THE EFFECT OF SUPPLY CHAIN MANAGEMENT ON ORGANIZATIONAL PERFORMANCE IN DANGOTE FLOUR MILL ILORIN, NIGERIA
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FIRST CHAPTER
INTRODUCTION
1.1 CONTEXT OF THE STUDY
Organizations implement a variety of business improvement strategies to enhance performance. As competition rises, so do the difficulties associated with delivering a product or service at the right place, at the right time, at the lowest overall delivered cost. Organizations in the manufacturing industry have begun to recognize the potential benefits and significance of cooperative and strategic buyer-supplier relationships. They have begun to include critical suppliers in decisions on resource management (Morgan and Monczka, 2006). Instead of relying on acceptance sampling to determine the quality of incoming materials and component parts, manufacturers purchase from a smaller number of qualified or certified suppliers and embrace the concept of supply base management in an effort to reduce costs by reducing inventory and enhancing efficiency throughout the supply chain (Watts and Hahn, 2003). In addition, firms have come to place a greater emphasis on customer-driven corporate policies that simultaneously pursue customer satisfaction, quality and productivity improvement, and cost reduction objectives.
SCM practices have been defined in various other ways; Koh et al. (2007) defined SCM practice as the set of activities an organization engages in to support effective management of its supply chain; as the methodologies utilized in integrating, managing, and controlling the supply chain.
Coordination of supply, demand, and relationships in order to effectively satisfy customers (Wong et al., 2005); as tangible activities/technologies that play a significant role in the collaboration of a focal firm with its suppliers and/or customers (Vaart and Donk, 2008); and as the strategy to involve suppliers in decision making, encouraging information sharing, and seeking new ways to integrate upstream activities. As a result, it entails establishing consumer contacts through customer feedback in order to integrate downstream operations and delivering orders directly to clients (Chow et al., 2008). It has been asserted that the concepts and practices of SCM improve the performance of organizations that employ them.
The overall objective of supply chain management is to improve value delivery to customers by utilizing a just-in-time approach, minimizing waste, involving all stakeholders in the value creation process, and collaborating closely with suppliers. According to Ireland and Webb (2007), SCM continues to be adopted by firms as a means of building and retaining a competitive edge, which is understandable given the potential benefits of effective supply chain management. Inventory reduction, enhanced delivery service, and quicker product development cycles are some of the benefits attributable to supply chain management. The objectives of supply chain management, according to Slack et al. (1995), include focusing on pleasing end customers, formulating and implementing strategies focused on capturing and keeping end-customer business, and managing the entire chain effectively and efficiently. SCM is one of the most efficient methods for companies to enhance performance (Ou et al., 2010). For the purpose of supply management
Improving the planning and management of operations such as materials planning, inventory management, capacity planning, and logistics (Chandra and Kumar, 2000) with suppliers and customers is required to realize improvement in enterprise performance.
Supply chain management is the simultaneous integration of client requirements, internal procedures, and upstream supplier performance (SCM). Supply chain management (SCM) is an integrated method that begins with the planning and control of materials, logistics, services, and information flowing from suppliers to manufacturers or service providers to the end customer; it marks a significant shift in company management approaches (Fantazy et al., 2010). SCM is one of the most efficient methods for companies to enhance performance (Ou et al., 2010). It is required to improve the planning and management of activities such as materials planning, inventory management, capacity planning, and logistics with suppliers and customers in order to manage the supply chain operations for the aim of realizing an improvement in corporate performance.
Individual supply chain practices cannot improve efficiency on their own, as efficiency can only be attained through the interplay of multiple supply chain practices. For efficient SCM, a complete effort should be undertaken to improve all supply chain functions within a company, and the emphasis of supply chain practices should first change from functional and independent to general and integrative. This implies that the performance of each supply chain practice should be evaluated based on the practice’s effect on the efficient integration of supply chain processes as a whole, and that the achievement of SCM integration can be made possible through the systematic application of various supply chain practices. Bowersox (2009) has the same viewpoint as the preceding argument.
Organizational performance is the end accomplishment of an organization and includes the existence of specific goals to be attained, a timeframe for reaching those goals, and the achievement of efficiency and effectiveness (Gibson et al., 2010). Organizational performance, on the other hand, relates to an enterprise’s capacity to achieve objectives such as high profit, quality product, huge market share, strong financial outcomes, and survival at a predetermined period utilizing an appropriate action approach (Koontz and Donnell, 2003). Organizational performance can also be used to compare a business’s profit level, market share, and product quality to those of other businesses in the same industry. Consequently, it is a reflection of the productivity of an enterprise’s members as measured by income, profit, growth, development, and expansion.
