CHAPTER ONE

1 INTRODUCTION

       In this chapter the researcher will be looking at the background to the study, delimitations of the study, delimitation of the study, statement of the problem, research questions, research objectives, research hypothesis and significance of the study.

1.1 Background to the Study

    As the business environment is uncertain nowadays, it is very hard to be constant at success, so the business must respond to the uncertainty and meet the customer needs as they are changing day by day Gerwin (1987) , Huber(1984), Narasimhan and Das(1999.) Logistics and the management thereof play a key role in, and have an important impact on, both the well-being of a company and the economy of a country. The objective of logistics is to consistently supply the correct quantity of the correct product to a customer, in the right condition and at the required place, time and price. The effectiveness and efficiency with which a company and its logistics function achieve this has a significant impact on the competitiveness and success of the company.

       Logistics management, originated by the British Army far before the outbreak of the First World War where a military supply chain system was developed by building infrastructure such as; roads, railroads, ports, airfields, supply stores and vehicles to transport weapons and troops.

Lynch (2000), for example, quotes Ackerman (2000) who suggests that one of the first business logistics arrangements is described in the Bible, in Genesis Chapter 41. This is an account of the seven years of plenty during which the people in the land of Egypt accumulated crops for the predicted seven years of famine. The grains and other fruits of their labours were taken to storehouses for safekeeping the grain was placed in storehouses for later redistribution during the time of need. Lynch goes on to point out that in Europe, a number of logistics service providers can trace their origins back to the Middle Ages with the first commercial warehouse operations having been built in Venice, Italy in the 14th century. Merchants from all across Europe used these as collection and distribution points.

As an area of study, logistics in the US started to receive attention in the early 1900s, with an investigation into the distribution of farm products, as a manner of supporting organizational business strategy, and in its role of providing time and place utility. The Report of the Industrial Commission on the Distribution of Farm Products was thus the first text to deal with the costs and factors affecting the distribution of farm products and in 1916 a text titled An Approach to Business Problems discussed the strategic aspects of logistics, while a further text The Marketing of Farm Products introduced the concepts of marketing utilities and channels of distribution. (Stock & Lambert, 2001). In the 1920s, the term logistics was defined in a way similar to the definition used today. In the US in the 1930s, Al Capone managed the logistics activities associated with his movement (smuggling) of liquor from Canada to Chicago by outsourcing these, in an effort to keep his associates out of harm’s way. Since most shipments were subject to hijacking and other unpleasantness, Capone minimized his risk through strategic alliances with fledgling ambitious and aggressive service providers. Another example of the historical development of logistics in the US commenced in 1971 when Frederick W. Smith used a $4 000 000 inheritance and over $90 000 000 in other capital to acquire a Little Rock, Arkansas, used aircraft business. It was Smith’s intention to provide an overnight delivery service. In 1973, Federal Express, with 389 employees and 14 Dassault Falcon planes, began operations at the Memphis International Airport. By 2000, it employed 150 000 people located around the world and had a fleet of 648 aircraft and 64 000 vehicles. (Lynch, 2000). This eventually led to the start of the official Logistics Management Science in the US in 1964. The public sector has adapted the logistics management into their business practice up until now.

According to Coyle, Bardi and Langley (2003) the concept of logistics as a business discipline began to appear in the business-related literature in the 1960s when it was called physical distribution. At that time, its focus was on the outbound side of the logistics system. With the emerging importance of supply chain management, logistics has become even more crucial as supply chain managers realize that the coordination and integration of the logistics systems of all organizations with the supply chain are requirements for success. ).

   Most  scientists in their work, such as: Campos & No‘brega (2009), Chee & Noorliza (2010), Chen, Chang & Lai (2009), Huang & Huang (2012), Davidavičienė & Meidutė (2011), Jaiswal (2008), Jayawardhena (2010), Juga, Juntunen & Grant (2010), Lu & Jang (2007, 2010), Meidutė, Litvinenko & Aranskis (2012), ides (2007), note that the client is the most important part of any business of the service or product  sector. Since they play an important role and are essential in keeping a product or service relevant; it is therefore, in the best interest of the business to ensure customer satisfaction and build customer loyalty. To attain the business goal, it is important to design methods that will meet the needs of the customers well (Asiado, 2009). During the 50’s-60’s the product costs were continuously increasing which lead to many crises and low purchase power, the business consultants and operational management kept searching for a tool that can take care of customer satisfaction as  well as cost and quality. In addition, the highly competitive environment at that time made companies look for a competitive advantage. Researchers arrived to the conclusion that logistics management has the potential to assist the organization in the achievement of both,customer satisfaction and cost / productivity advantage and a value advantage (Christopher, 1998).

      Logistics management on the African continent can be traced back to the slave trade. For example, when the Arawaks (an Indian tribe) population started to disappear within a few years after the arrival of Christopher Columbus, the lack of man power fermented the idea of the introduction of the African slaves gradually, the importation of the African Slaves, which, around the year 1502, was only a logistical alternative, became an operational necessity.

