The Effectiveness Of Physical Distribution In Nigerian Bottling Company (A Case Study Of Coca-Cola, Enugu)

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The Effectiveness Of Physical Distribution In Nigerian Bottling Company (A Case Study Of Coca-Cola, Enugu)


Abstract


This research examined The Effectiveness Of Physical Distribution In Nigerian Bottling Company (a Case Study Of Coca-Cola, Enugu). Survey design was employed with the use of a well structured questionnaire. Respondents were selected based on simple random sampling technique. Fifty (50) staff were selected from Coca cola company. Two hypotheses were formulated and tested with the use of Chi-Square analysis. The analysis resulted to rejecting both null hypotheses and hence accepting the two alternate hypotheses. Based on decisions of the tested hypotheses conclusions were reached that there exist relationship between product availability and sales turnover; also, there is correlation between product delivery flexibility and cost efficiency. The Coca cola company of study were recommended to take fresh look at physical distribution and focus on time as a source of competitive advantage


Table of Content


Chapter One:

Introduction

  • 1.1 Background of the study
  • 1.2 Statement of the problem
  • 1.3 Objective of the study
  • 1.4 Research questions
  • 1.5 Hypothesis of the study
  • 1.6 Significance of the study
  • 1.7 Scope of the study
  • 1.8 Limitation of the study
  • 1.9 Definition of terms
  • 1.10 Organizations of the study

Chapter Two:

Review of Literature

  • 2.1 Conceptual Framework
  • 2.2 Theoretical Framework
  • 2.3 Empirical Review

Chapter Three:

Research Methodology

  • 3.1 Research Design
  • 3.2 Population of the study
  • 3.3 Sample size determination
  • 3.4 Sample size selection technique and procedure
  • 3.5 Research Instrument and Administration
  • 3.6 Method of data collection
  • 3.7 Method of data analysis
  • 3.8 Validity of the study
  • 3.9 Reliability of the study
  • 3.10 Ethical consideration

Chapter Four:

Data Presentation and Analysis

  • 4.1 Data Presentation
  • 4.2 Analysis of Data
  • 4.3 Answering Research Questions
  • 4.4 Interpretation of Result

Chapter Five:

Summary, Conclusion and Recommendation

  • 5.1 Summary
  • 5.2 Conclusion
  • 5.3 Recommendation
  • References
  • APPENDIX
  • QUESTIONNAIRE

Chapter One


Introduction

1.1 Background to the Study

As competition in the 1990s intensified and markets became global, so did the challenges associated with getting a product and service to the right place at the right time at the lowest cost. Organizations began to realize that it is not enough to improve efficiencies within an organization, but their whole supply chain has to be made competitive (Tan, Lyman and Wisner 2002).

The understanding and practicing of physical distribution management has become an essential prerequisite for staying competitive in the global race and for enhancing profitably,(Moberg, Cutler, Gross, and Speh 2002). Council of Logistics Management (CLM) defines physical distribution management as “the systemic, strategic coordination of the traditional business functions and tactics across these businesses functions within a particular organization and across businesses within the supply chain for the purposes of improving the long-term performance of the individual organizations and the supply chain as a whole”.

The goal of physical distribution system is to integrate both information and material flows seamlessly across the supply chain as an effective competitive weapon (Childhouse and Towill 2003, Feldmann and Müller 2003).

The concept of physical distribution has received increasing attention from academicians, consultants, and business managers alike (Tan, Lyman and Wisner 2002, Feldman and Müller 2003, Van 1998). Many organizations have begun to recognize that physical distribution is the key to building sustainable competitive edge for their products and/or services in an increasingly crowded marketplace (Jones 1998).

In the transportation and distribution (T&D) sector, as in many others, it is important to have a good performance in operations. In order to achieve high performance, it is necessary to know which operational factors are critical for success and which are less important. Only then can management focus attention on those factors that have a strong effect on performance.

Challenges exist in terms of identifying appropriate performance measures for the analysis of supply chain (Arzu Akyuz, & Erman Erkan, 2010; Beamon, 1999). Researchers have thus far been content in limiting their choice of performance measures. Customer responsiveness has also been recognized as an important dimension of physical distribution management performance (Christy & Grout, 1994). In addition, Lee and Bullington (1993) identify supply chain flexibility as an important measure of physical distribution management performance.

In order to capture the construct of performance measure, all the different dimensions of physical distribution management performance need to be considered simultaneously. In addition, it is recognized that since physical distribution has firm level implications and it becomes imperative to measure effects of physical distribution management performance on organizational performance measures (Green, McGaughey & Casey, 2006).

The purpose of this study is therefore to empirically test the effect of physical distribution on organizational performance. Identifying the relationships among physical distribution practices, competitive advantage and organizational performance.


1.2 Statement of the Problem

Distribution firms have always researched for methods to minimize the cost and maximize flow of shipping each unit of commodity to and fro across the supply and demand nodes. Though, warehousing has smoothen out the fluctuations in demand and supply at market place yet major constraints are been faced in assigning supply and properly matching orders placed during redistribution to final retailers outlets. In recent times logistics firms are faced with greater problems of optimizing the whole system so as to develop strategies that minimizes cost and maximizes flow.

Some of the constraints affecting effective physical distribution in Coca cola company are Setting geographical coverage area for each warehouse to avoid conflicting customer coverage; efficiently utilizing space, resources and capacity of warehouses that will be optimal to avoid diseconomies of scale from under-utilization of warehouses and allocation of the flow of products and balancing of routes from each salesman to retailers’ outlets.

This research study tends to address the above issues and challenges facing organizations as they strive to maximize effectiveness and efficiency of their distribution processes and activities.


