1. DECLARATION
I declare that this is my original work and has not been submitted in any other
institution for examination or any other purpose.
Name Munga Mrina Ndago adm No DPM/2014/62296
Student’s signature……………………………………date…………….
Approval
This research has been submitted for examination with the approval of my
supervisor.
Mr. Jacob Kimilu
Supervisor’s signature……………………………date……………….
2. DEDICATION
This project is dedicated to my loving mom for her inspiration and guidance
towards my course.
May the Almighty God bless you abundantly.
3. ACKNOWLEDGEMENT
I would like first and foremost thank the Almighty Allah for giving me ability to
undertake this research .
I would like to take this opportunity to thank my supervisor, Mr Jacob Kimilu who
patiently guided me through the writing of the whole project without complaining.
I would also take this opportunity and sincere opportunity and acknowledge my
brothers, Hamisy and Diesel for the financial and material support towards my
education.
Lastly and most definitely, I would not finish without acknowledging my
inamorata, Binty , for being by me during the time of the project.
4. ABSTRACT
Every organization needs to acquire goods and services in order to carry out its
mission. Varying degrees of effects associated with obtaining these inputs. An
unplanned event might occurin there acquisition, delivery and use that can
negatively affect the organization ability to serve its customers.
Supply chain is an integration of activities taking place among a network of
facilities that procureraw materials, transform them into intermediate goods and
then final products, and deliver them to customers through a distribution system.
Risks in supply chain emanate when unexpected events happen and disrupt the
flow of materials on their journey from initial suppliers through to the final
consumer. Supply chain vulnerability exists in every organization whether big or
small irrespective of their quantity of requirements. If the contingency plans are
not made to manage effects of supply risks in purchasing, occurrence of a negative
incident can have an immediate effect on the purchasing organization.
In order to understand how purchasing organizations address the effects of supply
chain risks, this research has highlighted how resilient chain can be designed by an
organization.
Organizations face numerous sources ofeffects with inbound supply. Effects can
differ in type from supplier to supplier in the duration of the effect and in the
degree of impact in goods or services effects has on the purchasing organization.
Some of the common methods employed to manage supply chain risks are: data
mining analysis, failure mode effect analysis (FMEA), vulnerability analysis,
inventory management, material requirement planning (MRPI), which is a
computer aided technique which eliminates inventories while maintaining delivery
schedules. Just in time (JIT) is based on the elimination of all waste and containing
improvement of productivity. Economic Order Quantity (EOQ) which is the
optimal ordering quantity of an item of stockthat minimizes cost. Manufacturing
resource planning (MRP2), ABC analysis, vendor management inventory (VMI).
These purchasing technique shield an organization from the effect of supply risk
due to uncertainty by creating a “buffer” from the detrimental incidents that can
occur.
5. TABLE OF CONTENTS
Title page
Declaration …………………………………………………………………...i
Dedication ……………………………………………………………………ii
Acknowledgement …………………………………………………………...iii
Abstract ……………………………………………………………………….iv
Chapter One…………………………………………………………..…………1
1.0 Chapter overview…………………………………………………………...1
1.1 Background information..……………………………………………..…...1
1.2 problem statement………………………………………………………….1
1.3 Research Objectives………………………………………………………..2
1.3.1 Main Objectives…………………………………………………………..2
1.3.2 Specific Objectives……………………………………………………….2
1.4 Research questions………………………………………………………….2
1.5 Justification of the study………………………………………………..…...2
1.6 Scope of the study……………………………………………………...……3
1.7 Limitations of the study……………………………………………………...3
Chapter two………………………………………………………………………4
Literature review…………………………………………………………………4
2.0 Chapter Overview……………………………………………………………4
2.1.1 Theoretical review………………………………………………………….4
2.1.2 Concept of resilience in supply chain………………………………………5
2.1.3 Factors contributing to vulnerability resilience………………………….…5
6. 2.1.4 Effectiveness and efficiency in supply chain……………………………….6
2.1.5 Supply chain risk management………………………………………………7
2.2 conceptual frame work………………………………………………………....8
2.2.1 Techniques to identify risk sources……………………………………..........9
2.2.2 Tools to reduce vulnerability…………………………………………………9
2.2.3 Methodology to enhance supply chain management………………………..10
2.2.4 Benefits Accrued by organization…………………………………………..10
CHAPTER THREE
3.0 Research design and methodology…………………………………………...11
3.1 Chapter overview……………………………………………………………...11
3.2 Research design ………………………………………………………………11
3.3 Target population……………………………………………………………..12
3.4 Sampling design and sample size……………………………………………..12
3.5 Data collection instruments and procedures...............................................…...12
3.5.1 Questionnaire………………………………………………………………..13
3.6 Data analysis methods…………………………………………………...……13
3.7 Data presentation ……………………………………………………………..13
CHAPTER FOUR
4.0 Results, Discussion and Findings……………….……………………………14
4.1 Chapter overview……………………………………………………….……14
4.2 Background Information……………………………………………………..15
4.2.1 Gender Response…………………………………………………………..15
4.2.2 Marital Status……………………………………………………………….16
4.2.3 Levels of Educations……………………………………………………….17
