A Research Proposal Submitted to the Procurement and

Supplies Professionals and Technicians Board (PSPTB)

………………………………………………

Mr. Messon Siame

(Supervisor)

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Date ________________________

ACKNOWLEDGEMENT

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Table of ContentsACKNOWLEDGEMENT...................................................iiABREVIATIONS.......................................................v

CHAPTER ONE: INTRODUCTION..........................................11.1 Background to the Study......................................1

1.2 Statement of the problem.....................................41.3 Objectives of the study......................................5

1.3.1 General Objectives.......................................51.3.2 Specific Objectives......................................5

1.4 Research Questions...........................................51.4.1 General Questions........................................5

1.4.2 Specific Questions.......................................51.5 Significance of the study....................................5

1.6. Scope of the study..........................................61.6.1 Scope....................................................6

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1.7 Limitation of the Study......................................61.8 Organization of the study....................................6

CHAPTER TWO: LITERATURE REVIEW...................................92.0 Introduction.................................................9

2.1 Store Functions..............................................92.2 .Theoretical Review.........................................11

2.2.1 Store Management........................................112.2.2 Centralization..........................................11

2.2.3 Decentralization........................................122.2.4 Store and stock holding center..........................12

2.2.5 Selection and training of personnel performing stores function......................................................12

2.2.6 Stores management and security..........................132.2.6.1 Control of entry into stores..........................13

2.2.6.2 Marketing of stock....................................142.2.6.3 Fire Precautions......................................14

2.2.6.4 Segregation of high risk material and knowledge of materials.....................................................15

2.2.6.5 Knowledge of materials................................152.2.7 Procurement performance measurement model...............15

2.2.8 Logistic Management.....................................172.3 Empirical Literature Review.................................18

2.3.1 Empirical Literature Review in Tanzania.................202.4 Research Gap................................................21

2.5 Conceptual framework (Conceptual Model).....................22CHAPTER THREE: RESEARCH METHODOLOGY...............................26

3.0 Introduction..................................................263.2 Research Design.............................................27

3.2 Types of Data...............................................283.2.1 Primary Data............................................28

3.2.2 Secondary Data..........................................283.3 Data Collection Methods.....................................28

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3.3.1Questionnaire............................................283.3.2 Interview...............................................29

3.4 Sampling Techniques.........................................293.4.1 Sample and Sample Size..................................29

3.4.2 Sampling procedure......................................303.5. Reliability and Validity...................................31

3.5.1 Reliability.............................................313.5.2 Validity................................................31

3.6. Management and Data analysis...............................323.6.1 Data management.........................................32

3.6.2 Data Analysis...........................................323.7 Expected result.............................................32

REFERENCES........................................................33

ABREVIATIONS

CCKL Coca Cola Kwanza Company Ltd

CPSP Certified Procurement and Supplies

Professional

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JIT Just In Time

NBMM National Board for Materials Management

SPSS Statistical Package for social and

Science

ECR Efficient Consumer Response

CRP Continuous Replacement Planning

VMI Vendor Managed Inventory

PPE Personal Protective Equipment

SAP System Applied Product

ERP Electronic Resource Planning

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CHAPTER ONE: INTRODUCTION

1.1 Background to the Study

Stocks are goods or merchandise kept on the premises or

warehouse available for sale or distribution. Stock is in

the life of human being it had been practiced almost by

every person sometimes with or without understanding i.e. it

involves holding stocks during a day to day activities,

stocks at home where by a balanced of food, drink-water and

other basic needs have been kept to meet current and future

demands, (Slack et al 2011) said stocks accumulate

unnecessarily through poor control methods, obsolescence,

poor liaison and sub-optimal decision making.

A store is an area where good or merchandize is reserved for

future use. (Jessop et al, 1994). The store should be

considered as a temporary location for materials for

operational purpose and should be planned, organized and

operated in such a way that the period of residence of each

stock is as short as possible in consistent with economy

operation.

Store Management is the process of organizing, planning,

controlling and monitoring movement and arrangement of goods

or merchandize in a store. The scope of stores management

also concerns the fine lines between replenishment lead

time, carrying costs of stock, asset management, stock

forecasting, stock valuation, stock visibility, future

stock price forecasting, physical stock, available physical

space for stock, quality management, replenishment, returns

and defective goods, demand forecasting and replenishment.1

In business enterprises (Bowersox and Closs (2006) said

formulating stock management policies requires an

understanding of inventory’s/stock’s role in a

manufacturing/marketing enterprise. In order to grasp the

importance of inventory one must envision the magnitude of

assets committed in a typical enterprise.

(Dobler et al 2002) Most companies have experience a number

of challenges in relation to stock management. Some of these

problems are

One issue is infrequent large orders vs. frequent small

orders. Large orders will increase the amount of inventory

on hand, which is costly, but may benefit from volume

discounts. Frequent orders are costly to process, and the

resulting small inventory levels may increase the

probability of stock-outs, leading to loss of customers. In

principle all these factors can be calculated mathematically

and the optimum found.

A second issue is related to changes in demand (predictable

or random) for the product. For example having the needed

merchandise on hand in order to make sales during the

appropriate buying season(s). A classic example is a toy

store pre-Christmas. If one does not have the items on the

shelves, one will not make the sales. And the wholesale

market is not perfect. There can be considerable delays,

particularly with the most popular toys. So, the

entrepreneur or business manager will buy on spec. Another

example is a furniture store. If there is a six week, or

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more, delay for customers to get merchandise, some sales

will be lost. And yet another example is a restaurant, where

a considerable percentage of the sales are the value-added

aspects of food preparation and presentation, and so it is

rational to buy and store somewhat more to reduce the

chances of running out of key ingredients. With all these

examples, the situation often comes down to these two key

questions: How confident are you that the merchandise will

sell, and how much upside is there if it does?

And a third issue comes from the view that inventory also

serves the function of decoupling two separate operations.

For example work in process inventory often accumulates

between two departments because the consuming and the

producing department do not coordinate their work. With

improved coordination this buffer inventory could be

eliminated. This leads to the whole philosophy of Just In

Time, which argues that the costs of carrying inventory have

typically been underestimated, both the direct, obvious

costs of storage space and insurance, but also the harder-

to-measure costs of increased variables and complexity, and

thus decreased flexibility, for the business enterprise.