1.3 Aim and Objectives of the Study

The aim of this research project is to examine The Effectiveness Of Physical Distribution In Nigerian Bottling Company (a Case Study Of Coca-Cola, Enugu).

The objectives of this study include the followings;

  1. To ascertain the relationship between product availability and sales turnover.
  2. To evaluate the correlation between product delivery flexibility and cost efficiency.
  3. To determine the relationship between customer responsiveness time and reduced inventory cost.
  4. To examine if warehousing has any influence on market share of Coca cola company.

1.4 Relevant Research Questions

In order to achieve the purpose of this research study, the study will attempt to provide answers to the following research questions in order to arrive at a logical conclusion.

  1. Does any relationship exist between product availability and sales turnover?
  2. Is there correlation between product delivery flexibility and cost efficiency?
  3. Is there any significant relationship between customer responsiveness time and reduced inventory cost?
  4. Does warehousing have any influence on market share of Coca cola company?

1.5 Research Hypotheses

The following tentative statements can be related to the work study and they will be tested later.

Ho: That the poor state of roads has no significant impact on effective distribution of goods.

Hi: That the poor state of roads has significant impact on effective distribution of goods.


1.6 Significance of Study

The study is relevant to managers of Coca cola company to expose them to systematic means of distributing their products for greater performance.

This study is also of paramount importance to academicians and practitioners as the proposed framework is expected to uncover many neglected relationships that are of interest to managers. In addition, specific patterns of physical distribution practices would also be revealed which would further encourage managers to implement this technique and possibly improve both physical distribution management and organization performance.

Finally, the study is a contribution to knowledge which could serve as a springboard for students, businessmen and managers who are interested in pursuing a career in the field of physical distribution.


1.7 Scope of Study

The premise on which this study is based is the effect of physical distribution on organizational performance in Coca cola company. The study is limited to organizational performance with respect to physical distribution. The scope of the study will cover Coca cola company at enugu state.


1.8 Limitation of the Study

A lot of problems were faced when carrying out this study. The first big restriction was the time the study was supposed to be finished, combined with the fact that the research was performed alongside regular academic work. Another key quandary was finance owing to the present inflationary trends to the country transportation problems and risk of being on the road to various libraries, for vital information and materials. Inadequate literature was the third major concern. This study was able to produce meaningful materials that seem important to the subject, despite the above set backs.


1.9 Definition of Terms

Physical Distribution:

Handling, moving, and storage of goods from the point of origin to the point of consumption or use, via various channels of distribution.

Postponement:

The practice of moving forward one or more operations or activities(making, sourcing and delivering) to a much later point in the supply chain.

Physical Distributor:

The provider of services who has entered into a physical distribution agreement with the principal and accordingly has agreed to undertake physical distribution.

Wholesalers:

Makes marketing systems more efficient by buying a variety of products, in fairly large quantities, and selling these items on to other businesses that require relatively small quantities of a variety of goods.

Acquisition Performance:

This is perceived performance indicator that measures performance of organisations based on new customers generated, increase in sales growth and market share of such organisations.

Retention Performance:

This is perceived performance indicator that measures performance of organisations based on customer retention ability of such organisations.

Organizational Performance:

Refers to how well an organization achieves its market-oriented goals as well as its financial goals.

Delivery:

The moment in which the goods, after the agreed work has been carried out by the physical distributor, are made available to the principal or entitled party.


1.10 Organizations of the Study

The chapter one consist of the introductory part of the study which includes the study background, the statement of the research problem, the study objective and scope of the study.

The second chapter is a critical review of other literatures relevant to the study and its objectives including the theoretical framework for the study. While the third chapter is methods of data collection, sampling and data analysis used in conducting the study. The fourth chapter centres around the research findings including an analysis of how it relates to previous findings. The fifth chapter consists of the summary of findings, conclusion and recommendations base on the study objectives


Chapter Five


Summary, Conclusion and Recommendation

5.0 Introduction

This is the last chapter of this survey research. The major highlight of each chapters that form the bedrock of this study will be summarized, while the conclusions will be drawn thereof and recommendations are given based on the outcome of the findings.


5.1 Summary

This project is concerned with “The Effectiveness Of Physical Distribution In Nigerian Bottling Company (a Case Study Of Coca-Cola, Enugu)” pricing and promotion are basically essential features of product distribution system in business organization with the fact that, production is not complete until the product and service rendered, gets to the final consumer.

The distribution mix is all those function marketers perform to move goods from producers to consumers. These intermediate consumers are wholesalers and retailers. They are known as marketing middlemen because they are in the middle of a distribution network that connects producers with consumers.


5.2 Conclusion

From the findings so far, the researcher discovered that, distribution efficiency declines when the company fail to meet with delivery date. This leads to customers “bad-mouth” the company and eventually sales fall. When management responds by increasing sales force incentives to secure more force succeeds but once company slips in meeting delivery dates the sales force declines.


5.3 Recommendations

One of the problems identified in the impact of effective distribution system in an organization is their failure in meeting delivery date. In this instance, the researcher hereby suggest that management should search for and employ distribution economies in inventory control, warehouse location, and transportation modes so as to meet delivery dates as at when due.

Another findings in relation to the hypothesis, to alleviate the problem of distribution system in an organization, the researcher recommends that there should be increase in the number of workers in distribution section so as to meet delivery dates of the numerous customers available.

In respect of poor road network, organization should construct road leading to her major market to ease distribution. Federal government should also encourage companies by improving on the road network of the country to allow free movement of goods from the factory to customers.

Research and development department should be established so as to furnish information to the management about problems facing any department in the organization.

Finally, remuneration should be increased to equate the responsibilities as motivation leads to increase productivity.


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