4.3. Analysis of Objectives……………………………………………………….18
7. 4.3. Objective 1: Sources of risks in the Organization…………………………18
4.3 .1 Management ability to identify sources of risks………………………...18
4.3.2 Measures to mitigate supply chain vulnerability…………………………19
4.3.3 Origin of risk……………………………………………………………...20
4.3.4 Other risks suggested……………………………………………………..22
4.4 Objective 2: strategies to enhance supply chain management………………23
4.4.1Organization had any risk mitigating strategy……………………………...23
4.4.2 Which strategies should be implemented…………………………………...24
4.4.3 Usage of only one strategy to enhance SCM………………………………..25
4.4.4 Levels of risks determines the strategy to be used………………………….26
4.4.5 Other Strategies which GCB can use……………………………………….27
4.5.0 Objective 3: Benefits the organization will get after implementation of the
strategies…………………………………………………………………………..28
4.5.1 Any benefit which the Organization will accrue……………………………28
4.5.2 Benefits GCB will get after implementing SCRM strategies……………….29
4.5.3 Whether the benefits will result to the growth of the organization…………31
4.6.0 Objective 4: challenges faced……………………………………………….32
4.6.1 Challenges faced by GCB ………………………………………………….32
4.6.2 Whether the challenges are internally or externally………………………...33
4.6.3 Ways in which the organization can minimize the challenges it faces…….34
4.6.4 Other challenges faced by GCB……………………………………………36
4.6.5 If the challenges can be minimized by implementing SCRM strategies……37
CHAPTER FIVE
5.0 Summary, conclusion and recommendation…………………………………..39
5.1 Chapter Overview …………………………………………………………….39
8. 5.2 Summary………………………………………………………………………39
5.3 Conclusion……...……………………………………………………………..40
5.4 Recommendations…………………………………………………………….40
5.5 Other areas of Study………………………………………………………….41
Reference………………………………………………………………………….42
Appendices ……………………………………………………………………….43
LIST OF TABLES page
Table …………………………………………………………………………
Table 3.1 sample size…………………………………………………………12
Table 4.1 response rate…………………………………………………………14
Table 4.2.1 gender response…………………………………………………….14
Table 4.2.2 marital status……………………………………………………….16
Table 4.2.3 levels of education …………………………………………………17
Table 4.3.1 management ability to identify sources of risks……………………..19
Table 4.3.2 measures to mitigate supply chain vulnerability……………………..20
Table 4.3.3 Origin of risks…………………………………………………..……21
Table 4.3.4 Other sources of risks suggested……………………………………..22
Table 4.4.1If the organization had risk mitigation strategy………………………23
Table 4.4.2 Strategies to be implemented…………………………………………25
Table 4.4.3 Usage of only one strategy enough to enhance SCM………………...26
Table 4.4.4 Level of risk determines the strategy to be used……………………..27
Table 4.4.5 Other strategies which GCB can use………………………………...28
Table 4.5.1 Any benefit the Organization will accrue……………………………29
Table 4.5.2 Benefits GCB will get after implementing SCRM…………………...31
9. Table 4.5.3 Whether the benefits will result to the growth of company………….32
Table 4.6.1 Challenges faced by GCB……………………………………………33
Table 4.6.2 Whether the challenges are internal or external sourced…………….35
Table 4.6.3 Ways in which the organization can minimize its challenges………..36
Table 4.6.4 Other challenges faced by GCB……………………………………...37
Table 4.6.5 If the challenges can be minimized by implementing SCRM………..38
List of figures page
Figure 2.2.2 Conceptual framework………………………………………………………….8
Figure 4.1 Response rate……………………………………………………………………..15
Figure 4.2.1Gender of the respondents………………………………………………………..16
Figure 4.2.2 Marital status……………………………………………………………………..17
Figure 4.2.3 Levels of education……………………………………………………………….18
Figure 4.3.1 Management ability to identify sources of risks…………………………………..19
Figure 4.3.2 Measure to mitigate supply chain vulnerability……………………………………20
Figure 4.3.3 Origin of risks………………………………………………………………………21
Figure 4.3.4 Other sources of risks suggested………………………………………………..…22
Figure 4.4.1 If the organization had any risk mitigation strategies……………………………..24
Figure 4.4.2 Strategies to be implemented………………………………………………………25
Figure 4.4.3 Usage of only one strategy to enhance SCM………………………………………26
Figure 4.4.4 Levels of risks determines the strategy to be used…………………………………27
Figure 4.4.5 Other strategies……………………………………………………………………..29
Figure 4.5.1 Any benefit the organization will accrue…………………………………………..30
Figure 4.5.2 Benefits that GCB will get after implementing SCRM…………………………….31
Figure 4.5.3 Will the benefits lead to the company growth……………………………………..32
10. Figure 4.6.1 Challenges faced……………………………………………………………………34
Figure 4.6.2 Challenges are internally or externally caused……………………………………..35
Figure 4.6.3 Ways in which the organization can minimize its challenges…………………...…36
Figure 4.6.4 Other challenges faced by GCB……………………………………………………38
Figure 4.6.5 If the challenges can be minimized by implementing SCRM…………………...…39
12. CHAPTER ONE
INTRODUCTION
1.0 Chapter overview
This chapter explains the background of Gold Crown Beverages K Ltd. The statement of the
problem, research objectives, main objectives and specific objectives, research questions, scope
of the study, limitations of the study, delimitations of the study and justification of the study.
1.1 Background of the study
Gold Crown Beverages K ltd started its operations in the year 2001. And was registered the same
year under private company. The head office is located in Mombasa along the Moi Avenue at the
Chai street Shimanzi. The company is a subsidiary of Global tea & commodities Ltd Uk. In
Mombasa it is best known for their “Baraka chai” products (a light refreshing tea for everyday
consumption.