Coca Cola Kwanza has four different stores for handling its

different categorized goods. Engineering store, Raw Material

Store, Fleet Spares stores and Marketing store. All of these

stores have been faced with a number of problems. Example a

number of plant shut down incident were reported due to lack

of carbon dioxide, packing material and concentrate in raw

material store. All these are imported items.3

In Engineering and Fleet spares several incidents of

overstocking were reported which adversely affect cash flow

of the company. In 2011 engineering store was worth

$500,000-$600,000.This caused a lot of queries from the

Group offices.

Due to all those problems, need to deploy stock management

strategies, such as a just-in-time inventory system and

Electronic Resource Planning to help to minimize

inventory/stock costs was considered as the best alternative

because goods are created or received as inventory only when

needed. Companies use inventory management software’s to

avoid product overstock and outages. Hence to support

efficiency and effective system of stock performance.

As of today companies use several systems such as

enterprises resource planning, supply chain execution or

warehouse management system in order to plan and control

material flow (Bowersox and Closs 2006). Many of these

systems have, however, yielded poor results due to the

unavailability of accurate information, its therefore

critical to the success of these companies to have accurate

information on the identity. Accurate of information is

again referring to daily and instant updating of the system.

Coca cola kwanza adapted electronic software called System

Applied product (SAP).The aim was to use this software’s to

address different problems and challenges which were

encountered. i.e. problem like order management, asset

tracking, service management, product identification and

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product searching, data security and cost saving. Major

challenge was how to control ordering since there was a need

to justify each and every purchase in order to avoid out of

stock or overstocking.

However, the questions of meeting overall efficiency and

performance, targets and objectives of organization by

ensuring, rational operational stock is kept to meet

intended targets, (Campton1985) is still a valid question up

to date. Each organization is struggling to establish

appropriate measures and process to achieve desired goals of

stores management.

British standard BS 5729 part 1 introduce the “Concepts and

objectives of stock control as part management strategy”

modern stores management rejects outworn concepts of stores

as “a place where goods are kept until they are needed some

day” Stored should be considered as a profit-earning service

to production or in the case of a warehouse, to

distribution. Storekeeping should contribute directly to

profitability and be concerned with storage costs,

acquisition, packaging pre-selection and issue, packing and

dispatch and other physical aspect.

One of the main questions practitioners face today is how to

justify the investments that enable to improve visibility of

efficient process of stock management, which will enhance

performance of supply chains. Nevertheless, there is still

little research in the stores management efficiency

literature.

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1.2 Statement of the problem

Globally the advancement of technology has helped many

organizations to improve its process and change the way

organization used to operate. Stores management goes hand

with hand, with the introduction and use of different

software to simplify the way we used to handle our stock.

Software like JIT, ERP and CRP were invented to support and

simplify manual ways of managing and controlling stock.

Major challenge to many organizations had been on how to

control, manage and to get a status report which will be

valid, accurate and reliable due to the fact that most of

the stores activities were done manually. Challenge of good

and up to date recording is still impacting negatively the

performance of stores management.

Problem like delay in receiving, stock-out, over stocking,

lack of bin location for some material, redundant stock,

inaccurate posting, delaying in posting, improper storage

locations and handling materials that occur in stores

section encourage the researcher to a deep study to examine

the efficiency and effectiveness of stores management

In Tanzania, though different software’s have been adapted

by different private organizations, challenge is still on

how to get the desired result i.e efficiency and

effectiveness of stores management system. Currently most

private organizations have embarked with this software’s to

manage and control their processes and work flow. Great

emphasis is to attain efficiency and effectiveness of stock

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management system since this process affects directly

financial position and performance of each organization.

Thus efficiency and effectiveness of stores management in

Private Sector is of vital importance due to its

contribution in business performance. The study has then

attempt to find out the factors affecting the efficiency and

effectiveness of proper stores operation at CCKL.

1.3 Objectives of the study

1.3.1 General Objectives

The general objective of this study will be to assess

efficiency and effectiveness of Stores Management in Private

Sector.

1.3.2 Specific Objectives

a. To examine the adequacy of personnel qualifications and

their effects on the proper storehouse operation in the

company.

b. To examine the effectiveness of ordering policies

execution.

c. To examine top management concern on stores matters.

d. To examine the sufficiency of security, hearth and

safety precautions in stores operations.

1.4 Research Questions

1.4.1 General Questions

The general Research question in that: how is the

performance of the stores management of the organization in

the private sector?

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1.4.2 Specific Questions

a) Are personnel qualifications adequate and what are their

effects on the proper storehouse operation in the

company?

b) Is the execution of organization’s ordering policies

effective?

c) How is the concern of top management on stores matters?

d) A security, Health and safety precautions in stores

operations sufficient?

1.5 Significance of the study

a) The study will help Private Sector to formulate stock

management policies and procedure.

b) Study will assist Fast Moving consumer Goods companies to

increase efficiency in stock control thus optimize their

cash flow.

c) To other scholars it may serve as reference materials in

their study if the results will be exposed for public

use.

d) This Topic will also widen researcher knowledge on

appropriate measure to manage stock.

e) The study is the partial fulfillment of the requirement

for professional CSP awarded by the Procurement and

Supplies Professionals and Technicians Board.

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1.6. Scope of the study

1.6.1 Scope

The study will deal with employees of CCKL in Dar es

Salaam. However, it selected only employees from

departments linked with store department. The study

concentrated on stores management.

1.7 Limitation of the Study

The researcher imagines a number of limitations .The study

is limited in a way that, it will only focuses on beverages

industries in Tanzania, yet there are many other industries

that also rely and operate under environment of store

management. Thus findings in this study might not be

adequate representation of the challenge in stores

management hence the results cannot be generalized to all

industries.

Possibilities of the respondents neglect to return the

questionnaires in time may be because of being busy or

other foreseen reason. Time constraint, there is shortage

of time which is required for data collection and analysis

and to complete the work. However the researcher will exert

all effort to closely financial constraint also is big

constraint because the researcher has no support in term of

funds.

