Embed Size (px)
Citation preview
MAKERERE UNIVERSITY
THE RELATIONSHIP BETWEEN SUPPLY CHAIN MANAGEMENT AND
PRODUCT QUALITY
A CASE STUDY OF SAMEER AGRICULTURE AND LIVESTOCK LIMITED
PLOT 49-53/55 FIFTH STREET, INDUSTRIAL AREA,
KAMPALA-UGANDA.
BY
ELUMUT EDWARD F ALDO
06/ U /9354/ EXT
A RESEARCH REPORT SUBMITTED TO MAKERERE UNIVERSITY IN
PARTIAL FULFILLMENT FOR THE AWARD OF THE DEGREE OF
BACHELOR OF COMMERCE TO MAKERERE UNIVERSITY
SEPTEMBER, 2010.
1
DECLARATION
I ELUMUT EDWARD F ALDO hereby declare that this report is my original work. To
the best of my knowledge, the work has never been submitted for any degree in the
Bachelor of Commerce external programme of Makerere University. This work has also
never been in any higher institution of learning. And I do hereby declare too that the
conception, research, organization and writing of the report were entirely my own effort.
ELUMT EDWARD FALDO Date…………………………………….
RESEARCHER
i
APPROVAL
This piece of work has been carried out at Makerere University under the title supply
Chain management and product quality. It has been under the supervision of Mr. Yombo
Raymond and it is ready for submission.
………………………………………………… Date……………………………………
MR. YOMBO RAYMOND SUPERVISOR
DEDICATION
ii
I dedicate this work to my dear parents, Late Mr. Okello Mackay and Mrs. 01< who have
been important in my life for encouraging and in me through.
To also my Aunt Ms. Akello Florence for her support and to my brothers and sisters for
their encouragement through my course.
Above all to the Almighty God who has enabled to reach my, dreams in life?
iii
ACKNOWLEDGEMENT
During this course of my study, I received great support from many people, to all of them
I will forever be indebted.
I am grateful to my supervisor Mr. Yombo Raymond for the knowledge, cooperation and
guidance during the supervision which enabled me to carryout my research successfully.
To my parents, brothers and sisters, special thanks for the support and encouragement
throughout the course.
To my friends, Makubuya Christopher, Ssekabembe James, Katongole Kenneth,
Ssebuuma Frank, Tamale Amans, Papa, Eria, Chris, Herbert, Jingo,
(v) Moses, pedis ion, Iddis, Patrick, Eric, Joel, Eve, Flavia, Tina, I am grateful for the
encouragement and support towards my career development process.
iv
TABLE OF CONTENT
ContentsDECLARATION.................................................................................................................................. i
APPROVAL....................................................................................................................................... ii
DEDICATION.................................................................................................................................... ii
ACKNOWLEDGEMENT....................................................................................................................iv
LIST OF TABLES..............................................................................................................................vii
ABSTRACT.....................................................................................................................................viii
CHAPTER ONE..........................................................................................................................1
1.0 Introduction..............................................................................................................................1
1.1 Background to the study...........................................................................................................1
1.3 Statement of the Problem........................................................................................................4
1.3 Purpose of the Study................................................................................................................5
1.4 Objectives of the study.............................................................................................................5
1.5 Research questions...................................................................................................................5
1.6 Scope of the study....................................................................................................................6
1.7 Significance of the study...........................................................................................................6
CHAPTER TWO.........................................................................................................................7
2.0 Literature Review..................................................................................................................7
2.1 Introduction..........................................................................................................................7
2.1 Concept of Study chain management...................................................................................7
2.3 Relationship between supply chain management and product quality..............................15
2.4 Conclusion..........................................................................................................................16
v
CHAPTER THREE.....................................................................................................................17
3.0 Methodology......................................................................................................................17
3.1 Introduction........................................................................................................................17
3.2 Research design..................................................................................................................17
3.3 Target population...............................................................................................................17
3.3.1 Sampling design and size.................................................................................................17
A table showing the various respondents from different departments in a organizations.......18
3.4 Sources of Data...................................................................................................................18
3.4.1 Data Collection methods..................................................................................................18
3.5 Data analysis and interpretation.........................................................................................19
3.6 Anticipated limitation.........................................................................................................19
3.7 Duration / time taken.........................................................................................................19
3.8 Proposed Budget................................................................................................................20
CHAPTER FOUR......................................................................................................................21
PRESENTATION, INTERPRETATION AND DISCUSSION OF FINDINGS.............................................21
4.0 Introduction........................................................................................................................21
4.1 Background.........................................................................................................................21
4.2 Length of service.................................................................................................................22
4.2 Findings on supply chain management practices................................................................24
CHAPTER FIVE........................................................................................................................33
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS................................................................33
5.0 Introduction........................................................................................................................33
vi
5.1 Summary of Findings..........................................................................................................33
5.1.1 Findings on supply chain management practices in Sameer agriculture and ........livestock
limited.......................................................................................................................................33
5.1.2 Findings on the product quality in S.ameer agriculture and livestock limited.................34
5.1.3 Relationship between supply chain management and product quality in.......................34
Sameer agriculture and livestock limited..................................................................................34
5.2 Conclusions:........................................................................................................................35
5.2.1 Supply chain management...............................................................................................35
5.2.2 Product quality................................................................................................................35
5.3.0 Recommendations...........................................................................................................35
5.4 Areas for further research..................................................................................................37
vii
LIST OF TABLES
Table 1: Respondents Sex
Table 2: Respondents' Length of Service in an Organization
Table 3: Education background
Table 4: Position of Responsibility
Table 5: Composition of supply chain management
Table 6: Record of supply chain
Table 7: Inspection of supply chain management
Table 8: Supply chain techniques in Sameer agriculture and livestock limited
Table 14: The relationship between supply .chain management and product quality
Table 10: Problem associated with supply chain management
Table 11: Product quality responsiveness and loyalty
Table 12: Research and Product quality
Table 13: Technology and product quality
Table 9: Technology and supply chain management.
