Effect of Supply Chain Management on Organizational Performance a Case Study of Dangote Flour Mill Ilorin, Nigeria
CHAPTER ONE
Research Objectives
The study objectives were:
- To establish the extent of supply chain management practices employed by Dangote flour mill in
- To establish the relationship between supply chain management practices and the organizational performance of Dangote flour mill inIllorin.
CHAPTER TWO
LITERATURE REVIEW
Supply Chain Management
The simultaneous integration of customer requirements, internal processes, and upstream supplier performance is commonly referred to as supply chain management (SCM). While SCM has become popular, there are in practice few examples of truly integrated supply chains (Handfield and Nichols, 2008). Although the literature is replete with reports of firms that developed strategic supplier-buyer partnerships, outsourced non-core competencies, and adopted strategic customer relations practices, few companies have succeeded simultaneously on all these fronts. Scott and Westbrook (1991) describe supply chain management as the chain linking each element of the manufacturing and supply process from raw materials through to the end user, encompassing several organizational boundaries. Thus, SCM encompasses the entire value chain and addresses materials and supply management from the extraction of raw materials to the end of its useful life. It aims at improving value delivery to customers; relying on just-in-time system; eliminating waste; getting the involvement of all stakeholders in the value creation process as well as working closely with suppliers.
According to Ireland and Webb (2007), SCM continues to be adopted by organizations as the medium for creating and sustaining a competitive advantage and points out that such a displacement is understandable considering the potential benefits of successful supply chain management. These benefits attributed to SCM include inventory reduction, improved delivery service, and shorter product development cycles. On their part, Slack et al., (1995) observed that the objectives of SCM include focusing in satisfying end customers, to formulate and implement strategies based on capturing and retaining end- customer business and also to manage the whole chain effectively and efficiently.
The success of a SCM system is dependent on adopters developing specific capabilities (Chandra and Kumar, 2000). These, they observe, include the ability to develop a flexible organization, develop a trusting relationship with its suppliers, seek total supply chain coordination, enhance communication to reduce uncertainty and inventory levels, outsource non-core competencies, implement build-to-order manufacturing, reduce inventory and minimize costs. Attaining these capabilities requires employees who are flexible in their roles, have a broad set of skills, are adaptable to reorganization, able to work in boundary-spanning responsibilities and are innovative. Companies said to be effective in their SCM practice put a lot of emphasis on developing their human resources through training and retraining of their employees (Gowen and Tallon, 2002).
CHAPTER THREE
RESEARCH METHODOLOG
Research Design
A descriptive cross sectional research design was used to establish the effect of SCM practices in the performance of Dangote flour mill in Illorin. A similar research design was used by Chege (2012) successfully. A descriptive research designed was adopted because the study was concerned about a univariate question in which the researcher asked questions about the size, form, distribution and existence of SCM practices on performance of dangote flour mill. This permitted the researcher to make statistical inference on the broader population and generalize the findings to real life situations and thereby increase the external validity of the study.
CHAPTER FOUR
DATA ANALYSIS, RESULTS AND DISCUSSION
Introduction
The research objective was to establish the effect of supply chain management practices on organizational performance of Dangote flour mill. This chapter presents the analysis, findings and discussion. The findings are presented in percentages and frequency distributions, mean and standard deviations. A total of 20 questionnaires were issued out in which two questionnaires. Of the 20 questionnaires issued out, only 15 were returned. This represented a response rate of 75% and this was considered satisfactory for the analysis.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATIONS
Summary
The study found out that the Dangote flour mill in Illorin practice several forms of supply chain management practices in order to gain competitiveness in their operations. The level of competition in the sector has resulted to the firm employing supply chain practices as a source of competitive advantage. It adopts different supply chain practices depending on the activities that they are engaged in and also which supply chain practice will yield better competitiveness to the organization. These firms set up their processes based on knowledge of existing customer partnership, level of information technology adoption, information sharing, knowledge management reverse logistics and green supply chain practices. It was found that the firm employ different supply chain practices depending on which forms will give it a better advantage.
It was found out that supply chain management forms part of the firm’s long-term strategy to gain competitive advantage over its competitors and thus the activity is seen as a unique capability that adds value to the product. The supply chain practices employed by the firms are integrated and coordinated by the top management and in consideration of the competitive nature of the industry at present it becomes imperative that all the firms devote more resources towards implementing other supply chain practices that have not be adopted. Managing the supply base has a significant impact on growth as well as the overall performance of the firm.
The firm’s performance was found to arise from different forms of supply chain practices and these has resulted in reduction in the operating costs borne by the firm, increase in the customer loyalty which in most cases will lead to the increase in the firm’s customer base and market share. The study also found out that with the firm’s adoption of various supply chain practices in its operation, the accuracy of order processing, reduction of response time for product volume changes and improved market share. Further, it was found out that adoption of these supply chain management practices has led to improved corporate image of the organization with all other stakeholders, promote longer term inter-firm relationship, increased sales, improved customer satisfaction, improved management of threats from competitors and sustainable production and consumption of products.
Conclusion
Improving product and process quality have been well established as ways by which organizations can respond to increased global competition. However, the challenges facing organizations at the present business environment go beyond improving quality. Organizations are increasingly faced with the reality that they cannot exist in isolation but are one piece of a complex chain of business activity. The results of this study support this notion and confirm that all three major components of a supply chain; suppliers, manufacturers, and customers must be effectively integrated in order to achieve financial and growth objectives. Moreover, the results indicate well defined linkages between specific practices and performance. Successful management of the supply chain is the key to the long term success of an organization. This cannot occur however if organizations implement business practices in an arbitrary-, uncoordinated manner, or if they direct scarce financial resources to initiatives that are unlikely to yield positive outcomes.
Recommendations for further research
Future research is needed to extend the findings of this study. There is a need to understand how future strategies will unfold given different competitive objectives. An additional question is how companies will share financial rewards.
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