1.8 Organization of the study

Organization of this study is as follows:-

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Chapter one; deals with an overview of the study. It gives

the details about the background information to the

problem, Statement of the problem, General question of the

study, Specific question of the study, General objective of

the study, Specific objectives of the study, Significances

of the study, Limitation of the study and Organization of

the study.

Chapter two, Deals with detailed Literature review of the

study, it includes; Theoretical review, Empirical review

and Conceptual reviews.

Chapter three, Concentrates with Research Methodology of

the study where all information related to research design,

sample design and sample size, targeted population, data

collection methods (instrument) are presented.

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CHAPTER TWO: LITERATURE REVIEW

2.0 Introduction

Literature review is a process of identifying or locating,

reading, evaluating, summarizing and incorporating in a

study documents having materials are related to the problem

under investigation.

2.1 Store Functions

The store functions include all responsibilities for

receipts, custody and distribution such as economy,

identification, receipt, inspection, issue and dispatch

(Jessop et al 1994).

Duties and responsibilities associated with stores

management (carter,1989)said there is very wide range of

duties and responsibilities, that are performed in

managing the store at various times and stages of operation.

All are important to overall efficiency of the organization

and its objectives the duties include:

Economy: One of the basic duties of stores manager is to

ensure that operations within the stores system are

performed as efficiency and as economically as possible the

concept of economic levels of stock is part of his/her

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responsibility. Concept of minimum stock should be clear

member of the stores team (Carter, 1989).

Stock Control: This is among the critical role of stores

personnel. i.e. to manage and control stock in a daily

basis. The process of stock control is performed within the

stores section. The store manager must ensure that the aims

of stock control are achieved. Stores must assess the

information concerning production, sales, and distribution

needed to maintain the stock control system (carter, 1989).

Stock Record: It is responsibility of stores personnel to

ensure adequate and up to date stock record are maintained

for every items held in stock. These records must provide

the kind of information required to control and maintain the

levels of stock established i.e. Level of stock, order

levels, code number and supplier references (carter, 1989).

Stock taking and stock checking: The store manager is

responsible for organizing, supervising and communicating

all stock checks out by organization, he/she is required to

formulate counting sheet, allocate staff, check results,

investigate discrepancies and produce final

accounts(carter,1989).

Storage of stock: It is one of the basic duties of store

keeper to store all the goods delivered to the store.

Storage of the materials entails the correct location of

goods in connection with supplies’ instructions. It require

skill and knowledge that is in line with stores functions,

bearing in mind that some of the materials need particular

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conditions of storage example must be kept dry, etc. It is

the duty of stores to ensure that goods do not suffer damage

or deterioration because of inefficiency of storage

(carter,1989).

Identification and location of stores: Stores management

also entails formulating and updating all system of

products/goods description. This can be easily done through

coding, so as to allow efficient identification and location

of all goods and services held within the stores operation.

It is also the duty of stores to ensure that the item

required is not available, then a suitable alternative is

recommended (where one exist, 1989).

Issue and dispatch: It is the duty of stores personnel to

ensure that the goods required for operation are issued as

and dispatched at the required time. Bearing in mind the

need for proper authorization and strict clerical control in

issuing stock. The issue process should be smooth the status

of the stores throughout the whole organization (carter,

1989).

Inspection: One of the key duties of stores personnel is

inspect and check all deliveries made to the store, these

checks to include such factors as quantity, type, quality,

damage, and shortage. In many cases supplier will not accept

responsibility for damage goods unless they are reported

within a specific number of days of delivery. Information

arising from such inspection has to be passed to purchasing

(carter, 1989).

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Security of stores: Stores management also includes security

and safety is maintained at all times within the stores

building and stockyards. The security element of the stores

manager’s job covers not only theft, but also damage,

windows and stock yard fencing are secured (carter,

1989).Safety will again mean that products with different

nature are stored separately.

Materials handling: One of the basic job to the store team

is the handling of materials in a, quickly and safety way.

Moving goods from the store to the factory or warehouse is

very important duty of the store keeper. Handling is not

just a simple task but it requires a person to be keen since

different materials have different handling style (carter,

1989).

Receipt of stock: It is the duty of the store keeper to

receive and handle all the items delivered to the store: to

check the documentation (delivery notes, packing notes, etc)

and inform purchasing stores management of all goods

received (carter, 1989)

Supply chain: Supply chain concept in nutshell deals with

activities that ensures availability of goods and services

to an organization as and when required economically. On the

other hand the supply chain concept focuses on every step

from sourcing of raw material up to the end user and even

the disposal of a package of a consumer finished product.

The value chain concept is aimed at creating competitive

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advantage. It treats as a chain of value creating activities

(Kilima, 2004).

2.2 .Theoretical Review

2.2.1 Store Management

Storage is the function of material management which is

vital department on the performance of the organization. In

order to assess stores performance, store’s procedures

which accomplish the stores function should be followed

properly and accordingly for better performance (Jessop and

Morrison 1994).

Morrison (1978) explains the basic objectives of stores

function as to provide service economically. This is

achieved through link between organization and customer. He

added that there should be enough knowledge on material

management concept so as to have accuracy performance of

accounting this point/other stores functions include:

identification, receipt, issue and dispatch, stock record,

stores accounting, stock control, storage, and stock

taking.

2.2.2 Centralization

Centralization of stores function occur when all stores

function are done centrally in a central warehouse, all

departments, units or branches replenish their Stock from

this center ware house(Warman,1980).

The centralization of stores function yield significant

benefits. The advantages of centralization are: it

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facilities control of the total stores operation, manpower,

material, space utilization and there is efficacy space and

equipment utilization. Centralization facilities the

balancing of individual workloads and permits more

efficiency utilization of personnel (Warman, 1980).

