EVALUATION OF LOGISTICS CHALLENGES OF MANUFACTURERS OF CONSUMER GOODS (A STUDY OF 7UP BOTTLING COMPANY PLC ABA)

ABSTRACT

This study evaluates the logistics challenges of manufacturers of consumer goods (A study of 7up bottling company plc Aba). The main  objective of this study is to determine the logistics challenges being faced by the manufacturers of consumer goods, while the specific objectives includes to find out whether the customers are satisfied with the customer service delivered by  7up company, to ascertain the effect of logistics on quality service delivery and also, to determine the ways of improving logistics performance in 7up company. The population of this study was made up of the company’s staff and 90 respondents were selected randomly as the sample size for the study. Primary and secondary data were collected to aid this research and the data were analyzed based on information derived from the returned questionnaire used for the study which amounted to 65copies out of the 90copies that was distributed. The researcher adopted survey design and from the findings, the researcher recommended that 7up bottling company should as a matter of urgency, convert all customer’s complaint into useful tool for customer delight and design a process whereby the firm’s product delivery system can be monitored/controlled for efficient customer satisfaction.

TABLE OF CONTENTS

CHAPTER ONE: INTRODUCTION

1.1 BACKGROUND OF THE STUDY-----------------------------------------------1-3

1.2 STATEMENT OF THE PROBLEM-----------------------------------------------3

1.3 OBJECTIVES OF THE STUDY----------------------------------------------------4

1.4 RESEARCH QUESTIONS------------------------------------------------------------4

1.5 RESEARCH HYPOTHESIS----------------------------------------------------------5

1.6 SIGNIFICANCE OF THE STUDY-------------------------------------------------5

1.7 SCOPE OF THE STUDY--------------------------------------------------------------6

1.8 LIMITATIONS OF THE STUDY---------------------------------------------------6

CHAPTER TWO: REVIEW OF RELATED LITERATURE

2.1 BRIEF OVERVIEW OF THE INDUSTRIAL SETTING OF 7UP BOTTLING COMPANY-------------------------------------------------------------------------------7

2.2 BRIEF PROFILE OF 7UP BOTTLING COMPANY AND ITS PHYSICAL DISTRIBUTION SYSTEM-----------------------------------------------------------8-9

2.3 NATURE OF PHYSICAL DISTRIBUTION-----------------------------------9-13

2.3.1 GOALS OF PHYSICAL DISTRIBUTION AND LOGISTICS----------13-14

2.3.2 IMPORTANCE OF DISTRIBUTION AND LOGISTICS---------------14-15

2.4 ELEMENTS OF PHYSICAL DISTRUBUTION-----------------------------15

2.4.1 TRANSPORTATION---------------------------------------------------------------16-17

2.4.2 WAREHOUSING--------------------------------------------------------------------18-20

2.4.3 INVENTORY MANAGEMENT AND CONTROL--------------------------22

CHAPTER THREE: RESEARCH METHODOLOGY

3.1 RESEARCH DESIGN------------------------------------------------------------------22

3.2 AREA OF THE STUDY----------------------------------------------------------------22

3.3 POPULATION OF THE STUDY----------------------------------------------------22

3.4 DETERMINATION OF SAMPLE SIZE---------------------------------------22-23

3.5 SOURCES OF DATA COLLECTION---------------------------------------------23

3.5.1 PRIMARY SOURCES------------------------------------------------------------------23

3.5.2   SECONDARY SOURCES--------------------------------------------------------------24

3.6 INSTRUMENT FOR DATA PRESENTATION--------------------------------24

3.7 VALIDITY AND RELIABILITY OF INSTRUMENT------------------------24

3.8 METHOD OF DATA PRESENTATION AND ANALYSIS-----------------25

CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS

4.1 DATA PRESENTATION--------------------------------------------------------------26-33

4.2 TEST HYPOTHESIS-------------------------------------------------------------------33-38

CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

5.1 SUMMARY OF FINDINGS----------------------------------------------------------39-40

5.2 CONCLUSION----------------------------------------------------------------------------40

5.3  RECOMMENDATIONS-------------------------------------------------------------40-41

CHAPTER ONE

BACKGROUND OF THE STUDY

1.1 Introduction

Since the 1950s when logistics made entry into marketing, it has gained an increasing popularity. This is as a result of its immense contributions to marketing’s achievement of its overriding goal of consumer satisfaction.

Bowersox (1974:1), who co-authored the first book written in the field of logistics in business (Smykay, Bowersox, and Mossman, 1961) defines marketing logistics as “the process of managing raw material, part, and finished inventory from vendors, between enterprise facilities and to consumers”. This definition implies a number of interesting things for the proper management of a firm. These issues are as follows:

i. Marketing logistics is basically concerned with the movement of physical material and finished goods.

ii. Marketing logistics is concerned with the movement of materials and goods at stage of pre-production, and post-production.

iii. Marketing logistics is a managerial function which involves planning, organizing, directing, and controlling the flow or movement of production materials and finished goods.

iv. Marketing logistics activities constitute an intimate part of the marketing strategies of a firm.

v. Customers (and their satisfaction) are the ultimate goal or priority of marketing logistics.