viii
ABSTRACT
The major aim of this study was to establish supply chain management and product
quality in Sameer agriculture and livestock limited. The objectives of the study were to
establish supply chain practices adopted by Sameer agriculture and livestock limited, to
examine the level of product quality and to establish the relationship between product
quality and supply chain management.
The research was carried out in Sameer agriculture and livestock limited whereby
descriptive study and collections were based on the variable and these are dependent and
independent variables.
Questionnaires and interviews were used and the Statistical Package for Social Scientists
was used to analyse the data collected. The researcher used stratified random sampling
techniques in choosing the respondents to collect the right date between variables. 60
respondents were selected for both questionnaires and oval interviews.
They included respondents from salers and distribution staff, marketing staff, accounts
staff, other employees in Sameer agriculture and livestock limited.
According to recommendations, Sameer agriculture and livestock limited has decided to
provide better products in the required time through ensuring that there is adequate
supply of milk and other raw materials to stabilize supply of milk products.
ix
CHAPTER ONE
1.0 Introduction
This chapter comprises of the background to the study, statement of the problem, purpose
of the study, objectives of the study, research questions, scope of the study and
significance of the study.
1.1 Background to the study
Supply chain management is defined as the network of organizations that are involved,
through up streams and down streams linkages. (Kotler and Armstrong, 2008) In the
different processes and activities that produce value in the form of products and services
in the hands of the ultimate consumer.
Supply chains emphasise the process approach concerned with how a product or service
is delivered to the customer. This approach is based on the recognition that the customer
is concerned of the required product or service that is delivered at the right time at the
right place that customers are largely unconcerned with how this is accomplished produce
chain management.
CLM (2009) published an extensive review of job descriptions for logistics and supply
chain personnel which is an approach that directly addresses the continuously changing
nature of profession or the importance of softer skills.
1
Wilding (2006) discusses the importance of the softer skills in managing time
compression projects to and the development of the agile supply chain. This paper aims
to suggest a specific approach to the further development of the people dimension in
supply chain management.
Apart from identifying activities, the supply value chain indicates the relative importance
of activities and that by allocating costs to activities rather functions, we identify the true
costs involved in service delivery (Gatton and Walters, 2005). The purpose of supply,
chain management is described by Kaufman as to being able to remove communication
barriers and eliminate redundancies through coordinating, monitoring and controlling
process.
Clancy described integration of supply chains as attempting to elevate the linkages with
each component of the chain to interact in a more efficient way, facilitate better decision
making and create supply chain visibility.
The establishment of materials management to or supply chain departments in the
organizations will be a step forward to expedite the recognition of the purchasing and
supply profession by the top management.
The "Bull whip" is an example of a typical supply chain management outcome resulting
from circumstances that are dynamically complex and was first highlighted by for
innovative companies in different industries have found that they can control the bull
2
whip affect and improve their supply chain performance by coordinating information and
planning along the supply chain.
Chen defined supply chain management as a phenomenon which the orders are seen by
the upstream stages of supply chain are more variables than the orders seen by the down .
stream stages.
Supply chain emphasis cross functional teams (Womack, Jones and Ross, 2008). State
that at Toyota and Honda project leaders or Shusas assemble small teams that are
assigned to the development project for it is life.
Product quality is the ability of a product to perform its functions. (Kotler and Armstrong,
2002). It includes the products over all durability, reliability precision, date of operation
and repair and other valued attributes.
Garvin proposed the most comprehensive definition of product quality with sight
attributes of performance, features, confonnance, reliability; durability, serviceability,
customer perceived quality.