2.2.3 Decentralization

Decentralization of store function entails that departments

or operating unit have their own sub-stores which do all

stores operations. Decentralization has the following

advantages: it reduces transportation and packaging cost

due to short distance from the warehouse to users: quicker

delivery to customers: risk on stock is spread out since

there are many sub stores: and better relation with

customers and users departments since their requirement is

quickly delivered (Warman.1980)

A stores department is a center for a large part of the

organization’s business other department in the firm as

well as with the firm supplies, Stores function cut across

all departmental lives (Fabricky and Banks)

2.2.4 Store and stock holding center

Stores may be regarded as stock holding center. Stock may

be held in store for a number of reasons. (Warman

1980)postulates the reasons to why firm hold stocks which

are: to ensure that the materials are available in store so

as to meet, customer demand, to allow for the lead time,

takes advantage of buying opportunities, and to obtain

economies of transport. In relation to this, Location and

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Layout of store are important aspects to be considered. The

location of the stores cans work-flow and thus productivity

and profitability –even in small work.

2.2.5 Selection and training of personnel performing stores

function

On the other hand, efficiency of stores function depends

mainly in selection and training of staff. The selection

and training of staff for the stores must be made with at

least as much care as the selection of operators for direct

production work qualities to be looked for reliability,

accuracy, arithmetic (Jessop and Marrison,1994).

Training improved working conditions and increased

efficiency (Saleemi, 2007).Training is the process of

increasing the knowledge and skill of an employee for doing

particular job. It is an organized activity designed to

create a change in the thinking and behavior of people and

to enable them to do their jobs in more efficient manner.

In industry, it implies imparting technical, knowledge,

manipulative skills, problem solving ability and positive

altitudes. The purpose of training is to enable the

employees to get acquainted with present or prospective

jobs and also increase their knowledge and skills, he

added, training make new employee more productive and

efficiency.

It makes old employees familiar with new machines and

techniques by refreshing their knowledge. Training jobs is

never finished so as an organization remains in business.

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Thus, training is not one stop process but it is ongoing or

continuous process, Training method must be appropriate to

the levels of employees the nature of the tasks and the

purpose of training. The effectiveness of training

programs should be evaluated so that necessary improvements

may be done time from time.

(Carter 1989) added that, Training of staff is vital in

order to make full use of their abilities and talents.

Labour is very expensive commodity and therefore it makes

good economic reasons to make full utilization of this

resource, she added that, training must be seen as an

investment in terms of time, money, and energy on the part

of organization and its management, she then said, the

rewards for this investment could develop into major

operational cost savings.

2.2.6 Stores management and security

Stores management cannot be completed unless there are

enough security which covers not only theft and fraud, but

also stock deterioration, damage, location and special

storage.

(carter,1989) said, responsibilities of stores management

in relation to storehouse security, the store’s manager

has a direct responsibilities for these responsibility for

store security in all areas in which materials are stored.

Each of these responsibility demands great care and

attention to ensure a comprehensive security covered,

example custody of store keys should only be for few people

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to ensure adequate control, although a degree of

duplication is necessary for operational and emergency

factors. However, duplication of keys can be undertaken

after consultation between all parties involved.

2.2.6.1 Control of entry into stores

Carter (1989) said, stores management also ensures that no

unauthorized persons are allowed to enter the stores area.

Store should be restricted, this is can be due to for the

following reasons: one to prevent theft of stores and the

second to prevent persons who should not be in the stores

being injured example, falling stock or for lift trucks.

Many stores construct counters to ensure that unauthorized

person cannot easily enter the stores.

In the case of more open areas, such as stockyards, a

system of pass cards can be employed such cards are issued

by management only to those person who should be in the

stores at given times, In some instances entry to stores

can be controlled by an electronic sensor and the pass

cards are specially coded only to allow entry by the

holder.

2.2.6.2 Marketing of stock

It is the responsibility of the store’s manager to ensure

that certain materials held by the store are marked in some

way to identify their ownership and origin, this applies

especially to items of equipment or items which are of high

value and therefore more liable to theft or misuse.

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There are two reasons for marking stock .Firstly, it

discourages theft. Marked stock cannot be easily sold or

used outside the organization and therefore the stores may

lose a degree of attraction for theft. Secondly, it ensure

that, if stock is stolen and subsequently recovered by

police or other agencies, the latter will know to whom the

goods rightfully belong and thus will arrange for them to

be collected. A great deal of stock is recovered every year

by police but, because of the lack of identification, not

all it is returned to the organization from which it was

stolen (carter, 1989)

2.2.6.3 Fire Precautions

These are very important in relations to stores security

and it is the responsibility of stores management to ensure

that all precautions necessary are taken so that all

equipment and procedures are employed properly. Industrial

fires cost organizations hundreds of millions pounds every

year, and loss of life and high insurance premiums all add

to make fire prevention vitally important as part of the

storehouse operations, signs like “No smoking “must be

clearly placed in all part of store, regardless of the

materials being held.

Stores management make sure that the “no smoking “rule is

maintained: fire -fighting equipment must be strategic

positions thought the store’s installations and must be

regularly inspected and maintained: Alarm systems must be

used in all stores to ensure any outbreak of fire is

quickly detected and the alarm raised: fire drills must21

be properly organized and clear fire instruction must be

place on the notice board and other places within the

store: Regular inspection by the local fire brigade’s

preventions officer will help to ensure a safe and

efficient system: fire doors and emergency exists must all

times be kept absolutely clear and a clear passage along

gangways’ must be maintained to facilitate quick exist from

store in case of fire(carter,1989).

2.2.6.4 Segregation of high risk material and knowledge of

materials

Most stores find it more efficient and more cost effective

to store “high risk” materials, such as petrol, oils,

chemicals, explosives, sprits and others in a store

specially designed for the purpose. Such store is usually

placed a reasonable distance from the main buildings of

organization segregation has the following advantages:

first, expensive fire –fighting and prevention equipment

can be concentrated in areas where it is most likely to be

needed and will therefore provide better fire cover.

Secondly, In case of fire in the main store, it will not be

able to reach the high risk stock and therefore the risk of

a large-scale conflagration is greatly reduced. And third,

fires in the high risk can be left to burn themselves out

of need be because it is separated from the main building

(carter, 1989).

2.2.6.5 Knowledge of materials

Part of the storekeepers’ job is to have a sound knowledge

of the materials and items there are dealing with, such22

knowledge will include all the basic characteristics of a

material, and its behavior in given condition and

circumstances, they must be able to recommend alternatives

I (if they exist)to items requested but not stocked. To be

able to do this the storekeeper must have experience and in

some cases training (carter, 1989).