Zsidisn defines vulnerability as the properties of a supply chain system; it premises, facilities and
equipments, including its human resource, human organization and all its software, hardware and
net-ware that may weaken or limit its ability to endure threats and survive .
A supply chain is generally conceptualized as a network of companies from suppliers to
end-users, which have the intention of integrating supply/demand via coordinated
company efforts (Frankel et al., 2008). Supply chains are complex and linked social–
ecological systems of people and institutions. The concept of resilience in supply chains
combines these previous tenets with studies of supply chain vulnerability, defined by
Svensson (2002) as "unexpected deviations from the norm and their negative consequences."
Vulnerability can be measured and expressed in numeric terms as “risk”, a combination of
the likelihood of an event and its potential severity (Craighead et al., 2007; Sheffi 2005). Both
these definitions have foundations in traditional risk management techniques and are
expanded by other authors (Svensson, 2002; Zsidisin, 2003; Pettit et al., 2010).
13. The concept of resilience is used extensively in engineering, ecological sciences, and
organizational research, all of which provide insight into creating a conceptual framework
for supply chain resilience. In the ecological sciences, the standard definition of resilience is
"the ability for an ecosystem to rebound from a disturbance while maintaining diversity,
integrity, and ecological processes" (Folke, 2006). It may be beneficial for a supply chain not
to return to its original "shape" following a disruption, but rather to learn from the
disturbance and adapt into a new configuration (Pettit et al., 2010). Network theory views a
supply chain as an adaptable living system and a resilient supply chain, therefore, should be
efficient, adaptable, and cohesive (Fiksel, 2003). A resilient supply chain enjoys high levels
of collaborations required to identify and manage risks where the culture of risk
management is a necessity.
Supply chain vulnerability is minimized on firms supply activities when professional and
strategic framework exists. Commonly relationships between suppliers and customers are driven
by personalities or needs of moment, whereas relationships and purchasing strategy should be
ideally be based on a combination of factors affecting the nature of each purchasing area
including threats, complexity of the supply network, values of the suppliers and buyers, the
market, logistics and basic matters of supply and demand.
14. 1.2 Problem Statement
Organizations which are unable to come up with pliable supply chain are faced with monumental
challenges in its running. Gold Crown Beverages has its share of the complications due.
Gold Crown Beverages was faced with reduced business performance that was brought up by
publicity and their liability to effective evaluates their supply chain and professional buying in
their organization.
This research attempted to find solutions to such problems and evaluations of supply chain
strategies by Gold Crown Beverages K Ltd. Firms will desire and negotiate an environment so as
to eliminate uncertainty. The researcher believes the goals of completely eliminating aspects of
supply chain risks is unrealistic but the goal of reducing the probability is achievable.
1.3 RESEARCH OBJECTIVES
1.3.1 Main Objectives
1To evaluate the effects of supply chain risks on improving organizational performance.
1.3.2 Specific Objectives
1. To identify sources of supply chain risks in Gold Crown Beverages K Ltd.
2. To identify methodologies for enhancing supply chain management that Gold Crown
Beverages K. Ltd can adopt.
3. To determine the benefits achieved after adopting vulnerability reduction strategy
4. To investigate challenges facing GCBK Ltd and suggest what can be done to improve the
effects of purchasing techniques.
1.4 RESEARCH QUESTIONS
i. What are the main sources of supply chain risks that may affect the supply chain system?
ii. What are the tools that GCBK Ltd can adopt to enhance supply chain management?
15. iii. What benefits will GCBK Ltd accrue after implementing supply chain mitigation strategy
in their organization?
iv. What are the challenges faced by GCBK ltd?
1.5 JUSTIFICATION OF THE STUDY
The research when successful completed will be of a great significance to:
The researcher will gain valuable knowledge for the study and benefits by exposing the
researcher to insights of area of the study.
To the management. The organization may find the findings and recommendations of
this research relevant hence adopt them for implementation inorder to help the
organization affectively evaluate the effects of supply chain risks, thereby improving on
their profitability and maximize profits. Help the management ensure customer
satisfaction.
To the community. The recommendations will result into an improvement in the
activities of the purchasing and supply management. This should lead to improved
relations between company and community. If adhered to the recommendations will
improve conducive working environment between suppliers and customers.
To other researchers it will serve as source of literature review.
1.6 SCOPE OF THE STUDY
The study is taking place at Gold Crown Beverages K Ltd in Mombasa along the Moi Avenue at
the Chai Street in shimanzi. The study is limited to about four hundred people, these being the
management, employees from different departments of the company, suppliers and immediate
surrounding community. The focus is on effects of supply chain risks on improving
organizational performance.
1.7 LIMITATIONS OF THE STUDY
The researcher encountered the following constraints while carrying out the research:
Financial constraints
16. The researcher faced financial limitations on the expense of travelling, acquisition of stationary
etc.
Organizational bureaucracy
The bureaucratic nature of the organization, made it difficult to obtain some data as the persons
concerned were not willing to provide the required information, instead referring to other or their
seniors
Accessibility
It was difficult to obtain certain information from managers since they were always busy with
office work.
Lack of cooperation
The respondents were reluctant to participating in research exercise due to lack knowledge to the
field under investigation.
