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IMPACT OF EFFECTIVE LOGISTICS OPERATION IN THE FIRM (A CASE STUDY OF PZ INDUSTRY PLC)

CHAPTER ONE INTRODUCTION 1.1. Background to the Study The globalization process enables the sale of products for the same purpose from different manufacturers and with different prices. The increased offer on the market has led to intensive competition and some of the companies are faced with the problem of survival. The development of information technology has led to increased flow of information around the world, which resulted in enhanced education of producers and consumers (Delfmann & Gehring, 2003). The only way for companies to survive on the market is constant lowering the price of products and regular improvement of product characteristics. Hence, the continuous intensive development of the company is crucial to its survival on domestic and global markets. Globalization had a critical impact on manufacturing, both locally and internationally. Through broadening the marketplace and increasing competition, globalization led customers to place greater demands on manufacturers to increase quality, serviceability and flexibility, while maintaining competitive costs (Laosirihongthong & Dangayach, 2005). One of the ways of improving efficiency on manufacturing firms was to improve logistics performance. That is why if manufacturing firms needed to become efficient and flexible in their manufacturing methods, they needed different strategies to manage the flow of goods from the point of production to the end user, (Awino, 2011). One important management practice that can be applied in organizations today is Logistics management. Logistics management provides business organizations with the total operations costs and increases the efficiency of the company’s business activities. Collaboration among all the supply chain players coupled with a responsive approach can enhance organizational competitiveness through reduced lead-time facilitated by smooth flow of material from upstream towards the downstream end of supply chain. This approach will ensure end customers get value for their money and also reduce the level of uncertainty in the industry (Waiganjo & Gatobu, 2014). Many factors such as deregulation, competitive pressures, information technology, globalization, profits leverage, contributed to the increase of Logistics management in the form we know it today (Ittmenn & King, 2010). The goal of Logistics management was to optimize the number, size, and geographical arrangement of plants and warehouse facilities, select transportation methods, and control distribution costs (Mentzer, Soonhong, & Bobbitt, Toward a unified theory of logistics, 2004). Consequently, Logistics management has done an excellent job of managing and moving inventory and the operational aspect of Logistics (Mentzer, Flint, & Kent, 1999) 1.2. Statement Of General Problems In every organization settings, logistics is one of the most paramount area of cutting cost of production. For every dynamic organization that want to remain in the market competitively, it need to find possible way to cut cost and as well improved quality of goods. For every sound procurement practices, nearness to the raw materials and finished goods to the potential consumers must be well planned. Logistics invold means of transporting of materials, goods and distributions to the last consumers and other miscellaneous. Until very recently the role of transport and distribution has been treated with the waves of hands, this is why most of the existing railway. Air sea transport and rural feeds roads lack of maintenance and proper management investigation revealed that the company, the (under sting) has not seen transport and distribution as an entity of capable of making meaningful contributions to its profit objective, the transport and distribution had been swept under the carpet by the management of the case study.

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