There is a great similarity and relationship between marketing logistics and physical distribution which will make them both be used interchangeably in this work. A times, suggestions has it that the role of physical distribution is to provide time and place utilities in the transfer of goods and services between buyers and sellers. Put in another way, there is no value in a product or service until it is in the hands of the consumer. It follows that making the product available is what in essence, the distribution function of business. Kotler and Keller (2009) contended that customers want more inventories. The first objective of physical distribution can be summed up in one word “service”. The purpose of physical distribution is to ensure that the right products are available when consumers want them, in the right place and at the right time. This overall goal of service has several aspects and they include: Availability of product, accuracy in filling orders, safe service and so on. Availability is in itself is a complex concept, impacted upon by a galaxy of factors which together constitute customer service. These factors might include delivery frequency and reliability, stock levels and order cycle time. Ehikwe (2002) stated that customer service levels could be defined from the perspective of derivable satisfaction of manufacturers’ service in the distribution of products, which customers require to keep their patronage with a particular product. For a thorough understanding of this project topic, it is necessary also to have a definition of physical distribution.

According to Nnabuko (1998) physical distribution involves the movement of products though various intermediaries to consumers. Its main elements include transportation, warehousing, order processing, inventory control and customer service. Due to problems which are inherent in physical distribution, it becomes challenging for the company to efficiently co-ordinate its physical distribution activities to ensure a certain level of customer services that is adequate.

Marshall (2014), state that distribution involves getting the product from the manufacturer to the ultimate consumer. Thus, it is on this note that the researcher undertook this study to highlight the need for efficiency and effectiveness in the coordination of the physical distribution elements to ensure a given level of customer satisfaction and also to highlight some of the problems inherent in the system, how they impact on the level of customer service delivered and proffer solutions.

1.2 Statement of the problem

Customer service is not adequately provided in a developing economy like Nigeria. This is because, companies do not have efficient infrastructure which usually help in providing adequate customer service which results in several customer complaints. These customer’s complaint which has a negative impact on the customer that experience it, leads to customer dissatisfaction and frustration which also has an adverse consequence of discontinuous customer patronage which has an effect on the company’s sales.

Thus, studies and anecdotal evidence reveal that the 7up bottling company has not been researching, reviewing and assessing their distribution and logistics system for provision of effective customer service. In consideration of the above challenges, one may want to know how effective the various distribution and logistics of 7up bottling company in marketing have been.

Have the distribution and logistics of 7up bottling company had any significant impact in increasing customer satisfaction? Are there standard way(s) by which the distribution and logistics of 7up bottling company is assessed? These are the problems this study will encounter.

1.3 Objectives of the study

The main objective of this research is to evaluate the logistics challenges of manufacturers of consumer goods.

However, the specific objectives of this study include:

i. To determine the distribution and logistics challenges faced by manufacturers of consumer goods.

ii. To ascertain the effect of distribution and logistics on quality service delivery.

iii. To determine ways of improving distribution and logistics performance in the company.

iv. To determine if customers are satisfied with the customer service delivered by the company

1.4 Research questions

The following are questions that will guide in the course of the work and they include;

i. What are the distribution and logistics challenges faced by manufacturers of consumer goods?

ii. Does distribution and logistics have an effect on quality service delivery?

iii. How can distribution and logistics performance be improved in the company?

iv. Are the customers satisfied with the customer service delivered by the company?

1.5 Research hypothesis

For the purpose of this study, the following hypotheses were formulated by the researcher in the course of this work.

Ho: Consumers goods manufacturers do not face distribution and logistics challenges.

Ho: Distribution and logistics has no effect on quality service delivery.

Ho: There is no room for improvement on distribution and logistics in Consumer Goods Company.

Ho: The customers are not satisfied with the customer service delivered by the company.

1.6 Significance of the study

This study will be of immense importance to the company (7up bottling company) and other manufacturers. This is because, the underlying relevance of the study is that distribution and logistics impact greatly on the level of customer service delivered.

Thus, this study is significant to the company in that it highlights the need to improve on the distribution and logistics techniques to ensure customer patronage. If the company does this effectively, it will help in reducing the total marketing cost and would place the company in a better competitive position so that there would be no case of stock-out or late delivery which will lead to customer dissatisfaction.

Finally, it will further add the already existing literature in the field of manufacturing sectors.  It will also provide solution to problems encountered by the manufacturing industries in the area of distribution and logistics of manufacturers of consumer’s goods.

1.7 Scope of the study      

This research is limited to the evaluation of logistics challenges faced by manufacturers of consumer goods especially the 7up bottling company located in Aba, Abia State.

1.8 Limitations of the study

The researcher faced a lot of challenges in the course of undertaking this work. The limitations can be classified into the following: time constraints, inaccessibility to some relevant materials and financial constraints.

Time constraints-time factor was a very special area the researcher experienced much difficulty. As a student it was difficult for the researcher to combine academic work with research, as such the researcher had to combine academic work with research, thus the researcher had little time visiting the company at its site.