2.2.7 Procurement performance measurement model

Procurement is an operation or activity which is directly

and closely related to that of stores management. Both are

said to be part of supply management and their common

objective is effective control of the goods and services

purchased by an organization. The relationship between

stores and purchasing involves both parties in having a

series of duties to reach other, interims of their

respective roles within supply management.

Procurement involves numerous activities, consisting of

many material and information flows, It is not as simple as

to convey a need from an internal customer to a supplier

and then deriver the item to the internal customer.

Instead, this process consists of activities that are

continuously changing intensity, duration and quality, thus

producing variations in performance, efficiency and

effectiveness of the purchasing department’s work

(Knudsen,1999).The procurement process consumers the

available resource in the purchasing department(input)to

produce a product or service(output)that aims to satisfy

the customer’s needs (Davenport,1994)This implies that a

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process can be described at different leaves with different

magnitudes of details.

Since acquiring external sources in order to satisfy

internal needs is a job with many varieties and options, it

is important to consider the conditions and environment for

procurement in order to produce goods results, this also

implies that a strategic plan for acquiring external

sources has to exist, operating procedures have to be

designed, customer needs have to be fulfilled and supplier

markets have to be surveyed in advance. Likewise, there is

a need to have clear understanding of the environment and

the structure of the purchasing department, which mainly

consists of the purchasing department, internal customers

and supplies, in order to achieved customer satisfaction

with a high level of efficiency and effectiveness (Knudsen,

1999).

At a tactical level, the operating procedure consists of

numerous at the purchasing department processes orders from

internal customers. While carrying out the procedures,

resources are being consumed and efficiency can be

measured. The main objectives of the purchasing department

are to fulfill internal customer’s needs. This gives rise

to measurement of the effectiveness of the process to

ensure that information about the extent to which the

objective set at the strategic Level has been reached or

not (Davenport, 1994).

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A single performance measure is generally inadequate, as it

is not inclusive-it ignores the interactions among

important supply links and ignores critical aspects of

organizational strategies roles, The actual measurements in

the supply link should consist of a set of generic measures

include time, quality and operational costs. These data

will be able to provide information to pinpoint problem

areas, thus giving rise to encouragement for continuous

improvements. It also allows trade-offs to be made between

the different components in the supply link (Knudsen,

1999).

The spectrum about procurement performance measurement

begins with regards to the efficiency and effectiveness of

the procurement process. Therefore; it leads to the

development of a sound measurement system. the design of a

reliable and effective measurement system has to include

some kind of business model or mental model of the system

as a whole. As there is an extensive list available in this

field, a list of the possible measurement areas provided

serve as the fundamentals (Davenport, 1994).

The most important factor that determines the types of

measurement for assessment of performance is the status of

the stores department in the organization. Organizations

where stores departments have a low, clerical status seems

to focus only on operational efficiency measures, while in

organizations where the stores department has a more

status, combinations of both the operational efficiency

25

measures and effectiveness-related measures are

used(Davenport,1994).

2.2.8 Logistic Management

Stores and inventory management as the interface

”procurement” and Distribution it may argue that stores

management is the most link in the supply chain Stock

represent against money, so it is essential that is safe

and levels are appropriate when measured against budged

and desire service level. Christopher (1992) defined

logistics management as the supply chain processes that

plans, implements, and controls the efficient, effective

flow and storage of goods Services and related information

from the point of consumption in order to meet customers’

requirements. Within a supply chain network, ,Logistics

service providers act as a bridge to formulate the linkage

between the upper and lower supply chain parties

processes(Chan and chug,2005).By work doing so, a “virtual

“enterprises is developed requiring the business owners

work collaboratively in order to carry out the business.

(Pagh and cooper 1998) Proposed a “value chain “concept

which has been widely used in presenting the integration

within the function of firm. Underlying the “value chain”

concept, a firm is defined as collection of key functional

activities that can be separated and identified as a

primary activities consisting of inbound logistics,-

marketing and sales, and service, and support activities of

infrastructure, human resource management, technology

development, and procurement .Hence, maximizing the26

linkage between the activities can result in an enhancement

of the film’s operations efficiency and competitive

advantage.

Similar, a” virtual” enterprises operates in the same

approach of involving different number of supply chain

parties to perform various key functions(Chan and

chan,2005),(Armistead 1996)emphasized that it is important

for supply chain members, in particular, the logistics

service providers, to communicate through peers in

performing the same function or activities, Therefore, in

order to enable effective integration in the supply

chainman efficient information-sharing environment is

mandatory to exchange relevant information thereby

visualizing the logistics processes status between up and

down stream supply chain parties.

In stores management, Logistics play a key role to meet the

required materials or services, (Bowersox and closs 2006)

said, in the context of overall business performance,

logistics exist to allow inventory to achieve desired time,

place and possession benefits location to support the

ownership transfer or value-added creation. Then they said,

if the firm does not consistently satisfy time and place

requirements it is nothing to sell. To achieve the maximum

strategic benefits of logistics, the full range of

functional work must be performed on an integrated basis.

27

2.3 Empirical Literature Review

Researchers in the field of supply chain management tend to

place focus on customer service i.e. getting the right

product to the right place at the right time(Stank et

2001)suggest that collaboration, both internal and

external, is key to improving a firms customer service

because it allows “coordination of operations across

business entities “from an inventory control policy

perspective, supply chain management researchers have

begun to address questions regarding how collaboration

across business entities may influence a firm’s inventory

policy decisions.

Much of this advance has come through collaborative

inventory management approaches, such as continuous

replenishment planning (CRP),efficient consumer response

(ECR),quickly response (QR),and vendor managed

inventory(VMI),Which are designed to better match supply

and demand processes and subsequently control inventory in

the supply chain through external collaboration, CRP and

VMI are very similar automatic replenishment programs,

except that under a VMI partnership, the vendor makes the

replenishment decisions, ECR and QR are programs specific

to the grocery and apparel industries, respectively (Stank

et, 2001).