Conceptually, product quality is confonnance to customer requirements, relevant
dimensions depend on the product and the buyer, buyers, of similar products tend to seek
similar product quality dimensions.
3
Product quality is defined as the fitness for function or purposes which requires both the
needs of the customer and his belief in are explored. (Kelth,2008).
Poor quality must therefore be taken in account throughout all the areas of marketing'
design purchasing production or operations and distribution. Quality performance will
not just happen, effective leadership and team work is the only sure receipt for success.
Product quality policy requires supply chain management to establish an 'organization'
for quality, identify the customer's needs and perception of needs, ensure the bought-out
materials and services reliability meet the required standards of performance and
efficiency, assess the ability of the organization to meet these needs economically,
concentrate on the prevention rather than detection philosophy, educate and train for
quality improvement and review the quality management systems to maintain progress.
(Kotler, 2005)
1.3 Statement of the Problem
Sameer agricultural being a government parastatal and having much milk supply and
collecting. Centres has continually experienced cases of poor quality milk.
However, management has tried its level in ensuring high quality high and inputs by
hiring faster collecting trucks, recruitment of competent quality assurance staff and the
new development under which the company is undergoing ISO 2001 Certification which
have been measures geared towards improvement of product quality.
4
According to the Uganda standard of raw milk by Uganda National Bureau of Standards
US 21 CS 11: 1993 UDC 637, resacurin 6, alcohol positive and PH negative and which
should comply Sameer tests of raw milk DCL / R / TRM / 04.
1.3 Purpose of the Study
The study is aimed at providing high quality products and management contribution to an
improvement nutritional standards.
1.4 Objectives of the study
To evaluate the effectiveness of the supply chain
To determine the relationship between the supply chain and product quality
To identify the effectiveness of product quality on sales performance
1.5 Research questions
i) To what extent will the consistency of product quality and effective supply chain be
executed.
ii) What are the effects of continuous product assessment and improvements in supply
chain?
iii) How effectively will the monitoring of supply chain lead to quality performance in
Sameer agriculture.
5
1.6 Scope of the study
The study will be specifically limited to determine continuous provision of quality
products and management contribution to an improvement in supply chain and
nutritionals standards.
Specifically the study is limited to the Sameer agriculture head office located on 6 street
industrial area 4krns from the city centre. The coverage was for 4 years (2005-2009).
1.7 Significance of the study
i) The recommendations and findings will be useful contribute to an improvement in
nutritional standards and supply chain by management.
ii) The study will provide data that will help management to monitor continuous products
improvements and quality.
iii) The study will also be used for reference by future researchers and it will add
knowledge to the existing.
6
CHAPTER TWO
2.0 Literature Review
2.1 Introduction
Presented in this chapter is an overview of the major issues on the existing literature on
supply. Chain management and product quality that have been explored and studied by
other scholars and authors and therefore their finding are reviewed under the heading of
2.1 Concept of Study chain management
Supply chain management is defined as the network of organizations that are involved
through upstream and down stream linkages. (Kotler and Armstrong, 2006). In the
different processes and activities that produce value in the form of products and services
in the hands of the ultimate consumer.
The supply chain can be likened to a well balanced and practiced relay team in which the
entire team is coordinated to run the race.
Supply chains emphasise the process approach concerned with how a product or service
is delivered to the customer. This approach is based on the recognition that the customer
is concerned of the required product or service is delivered at the right time at the right
place customers are largely unconcerned are largely unconcerned with how this is
accomplished.
7
A process is simply a set of logically related tasks performed to achieve defined business,
outcome.
Supply chain may be primary or support. The former related to those concerned with
suppliers to be used for manufacture or re-sale to external! customers. The latter to those
concerned with the support of internal customers.
Supply chains differ, there is no single supply chain. Organisations form Networks of
chains with common points of inter-connection each organization is both a supplier and a
customer, as it looks both up and down a particular chain. Acknowledging the individual
of particular chains does not preclude adopting the concept as a means of analyzing how
operations may be improved.
Supply chains are linked for value chains states that each activity within a value chain
provides inputs.
After processing each input provides added value to the output which the ultimate
customer receiver in the form of a product or service, or as the aggregate of values at the
end of the value chain.
The amount of added value is determined by subtracting the sum of the bought-out
materials and services comprising an activity from the increased worth of a product or
service at the end of that activity within the supply chain.
8
Apart from the identifying activities, the supply value chain indicates the relative
importance of activities and that by allocating costs to activities rather than functions, we
identify the true costs involved in service delivering Gattorna and walters, 2005). A
simple method of value chain analysis is to call the price charged to the customer, at the
end of the supply chain, 1 00% and by working backwards estimate the amount of value
added by such chain activity.
The optimization of the supply chain costs suggests five supply chain areas which are
business process costs, procurement costs, production costs, inventory carrying costs and
storage, handling and distribution costs (Flint, 2009).