Time
The time allocated to undertake the research is not sufficient to carry out an in depth study
17. CHAPTER TWO
LITERATURE REVIEW
2.0Chapter overview
This chapter presents the theoretical review of the past studies, exploration of the same literature
from the internet and the conceptual framework.
2.1.1Theoretical review
This chapter establishes a theoretical foundation for studying the effects of supply chain risks on
the performance of the organization. It begins with a theoretical review followed by a
description of potential supply chain risk sources is presented. A discussion of buffer-oriented
supply risk management methods follow.
George A and Bob Ritchie (2005 P.3) embraced an initial definition of supply chain risk as “the
potential occurance of an accident or failure to confiscate opportunities with the inbound supply
in which its outcomes result in a financial loss for the (procuring entity) firm. However, risk as
used within the context of the supply chain may be categorized in a number of dimensions.
i. Disruption within the supply of goods/ services including poor quality which cause
downtime and consequent failure to satify the customers requirements on time.
ii. Volatility in terms of price may result in difficulties in passing on price changes to the
customer and potentially have consequences in lost profits.
iii. Poor quality products or service, either upstream or downstream, may impact on the level
of satisfaction of the customer with consequences for future revenues and possibly more
immediate claims for financial compensation.
iv. The reputation of the firm, often generated by issues directly related to the supply chain
itself, may pose risk. Inadvertent comments by senior executives or failure to endorse
certain protocol may damage the reputation of the organization.
Vulnerability is a concept that may be used to characterize a supply chain system’s lack of
robustness or resilience with respect to various threats that originate both with and outside its
system boundaries.
18. Vulnerability of a supply chain system may be manifested both in its infrastructures. Both nodal
and modal , its processes as well as the operation and management of the supply chain. The
nodal part of the supply chain e.g profits, terminals, warehouse and transport points, check or
security gates, while the modal part of the supply chain is the transportation of modes, e.g roads,
rail, air or waterborne transport modes including deep-sea, short sea and inland waterways.
A variety of demands, both from society in general and from related business will also add to the
supply chain system’s vulnerability. A supply chain system may be vulnerable with respect to as
diverse threats as: technical failure, human errors, criminal acts, environmental impacts,
accidents, loss of key personnel, strikes, variation in energy prices, etc. an example of
contemporary aspect that could be having tremendous impacts on the long term vulnerability of
the supply chain systems are the environmental impacts and related sustainability of the system
e.g as denote through new carbon footprint measures. The global environmental concerns and
sustainability focus could lead to radical changes in supply chain system, and expose strategic
and tactical vulnerability in present supply chain constructions.
Another example could be the dependence on single, large port sites in many deep-sea maritime
logistics chains.
Zsidisin further defines vulnerability as the properties of a supply chain system; it premises,
facilities and equipments , including its human resource ,human organization and all its software,
hardwareand net-ware, that may weaken or limit its ability to endure threats and survive
accidental events that’s originate both within and outside the system boundaries.
2.1.2 concept of resilience in supply chain
According to Pack (2006) the concept of resilience is related to risk and vulnerability in a
perspective that not all hazards and threats can be avoided, controlled or eliminated. Instead
,resilience focuses on the ability of the system to return to its original or desired state after being
disturbed e.g its ability to absorb or mitigate the impact of disturbance.
Zsidisin in his book of supply chain says that supply system is said to be robust or resilient ,with
respect to a threat, if the threat is not able to produce any “Lethal” affects on the sytem.
19. He defines robustness as a system’s ability to resist an accidental event and return to do its
intended mission and retain the same stable situation as it had before the accidental event. And
resilience as a system’s ability to return to a new stable situation after an accidental event. As
such, robust systems have the ability to resist, while resilience system have the ability to adopt
2.1.3 Factors Contributing To Vulnerability Resilience
Understanding the threats and risks that are underlying factors affecting the vulnerability of a
supply chain system is an important part of vulnerability relation where vulnerability may
materialize. The factors depend on the type of system. These factors are present in the internal
organization of physical and human capital within the system’s relationship with its surrounding
elements, or external.
The factors may be used to create check-listsfor a vulnerability analysis of a supply chain
system. By relating the factors to the dimensions of the system model, further structured insight
may be gained, and the factors ‘may be easier to achieve.
2.1.4 Effectiveness and efficiency in supply chain
How much risk is willing to take enhance effectiveness and efficiency, in proportion to increased
vulnerability is the underlying dilemma one directly or indirectly faces when designing new and
improved supply chain systems.
Hollnagel 2004, p. 153) raises some concerns around the search for effectiveness and efficiency,
and has given it an acronym ETTO for efficiency-thoroughness trade-off ;
Thoroughness means that they try as best as they can to do the right thing in the right way e.g to
choose the correct action and to try it out as well as possible
Efficiency means that they try to do this without spending too much effort in order to meet the
demands of the situation, regardless of whether these demands are imposed by an external source
or of their own making.
This efficiency-thoroughness trade-off (ETTO) is a common feature of human performance that
seeks to play a role at the level of individuals and at the level of organizations alike.
20. Hollnagel’s ETTO principle can be related to perrow’s (1984, 1999) definition of systems
according to their degree of coupling the interaction.