The inventory speculation approach is, by the most

frequently encountered inventory management approach in

practice (Pagh and cooper, 1998).With this approach, a firm

would purchase items and physically hold such items within28

its storage facilities before demand or usage requirements

for these items are known with certainty. This choice comes

with many benefits, not the least of which is the ability

to respond quirkily to demand or usage needs and the

ability to protect itself against fluctuations in prices.

In addition, with this approach, a firm can also avail

itself of volume discounts and reduced inbound

transportation costs from buying in bulk (pagh and cooper,

1998)

However, the inventory speculation approach is not without

its cost disadvantages. Besides the opportunity cost and

financial burden of having cash tied up in physical

inventory, There is also the incurrence of high inventory

holding costs, given the need for storage, material

handling and tracking, and given the threat and expense

of inventory obsolescence, particularly when operating in

highly volatile competitive environments(pagh and

cooper,1998) notes that the purpose of these collaborative

programs is “to make inventory commitment more efficient

“and that the basic for each of the programs is

information sharing. Their study took an approach to

examining involvement in automatic replenishment programs,

while other authors focused on specific programs.

(Katzenberg 2007) hypothesize that the value of information

in inventory replenishment models is dependent upon the

level of demand uncertainty assumed by the model. Thus, as

the focus of inventory management is more focused on

collaborative arrangements and decision making. Model’s29

demand uncertainty assumption and level of uncertainty

assumed becomes more important to the value that

information sharing based inventory management programs

provide.

In addition to the increased importance of the assumption

of demand uncertainty, the review also examines the

importance of the assumption regarding stock out response.

The occurrence of a stock out generally may be modeled in

one of two ways: backorder (backlog) or lost sale. when an

entity within the supply chain is unable to fulfill

customer demand from on-hand inventory, the demand is

either back ordered, meaning that the demand will be

fulfilled in the future when on-hand inventory becomes

available, or the demand is lost, meaning that the demand

will not be fulfilled.

For a given inventory control model, the stock out

assumption is of importance in terms of model’s application

and relevance to various supply chain echelons. Not that

many models, including the basic EOQ model developed by

Horrid (1913), assume that all stock outs are backordered.

While this assumption is certainly valid in some cases, it

is unrealistic in others and over-simplified for example,

when modeling upstream echelons, such as factories or

distribution centers, it is highly likely that unfulfilled

demand will be backordered and fulfilled at a later time.

However, the reaction to stock outs at the retail store

echelon is generally quite different.

30

(Dudley and Lasserre 1989) indicated that timely and

informative customer demand data can result in improved

firm performance through reduced inventories. (Huson and

Nanda1995) proved that the improvement of inventory

turnover(following JIT adoption)by a sample of 55 firm led

to an increase in earnings per share. hen et al,(2005)by

examining how the market values the firms with respect to

their various inventories policies, reported that firms

with abnormally high inventories have ordinary stock

returns while firms with slightly lower than average

inventories perform best over time.

Autry and Daugherty (2003) examined the relationship

between person-organization fit, job satisfaction, coping

behavior, and their impact on warehouse employee turnover.

One of their findings suggested that person organization

fit could significantly affect employee turnover, because

employees whose expectations about their company and

supervisor characteristics are unmet likely are to leave

their companies.

2.3.1 Empirical Literature Review in Tanzania

Stores and procurement management in Tanzania have been

facing great problem of managing its function this is due

to many reasons (Mlolere 2003) said, the inventory

management problems in Tanzania are based on economic,

cultural, social, moral, professional and technological,

but for the case of this study will mention only one.

Subordination of the supply function and NBMM reaction, he

31

said, there is general negligence of supply functions in

Tanzania.

More emphasis is put in finance than in materials, despite

the fact that findings reveal that over 60 percent industry

cost are on materials related expenditures as reported by

Saroya in his research paper,2013) that a lot of companies

abuse the indispensable role of the supply function. He

mention example in Tanzania Electrical supply Co.LTD, the

function has been reduced from a directorate to a

departmental status. The former director for supplies now

reports to his/he former pear, the finance director.

Mziray S. E. (1994) problems facing government stores is

the shortage of qualified professionals hence delays on

reporting or execution of tasks. Unprofessionalism i.e

theft or fraudulent activities are associated to stock

management.

Companies to other professional bodies, NBMM does not seem

to be implementing the policies contained in Act No 9 of

1981 that established the body. He added, organization with

inventories worth millions shillings do not have the right

people to manage the functions, He asked, what is the

reaction of the board to such a professional subordinating?

Then he said, according to studies carried out ( Hosfed,

1983), culturally

Tanzania’s are non-uncertainty avoiders. That is, a general

term we have ready accept situations without consider ring

the effects in future, such cultural values has a negative

32

impact to the inventory management function. The study

concluded at small holder Development for marginal Area

(SDPMA) found that government: practical organizations and

private stores have and are continuing to experience

significance stock losses. Findings have shown that lack of

education background and training has contributed to stock

losses. Found that poor stock checking and weak internal

audit system has been the causes of stock losses (Suka,

2001)

2.4 Research Gap

(Slack et al 2011) stock accumulates unnecessarily through

poor control methods, poor liaison and sub optimal decision

making. Slack did not consider what could be the cause of

poor control or sub optimal decision making. It did not

consider what might be the reason for poor performance.

(Jessop and Morrison 1994) Storage is the function of

material management which is vital department on the

performance of the organization. In order to assess stores

performance, store’s procedures which accomplish the stores

function should be followed properly and accordingly for

better performance. Jessop had only outlined importance of

store management as a function but he did not explain what

to be done in order to attain efficiency and effectiveness

of this important function. Recognizing it is one step but

how to attain efficiency and effectiveness in the most

important and desired goal.

33

Stores function had been considered as a routine job thus

most organizations or companies did not have qualified and

good control policies. Whoever in today’s world stores

function is more strategic in nature due to its effect on

the financial position of the company i.e. profitability of

the company. Thus many studies did not outline different

factors which can influence whether internally or

externally the performance of stores function. Thus this

research is important since it will help to pin point

different factors which will contribute to efficiency and

effectiveness of store management.