The supply chain management should be quantified in money terms, as should the cost of
delivering it (Cannon, 2008). It is only if there is a net benefit that the service is worth
delivering.
Cannon (2006) also suggests that money based service levels should be a bench marked
against other organizations as a further check on the function is effectiveness. Supply
chain value analysis can also be used to determine more accurate costs for providing
services to internal customers using the activity based.
Supply chain costs are also linked to time in general, the shorter the supply chain, the
however the costs. This emphasizes the importance of time compression approach.
9
Supply chains emphasize cross-functional teams (Womack, Jones and Ross,2004). State
that at Toyota and Honda project leaders or shusas assemble small teams that are
assigned to the development project for its life.
Product quality
Product is the ability of product to perform its functions ( Kother and Armstrong, 2002).
It includes the products overall durability, precision, ease of operation and repair and
other valued attributes.
Product quality has two dimensions level and consistency. Quality level is the ability of a
product to perform its various functions. . Beyond quality level, high quality also can
mean high levels of quality consistency where there conformance quality which are free
from defects and consistency in delivering a targeted level of performance.
Product quality is defined as the fitness for function or purpose which requires both the
needs of the customer and his belief in his needs are explored. (Keith, 2008).
Frequenting a choice of a product is made upon apparently irrational grounds, identical
products, presented in different ways, will sell in vastly different quantities, and will have
different qualities ascribed to them.
Similarly a quality judgment is often related to the price paid without any regard to the
discrible properties of the item being purchased.
10
Product quality and services is important not only for users but also for suppliers. For
manufactures, quality deficiencies result in additional costs for inspection, testing, scrap,
rework, handling of complaints and warrantly claims (Alan Muhleman, 2007).
Product quality must therefore be taken - into account throughout all the areas of
marketing design, purchasing production or operations and distribution quality
performance will not just happen, effective leadership and team work is the only sure
recipe for success.
Real understanding and commitment be senior management, together with explicit
quality policies lead to an improvement throughout the entire organizations, which in turn
generates a momentum improvement of products and performance.
The quality of a product should. For a managerial decision as complex and as. Important
as any which directors are called upon to make (John, Oakland, 2003).
The two determinants are intended market segments may have to be changed, or the
internal resources' may have to be increased. Thus, if a soundly based market
investigation reveals that a product requires a quality when which cannot be
economically achieved with existing equipment. The company must either change it's
intended market segment or improve its product facilities quality, like all other corporate
matters, must be continually reviewed in the light of current circumstances.
11
Product quality and services is important not only for users but also for suppliers. For
manufactures, quality deficiencies result in additional costs for inspection, testing, scrap,
rework, handling of complaints and warrantiy claims (Alan Muhleman, 2007).
Product quality must therefore be taken into account throughout all the areas of
marketing design, purchasing production or operations and distribution quality
performance will not just happen, effective leadership and team work is the only sure
recipe for success.
Real understanding and commitment be senior management, together with explicit
quality policies lead to an improvement throughout the entire organizations, which in turn
generates a momentum improvement of products and performance.
The quality of a product should. For a managerial decision as complex and as important
as any which directors are called upon to make (John, Oakland, 2003). The two
determinants are intended market segments may have to be changed, or the internal
resources may have to be increased. Thus, if a soundly based market investigation
reveals' that a product requires a quality when which cannot be economically achieved
with existing equipment. The company must either change it's intended market segment
or improve its product facilities quality, like all other corporate matters, must be
continually reviewed in the light of current circumstances.
12
The product and Quality control should be effected by inspection and diversion of out put
does not meet the required requirements.
This is a strategy of detection which allows time and materials to be invested in products
which are not always saleable.
The prevention of products and services which do not conform to the required quality is
management being dedicated to the on-going improvement of quality, not simply a one
step improvement to an acceptable plateau.
Product quality as fitness for use'. For example has identified five approaches to defining
product quality and eight dimensions. (Gavin, 2002). And these are the transcendent
product based. The user based, the manufacturing based. The value based approaches.
The transcendent approach is where product quality is absolute and universality
recognizable. It is loosely related to a comparison of product attributes and
characteristics.
The product approach is a precise and measurable variable in this approach differences in
quality reflect differences in the quality differences in the quality of some product
designers.
13
The value-based approach is defined in terms of fitness for uses, or how well the product
fulfills it is intended functions. The manufacturing-based approach is the conformance to
specifications i.e. targets and tolerances determined by product designers.
The value-based approach is defined in terms of costs and prices. Here a quality product
is one that provides performance at an acceptable price or conformances at an acceptable
cost.
When fanning an overall philosophy (Gaviris, 2002). Eight dimensions of product quality
include performance, reliability, serviceability, confonnance, durability, features,
aesthetics, perceived quality.
