IMPACT OF TECHNOLOGY ON FMCG SUPPLY CHAINS IN NIGERIA – COMPETITIVENESS THROUGH TECHNOLOGICAL INNOVATION

CHAPTER ONE

INTRODUCTION

1.1 Background of the study

When a company employs technology to obtain, store, process, and organize data, it is known as technology (Rajaraman, 2014). According to Graham et al. (2013), technology includes software, hardware, firmware, and middleware, as well as network infrastructures, platforms, operating systems, and the internet.

According to Gibson and Novack (2018), supply chain management is the control of the flow of products, services, information, and funds from suppliers to customers via intermediaries (Gibson and Novack, 2018). The administration of the entire supply and logistic process of a business is referred to as supply chain management. Procurement, warehousing, inventory control, manufacturing, distribution, and sales orders are among the operations covered by these logistics procedures (Graham et.al 2013).

Companies are finding it difficult to maintain good relationships with global supply chain, therefore, technology is employed to address the demands of the customers and to bridge the gap between supply chain and organizational performance (Auramo et al., 2015). Due to competitiveness through technological innovations, organizations are re-evaluating various ways to conduct and manage businesses successfully (Graham et al., 2013). To this note, Enistores is improving their supply chain through the adoption of modern technology to meet the challenges faced by both customers and workers. This is carried out with the sole aim of maintaining a competitive edge over rival companies and attracting new customers (Graham et al., 2013).

The E-commerce is a modern technology that has improved the supply chain of Fast-moving consumer goods (FMCG) products, as seen in small and medium enterprises in Nigeria (Hald, 2017).

In the current business world, companies are increasingly considered as components of multi-company and multi-echelon networks (Karkkainen & Sartpola, 2017). In the supply chain of a company, technology is considered crucial. Recent studies has shown that in Nigeria, the supply chain of Fast-moving consumer goods (FMCG) products is a relatively new area, and many businesses trade internationally. In today's fast-paced and complex corporate world, a reliable and efficient supply chain is essential. Firms continue to purchase materials for manufacturing and some to deliver to customers at the appropriate time and cost.

The supply chain is considered as a component of a network that transports a variety of FMCG from suppliers to end users. It's an entire commercial chain that is built into the network, all with the objective of efficiency and effectiveness (Hertz 2011).

According to Ackerman (2013), performance measurement is considered a critical management responsibility for achieving goals. Hald (2017), states that supply chain performance should assess the extent to which the supply chain is delivers customer value and suggest ways to improve it. The efficiency, efficacy, and adaptability of a supply chain are measured in three aspects (Hald, 2017). Efficiency is a cost advantage, but effectiveness is a customer service advantage. Just-in-time production and logistic supplier networks are used to enhance efficiency. However, Customer orientation results in effectiveness (Moller and Torronen, 2013). The goal of an efficient supply chain is to synchronize the flow of products and services in order to reduce stockpiles (Li, 2015). Within the supply chain, the efficiency of manufacturers and service providers is also improved.

Continuous improvements in customer service and internal operating efficiency of supply chain organizations are required for effective supply chain management (Hugos, 2011). High order fill rates must be consistent, delivery rates must be high and on time, and the rate of products returned by consumers must be minimal in order to provide the greatest customer care (Hugos, 2011). Organizations should earn a good return on their inventory and other assets when it comes to internal supply chain efficiency. They should also look for ways to reduce their sales and operating costs (Hugos, 2011). The value of a supply chain is boosted when it is more efficient and effective. Value creation is a set of direct and indirect connection functions that are regarded in terms of monetary and non-monetary outcomes (Walter et.al, 2011). Moller and Torronen (2013), states that supply chain efficiency has a direct impact on value, but supply chain effectiveness has an indirect impact.

In supply chain management, supply chain managers must consider the following important factors which includes Customers' demands, supplier availability, inventory levels, delivery, shipping locations and routes, as well as costs and margins. According to Gibson and Novak (2018), in order to become more inventive, gain competitive advantage, and adapt to today's fast-paced and complex market, companies are putting more effort into technology. It is discovered that customer demand has increased with the invention of technology around the world.

Organizations face several difficulties in their operations. The problem of incomplete and incorrect information on stock which results in production bottlenecks like poor demand planning and inventory deployment, materials and component inventory existing at high levels in the organization which gives rise to increase cost of carrying inventory and materials remaining in a non – value added state longer.

Organizations also face the problem of maintaining quality levels and good prices as a result of low-quality raw materials, which give, rise to the production of defective and substandard products. High material and product damage as a result of excessive transportation and material handling. These problems affect organizations performance and efficiency and so therefore a desperate need for effective logistics supply chain management. Against the backdrop of this study, the research examines the impact of technology on FMCG supply chains in Nigeria.

1.2 Research question, aim(s) & objectives

Research questions

The following research questions were provided by the research to help in the general execution of this study:

1. What are the benefits of technology in Enistores?

2. What are the different technologies employed in Enistores to maintain its competitive edge?

3. What is the contribution of technology to the effectiveness and efficiency of supply chain in Enistores?

Aim

The aim of this study is to assess the impact of technology on FMCG supply chains in Nigeria.

Objectives

Specifically, the study sought to:

1. examine the benefits of technology in Enistores.

2. examine the different technologies employed in Enistores to maintain its competitive edge.

3. examine the contribution of technology to the effectiveness and efficiency of supply chain in Enistores.

1.3 Justification of the study

In Nigeria, there is a dearth of study on the use of technology in supply chain activities among Fast-moving consumer goods (FMCG). Technology plays a crucial role because of the information that flows through a company's supply chain. Companies must optimize their use of technology in order to gain a competitive advantage over other companies.

This study will be beneficial to professionals in the supply chain as they will understand the importance of technology in the supply chain and how to improve their supply chain services to gain competitive advantage. The study will also benefit small and medium-sized businesses who use supply chains in their daily operations. It should be emphasized that the majority of these businesses lack advanced technology solutions that might aid in improving their operations. It will also benefit retail supermarkets by allowing them to focus more on technology in their supply chain in order to improve efficiency and effectiveness.

The study will be beneficial to academicians as well. They should place a greater emphasis on the value of technology in the supply chain. Organizations are shifting to a green supply chain, in which waste generated by the supply chain is reduced. They must educate employees on how technology may help minimize paperwork and promote paperless transactions.

According to previous studies, companies use technology for integrated supply chain management (Lan and Unhelkar, 2018). This integration guarantees efficiency and effectiveness, therefore, the need to carry out this research.

1.4 Outline of methodology

Research methodology involves the techniques used to collect and evaluate data with regards to a given topic. This study employs a descriptive survey method where data is collected from the employees of EniStores.

The descriptive survey is used to systematically and accurately describe the characteristics of a study population (Diekmann, 2019). The descriptive research design was used because the study relied majorly on primary data collected from sampled respondents.

1.5 Outline of the rest of the project

The chapterization of this study is sectioned in to five. Chapter one introduces the topic and talks about the objectives of the study and justification. Chapter two is the literature review of the study which discusses the related literature of the study. Chapter three discusses the research methodology adopted by the researcher. Chapter four presents the results and discussion of the study. Finally, Chapter five discusses summary, conclusion and recommendations of the study.

1.6 Summary of the study

This chapter introduced the topic: impact of technology on FMCG supply chains in Nigeria – competitiveness through technological innovation. The chapter showed that EniStores, Uyo, Akwa Ibom was selected as the case study of this research. Furthermore, supply chain can be described as the activities required by an organization to successfully supply a particular product. The scope of this study is focuses on the competitiveness through technological innovation in the FMCG supply chains of EniStores.