ROLE OF LOGISTICS ON SUSTAINABLE TRANSPORTATION

(A CASE STUDY OF NIGERIAN BREWERIES, ABA)

{65 PAGES}

DEPARTMENT OF TRANSPORT MANAGEMENT TECHNOLOGY

SCHOOL OF MANAGEMENT TECHNOLOGY

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 TABLE OF CONTENTS
CERTIFICATION ii
DEDICATION iii
ACKNOWLEDGEMENT iv
TABLE OF CONTENTS vi
CHAPTER ONE 1
INTRODUCTION 1
1.1 BACKGROUND OF THE STUDY 1
1.2 PROBLEM STATEMENT 2
1.3 AIM AND OBJECTIVES OF THE STUDY 4
1.4 RESEARCH QUESTIONS 4
1.5 RESEARCH HYPOTHESES 5
1.6 SCOPE OF THE STUDY 5
1.7 LIMITATIONS OF THE STUDY 6
1.8 SIGNIFICANCE OF THE STUDY 6
CHAPTER TWO 8
REVIEW OF RELATED LITERATURE 8
2.1 Concept of Logistics 8
2.1.1Transport Costs and Goods Characters in Logistics 10
2.1.2 Cost ratio of logistics items 11
2.2 The Effects of Transportation on Logistics Activities 11
2.3 Forms of Logistics Operation 13
2.3.1 Supply Chain Management 13
2.3.2 Reverse Logistics 14
2.3.3 Maritime Logistics 16
2.3.4 Air Freight Logistics 17
2.3.5 Land Logistics 18
2.3.6 Express Delivery 19
2.3.7 E-commerce 20
2.3.8 City Logistics 21

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2.4 Best Strategies for Logistics Improvement 22
CHAPTER THREE 29
RESEARCH METHODLOGY 29
3.1 Introduction 29
3.2 Research Design 29
3.3 Characteristics of the Population 29
3.4 Sampling Design and Technique 30
3.4.1 The Sampling Technique 30
3.5 Determination of Sample Size 30
3.6 Data Collection Instrument 31
3.6.1 Questionnaire Distribution and Administration 32
3.7 Sources of Data 32
3.7.1 The Primary Source 33
3.7.2 The Secondary Source 33
3.8 Validation of the Instrument 33
3.9 Method of Data Analysis 34
CHAPTER FOUR 39
PRESENTATION AND ANALYSIS OF DATA 39
4.1 Respondents Characteristics and Classification 39
4.2 Data Presentation 40
4.3 Analysis of Data According to Research Questions 42
4.4 Test of Hypothesis 47
4.4.1 Hypothesis One: 47
4.4.2 Hypothesis Two 49
4.4.3 Hypothesis Three: 50
4.5 Discussion of Result 52
4.6 Findings of the Study 53
CHAPTER FIVE 54
SUMMARY, CONCLUSION AND RECOMMENDATION 54
5.1 SUMMARY 54
5.2 CONCLUSION 56

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5.3 RECOMMENDATION 57
REFERENCES 59

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 CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Companies are today facing increasing levels of competitive pressure and

difficulty with regard to maintaining and improving profitability. The management
of these companies is being forced to seek and implement innovative strategies
with which to advance their company’s competitive advantage as well as their
profitability, Burns (2012).

These circumstances and the increasingly complex nature of logistics operations

are causing companies, such as those in the manufacturing sector, to focus on their
core competencies, while others provide, for example, some or many of their
logistics activities. Companies are also increasingly coming to realize the
importance and role of logistics in their organizations and therefore the need for
specialist input therein.

Furthermore, as companies find themselves under growing pressure from both

customers and shareholders to seek ways in which to decrease their costs while at
the same time increasing performance, they are forced to find ways in which they
may improve the efficiency and effectiveness of their operations. These pressures
are increasingly impacting the way in which companies, and their customers, view
logistics activities. Logistics therefore has a very great impact in sustaining
transportation cost of manufacturing companies, in particular for companies
seeking to increase their competitive advantage and corporate profitability.

It can be said that companies with a competitive advantage enjoy a position of

enduring superiority over competitors, in terms of customer preference, which may
be achieved through logistics. The source of competitive advantage is in the ability
of the organization to differentiate itself, in the eyes of the customer, from its
competition, and to operate at a lower cost, and therefore a greater profit than its
competitors. Competitive advantage stems from the many discrete activities a

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company performs in designing, producing, marketing, delivering, and supporting
its products. Christopher (2015)

This research work therefore is focused in assessing the impacts of logistics to

sustain transportation cost in manufacturing companies in Abia State with Nigerian
Breweries as a case study.