Performance is the products operating
Characteristics
Reliability is the probability of a product serving over a specified period of time under
stated conditions of use.
Serviceability is the speed, accessibility and ease of repairing the item or having it
repaired.
Conformance is the degree to which delivered products meet the pre-determined
standards.
14
Durability is the projected use available from the product over it's intended operating
cycle before it deteriorates.
Features is the 'Bells and Whistles' or secondary characteristics which supplement the
product basic.
Functioning
Aesthetic is the personal judgments of how a product looks, feels, sounds, tastes or
smells.
Perceived quality is closely identified with the reputation of the producer like aesthetics
it's a personal evaluation.
2.3 Relationship between supply chain management and product quality
The reputation attached to an organization for the quality of its products is accepted as a
key to its success and the future of it's employees (G.A Cole, 2006). To proper in today's
economic climate, any organization and it's suppliers must be dedicated to never
- ending improvement, and more efficient ways to obtain products or services that
consistently meet customer's needs must constantly be sought.
In today's tough and challenging business environment, the development and
implementation of a comprehensive quality policy is not merely desirable but it is
essential (Massie, 2004).
15
The quality policy requires supply chain management to establish an 'organization' for
quality, identify the customer's needs and perception of needs, ensure that bought-out
materials and services reliably meet the required standards of performance and efficiency.
Assess the ability of the organization to meet these needs economically, concentrate on
the prevention rather than detection philosophy, educate and train for quality
improvement and review the quality management systems to maintain progress (Kotter,
1991).
2.4 Conclusion
The supply chain management and product quality of the diary industry in particular has
been basically significant in the improvement of product quality and nutritional standards
but what is left lacking is the establishment of its benefits and weakness and how
. Effective supply chain management has been in a directing a free flowing economic.
16
CHAPTER THREE
3.0 Methodology
3.1 Introduction
This chapter will cover sections namely; the research design, target population, data
collection methods, data processing analysis and problems that will be encountered
during the study.
3.2 Research design
The study will be designed to describe and analyse the variables which will be used to
study the performance of Sameer agriculture under the supply chain and product quality.
3.3 Target population
The researcher will select employees of Sameer agriculture purposely for this study from
different departments within an organization.
3.3.1 Sampling design and size
The study 'will be carried out among 60 respondents using stratified sampling from
different departments because the properties or characteristics of the sample subjects will
be possible to generalize and easily understood.
17
A table showing the various respondents from different departments in a
organizations
Department No of Respondents
Accounting 15
Quality control 20
Marketing 15
Administration 10
Total 60
Sources of data
3.4 Sources of Data
Primary data will be collected directly from the respondents using self administered
questionnaire. Secondary data will be collected from documents and other relevant
records like journals reports, news papers that will be used to supplement primary data.
3.4.1 Data Collection methods
The researcher will use the following instruments to collect data from the field. Self
administered questionnaires which are short, simple to fill and making it easy for the
respondent to answer.
Document review which is relatively cheap as long as records have been availed.
18
3.5 Data analysis and interpretation
The gathered data will be edited and coded. Editing will be done to ensure consistency
and percentages in order to come up with organized information for decision makers.
3.6 Anticipated limitation
The researcher is likely to face a problem of limited funds as a lot of money will be
required for transport, computing the work and motivating the respondents.
Time is also likely to be short for the researcher to balance both research and other
subjects.
Some of the respondents are likely not be in position to offer information for fear of
publicity since it was privatized.
3.7 Duration / time taken
March: Selection of topics and allocation of supervision and approval of topics.
April: Collection of data
May: Finalizing the research work
June and July: Submitting and approval of research reports (proposal).
19
3.8 Proposed Budget
Item Cost (Uganda shs)
Printing and binding 45,000
Stationary 20,000
Transport 30,000
Meals 25,000
Internet surfing 20,000
Miscellaneous 15,000
Total 155,000
CHAPTER FOURPRESENTATION, INTERPRETATION AND DISCUSSION OF FINDINGS
20
4.0 Introduction
This chapter presents the findings and interpretation of the study on the relationship
between supply chain management and product. Quality in business organizations using
Sameer agriculture and livestock as a case study.
The detailed description of the results of the data gathered through questionnaires and
interviews were done basing on the objectives and research questions that were posed in
chapter one. The research objectives included:
To evaluate the effectiveness of supply chain in Sameer agriculture and livestock
limited.
To determine the relationship between supply chain and product quality.
To identify the effectiveness of product quality on sales performance.
4.1 Background
This section presents demographic characteristics of the respondents who participate. In the study:
Table 1: Respondents Sex
Sex Frequency Percentage
Male 45 75
Female 15 25
Total 60 100
Source: Primary dataThe results portray that 75% of the respondents were males and 25% were females. This
implies that men contributed more to the research on supply chain management and
product quality than women in Sameer agriculture and livestock Ltd as working staff.
