CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
Distribution management has developed rapidly over the years and have grown in importance as a result of both demand and supply pressures, inclusive of worldwide supply and distribution networks caused by the globalization economy, superior records generation (IT) and the appearance of the e-trade society, industry restructuring, mergers and acquisitions, higher customer support expectation and reducing price and margins (Xiao Hong et al, 2010). To offer application, traders and manufacturers have always confronted a need to bodily distribute goods as goods constitute little price for clients until "located in a temporal and spatial context so as to offer (clients) the opportunity to experience the bodily and mental attributes associated with ownership" therefore consumer delight which engenders organisation overall performance (Fraizer, 2009).
According to Gaedeke and Tootelian (1983) distribution management is defined as all sports concerned in making plans, imposing, and controlling the bodily go with the flow of raw substances, in-method stock, and completed goods from point-of-starting place to factor-of-intake. The main activities consist of customer support, inventory control, material dealing with, transportation, warehousing and garage. Distribution management has been recounted as being a critical aspect of channel management (Coughlan, Anderson, Stern and El-ansary 2006). In making plans for the delivery of products to customers, marketers have usually looked at a technique termed distribution management, which refers to the sports used to move finished items from producers to final customers which critical for income and profit maximization for organization for this reason extended overall performance. Distribution management capabilities will affect each channel company and the manner in which channel relationships are coordinated over the years (Giunipero, 2008). The ensuing patron pride degree and the customer's buy choice from distribution management is of utmost significance to entrepreneurs and company increase effect.
Distribution management is functionality because it influences the customer without delay thru delivery velocity and high-quality. Clients experience firsthand the performance of the distribution gadget (Garavelli, 2003). It therefore serves as a bridge between purchasers and manufacturers. For performance distribution management flexibility which is the capability of a company to adjust the stock, packaging, warehousing, and transportation of physical merchandise to fulfill client needs, quickly and effectively as indicators of agency overall performance is inevitable (Ömü, 2016) accordingly bodily distribution flexibility becomes the principle actor in employer and overall performance survival method.
Distribution management therefore makes goods and merchandise movable and presents well timed and local efficacy to promote price-brought under the least value principle. Distribution affects the results of SCM sports and, of course, it impacts production and sale (Kahia and George 2014). In the logistics system, transportation price will be appeared as a restriction of the goal market value of distribution varies with different industries. according to Knemeyer & Murphy, (2004) for the ones products with small volume, low weight and excessive fee, distribution price certainly occupies a completely small part of sale and is less seemed; for those big, heavy and coffee- valued products, distribution occupies a completely huge a part of sale and impacts income extra, and therefore it is more appeared.
The new source of business opposition lies out of doors the walls of an organization, and is determined by using how efficaciously companies link their operations with their deliver chain partners; suppliers, distributors, wholesalers, stores and end costumers (Petrovic-Lazarevic et al. 2007). Being able to create commercial enterprise relationships with clients, suppliers and other strategic companions anchored on believe and long term commitment then will become a vital aggressive parameter in advent of application (Mattson 2002). For this, and elements like shorter product lifecycle and client expectations, agencies have needed to invest and re-consciousness extra attention on relationship with clients and providers therefore the call for for products can only be satisfied via the right and value-effective delivery of products and services as a strategic time table via flexible bodily distribution (Kahia and George 2014). As the us economic system grew from a rural agricultural economy to an industrialized urban economy, the converting importance and developing complexity of distribution carrier options have been more and more identified in business literature (winter 1989). In line with Mensah et al (2014) indicated that supply chain management exercise which incorporates distribution management has considerably have an effect on business overall performance and changed into evidence inside the income performance of organisation over time in Ghana. Delivery control and distribution management practices permits faster and fee powerful float of goods and uncooked substances as a result improving operational performance in a observe conducted in Mumias sugar business enterprise (Mukolwe, 2015).
However, unfortunately, little interest has been paid to distribution management functions in several studies inside the marketing literature (Fraizer, 2009). The lack of attention to distribution management in several researches in purchasing and supply remains a challenge and is the motivation behind the design of this study is to examine the effect of distribution management on organizational performance by using Nigerian Bottling Company as a case study.
1.2 Statement of the Problem
Distribution management has an effect on ensuring that goods and services are available when and where they are required by the customer and in safe conditions to enable efficiency in organizational performance. But due to the rise in technological development and global marketing, the process however, is not without difficulties as many business people still lack adequate distribution management facilities leading to the damage of the products before arriving at their destination besides high costs of distribution which impacts on their sales volumes.. Uncertainties which are inherent with inefficient distribution systems include demand and supplier performance uncertainties which precipitates loss of sales, customers good will, expediting costs which in the long run compromises on organizational performance. The performance of distribution logistics impacts tremendously on the performance of an entire organization as it links the organization with its customers (Sansoraraj and Chen, 2007) However, despite the vitality of distribution management many organizations perform short of customer expectations in this area (Kahia, 2014). However, relatively little attention has been paid to distribution management functions in several research within the marketing literature (Fraizer, 2009). These altogether has inspired the need of the current study on the effect of distribution management on organizational performance by using Nigerian Bottling Company as a case study.
1.3 Objective of the Study
The aim of this study is to examine distribution management on organizational performance by using Nigerian Bottling Company as a case study. The specific objectives include:
- To ascertain the relationship between material handling and organizational performance
- To evaluate the correlation between order processing and organizational performance
- To find out the effect of product packaging and organizational performance
1.4 Research Questions
In order to achieve the purpose of this study, the study will attempt to provide answers to the following research questions in order to arrive at a logical conclusion.
- What is the relationship between material handling and organizational performance?
- Is there any correlation between order processing and organizational performance?
- What is the effect of product packaging and organizational performance?
1.5 Research Hypotheses
- There is a significant relationship between material handling and organizational performance?
- There is no significant correlation between order processing and organizational performance
- There is a significant effect of product packaging and organizational performance
1.6 Significance of the Study
The study was expected to assess the effect of distribution management on organizational performance in Nigerian Bottling Company, Asejire, Ibadan in order to address any shortcoming of these activities on organization performance. This study would help the organization and procurement department to understand the essence of implementing distribution management activities effectively as this will guarantee their performance. The research will help policy makers understand well the role of physical distribution on organization performance. In terms of knowledge advancement the study is significant because the findings will trigger more researches in the same area of study either as criticism of the findings or expansion on the same and also other organizations will benefit from the study because they will know the best way to manage their organization in order to be efficient and effective in terms of delivery schedules. Finally, the study is a contribution to knowledge which could serve as a springboard for students, businessmen and managers who are interested in pursuing a career in the field of distribution management.
1.7 Scope of the Study
The premise on which this study is based is the examination of distribution management on organizational performance in Nigerian Bottling Company, Asejire, Ibadan. The study is limited to organizational performance with respect to distribution management. The scope of the study will cover workers and customers of Nigerian Bottling Company, Asejire, Ibadan.
1.8 Definition of Terms
The following terms were used in the processing of carrying out this study:
Distribution Management: as a set of activities undertaken in an organization to promote effective management of its supply chain.
Delivery: The moment in which the goods, after the agreed work has been carried out by the physical distributor, are made available to the principal or entitled party.
Organizational Performance: refers to how well an organization achieves its market-oriented goals as well as its financial goals.
Retention Performance: This is perceived performance indicator that measures performance of organisations based on customer retention ability of such organisations.
Wholesalers: Makes marketing systems more efficient by buying a variety of products, in fairly large quantities, and selling these items on to other businesses that require relatively small quantities of a variety of goods.