1.2 PROBLEM STATEMENT

Companies are increasingly under pressure to seek ways in which to improve

competitive advantage and profitability and that includes the efficiency and
effectiveness with which their logistics activities are executed. Logistics therefore
tends to help reduce transportation cost for manufacturing companies; Savvy
manufacturers use technologically advanced routing and navigation systems for
drivers, fuel-efficient vehicles, cost-efficient purchasing and order-processing
systems and strict handling procedures to lower supply-chain costs and boost
overall profitability. Many problems are encountered during this operation, if these
problems can be mitigated or solved then there will be a rapid increase in terms of
sustainable transportation cost for manufacturing companies. The problems are

i. Government Regulations: Carriers face significant compliance regulations

imposed by federal, state and local authorities.
ii. Environmental Issues: The anti-idling and other emission reduction
regulations brought about by state and local governments has created
concern that the compliance costs could exceed benefits.
iii. Technology Strategy & Implementation: While the industry understands and
supports many of the benefits of these technologies, some questions remain
as to how they will pay for it and who will help implement the
improvements.
iv. Economy: With high fuel prices comes a greater credit crisis and rising
inflationary demands that take a greater toll on the Nigeria economy. This
industry is then pressured by increasing compliance regulations, declining
demand, additional capacity with additional increases in key cost centers.
At the end of this research the researcher will be able to provide the best strategy
for manufacturing companies to reduce transportation cost and sustain

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transportation through the use of logistics to its optimum point thereby increasing
its profitability.

1.3 AIM AND OBJECTIVES OF THE STUDY

The aim of the study is to examine the role of logistics on sustainable
transportation in Abia State manufacturing companies. Specific objectives of the
study are:
i. To determine the factors that hinder logistics.
ii. To establish the best strategies for logistics improvement in the state.
iii. To ascertain the impact of logistics on manufacturing companies
performance.

1.4 RESEARCH QUESTIONS

In-order to guide the study and achieve the above stated research objectives; the
following research questions were formulated:
i. What are the factors that hinder logistics?
ii. What are the best strategies to improve logistics?
iii. What are the roles of logistics on manufacturing companies’
performance?

1.5 RESEARCH HYPOTHESES

In order to answer the research questions, the following hypotheses were
formulated.
HO1: The factors that hinder logistics in manufacturing companies are not
significant.

HO2: The strategies for improvement of logistics are not significant.

HO3: The role of logistics has no significant effect on manufacturing company

performance.

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1.6 SCOPE OF THE STUDY
The scope of this research is limited to investigating the role of logistics on
sustainable transportation in manufacturing companies in Abia State, with Nigerian
breweries as the case study and proffering solutions on how to sustain
transportation in Nigeria with the help of logistics. All findings and
recommendations from the study may not reflect the true view of the traditional
roles and changing roles of logistic professionals.

1.7 LIMITATIONS OF THE STUDY

The study is limited to Nigeria Breweries in Abia State due to easy access of
information in Abia State by the researcher. Target respondents for this study are
the principal actors in the manufacturing and transportation companies namely: the
transportation/logistics managers, the Consultant and the manufactures.
Some setbacks during the research work includes
i. Transportation cost to the target area
ii. Unwillingness of most respondent to fill out questionnaires and
iii. Time factor

1.8 SIGNIFICANCE OF THE STUDY

This study will be of importance to logistic professionals and the general public
because it would not only clarify but also create awareness of the extent to which
inadequacies in logistics improvement can adversely affect company’s competition
against rivals and its profitability. The study will also help transporters, clients,
consultants and all parties involved in logistics about ways of improving their
current method of logistics in other to sustain transportation. The study will also be
of great benefit for other student researchers who may want to venture into the
same subject matter. Having gotten results-both empirically and theoretically, the
study will serve as a foundation for future research studies.
2.3 Area of the Study
Nigerian Breweries was incorporated in 1946 and the first bottle of its brand, the
STAR Lager, rolled off the bottling lines of its Lagos brewery in June 1949. As the
company expanded into other regions, it established more breweries such as Aba
Brewery in 1957, and Kaduna Brewery in 1963. By 1971, the company was one of

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the largest industries within the country in terms of capital investment. In 1982,
another brewery was added in Ibadan. In September 1993, the company acquired
its fifth brewery in Enugu, and in October 2003, its sixth brewery, sited at Ameke
in Enugu. Ama Brewery began brewing on the 22 March 2003 and at 3 million
hectoliters is the largest brewery in Nigeria.

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 ABSTRACT

The role of logistics on sustainable transportation is focused towards the

enhancement of logistics operations in Nigeria. Primary and secondary source of
data were used for the study, the data were collected through a well-structured and
standardized questionnaire based on Likert five-point scale. The data collected
from the respondents on the field was computed and displayed on the ANOVA
Output. The various hypotheses formulated for the study were tested using
Analysis of Variance (ANOVA) F- Test. From the analysis of data collected. The
analysis examines the role of logistics on sustainable transportation in Nigeria,
with the results of the data analysis we were able to verify and actualize the stated
problems, objectives and research questions of the study. The results from the three
stated hypothesis used in the study shows that: The factors that hinder logistics in
manufacturing companies are significant; the strategies for improvement of
logistics are significant. Transportation plays an important role in logistics system
and its activities appear in various sections of logistics processes. Without the
linking of transportation, a powerful logistics strategy cannot bring its capacity into
full play. Based on the findings and conclusion, the research recommends that:
there should be a faster approach and delivery in other to boost the rate of sales and
services as well as giving the customer a reason to purchase again, companies
should make research of new technologies for tracking and tracing of goods and
commodity, the government should provide an efficient custom clearance which
will have no biased or corrupt attentions, this help develop logistics culture in the
country thereby sustaining transportation.

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