According to Boahen (1966), there were four primary ways in which one became an African slave: chiefs would often sell criminals as a penalty, mostly African gangs and a few white gangs would kidnap free Africans in raids, domestic slaves would be resold and/or prisoners of War. Boahen (1966) emphasized that it was logistically impossible for the Europeans to have such a wide reaching slave industry without the much invested African kingdoms.

It was not only slave trade that involved logistics management. Some early kingdoms operated successful trade in gold, salt, and slaves (DeVault, 2007). The camel and human beings became a primary logistical tool for transportation of products.

 As studied by Day 1994, the customer’s awareness is increasing day by day, Companies, Enterprises and corporations in Cameroon such as CDC (Cameroon Development Corporation) need to manage their logistics that is how the products will be produced and delivered to customers. All this involves supply chain and within this supply chain, flexibility is one of the major factor to consider, so flexible supply chain perspective is more important than an equipment or the process perspective emphasis is not only placed on making products and services unique but also on reducing price, making good available to customers when and how they want it while making profits for the organization.

1.2 Delimitation of the study

1.2.1 Spatial Delimitation

  This study is to take place in Limbe Southwest region of Cameroon, which was initially Victoria and it’s vicinity was not a part of the new German colony Kamerun and remained under the British administration. On May7, 1886 Great Britain and Germany agreed to exchange Victoria and it’s vicinity for German tights at the Forcados river In Nigeria and St Lucia KwaZulu-Natal in South Africa. On March 28,1887 Victoria and it’s vicinity was handed to over to the German administration at the same time Swiss Presbyterian missionaries bought the land from the Baptist’s missionary security in 1887Victoria became British again in 1915. In 1982 Victoria was renamed Limbe by Ahmadou Ahidjo.

   Limbe is located In a bay against the backdrop of a major mountain range. Black sand and beaches makes Limbe one of the coastal towns ( Kiribati being the other) that is popular among Western touristic Sites. Attraction in Limbe include; the wildlife center and Limbe Botanical garden also Bimbia slave trade route. The Germans left a Bismarck tower in the vicinity of Limbe. It is the home for Bakweri people.

Limbe is the center for Cameroon’s oil industry . Other industries are fishery and tourism. The port of Limbe is one of the four commercial ports in Cameroon. LimbeIs a seaside city in the SouthWest region of Cameroon.

1.2.2 Time Delimitation

 Since time management is a key component In carrying out this research, it’m is going to be well budgeted on an account of time So as to Meet the deadline of school Authorities. The research has been well planned for 3 months hopefully they will nothing to delay or disturb the outcome of the research. The research starts from March to May.

1.2.3 Theme Delimitation

This research is centered on the impact of logistics management on customer satisfaction in CDC. In this research I focused on logistics management activities which are inventory management, order processing and transportation management which are vital elements in meeting customer satisfaction within an organistation.

1.3 Statement of the research problem

Logistics is responsible for the planning, implementing and controlling of the efficient, effective flow and storage of goods and services in any supply chain along with the goods and services the flow of information from the origin to the flow of consumption is also included. Consumers always demand goods and services in time and most importantly in a cost-effective way, So companies must ensure that customers are satilsfied both within and outside the company Pfau et al., (1991).  According to Barnard et al., (2016), a logistics system which is efficient will facilitate smooth flow of goods. Efficiency in logistics operation is the ability to swiftly store, and take delivery of products as they come and deliver on time. The outcome will be increased customer satisfaction given that the customer can get what he/she wants and at the right time.

For a corporation like CDC, their logistics department is made up of mostly staff without a transport and logistics background, there is a lot of struggles with planning controlling and implementing logistic activities such as inventory management, order processing, transportation management which leads to customer dissatisfaction. They are always in need of a smooth flow of goods and proper inventory and transportation management which means logistics management plays a very vital role in making decisions on the best route and medium through which the goods can reach the customer in the most cost effective way and on time that will favor both the corporation and their customers. As if there will be any delay for the goods to reach the consumers or the cost increases or wrong goods are constantly delivered then the customer will be dissatisfied and will switch to a competitor. And as the main objective of every organization is maximize profit and along with the profitability the performance of the organization should also be at its best so that the customer can be satisfied. So this study is going to address the impact of logistics management  on the customer satisfaction by taking into consideration the three most important factors which are inventory management, order processing and transportation management.

1.3 Research Questions

1.3.1 Main Research Question

What are the impact of Logistics Management on customer satisfaction in CDC Limbe?

1.3.2 Specific Research Questions

1.1 How does inventory management affect customer satisfaction in CDC?

2. What is the effect of order processing on customer satisfaction at CDC?
3. How does transport management influence customer satis faction at CDC ?

1.4 Research objectives ( main and specific )

1.4.0 Main objectives

To examine the impact of Logistics Management on customer satisfaction in CDC Limbe.

1.4.1 Specific objectives

1. To evaluate the effect of inventory management on customer satisfaction at CDC.

4.To determine the effect of order processing on customer satisfaction at CDC.

3.To examine the influence of transport management on customer satisfaction at CDC.