CHAPTER ONE

INTRODUCTION

1.1 Background of the study

Today’s highly competitive business dynamic, demands entrepreneurs to focus their efforts on maintaining a supply chain that runs like a well-oiled machine. Fleet management have prove to be a critical component of oiling the supply chain, since it manages the transport function throughout the supply chain. Supply chain performance isn’t just a goal but a necessity in Today’s business world,most businesses are outsourcing distribution and transportation services from third party logistics companies to reduce major investments such as,hiring and managing fleet personnel and purchasing fleet trucks. Outsourcing is advantageous but firms need to be cautious of preventing their supply chain from collapsing, by outsourcing transportation from 3PLs who have an inefficient fleet management function, indeed poor transportation management can bring supply chain to its knees. Supply chain fleet managers are uncelebreted heroes of Today’s economy .They play a very significant role by orchestrating the vital link between suppliers and consumers, they are responsible for ensuring the uninterrupted flow of commerce despite the numerous challenges affecting productivity ,safety and customer satisfaction (N Kelvin 2016)

A report by world 2005 on issues in trade logistics in Kenya,shows that transport costs and delays are significant in supply chain and that the fleet running costs in Africa amounts to 75% of the operating costs while in Europe it amounts to 60%,Kenya was seen to be far from being an efficient sub regional logistics hub.it was established that it is more expensive for express carriers to move cargo between East Africa than to or from Europe. A study byTurku school of Economics and business administration in Finland in 2004 rated Belgium, Switzerland and hongkong as the leading countries in over all logistics perception index with Kenya rank at position 70 which is an indication of low level of logistics services and specifically in regard to transportation which is a risk to the supply chain. According to Asvin 2008 today more goods are transported worldwide than ever before,while globalization and liberalization of marker will lead to even more trade in future.From 1970 to 2000 the inland transportation within the European union has almost doubled. Therefore the success of global supply chain in different is hinged on effective fleet management to ensure smooth movement of goods across the supply chain. Coyle et al 2015,argued that transportation is a critical ingredient for overall supply chain performance and in general the fleet management function is view as the glue that holds the supply chain together..

According to cecere 2015,we are living in times when the growth of global supply chain have stalled and many supply chain are stuck in driving supply chain performance which is attributed poor fleet management with low ICT applications, ineffective vehicles routing and poor customer service. Globally the application of ict is as low as 46%,according to survey done by Bloomberg 2014 while another survey by saddle Creek corporations 2011 reveal that the customer service offered by logistics services providers is relatively low.Transportarion has been cited as a burning platform for firms working towards cutting supply chain cost,fleet management function is not faring well globally with a substantial number of vehicles operating along the distribution network with multiple mechanical issues which put the supply chain at risk.

Fleet management in Cameroon is not in any way different from global perspectives as it manifest numerous inefficiencies as well  which are of significant impact in the local supply chain. James and Alfred 2014 reveals that they is poor fleet management in manufacturing and transport companies, where transport and logistics where viewed as an area in which cost appear out of line with the benefits and services accruing to the customers.it was from this perspective therefore that the government of Cameroon deemed the issue of promotion international and national trade to be the objective of the national interest,and sought to advance shipment of agricultural and wood products as the country’s key commodities. A major obstacles to this goals however is the lack of adequate distribution systems.From this stand point,the issue of road improvement is a critical one.

Simon 2013 review that a greater number of roads will continue to be flooded during the raining season,and while the percentage of paved roads increase from 7.6%in 1982 to 12.3%in 1995,the figure remain low and ongoing need for better road maintenance and rehabilitation capacity is recognized so as to  better the transport sector hence the supply chain performance of organization in the country, it is important to note that fleet management for most organizations is seen as having short term effects and short respond period by Martinez 2010.There are various services offered through transport and most of this are base on Background information.Many companies have issues managing their fleet,which affect supply chain management.

1.2 Statement of the Research Problem

Despite the development of technological control tools,like the global positioning system (GPS),satellite technology, barcodes to ensure better fleet management, companies are still face with the challenge of effectively and efficiently managing their fleet so as to ensure supply chain performance. These problems include, poor vehicles acquisition, insufficient vehicles, poor communication, repair and maintenance, fuel management,shortage of drivers .

Apparently, many companies witness a decrease in customer satisfaction delayed in deliveries ,due to longer lead time,which is the time taken in preparation of bids,making an award and placement of an order,the delivery time and the duration of time between receipt receipting and actual payment.increase in operational cost,due to the type of maintenance policy (corrective maintenance)put in place.vehicle repair and maintenance is done only when they is a breakdown,hence leading to a poor supply chain performance.

Fuel management poses a significant challenge to fleet managers, such as, vehicles may consume more fuel than necessary due to factors such as,poor driving habits,poor roads Furthermore, unauthorized fuel usage can result in financial losses for organizations, moreover,inadequate tracking of fuel usage and discrepancies in fuel records can make it challenging to identify and address issues promptly

Efficient vehicle acquisition is essential for maintaining a reliable fleet. However this has been a challenge to companies selecting the right vehicles for their businesses, considering factors such as pay load capacity, fuel efficiency, maintenance requirements and costs can be complex.Further,limited funding may restrict organizations ability to acquire new vehicles or upgrade their existing fleet with more efficient models.in addition to this,delay in vehicle procurement such as production, ordering and delivery can impact operational timelines and result in down time.

Repair and maintenance is another challenge is another challenge that has lead to a longer lead time (customer order cycle time),it is the time in which a customer is ready to wait for an order to be served. Companies are relying mostly on reactive maintenance rather than preventing maintenance which can lead to unplanned breakdown, increase repair costs and vehicles down time.balancing repair cost with the need for quality repairs can be challenging especially when dealing with aging vehicles or unexpected breakdown. This research seeks to find out fleet management and its effects on supply chain performance. As a result of the above mentioned challenges, some research questions were realized to guide the study.

1.3 Research Questions

Main Research Question

What is the impact of fleet management on supply chain performance

Specific Research Questions

1.what is the effects of vehicle maintenance on supply chain management

2.What is the effects of vehicle acquisition on supply chain management

3.what is the effect of fuel management on supply chain management

1.4 Research Objectives

Main Research Objective

To examine the impact of fleet management practices on supply chain performance

Specific Research Objectives

1.To assess the effect of vehicle maintenance on supply chain management

2.To examine the effect of vehicle acquisition on supply chain management

3.To determine the effect of fuel management on supply chain management