According to perrow interactions in a system may range from linear to complex. Linear means
“interactions in an expected sequence” while complexity means “interactions in an unexpected
sequence” from perrow’s discussion of complex and linear systems one might believe that linear
system is an optimal system but perrow claims that there are two reasons why we need to have
complex (vulnerable) systems.
i. Complex systems are more efficient than linear systems(in the narrow terms of
supply chain efficiency, neglecting accident and disruptions hazards.
ii. Often , we have complex systems because we do not know how to produce the
output through linear systems.
Then according to perrow we have complex systems both because we want to take advantage of
the possibilities the complex systems give, in our search for efficiency and effectiveness, but
also because we do not sufficiently understand how a given complex system may be converted
into a linear system , e.g, we have limitations in our learning capability.
The learning capability may only be improved by using the system, and therefore a complex
system may only be converted to a linear system through a learning process. It is during this
learning process that complex systems are especially vulnerable due to our limited knowledge
of all interactions.
Paradoxically, the more efficient a logistics chain is , the more vulnerable it may be , as
suggested by the ETTO principle (hollnagel 2004)
The need for resilience reflects a need for strategic resilience in supply chain systems and SCM
to maintain high efficiency in a dynamic and complex environment. Also within the safety
science domain, the increasingly complex world has enforced a shift of assumptions from those
of stable controllable setting enabling functional closure, to those of a more dynamic and
complex world
21. 2.1.5 Supply chain risk management.
Efficient risk management can provide value to stakeholders of a firm. The compliance with
appropriate procedures and corporate governance policies can help to reduce or avoid crisis
situations.
Risk management entails identifying operational risks and developing
mitigation procedures for maintaining operational performance .Along with considering supply
chain risk management from an operational new point, it is also beneficial to consider the
supply chain risk management from a strategic management perspective. Developing
appropriate corporate governance policies to tackle issues of sustainability and ethical sourcing
leads to a better corporate reputation and also helps in risk management.
Rice and Cavinato (2003) report that many firms have developed various risk assessment
programmes that are intended to:
i. Identifying various types of risks
ii. Estimate the likelihood of each type of major disruption occurring
iii. Assess potential loss due to major disruption
iv. Identify strategies to reduce risks
In considering the risk primarily in the supply chain Rice and Cavinato (2003) and Zsidisin et al
(2000,2004) suggested that a supply chain risk assessment programme motivate a firm to
develop contingency plans, which thus can also be used to meet certain legal requirements such
as the Sarbanes Oxley Act of (2002) and KonTraG Davis (2004) have suggested that
interdependence carries risk in the supply chain but this can be managed. Zsidisin et al (2000)
and zsidisin (2003) presents suggestions for minimizing risk :
Carrying buffer stock and improving stock management
Using alternative sources of supply
Use of contracts to manage price fluctuation
Quality initiative.
22. 2.2 THE CONCEPTUAL FRAMEWORK
A conceptual framework is an analytical tool with several variations and contexts. It is used to make
conceptual distinctionsand organize ideas. Strong conceptual frameworks capture something real and
do this in a way that is easy to remember and apply
Fig..2.1 conceptual frameworks
Independent variables.
Dependent variables
Benefitsrequired
Techniquestoidentifyrisk
sources
Toolsto reduce
vulnerability
Methodologytoenhance
supplychainmanagement
Challengesfaced
Proactive supplychain
riskmanagement
Reactive supplychain
Riskmanagement
Supplychain
management
23. Moderating factors
Many supply chains are particularly vulnerable because management was not fully aware of the
threats that the system is exposed to and the vulnerable situation these threats impose on the
supply chain.
The study had five variables on the research questions, which the researcher attempted to bring
to light their effect on supply chain risks on manufacturing industry at golden crown in
Mombasa, which is the dependent variable. This study acknowledged that there are other factors
which also may influence the impact of risk in manufacturing industries. They include:-
Physical network.
Financial network
Information network
Relational network
Innovational network
2.2.1 Techniques To Identify Risk Sources
There is no single style of risk management or approach to risk management that offers all the
answers. All style that can be adopted should operate as complementary approach within the
organization.
2.2.2 Tools to reduce vulnerability
Communication – the organization can enhance proper communication by also amalgamating the
suggestions from junior staff, this is upward communication.
Leadership style –the leadership style should be that of participatory, where both the top and
lower management participate in contributing both in long and short term decisions.
2.2.3 Methodology To Enhance Supply Chain Management
In all cases the key components of successful risk management framework are:-
Communication and reporting structure (Architecture)
Overall risk management strategy
24. Set guideline and procedures
2.2.4 Benefits Accrued By Organization
Benefits arising from successful implementation of SCRM
Compliance-Risk management activities designed to ensure that an organization complies
with legal and regulation obligations.
Assurance-Board of an organization will require assurance that signifies risks have been
identified and appropriate control put in place.
Decision-In order to ensure that correct decision are taken, the organization should undertake
risk management activities that provide additional structured information to assist with
business decision making.
Efficiency/ Effective/Efficacy-A key benefit from risk management is to enhance
The efficiency of operations within the organizations operations- Ensures business processes
are effective and that the selected strategy is efficacious – capable of delivering exact what is
required to satisfy the ultimate customer.
The benefits of risks management can also be identified in relation to these three timescale of
activities within an organization
Efficacious strategy– business growth, business continuity and competitiveness in the market
arena.
Effective processes and project – Elimination of wastes and loss reduction.
25. CHAPTER THREE
3.0 RESEARCH DESIGN AND METHODOLOGY
3.1 Chapter Overview
This chapter presents an overview of the methodological aspect of the research. The chapter
describes the various methodologies that were used in gathering data, procedures that were
adopted in conducting the research, the techniques which were employed to analyze and
presentation of the data gathered.
