knowledge in logistics
management and its importance in the supply chain especially in the areas of the
impact of 3rd party and 4th party logistics service providers on organization
performance.
Many studies in Tanzania tried to look specifically on logistics management at
company level but great emphasized should be addressed at the sectors that have a
direct impact on logistic activities and government level as argued by (Bowersox
et al., 2002).
The researcher recommends that, study should be conducted at country level and
advice the government on how the logistics process management can have a
positive impact to the economy of the country.
52
Despite this study that explaining the role outbound logistic in competitive
performance in a manufacturing industry and many other studies done on this area
the researcher is suggesting more study in this field area should be conducted to
assist organization in realizing their strategic objectives and goal.
53
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59
APPENDICES
APPENDIX I
INTERVIEW GUIDE FOR DATA COLLECTION
Date: ……………………………..
Dear respondent
I am conducting a study for the award of Master’s degree in procurement and Supply
Chain Management of Mzumbe University. The study is on the roles of logistics
function on competitive performance of manufacturing company in Tanzania and
my case study is TOL GASES LIMITED, your company.
This study focuses on assessment of how logistics related activities can become the
determinants for the long term sustainability of any manufacturing company in
Tanzania. The findings of this study will lead to the clear understanding on how the
roles of logistics function can make the manufacturing company to become both cost
leader and service leader in its operating industry. At the end the study will provide
recommendations and suggestions suitable to all manufacturing companies and
other parties of interest as a base for remedial actions.
The summary of the results will be made available to you upon request.
I also provide questionnaires which have been designed to simplify your response
as I value your valuable time.
The research is conducted for the study purpose and nothing else.
Please assist by responding for the oral interview specifically in the areas covered
in the attached questionnaires as honest as possible.
I would like to request for an appointment of audio recorded interview in your office
which will hardly take less than 20 minutes to finish. The scope of the interview is
devoted into seven questions which I have attached together with this letter.
Thank you in advance for your valuable time and corporation.
Sincerely,
60
NoelAnthonyChami
A Student
Mzumbe University
Interview guide questions for data collection on assessment of the roles of
logistics function on competitive performance of TOL GASES LTD as a
manufacturing firm in Tanzania.
1. Please mentioned the roles of logistics function in your company
i. ……………………………………………………………………
ii. ……………………………………………………………………
iii. ……………………………………………………………………
iv. ……………………………………………………………………
v. ……………………………………………………………………
2. Is organizational performance possible by coordinating logistic department and other
department?
3. How customer services are managed to ensure value- added products all the time?
4. What are the costs involved in carrying different activities in logistics function?
i. ……………………………………………………………………
ii. ……………………………………………………………………
iii. ……………………………………………………………………
iv. ……………………………………………………………………
v. ……………………………………………………………………
5. How the decisions on appropriate mode of transport affect organization performance?
Who are involved in these decisions?
6. How the locations of warehouse and storage facilities affect the responsiveness and
flexibility of the company’s logistics system?
7. Please mention any improvements on costs, time, quality and responsiveness which
have been spotted since establishment of logistics function in your company
i. ……………………………………………………………………
ii. ……………………………………………………………………
61
iii. ……………………………………………………………………
iv. ……………………………………………………………………
v. ……………………………………………………………………
62
APPENDIX II
RESEARCH QUESTIONNAIRE FOR A STUDY ON ROLES OF
LOGISTICS FUNCTION ON COMPETITIVE PERFORMANCE OF
MANUFACTURING FIRM IN TANZANIA, A CASE TOL GASES
LIMITED.
I am a student pursuing Master’s degree on Procurement and Supply Chain
Management of Mzumbe University, currently am conducting a research on roles of
logistics function on competitive performance of manufacturing firm. The aim of
this study is to examine those roles of logistics function and how they become
determinants of competitive performance of any manufacturing firm. Therefore I am
kindly requesting you to spare few minutes of your valuable time to answer
questions provided in this questionnaires.
Thank you in advance for your kind response.
PART A: Profile description of the respondents
Respondent’s profile
Cross the desired answer
1. What age are you?
a) 20-25yrs ( )
b) 25-35yrs ( )
c) Above 35yrs ( )
2. What is your position in the organization?
…………………..………………
3. How long have you been in this organization?
a) Less than 2 years ( )
b) 3-5 years ( )
c) 6-10 years ( )
d) More than 10 years ( )
63
4. Which gender are you?
a) Masculine ( )
b) Feminine ( )
5. Do you know anything about logistics? Yes ( ) No ( )
6. Are you a member of logistic department? Yes ( ) No ( )
Please mark a cross of the desired answer below using Likert scale.
PART B: The organization of logistics operation and competitive performance of the company
S/N
Questions Strongly
True
True Neither
True nor
False
False Strongly
False
1 My department
section objectives
certainly relate to
logistic function
2 My department
section offers funds
to support
improvement of
logistics function
3 Materials and
information flows
management makes
logistics being the
most important
function for long
term sustainability of
the company’s
business
4 Often, my tasks are
absolutely relates
with Supply chain s
5 Malfunction
competitive
performance has a
direct impact with
logistics activities
64
6 My section is always
join efforts to make
logistic department
realizes
organizational goals
7 Organization
performance are
positively
contributed by
Logistic department
Part C: Implementation of effective procurement system, ordering system and improved customer
service and competitive performance of the company
S/N
Questions Strongly
True
True Neither
True nor
False
False Strongly
False
1 Effective procurement is
essential for logistics to
meet customer satisfaction
through in-time production,
inventory control and
product quality and design
2 Ordering system is vital for
customers’ requirements
management and
satisfaction hence create
competitive performance of
the company
3 Customer service is one of
the key role of logistics in
ensuring competitive
performance of the
company
4
Can effective procurement
reduce purchasing costs,
meet requirements standard
and improve products
quality
5 Ordering system can
reduce time, create
flexibility, quick
65
responsiveness and
reliability in logistics
system and hence
competitive performance
of the company.
6
Customer service add
value to the products
offered by the company by
creating intangible services
that suit customer
requirements effectively
and efficiently
PART D: The warehouse, storage facilities, inventory control, materials handling and
competitive performance of the company
S/N
Questions Strongly
True
True Neither
True nor
False
False Strongly
False
1 The company has sufficient
warehouse and storage
space facilities
2 The warehouse and storage
facilities in the company
are modern and well
located
3 The storage facilities are
very useful in intermediate
production
4 Effective control of
inventory result to logistics
competence and hence
competitive performance
5 The adequacy of
equipment, tools and
handling material support
effective and efficient
logistics management
66
6
The effective usage of
warehouse & storage
facilities effective
inventory control are
positively affects or
competitive performance
of the company.
PART D: The selection of appropriate mode of transport, distribution channels and
outsourcing logistics activities and competitive performance of the company
S/N
Questions Strongly
True
True Neither
True nor
False
False Strongly
False
1 The decisions on of
transport mode &
distribution channels
results to logistics
efficiency, reduction of cost
and promote service
quality.
2 The procedures used to the
select appropriate mode of
transport and distribution
channels are relevant to
such function
3 Location of facilities
influence expansion of
consolidation and
distribution center in turn,
results to logistics
competence.
4
Outsourcing of Logistics
activities provide
competitive edge to the
performance of the
company
67
5
Company should outsource
core logistics activities
(transportation,
warehousing, distribution
etc.) to 3rd PL and 4th PL
providers
6
Strong and viable
distribution environment
manipulate logistic
efficiency in performing
their activities
7
The effective cordination
of transportation activities
positively relates with
competency in operations
Thank you for your valuable time, information and corporation.
68