21
4.2 Length of service
The respondents were asked about their length of service in an organization and the
following respondents were provided.
Table of 2: Respondents' Length of Service in an Organization
Number of years Frequency Percentage
0-1 8 13.3
2-5 42 70
5-8 10 16.6
8-10 0 0
10 and above 0 0
Total 60 100Source: Primary data
The table reveals that 70% of respondents had worked between 2 and 5 years in an
organization. 16.6% had spent 6-8 years and 13.3% had spent between 0 and 1 year in an
organization.
This indicates that majority of the respondents have worked between 2 and 5 years in
Sameer agriculture and livestock limited.
This implies that the respondents had taken quite some time in the organization and were
able to provide the required data to the researcher.
Table 3: Education background
Qualification Frequency Percentage
Diploma 20 33.5
Degree 40 66.6
22
Total 60 100
Source: Primary data
From the table above 66.6% attained degree education, 33.3% attained diploma
education. This indicates that majority of the respondents have degrees, and this implies
that the organization employees qualified people who are able to provide the necessary
information to the researcher.
Table 4: Position of Responsibility
The respondents were asked about their positions of responsibility and they provided the
following respondents.
Position Frequency Percentage
Sales Executive 14 23.3
Accounts Assistant 10 16.6
Marketing Assistant 12 20
Transport Officer 7 11.6
Store keeper 13 21.6
Production Manager 4 6.6
Total 60 100
Source: Primary data
The table indicates that 23.3% of the respondents were sales executive, 21.6% were store
keepers, 20% were marketing assistants, 16,5% were accounts assistants, 11.6% were
transport officers and 6.6% were production managers. This reveals that majority of the
respondents were from sales and distribution and this implies that information collected
from these employees is vital to the research in that they are aware of complaints of
products quality.
23
4.2 Findings on supply chain management practices
In Sameer agriculture and livestock limited research results manifest that Sameer
agriculture and livestock takes supply chain as a fundamental factors to its success from
the questionnaires and interviews. The following were revealed:
Table 5: Composition of supply chain management
The respondents were asked about the composition of the inventories of supply chain
management and the following responses were provided:
Responses Frequency Percentages
Raw materials 15 25
Work in progress 23 38.3
Finished goods 22 36.6
Total 60 100
Source: Primary data
The table above indicates 38.3% agriculture and livestock limited keep work in progress
at the highest level, 36.6% say that it keeps raw materials finished goods, and 25% say it
keeps raw materials. This implies that there is inadequate supply of raw materials in
Sameer agriculture and livestock limited. Therefore the organization should work to
increasing on the level of supply chain management.
Table 6: Record of supply chain
The respondents provided the following responses when they were asked about the
records of supply chain.
24
Response Frequency Percentage
Strongly agree 22 36.6
Agree 17 28.3
Not sure 10 16.6
Disagree 6 10
Strongly disagree 5 8.3 .
Total 60 100
Source: Primary data
Findings indicates that 36.6% stage agree that all inventories in the Sameer agriculture
and livestock are recorded, 28.3% agree, 16.6% are not sure.
This reveals that majority of respondents strongly agree that all supply chain are
recorded, this therefore implies that proper books are maintained in Sameer agriculture
and livestock limited which can be used to prepare financial reports.
Table 7: Inspection of supply chain management
Response. Frequency Percentage
Strongly agree 14 23.3
Agree 16 26.6
Not sure 12 20
Disagree 10 16.6
Strongly disagree 8 13.3
Total 60 100
Source: Primary data
Results manifests 26.6% of the respondents agree all inventories in organizations are
inspected, 23.3% strongly agree, 20% are not sure and 133% strongly disagree.
25
This indicates that the majority of workers agree all inventories are inspected. This
therefore implies that the system is not documented for all workers to be able to
understand and comply with.
Table 8: Supply chain techniques in Sameer agriculture and livestock limited
The respondents were asked about supply chain management techniques and the
following respondents were provided.
Supply chain mgt techniques Frequency Percentage
ABC analysis 15 25
Just m time 15 25
Re-order point 25 41.6
SOQ 5 8.4
Total 60 100
Source: Primary data
The findings indicate that 41.6% of respondents revealed that re-order point is mostly
used in Sameer agriculture and livestock. Just in time is used at an average of 25% and
ABC analysis and SOQ is used at an average of 8.4%
This shows that since the majority of the respondents revealed that the re-order point is
mostly used in Sameer agriculture and livestock limited. It implies that its efficient and
effective in managing supply chain.
Table 9: Technology and supply chain management.