2.5 Conceptual framework (Conceptual Model)

Firm’s performance, apart from other determinants it also

depends on efficiency and effectiveness of stores

management. But effective management of stores is directly

linked with various issues: personnel knowledge and skills,

proper execution of ordering policies, and intention of

achieving stores objectives are some of the issue which

influence stores management, In respect to this study, these

issues build an environment within a study has to be

conducted.

34

Above are the factors that Coca Cola Kwanza LTD can look to

improve Efficiency and effectiveness of Stores Management

System.

Good Ordering Policy and Procedure

Operations of companies are controlled by policies and

procedures. This is to ensure that activities are performed

in favor to the organization, so as stores functions. Does

organization have a specific plan to order different items

in different times or it does not have a clear structure?

Good ordering system will ensure that goods are only

procured when they are needed.

Ordering process is also affected by user department. This

is due to the fact that user department are develop a

requirement for purchase of goods. This ordering policy can

35

either be affected positively or negatively by Management

and User department

Qualified Store Personnel

These are employees who have been trusted by company to

oversee performance and operation of store management unit.

Since stores operation involves different activities which

require a great attention. Stock keeper can account into

loss if he/she does not know how to account stock in a daily

basis. In organizations which use automated system require

personnel who are proactive in such a way that every

transaction is recorded on a spot. Good record management

constitutes among the good qualities of stores personnel.

Management with good recruitment and retention policy will

ensure, that it employee experienced, knowledgeable, skilled

and qualified staff allocated or assigned to perform stores

activity. Hence will improve efficient and effectiveness of

stores management. Vice versa will affect performance

negatively.

Security and Safety Precautions in stores management

Efficient store management system will ensure that goods

stored are well secured depending on the nature of the

goods. Safety precautions will involve the use of PPE in all

stores activity. Store has to be secured and restricted from

unauthorized person to prevent theft. Different controls are

set by different companies to guide stores operation.

36

Management with a tight security and safety system will

always have an outstanding performance hence outlays

efficiency system of stores management. Vice versa will

affect stores performance negatively.

User Department and Top Management

These are the dependent variables i.e they influence

directly the efficiency and effectiveness of stores

management functions. The more the awareness of top

management and user department on the importance of stores

operation and how they support store functions.

User department sometimes they place orders or force to get

material/good from the store without following procedures.

Incident like those can lead to poor performance of stores

management. But once user department and top management is

aware and decide to take a lead on driving performance then

efficiency and effectiveness in managing stock will

increase.

37

38

CHAPTER THREE: RESEARCH METHODOLOGY

3.0 Introduction

This chapter presents methodological framework of the study.

It provides various procedures to be used during the study.

These are study design, sampling, method of data collection

and data analysis.

3.1 Research paradigm (philosophy)

Research philosophy refers to the systematic search for

existence, knowledge, values, reason, mind, and language.

Any research will require an open mind in order to establish

facts to both new and existing mysteries.

Paradigms or ‘school of thought’ is the shared understanding

of reality. It can also be defined as the consequent

approach / methods to generate knowledge that is held by

group of people who have wide influence in that subject

area. Plato and Aristotle are regarded as the father of

philosophyz.

There are three paradigms of doing research; namely

Positivism, Interpretivism and Phenomenology.

Positivism is based on statistical, physical measurements

conducted by natural scientists to arrive at the conclusion.

39

Positivism relate to quantitative data and it base mostly of

the logical or analytical thinking. Positivism have

developed through several stages known by various names,

such as empiriocriticism, logical positivism, and logical

empiricism, and finally, in the mid-20th century, flowed

into the already existing tradition known as analytic

philosophy (also called linguistic philosophy).It is more

objective

The discipline of phenomenology may be defined initially as

the study of structures of experience, or consciousness.

Literally, phenomenology is the study of “phenomena”:

appearances of things, or things as they appear in our

experience, or the ways we experience things, thus the

meaning of things we have in our experience. Phenomenology

studies conscious experience as experienced from the

subjective or first person point of view. Phenomenology is

based on social science approach in which a particular set

of circumstances and individual’s understanding of the

question concerned with the study is proposed (Churchill. et

1984)

During the research will use Positivism philosophy due to

the following reasons:

Positivism relies on quantitative data that positivists

believe is more reliable than qualitative research.

Quantitative research is more “scientific” in its methods

than qualitative research and thus more trustworthy. In

40

research, quantitative data provides objective information

that researchers can use to make scientific assumptions.

Positivism follows a well-defined structure during studies

and discussions. Positivists believe that since there are

set laws and rules followed, there will be minimum room for

error. This structure also gives little room for variance

and drastic variable changes, thus making the study more

accurate when it comes to experiments and applications as it

tries to follow specific rules using objective mathematical

and scientific tools.

Positivism methodology entails looking for correlations

between different facts. A correlation is a tendency for

two or more things to be found together, and it may refer to

the strength of the relationship between them. 

3.2 Research Design

A Research design is the conceptual structure within which

research would be conducted (Kothari, 2006)

This study has therefore opted to use a case research

design. A case study is a strategy that involves the

empirical investigation of a particular contemporary

phenomenon within its real-life context, using sources of

evidence (Saunders et al, 2007).The case study design has

been selected because it provides a deeper study based on

selected sample. It also minimizes cost and time usage.

41

Study conducted at Coca cola Kwanza company limited

(CCKLL),it involved both quantitative and qualitative

approach in order to get insight understanding of the

problem and give room for flexibility of the natural

settings. Therefore the same respondents provided both:

qualitative data.

3.2 Types of Data

Data are facts, figures and other element materials past and

present serving as bases for study and analysis

(Krinshnaswam, 1993). The researcher will use various types

of data depending on their availability and accessibility.

Under this study both primary and secondary data will be

used.

3.2.1 Primary Data

A primary data those which are collected a flesh and for the

first time, and this happen to be original character

(Kothari, 2006), A research gathered primary data from the

areas of study through questionnaires and interviewing all

expected respondents. These are new data collected by a

researcher during a field study. Primary data crucial while

undertaking empirical studies. This will constitute large

part of data collected.