This chapter mainly focuses on research design, target population/ sampling design and
sample size procedures, data collection instruments, and procedures and data analysis
methods. It describes the procedures and methods which were used in the study purposes of
assessing the effects of supply chain risks in organizational performance.
The research design was limited by the topic of study and involved the use of a combination
of descriptive and qualitative research methodologies. Questionnaires as well as observation
methods were employed on the sample respondents to provide quality study.
The study was limited to golden crown beverages limited along chai street in shimanzi,
Mombasa. However, the study results can be used for other area and businesses in Kenya.
The study attempted to answer the research questions outlined in chapter one by a way of
objectives.
3.2 Research design
This section describes the research design used in the study. The role of research design was
to connect the research questions to the data. In this study, inferential research design was
used. Inferential statistics consists of procedures for for making generalization about the
population by studying a sample from that population.
The study design adopted was a case study aimed at establishing the effects of supply chain
risks on GCB in Mombasa coast province. The researcher used one case study so that
comprehensive study could be conducted.
26. 3.3 Target population
The target groups were the management staff, customers and community living around GCB.
The company has two hundred unionsable employees fifty management staffs. The
customers are the community within the company and all over the coastal region. The
company has thirty main suppliers. Therefore the target population was approximately one
thousand people.
3.4 Sampling design and sample size
Sampling has often been defined as the taking of part of a population or universe and
considering it as representative of that population or universe.(kerlingr,1964).
Stratified random sampling method was used to determine the right number of respondent in
each category; this method ensures that different groups of population are adequately
represented in the sample to increase the level of accuracy when estimating parameters.
Simple random sampling was used in each of the strata.
Approximately one thousand people were targeted but only 12 percent of the population was
sampled from different strata. The sample target was as follows
Table 3.1 showing the sample size.
Category Population Sample size percentage
Employees 200 20 10
Management 20 5 25
Suppliers 20 6 30
Community 760 60 7.89
Total 1000 101 10.1
Source: Munga
Hence the sample size was one hundred and one people. The population was classified into
categories/ strata then they were sampled randomly to get the right number in each category.
27. The random sample technique was used because it permits the application of inferential data
analysis and interpretation. The researcher interviewed 101 people from all the categories. These
were to cater for a reasonable percentage of the population, 30%.
3.5 Data collection instruments and procedures
The researcher used the following data collection instruments.
3.5.1 Questionnaires
The research was carried out through designed questionnaires which were distributed to the
respondents through research assistants. The respondents were given one week to respond to the
questions after which the research assistants collecttd the completed questionnaires.
Questionnaires were distributed to selected respondents in every category / strata.
this was used to the staff of GCB, customers , suppliers and even the community living around
the company. Th reason for using this method is because it is faster and thus saves time for the
sample population within a period of one month. It was also confidential and gave room for
individual opinion. The different categories were given different questionnaires differently
structured. The researcher structured the questionnaires and then distributed them with the help
of the three research assistants as the questionnaires were to be distributed to various parts of the
community, the management staffs, customers and suppliers. Permission sort from GCB
management to administer the questionnaires, then after the management briefed the staff
through memo about the whole process; the researcher met and explained to the respondents the
purpose of the questionnaires.
Each respondent was handed a copy of the questionnaire and instructed to return it after two
weeks. This method gave the opportunity to collect responses within a short period of time and
any doubts that the respondent faced could be clarified on the spot. This method was also cheap
and reached the target population. After two weeks the responses were collected for in-depth
analysis in order to vary the answers based on the research questions as guided by the research
objectives.
28. 3.6 Data analysis methods
Data from the completed questionnaires were checked for completeness and consistency. Data
analysis involved editing, cleaning, transformation and tabulation. Analysis was done using
statistical techniques, such as measures of central tendency (mean, mode median), and
percentages using computer software-statistical package for social sciences (SPSS).
3.7 Data presentation
The researcher presented the data collected in a form of report, tables and charts. The report gave
a summary of the responses to the questionnaires and observation which were analysed
qualitatively and quantitatively.
29. CHAPTER FOUR
4.0 RESULTS, DISCUSSION AND FINDINGS
4.1Chapter Overview
This chapter highlights the results of the data collected from the selected respondents after the
administration of questionnaires. In this chapter various data presentation methods have been
used.
The researcher intended to obtain response from 120 respondents to whom questionnaires were
issued. Table 4.1 shows the number of questionnaires issued and later brought back for analysis.
Table 4.1 showing the response rate
Category Questionnaires issued Questionnaires
returned
Percentage
Employees 25 20 80%
Management 5 3 60%
Suppliers 10 8 80%
Community 80 70 87%
Total 120 101 84.167%
Source: mungah
Summary of questionnaires issued and returned
Questionnaires returned 84.167%
Questionnaires not returned 15.833%
Figure 4.1 showing the response rate
30. The researcher distributed 120 questionnaires but only 101 of them were returned.
4.2 Background information
The sample for the study was 12% of the total population.
4.2.1 Gender response
The respondents had been requested to indicate their gender. The reason was that this would
enable an in-depth analysis of responses along gender lines, should there be need.
Analysis
Out of the respondents,55 percent were male and 45 percent were female. Table 4.2.1 shows
gender response analysis.
