Description
TABLE OF CONTENT
COVER PAGE
APPROVAL PAGE
DEDICATION
ACKNOWLEDGEMENT
TABLE OF CONTENT
1.1 STATEMENT OF THE PROBLEM
1.2 OBJECTIVES OF THE STUDY
1.3.1 GENERAL OBJECTIVES
1.3.2 SPECIFIC OBJECTIVES
1.3.3 SIGNIFICANCE OF THE STUDY
1.3.4 SCOPE OF THE STUDY
1.3.5 RESEARCH QUESTIONS
1.3.6 RESEARCH HYPOTHESIS
1.3.7 HISTORICAL BACKGROUND OF THE CASE STUDY
1.3.8 DEFINITION OF TERMS
CHAPTER TWO
2.1 CONCEPTUAL FRAMEWORK
2.2 THEORETICAL REVIEW
2.3 THOERY CONSTRAINTS
2.4 EMPERICAL REVIEW
2.5 GAP IN LITERATURE
CHAPTER THREE
3.1 INTRODUCTION
3.2 RESEARCH METHOD USED
3.3 SOURCES OF DATA
3.4 DATA COLLECTION TOOLS
3.5 RESEARCH POPULATION AND SAMPLE SIZE
3.6 SAMPLE SIZE AND SAMPLING TECHNIQUE
3.7 STATISTICAL METHOD USED IN DATA ANALYSIS
CHAPTER FOUR
4.1 DATA PRESENTATION AND ANALYSIS
4.2 HYPOTHESIS TESTING
CHAPTER FIVE
5.1 SUMMARY OF FINDINGS
5.1 CONCLUSION
5.2 RECOMMENDATIONS
CHAPTER ONE
INTRODUCTION
1.3 BACKGROUNG TO THE STUDY
As more and more manufacturing firms have realized the
importance of supplier performance in establishing and maintaining
their competitive advantage, purchasing research has tended to focus on supplier development programs and explore how these initiatives impact on buyer and supplier performance (Humphreys,
2001) which eventually leads to organization improvement.
Supplier development is the process of working collaboratively
with suppliers to improve or expand their capabilities (Charles
Dominick, 2006). Supplier development contributes to the companies
in terms of “creation and maintenance of appropriate suppliers,
quantity, technicality, cost capability and delivery with continuous
improvement” (Rajput and Bakar, 2012). It is a bilateral effort by both
the buying and supplying organization to jointly improve the supplier’s
performance or capability in one or more of the following areas: cost,
quality, delivery, Time to market, environmental responsibility and
managerial capability and financial viability (Krause & Handfield,
2011).
According to Lascellas and Dale (2008) there are reasons why
supplier development has become a key element in maintaining or
improving a company’s competitiveness which in turn leads to
organizational improvement. Firstly, technological and competitive
pressure has resulted in a great trend towards specialization.
Secondly, the nature of competition itself has changed. Feigenbaum,
among others postulates that effective international competition is a
combination of competition in its traditional and visible form (product
versus product) and an equally powerful, but less visible, form of
competition involving companies skill in implementing and managing
a process of total quality management of which suppliers are vital
parts.
As an international company EABL recognizes that achieving
high standards are aspirations presents unique challenges in different
countries. Therefore EABL understands that while there will be
varying degrees of performance, they strive for continuous
improvement with their suppliers and they consistently drive up
standards together to achieve excellence. They also appreciate that
the they work will consistently offer support to their suppliers in
achieving minimum standards thus the supplier development program
(Ireland, 2014).
1.4 STATEMENT OF THE PROBLEM
Facing up to the challenge of stiffer competition and having to
supply the global markets, manufacturers have quickly learned the
importance of improving productivity and quality (Erasmus, 2006)
suppliers play a very vital role in the production value chain. They
indirectly determine the quality of the final product. There is therefore
need for the manufacturing firms to put in place measures to develop
and equip suppliers with prerequisite skill in order to ensure quality
supplies and this is done through supplier development EABL face a
major challenge in its production processes because of the increasing
cost of barley and hops.
There is a constant spike in the commodity price of barley
which is sorghum based (Ogunda, 2013). This is reflected in the slow
improvement in its profit margins which is seen in the EABL 2013
annual report. Between April and July 2012, the price of barley
increased by 26.06%. This exposes EABL to a significant rise in the
price of the inputs used in producing beer (Euromonitor, 2012).
According to Ireland, (2013) managing Director, East Africa
Breweries Limited, on raw materials, EABL has a strategy which is
supplier development that maximizes the amount of raw materials,
EABL has a strategy which is supplier development that maximizes
the amount of raw materials from the beer that is sourced locally and
the benefits of this, is reducing the exchange rate risk, reducing the
exposure to imports, security of supply, lowering costs thus the
success in the supplier development is not a foregone conclusion.
While many researchers in Kenya like Ochieng 2914 and Ritich,
Abura & Kihava 2014 have researched on supplier development,
there is limited research on the role of supplier development on the
organizational performance of manufacturing industry specifically in
Kenya a factor that requires extensive research. Again many
researchers like (Krause, 2007) and Humphreys 2003 have dealt with
supplier development and specifically on how it impacts on the buyer
– supplier performance thus little has been researched on its impact
to organization performance.
It’s in this reference above that the researcher investigated the
role of supplier development on organizational performance in
manufacturing industry in Kenya and with specific focus on East
African Breweries.
1.5 OBJECTIVES OF THE STUDY
1.3.9 GENERAL OBJECTIVES
The general objective of this study was investigating the role of
supplier development on improving organizational performance on
manufacturing industries. A case study of EABL
1.3.10 SPECIFIC OBJECTIVES
1. To establish the role of training suppliers on organizational
performance of East African Breweries Limited.
2. To determine the role of rewards on organizational performance
of East African Breweries Limited.
3. To establish the role of financial support on organizational
performance of East African Breweries Limited.
4. To establish the role firm involvement on organizational
performance of East African Breweries Limited.
1.6 SIGNIFICANCE OF THE STUDY
The researcher hopes that the findings of this study will form the
basis on which future researchers could be built and most importantly
the practices of manufacturers with respect to supplier development
and supplier performance evaluation will help EABL to provide
supplier development as value added services to their potential
customers and finally the study will contribute to the body of
knowledge in the field of manufacturing industry.
1.7 SCOPE OF THE STUDY
This research work will cover purchasing for organization thus its
scope will be based only on international purchasing aspect.
Theoretical Scope: this refers to the area to be covered during the
period of research work. The area to be discussed shall be limited
to purchasing and supply.
Geographical Scope: the researcher shall offer useful suggestions
where necessary so that the organization could be able to advice
much for progress and make valuable contributions to see the
economic depression of this great nation.
Industrial Scope: the researcher will focus more attention on the
purchasing department with particular reference to Nigerian
Bottling Company, Lagos. As regard to their activities.
Time Scope: this is where the researcher would use his time to
spend for collecting data from the organization in order to get
facts from them.
1.8 RESEARCH QUESTIONS
1. To what extent does the role of training suppliers to improve
organizational performance of East African Breweries
Limited?
2. How does the role of rewards improve organizational
performance of East African Breweries Limited?
3. To what extent does the role of financial support improve
organizational performance of East African Breweries
Limited?
4. How does the role of firm involvement improve organizational
performance of East African Breweries Limited?