The respondents were asked whether technology affects supply chain management and
the following responses were provided:
26
Supply chain mgt techniques Frequency Percentage
Strongly agree 17 28.3
Agree 23 38.4
Not sure 15 25
Disagree 5 8.3
Strongly disagree 0 0
Total 60 100
Source: Primary data
Table 10: Problem associated with supply chain management
Problem associated with Frequency Percentage
supply chain management
Inadequate 16 25
Documentation problems 5 8.3
Power problems 4 6.6
Poor transportation 3 5
Stock out 10 16.6
Poor storage facilities 12 20
Inaccurate figures 11 18.5
Total 60 100
Source: Primary data
The researcher wanted to find out whether. Sameer agriculture and livestock meets
problems while satisfying its farmers needs and expectations. From the table above its
27
revealed that there are a number of findings reveal that 38.4% agree that technology
affects supply chain management, 28.3% are strongly agree. 26% are not sure and 8.6%
This indicates that technology influences supply chain management in Sameer agriculture
and livestock limited since majority agreed. This implies that if there is a change in
technology the organization has to adjust the level of supply chain in order to meet
customer's expectations and needs.
Table 11: Product quality responsiveness and loyalty
The respondents were asked whether the responsiveness to product quality determines
their loyalty and the following responses were provided:
Response Frequency Percentage
Strongly agree 30 50
Agree 10 16.6
Disagree 8 13.3
Not sure 7 11.6
Strongly disagree 5 8.5
Total 60 100
Source: Primary data
From the table above, 50% of the respondents strongly agree that response to product
qualities. Problems determines their satisfaction, 16.6% agree, 13.3% disagree.
This indicates that since majority of the respondents agree, it implies that the organization
should try to respond to customer's problems so as to influence their loyalties.
28
Table 12: Research and Product quality
The respondents were asked whether undertaking research into product quality makes
Customers contented with the products and the following responses were provided.
Response Frequency Percentage
Strongly agree 15 25
Agree 25 41.6Disagree 10 16.6
Not sure 10 16.6
Strongly disagree 0 0
Total 60 100
Source: Primary data
The findings reveal that 41.6% of respondents agree, 25% of the respondents strongly
agree that overtaking research into service quality determined their satisfaction, 16.6%
are not sure. This show that since the majority of the respondents agree therefore it
implies that Sameer agriculture and livestock limited should try to undertake research
into quality so as to keep its customers contented with the products.
Table 13: Technology and product quality
The respondents were asked whether technology affects product quality and the
following responses were provided:
Response Frequency PercentageStrongly agree 10 16,6
29
Agree 20 33.3
Disagree 8 13.3
Not sure 15 25
Strongly disagree 7 11.8
Total 60 100
Source: Primary data
The table portrays that 33.3% of the respondents agree that technologies affect product
quality, 25% disagree, 16,6% strongly disagree, 13.3% are not sure and 11.8% strongly
disagree. This shows that since majority of the respondents agree that technology affects
product quality, therefore implies that the organization has to improve its technology in
order to improve the quality of its products which in turn satisfies customer's needs,
relationship between supply chain management and product quality,
Pearson correlation coefficient (r) was used to test for the relationship between supply
chain management and product quality. This can be revealed from the table below.
Table 14: The relationship between supply .chain management and product quality
Supply chain management Product quality
Supply chain management Pearson correlation 1.000 6.52
61g (2-tailed) - 000
30
N 60 60
Pearson Correlation 6.52 1.000
Product quality Sig.(2-tailed) 000 -
N 60 60
Correlation is significant at the 0.01 level (2 tailed)
Source: Statistical package for social scientists.
The researcher observed a significant positive relationship between supply chain
management and product quality [ r=0.0652, sig = 000].
The positive correlation coefficient of value of 0.652 indicates a high correlation between
supply chain management and product quality.
This implies that the more the effort towards supply chain management through
implementing systems designed, the better the satisfactory levels among customers. So if
supply chain management is neglected that means that the level of product quality will be
affected negatively in that its customers will be provided with state products and will not
receive the rights quantities they have ordered for.
Conclusion:
The researcher fond out that there is a big relationship between supply chain management
and product quality. According to Pearson correlation., therefore Sameer agriculture and
31
livestock limited should maintain good inventory management technique in order to meet
expectations and needs of its customer
CHAPTER FIVESUMMARY, CONCLUSIONS AND RECOMMENDATIONS
5.0 Introduction
32
The purpose of the study was to establish the relationship between supply chain
management and product quality. In this chapter, the researcher summarizes the main -
findings of this study, makes conclusion and recommendations that are usual for further
research.
5.1 Summary of Findings
The study was carried out to evaluate the contribution of supply chain management on
the product quality in Sameer agriculture and livestock limited. The findings indicates
that supply chain management has an effect on product.