All organizations, whether large or little, public or private, for-profit or not-for-profit, struggle to survive. In order to exist, they must achieve success (effective and efficient). In order to ensure their prosperity, businesses must execute admirably. Performance is at the core of every managerial process and organizational structure, and is consequently regarded as a crucial term in the subject of strategic management. Organizational performance encompasses a variety of activities that aid in creating the organization’s objectives and tracking its progress towards those objectives (Johnson et al., 2006). Adjustments are made to achieve objectives more efficiently and effectively. Business executives and owners are frequently dissatisfied with their organization’s performance. This is the case because, despite the fact that the personnel are diligent and busy with their responsibilities, their organizations are unable to accomplish the desired results. Rather than the efforts of the personnel, unanticipated events and good fortune contribute more to the achievement of results. Nonetheless, for a firm to be successful, its functions must be outlined and carried out. It is essential for an organization to build strategies that are based on the talents that would improve the organization’s performance.
1.2 DESCRIPTION OF THE PROBLEM
Faced with a competitive global market, firms have reduced, refocused on core competencies, and attempted to gain competitive advantage by better managing purchasing processes and supplier relationships. The supply base management refers to how enterprises use their supply processes, technologies, and capabilities to gain a competitive advantage (Farley, 2007) and how the production, logistics, materials, distribution, and transportation functions are integrated inside organizations (Lee and Billington, 2002). Numerous businesses have limited their supply base in order to manage relationships with important suppliers more effectively. Purchasing organizations are cultivating cooperative, mutually advantageous relationships with their suppliers and perceiving them as virtual extensions of their own organization.
Recent data suggests that innovative firms are moving their quality emphasis from inspection to the design of quality into their products, accompanied by process control and process improvement initiatives (Greene, 1993). These activities, especially when done concurrently with supply base management, are cited as strategic strategies for attaining a competitive edge. Other quality improvement strategies parallel those incorporated in the evaluation criteria for prizes such as the Baldrige and Deming awards (Black and Porter, 2006). These include strategic quality planning and the leadership of senior management.
Numerous research on SCM implementations in manufacturing companies (Sandberg, 2007) and major retailer organizations (Sandberg and Abrahamsson, 2010) have demonstrated the significance of SCM. Mwingi (2011) and Andebe (2011) conducted research and discovered that exchanging promotional information between retailers and producers is beneficial, particularly on the global market. These studies have not exhaustively examined the impact of SCM methods on the performance of a business. Therefore, this research will determine the impact of the Dangote flour mill, Illorin supply chain management on organizational performance.
1.3 RESEARCH OBJECTIVES
The aims of the study were:
Determine the extent of Dangote wheat mill’s supply chain management practices
Determine the connection between supply chain management methods and the organizational performance of the Dangote flour mill in Illorin.
Research Concerns
What supply chain management strategies does the Dangote flour mill in Illorin employ?
What is the relationship between Dangote’s flour mill in Illorin’s supply chain management methods and its organizational performance?
1.5 Importance of the Research
The management of the Dangote flour mill in Nigeria would benefit from the study as they will be able to understand the significance and influence of an effective supply chain and the role it will play in their performance. The findings of this study will be incorporated into action plans that will assist the Dangote flour mill in gaining a regional and local competitive edge.
The study will also produce a monograph that may be repeated in other industries that face intense rivalry from overseas competitors. Importantly, this research also aims to provide some practical recommendations about the impact of supply chain management on a company’s performance. The policymakers will gain an understanding of the agriculture industry’s dynamics and supply chain practices; as a result, they will be better equipped to establish appropriate regulations to control the sector.
The range of the study
The subject of the investigation was the connection between supply chain management and operational performance at Dangote Flour Mills in Illorin. The scope of the investigation was limited to the operations and personnel of the Illorin mill. During the course of conducting this research, the researcher was constrained by financial and time restrictions.
THE EFFECT OF SUPPLY CHAIN MANAGEMENT ON ORGANIZATIONAL PERFORMANCE IN DANGOTE FLOUR MILL ILORIN, NIGERIA
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