Table 4.2.1
response frequency percentage Cumulative %
Male 66 55 55
female 54 45 100
Source: mungah
84%
16%
QUESTIONNAIRE
RETURNED
QUESTIONNAIRES NOT
RETURNED
31. The responses were outputted in the figure below.
Findings
The findings in the respondents; more men with a frequency of 66 and that of female was 54
persons.
4.2.2 Marital status
Analysis
On marital status 40 percent were married, 20 percent divorced,30 percent single and 10 percent
widowed.
The table 4.2.2 shows the categories of marital status and their respondents.
Table 4.2.2 marital status
Respondents Frequency Percentage
Married 48 40%
Divorced 24 20%
0%
10%
20%
30%
40%
50%
60%
female male
32. Single 36 30%
Widowed 12 10%
Source: mungah
The responses in table 4.2.2 were outputted in the figure below.
Fig 4.2.2 marital status
Findings
The data revealed that the married couples have the majority share of the respondents, followed
by the single families, then divorced with a frequency of 24 respondents and the last one is the
category of widowed.
4.2.3 Levels of Education and Training
The respondents had been asked to indicate their highest education level with the view to
establishing the respondents level of understanding of the area understudy.
40%
30%
20%
10%
maried
single
devorced
widowed
33. The results were, most employees were having basic education as 70 percent of the respondents
were having O-level/ KCSE,15 percent of the respondents had certificates/ diploma, 10% of the
respondents had Bachelor degrees and only 5 percent had master’s degree.
Table 4.2.3 shows the response rate for the level of education and training of the employees in
gold crown beverages.
Table 4.2.3 level of education and training respondent
Response frequency percentage Cumulative
percentage
O-level/KCSE 14 70% 70%
Cert/Dip 3 15% 85%
Degree 2 10% 95%
Masters 1 5% 100%
Source: mungah.
The responses in table 4.2.3 were then outputted in the figure below.
O level/KCSE,
70%
cert/dip,
15%
degree, 10%
masters, 5%
O level/KCSE
cert/dip
degree
masters
34. Findings
The findings were majority of the population had the basic education, those with certificates and
diplomas took the second position with a frequency of 3 respondents followed by those with
degrees with frequency of 2 respondents and the last category with master’s had a frequency of
one respondent.
4.3 Analysis of the objectives
4.3.1 Objective 1: sources of risks in the organization
4.3.1.1 Management ability to identify sources of risks
Analysis
Data was analyzed quantitatively by the researcher. Majority of the respondents (80%) disagree
that the management was able to identify the sources of risks in the GCB. However, there were
few responses ( 20%) who agreed that the management was able to identify sources of risks.
Table 4.3.1.1 showing analysis of respondents on the management ability to identify sources
of risks.
Respondents yes Yes % No No%
Management 3 4.1 0 0
Employees 7 9.6 18 24.7
Suppliers 2 2.7 3 3.8
Community 3 4.1 37 50.7
Total 15 20 58 80
Source: mungah
Figure 4.3.1.1 showing analysis of respondents on the management ability to identify
sources of risks.
35. FINDINGS
According to the above analysis, a frequency of 58 of the respondents say that the organization
had no ability to identify sources of risks while only 15 of the respondents say that the
management had the ability sources of risks. This was due to management not allowing the
operational rank to participate in decision making of the organization. The operational rank was
aware but communication to the top management was not possible as their decisions were only
an opinion and not significant to the decision makers.
4.3.1.2 Measures to mitigate supply chain vulnerability
Analysis
Most of the respondents (95%) said that the measures usually taken are reactive, with only 5%
said that the measures undertaken were proactive measures as tabled below.
0
10
20
30
40
50
60
70
80
YES NO
36. Table 4.3.1.2 measures to mitigate supply chain vulnerability.
Respondents proactive % Reactive %
Management 1 1% 2 3%
Employee 0 0% 25 34%
Suppliers 1 1% 4 6%
Community 2 3% 38 52%
Total 4 5% 69 95%
Source: mungah..
Figure 4.3.1.1 showing analysis of respondents on management ability to identify risk
sources
Findings
According to the findings, 95 of the respondents said the organization uses reactive measures of
mitigating risks and only 6 respondents said the measures taken were proactive.
The organization had no set measures placed by the top management to mitigate risks since, first
they were not aware of the risks which are vulnerable to the supply chain in existence thus
always taking reactive measures.
4.3.1.3Origin of the Risks
5%
95%
proactive
reactive
37. The respondents were also asked to indicate where the risks originated from.
Analysis
Respondents mentioned various sources of risks, 20% of the respondents said they originated
from internally, 25% said from external while 50% said the risks originated from both internal
and external sources while 5% said they were not aware. The findings were tabled below.
Table 4.3.1.3 Origin of the Risks
Response frequency Percentage Cumulative
percentage
Internally 20 20 20
Externally 25 25 45
Both internal &
external.
51 50 95
Not aware 5 5 100
Source: mungah
The responses were presented as below:
Table 4.3.1.3 Origin of risks.
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
internally
externally
both
internally &
externally
not aware
38. Findings
The findings from the data was that the majority of the respondents believed that the main risk
source was originating from both internal and external source at the GCB has to put in some
adequate strategic measures to accommodate others opinion as it seems the overwhelming
percentage have an opinion that the risk originate from internal and external sources which can
help in strategic decision making, then mitigating risks.