5.1.1 Findings on supply chain management practices in Sameer agriculture and
livestock limited
The findings revealed that supply chain management in Sameer agriculture and is poor
and is the major cause poor product quality. The poor product quality is brought about by
a number of problems associated with supply chain management which include
inadequate supply raw materials, poor storage facilities, poor documentations, stock outs,
power problems and poor transportations of products among others. A lot of effort needs
to be put in place such that proper supply chain management is achieved for example
ensuring that all inventories are recorded and inspected and further more ensuring
effective and efficient supply chain management technique.
5.1.2 Findings on the product quality in S.ameer agriculture and livestock limited
33
Findings revealed that customers are satisfied with' the product .quality of Sameer
agriculture and livestock limited due to the fact their needs are addressed through a
positive response towards them that is improving the quality of products, but. The
satisfaction of customers is threatened by number of problems associated with product
quality such as poor storage facilities, inadequate supply of raw materials, poor
documentation provoke complaints from clients.
5.1.3 Relationship between supply chain management and product quality in
Sameer agriculture and livestock limited.
The findings from chapter four indicated that product quality is positively related to
supply chain management in Sameer agriculture and livestock limited as revealed that
timely address of product quality complaints and staff training can enhance customer
satisfaction.
This is shown by the positive correlation between two variables [r = 0.652, Sig.=OOO).
The correlation coefficient of value of 0.652 indicates a high correlation between supply
chain management and product quality. This has an implication that Sameer has to
anticipate trends and customer demands well ahead 'of time in order to accurately
maintain product quality.
Tag in Fead time makes responding to change difficult and any misjudgment in customer
preferences can be detrimental to earnings as well as customer satisfaction.
5.2 Conclusions:
34
From the findings, it can concluded that Sameer agriculture and livestock limited is
currently satisafying its customer needs and expectations. This can be clearly seen by the
ratio of satisfied to unsatisfied customer and the nature of the complaints put forward to
Sameer agriculture and livestock limited.
5.2.1 Supply chain management
Findings in chapter four indicate that respondents greatly agreed that proper supply chain
management improves on product quality / Sameer. But untimely response to customers'
complaints in case of delays in finished products is perceived and is blamed on supply
chain management.
5.2.2 Product quality
From the findings presented in chapter four. This indicated that customers are satisfied
with product quality provided by Sameer agriculture and livestock limited but there is
need for the organization to address the complaints as soon as possible.
5.3.0 Recommendations
The following recommendations are made from the findings in the study;
All documents should be maintained properly in a safe place and should be reviewed
periodically to ensure that they are error free.
35
Stores should be visited periodically to determine minimum and maximum reorder levels
to prevent stock outs.
Stores should have refrigerators to keep milk products or raw materials m normal
conditions to prevent them from going bad.
Stores should ensure that there is adequate supply of milk and other raw material to
stabilize supply of milk products or raw materials in normal conditions to prevent them
from going bad.
Stores should ensure that there is adequate supply of milk and other raw materials to
Stabilize supply or milk products.
The organization should ensure that adequate power supply is provided in the plant to
Avoid power problems.
Sameer agriculture and livestock limited should open more branches or outlets if they are
to effectively compete with other milk processors in the industry.
Management should try to address customer complaints through providing better.
Products at the time they are required and at a best price.
Since there is a positive relationship between supply chain management and product
quality as observed m chapter four. Sameer agriculture and livestock limited should
improve on supply chain management practices in order to improve on product quality.
36
5.4 Areas for further research
After the researcher has studied the relationship between supply chain management and
product quality in Sameer agriculture and livestock limited and has identified the missing
gaps, these gaps will act as a basis for future researchers to research on: Areas include:.
1) Further research is needed on curbing the problems of inventory management.
2) The effect on stock valuation on customer satisfaction.
37
REFERENCES
Albrecht and Zemke, (2005), Service Amer Ica Homewood III:
Berry (2001), Marketing Services Competing through quality.
Goldratt and Cox, (2002). Production and Operations Management
Hinton, (2001). The Spirit of Service Ubugwe.
International Journal of Research in Marketing Vol. 10 NO.2 pp 153-65s
International Journal of Retail and Distribution Management Vol. 38 No.1 de Rufter
Pollen (1991). The Common thread connecting functions to create a service culture
employment relations today research 1: 1-4
Phillip Kotter and Armstrong (1993). Principles of marketing. Hall, Inc. Upper Saddle
River.9th Edition, Prentice
Kotter and Armstrong (2003). Principles of marketing, 10th edition, prentice - hall. .
Kenneth lysons, (1988). Purchasing and supply chain. Management, fifth edition, DP
Publications.
Keith Lockyer, Alan Muhteman, John Oakland, (1985). Production and Operations
Management, 6th Edition, Prentice Hall.
Tom Cannon, (1981). Basic Marketing 5th Edition, Prentice-Hall.
Tom Cannon, (1992). Basic Management Principles and Practice, sixth edition prentice
hall.
38