3.2.2 Secondary Data

Secondary those which have already been collected by someone

else and which have already been passed through the

statically processes (Kothari, 2006), secondary data used

42

were secured from available literatures, published and

unpublished documents at the company. These are second hand

data, already prepared by other users for other purposes

these are used to supplement primary data.

Secondary data will help to determine whether Coca Cola

abide to country/international standard, procedures and

requirement. Through secondary data research will be able to

establish a malpractice in stores function. Also to provide

comments and recommendations for change.

3.3 Data Collection Methods

3.3.1Questionnaire

Questionnaire will be administered to the selected

respondents from the selected departments. The

questionnaires will be left to respondents for later

collection. This method aim to minimize cost and also gives

respondents anonymity of expression.

The questionnaire will contain both closed and open ended

Questions. A questionnaire is data collection technique in

which a person is asked to respond to the same set of

questions in a predetermined order (Saunders et al, 2007).

3.3.2 Interview

This is a data collection technique in which an interviewer

reads the same set of questions to the respondent in a

predetermined order and records his/her responses (Saunders

et al,2007).The researcher will conduct face to face

43

interviews with respondents. This will be done after

fulfillment of questionnaires in order to access further

details of data. Data will be recorded using prepared

marking schedule by a researcher. A research will use both

structured and unstructured questions that provide the

opportunity to ask broad questions with the aim of

collecting additional details of data. Interview will aim on

establishing understanding of procedures and policies by

employees.

3.3.3 Observation

The researcher will use direct observation to obtain useful

information, hence will be able to examine and evaluate

challenge associated with Stores management at Coca Cola

Kwanza LTD. This has been considered under the circumstance

the respondent may not give some information especially

where is difficult for them to answer researcher questions

though interview or questionnaires. Observation will assist

to give information mostly on the commitment of top

management to improve stores management system. Observation

will also reveal normal stores operation practice as opposed

to standardized procedures of the company practices.

3.4 Sampling Techniques

There are two sampling Technique that is probability

sampling and non-probability sampling techniques. In this

report Non Probabilistic Technique will applied.

Non Probability sampling

44

These are approaches to sampling result in the elements in

the target population having an unequal chance of being

selected into the sample. Non Probability sampling does not

involve random selection while probability sampling does.

3.4.1 Sample and Sample Size

Sampling is the act, process, or technique of selecting a

representative part of a population for the purpose of

determining the characteristics of the whole population. In

other words, the process of selecting a sample from a

population using special sampling techniques called sampling

(Saunders et al, 2007). The study will select the sample

size that will ensure that it represent the entire

population.

This study will target a population of 35 employees from

different department in order to have better and true

representation of daily routines in relation to stores

management. Researcher will go further and select sample of

25 employees.

Table 1: Targeted population and Sample Size of the study

Section Target

Populat

ion

Sampl

e

Units

Finance Section 6 4

Supply Chain

Section

9 7

Planning Section 4 245

Procurement

Section

7 7

Warehousing

Section

3 2

Engineering

Section

5 3

Total 35 25

Source: The researcher (2013)

3.4.2 Sampling procedure

The researcher will use the convenience sampling method, a

sample of convenience is the terminology used to describe a

sample in which elements shall be selected from the targeted

population on the basis of their accessibility or

convenience to the researcher.

Convenience samples are sometimes referred to as ‘accidental

samples’ for the reason that elements may be drawn into the

sample simply because they just happen to be situated or

administratively, near to where the researcher is conducting

the data collection.

This non probabilistic sampling procedure will help to

establish the base/level of understanding to all employees

who works closely with stores department. Furthermore it

46

will establish the reality as to whether company abides to

its stores policies and procedure or not.

3.5. Reliability and Validity

3.5.1 Reliability

According to Krishnaswami and Ranganatham, (2006),

reliability means the ability of measuring instrument to

give accurate and consistent result.

Reliability can also be defined as the extent to which

results are consistent over time and an accurate

representation of the total population under study is

referred to as reliability and if the results of a study

can be reproduced under a similar methodology, then the

research instrument is considered to be reliable i.e. test

is considered reliable if we get the same result

repeatedly.

The study will rely on Cronbach's α (alpha) which is a

coefficient of reliability. It is commonly used as a

measure of the internal consistency or reliability of a

psychometric test score for a sample of examinees which

means validation of measurement instruments such as

questionnaires, tests, and personality assessments. This

research will use this instrument as reliability statistics

test.

3.5.2 Validity

Validity measures the extent to which the research is

really measuring what it says it is. (Joppe, 2000)

47

provides the following explanation of what validity is in

quantitative research. Validity determines whether the

research truly measures that which it was intended to

measure or how truthful the research results are. In other

words, does the research instrument allow you to hit "the

bull’s eye" of your research object? Researcher will

determine validity by asking a series of questions, and

will often look for the answers in the research of others.

Construct Validity refers to whether a scale measures or

correlates with the theorized psychological scientific

construct; that it purports to measure. In other words, it

is the extent to which what was to be measured was actually

measured. It is related to the theoretical ideas behind the

trait under consideration, i.e. the concepts that organize

how aspects of personality, intelligence, etc. are viewed

Content Validity is the estimate of how much a measure

represents every single element of a construct. It is

qualitative in nature, and asks whether a specific element

enhances or detracts from a test or research program. It is

a good indicator of whether the desired trait is measured.

3.6. Management and Data analysis

3.6.1 Data management

The data were checked for their sufficiency computer

software which is SPSS that helped to assemble data for

final stages. However, prior to that were coded for

efficacy use of SPSS.

48

The questionnaires and all important documents will be

completed, incase anything misses it has to be filled from

the right source, during the interview the researcher will

make sure that all important information is collected.

Collection of only relevant data to the research will help

to minimize errors

3.6.2 Data Analysis

Data analysis was done by using both qualitative and

quantitative methods in order to get descriptive results

and statistical results which are presented using charts

and graphs in chapter four. Quantitative data captured by

structured questionnaire were assessed through simple

descriptive statistics.

3.7 Expected result

At the end of the study, the researcher expects the

following;

The challenges will be revealed and suggestions for

improvement presented the beverages industries management,

awareness to the stakeholders will be established in regard

to the efficiency and effectiveness of stock management.

49

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