CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

A supply chain is a sequence of processes and flows that aim to meet final customer requirements and take place within and between different supply chain stages. The supply chain not only includes the manufacturer and its suppliers, but also (depending on the logistics flows) transporters, warehouses, retailers, and consumers themselves. It includes, but is not limited to, new product development, marketing, operations, distribution, finance, and customer service (Van der Vorst,  2004 & Ayalew,  2018).

Supply chains encompass the companies and the business activities needed to design, make, deliver, and use a product or service. Businesses depend on their supply chains to provide them with what they need to survive and thrive. Every business fits into one or more supply chains and has a role to play in each of them. The pace of change and the uncertainty about how markets will evolve has made it increasingly important for companies to be aware of the supply chains they participate in and to understand the roles that they play. Those companies that learn how to build and participate in strong supply chains will have a substantial competitive advantage in their markets (Ayalew, 2018).

The understanding and execution of supply chain management (SCM) practices have a key role for an organization in staying competitive and for enhancing profitability in the increasingly competitive global marketplace (Childerhouse,  & Towill, 2003 ; Haile, 2017).

Organizations are facing different kinds of challenges in their effort of competing in today’s dynamic global markets. To remain competitive, organizations must recognize the importance of effective supply chain practices that improve not only their organizational performance but also coordinate with their supply chain partners to improve their joint performance. Yet, despite the significant advances in research and practices, many organizations continue to struggle to understand the complex issues associated with the coordinated planning and supply activities amongst the members of their supply networks (Cook, Heiser,  & Sengupta, 2011).

The beer industry has gone through much change in recent years with numerous entrants in the better beer segment and consolidation among larger brewers. Brasseries Du Camerron, UCB, Heineken, and Guinness Cameroon SA, are the 4 beer companies operating in Cameroon which collectively run more than 4 factories. Many and wineries also make part of Cameroon’s growing beverage industry. Since the industry is extremely competitive pursuing effective supply chain management is the best methodology to reduce costs, increase customer satisfaction, better utilize assets, and build new revenues (Haile,  2017).

Diageo is the 11th largest company in the UK. It has bases in 180 countries around the world, with growing markets in Africa, as well as substantial interests in Europe and North America. It is a global leader in beverage alcohol with an outstanding collection of brands across spirits and beer categories. These brands include Johnnie Walker, Crown Royal, J&B, Buchanan’s and Windsor whiskies, Smirnoff, Cîroc and Ketel One vodkas, Captain Morgan, Baileys, Don Julio, Tanqueray, and Guinness (Mehabaw,  2017).

Guinness Cameroon, was established in with an initial capital of and a production capacity of  The principal aim of Gunness Brewery is to meet the customers’’ requirements for quality beer and offer customers more choices in the market without affecting the environment. Thus, the Brewery is highly committed to waste reduction, waste management, and satisfying customers’’ needs and expectations. Guinness Cameroon Brewery utilizes state-of-the-art technology and has a highly qualified professional workforce that enables it to compete on the export market with the leading international beer producing and marketing companies (Mehabaw, 2017).

Due to the number of rival companies expanding both locally and globally, companies not only have to reestablish themselves to produce higher-quality products and services, to decrease wastes, and try to be able to respond to the market but also to handle their supply chain management efficiently (Kindie, 2017).

Effective supply chain management can provide a major source of competitive advantage. A successful SCM implementation is expected to enhance the relationship between upstream suppliers and downstream customers, and thereby increase customer satisfaction and firm performance. The goal of a supply chain manager must therefore be to link the end customers, the channels of distribution, the production processes, and the procurement activity in such a way that customers’ service expectations are exceeded and yet at a lower total cost than the competition (Ibrahim,  & Hamid, 2014).

Any weaknesses in the supply chain management can severely affect the production and delivery of products to consumers. This may have negative impacts on the profitability of the processing firms. Lack of awareness of upcoming technologies telecommunications and IT impediments and energy supplies unreliable (Nyanchoka, 2017). Effective supply chain management practices are important to build and sustain competition in the products and services of the firm. The performance of the supply chain is influenced by managing and integrating key elements of information into its supply chain. To achieve effective supply chain integration the firms need to implement information technology that will see them gain competitive advantage through numerous supply chain dimensions such as quality, cost, flexibility, delivery, and profit (Mwale, , 2014).

Supply Chain Management practice in Cameroon is still in the infancy stages, there are small numbers of manufacturing companies integrating it into their organizational system. Besides, there are some challenges in the brewery industry that resulted in reducing the quality and demand of products manufactured domestically. One of the problems is the poor SCM practice of organizations in the brewery industry (Ayalew, 2018).

The brewery industry is extremely competitive and faces new opportunities and challenges. Changing consumer demands and preferences require new ways of maintaining current customers and attracting new ones. In a majority of beer markets, there has been a steady shift towards premium brands that offers health benefits. As a result, there is a focused switch by brewers from mainstream brands to premium brands to enhance their growth prospects. This in turn has resulted in an increasing need to have an efficient supply chain network and to reduce operating expenses (Haile, 2017).

1.2. Statement of the Problem

The supply chain is a system of organizations, people, technology, activities, information, and resources involved in moving a product or service from supplier to customer. Supply chain activities transform natural resources, raw materials, and components into a finished product that is delivered to the end customer. The Council of Supply Chain Management Professionals defines supply chain management as “the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities”. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers (Aboneh, 2017).

The problem to be explored in this study was to establish the relationship between the variables of supply chain management practice and organizational performance of Guinness Cameroon. Strategic supplier partnership, customer relationship, level of information sharing, and quality of information sharing are the variables to be selected.

1.3 Basic Research Questions

1.3.1. Main Research Questions

What are the influences of Supply Chain Managementon the performance of  Brewery Firms in Cameroon ?

 Specific Research Questions

1. 1. What is the effect of strategic supplier partnership on organizational performance?
2. What is the effect of customer relationships on organizational performance?
3. 3. what is the effect of information on the performance of Guinness Cameroon SA?

1.4. Objective of the Study

1.4.1. General objective

The major objective of this study is to investigate the effect of Supply Chain Management Practices on the Performance of Brewery Firms in Bamenda Guinness Cameroon SA.

1.4.2. Specific objectives

1. To find out the effect of strategic supplier partnership on organizational performance?
2. To find out effect of customer relationships on organizational performance?
3. To find out effect of information on the performance of Guinness Cameroon SA?