4.3.1.4 Other of risks suggested
Analysis
The respondents were also asked to suggest other sources of risks, their responses are 25% of
respondents said physical network, 20% said financial network, 30% said information network,
while 20% of the respondents said relational network in the source of risks, while only 5%
indicated innovational network.
The respondents are tabled below
Table 4.3.1.4 other sources of risks suggested
Respondents frequency percentage Cumulative
percentage
Physical network 26 25 25
Financial network 20 20 45
Informational network 30 30 75
Rational network 20 20 95
Innovational network 5 5 100
Source: mungah
The output was then figured as shown.
Figure 4.3.1.4 other sources of risks suggested.
39. Findings
From the analysis above, the data findings shows that the majority of the stakeholders believed
that informational network was the main source of supply chain risk, while innovational was the
least cause, while the other sources were almost linearly.
4.4 objective 2: strategies to enhance supply chain management.
4.4.1 Organization had any risk mitigating strategy?
Analysis
The respondents were asked if the organization had any mitigating strategies in place, 16% of the
respondents said yes while a mammoth of them with 84% said no strategies were in place. The
data was tabulated as shown.
Table 4.4.2.1 If the organization had any risk mitigating strategies
Response Yes frequency Yes percentage No frequency No percentage
Employee 9 12 16 22
Management 1 1 2 3
Supplies 2 3 3 4
0%
10%
20%
30%
40%
50%
60%
70%
80%
data mining FMEA vulnerability
analysis
all the above
40. Community 0 0 0 0
Total 12 16 61 84
Source: mungah..
The analysis in the table was then presented in the figure.
Figure 4.4.2.1 if the organization had any risk mitigation strategies
From the data analysis the findings were, majority of the stakeholders believe that there were two
strategies in place to mitigate risks in the organization.
4.4.2. Which strategies should be implemented.
The respondents were asked to identify the risk mitigating strategies that the organization should
implement to enhance supply chain management.
Analysis
The data showed that only 10% of the respondents advocated for the data mining analysis, 5%
said the failure mode effect analysis (FMEA), 10% said vulnerability analysis and the rest of the
respondents said all the above strategies should be implemented for effective risk mitigation.
16%
84%
yes
no
41. The findings are presented in the table below:
Table 4.4.2. strategies to be implemented
Respondents Frequency Percentage Cumulative
percentage
Data mining 10 10 10
FMEA 5 5 15
Vulnerable analysis 10 10 25
All the above 76 75 100
Source: mungah.
The analyzed data in the table was then presented in the figure below:
Figure 4.4.2.2 strategies to implement
Findings
The analysis shows that all the strategies need to be implemented to enhance supply chain
management in GCB.
4.4.3 Usage of only one strategy to enhance SCM
data mining,
10% FMEA, 5%
vulnerability
analysis,10%
all the above,
75%
data mining
FMEA
vulnerability analysis
all the above
42. The respondents were also asked if the usage of only one type of strategy could be enough to
enhance SCM.
Analysis
5 percent said yes while a mammoth of 95 percent said no. the findings are tabled as shown.
Table 4.4.2.3 usage of only one strategy enough to enhance SCM
Respondents Yes frequency Yes percentage No frequency No percentage
Management 0 1 3 4
Employee 1 1 24 31
Suppliers 1 2 5 7
Community 1 1 39 50
Total 2 3 71 95
Source: mungah.
These respondents were then presented in the figure below.
Figure 4.4.2.3 usage of only one strategy to enhance SCM.
0%
1%
1%
2%
2%
3%
3%
undecided disagree
43. Findings
The findings from the above data analysis shows that majority of the stakeholders believe that
the usage of only one technique to enhance SCM will not be sufficient to impact the
effectiveness of the whole supply chain.
4.4.4 Level of risk determines the strategy to be used.
The respondents were also asked whether the level of risk determine the type of strategy to be
used. The response for the question was indicated in the table below.
Table 4.4.4 level of risk
Response Frequency Percentage Cumulative
percentage
Strongly agree 45 45 45
Agree 20 20 65
Undecided 10 10 75
Disagree 8 7 82
Strongly Disagree 18 18 100
Source: mungah.
These responses were then presented in the figure.
Figure 4.4.4 level of risk determines the strategy to be used.
44. Findings
The findings from the data revealed that the level of risks in an organization determines the type
of strategy to be used as indicated by the 65% of the respondents while 25% 0f the respondents
disagree with the idea.
4.4.5 Other strategies which GCB can use.
Analysis
The respondents suggested other strategies which the organization can use to enhance SCM. 25%
of the respondents suggested carrying buffer stock and improving inventory management. EOQ,
MRPI and MRPII, ABC analysis, vendor management inventory (VMI),30% of the respondents
suggested the use of multiple suppliers,20% suggested the use of contracts to manage price
fluctuations and 25% of the respondents suggested the implementation of quality initiative.
45%
20%
7%
18%
10%
strongly agree
agree
disagree
strongly disagree
undecided
45. Table 4.4.5 other strategies which GCB can use.
Responses Frequency percentage Cumulative
percentage
Inventory
management
25 25 25
Multiple suppliers 31 30 55
Contracts 20 20 75
Quality initiative 25 25 100
Source :mungah.
The tabulated data was then presented in the figure below.
Figure 4.4.2.5 other strategies
25%
30%
20%
25%
inventory management
multiple suppliers
contracts
quality initiative
46. Findings
The findings from the data analyzed reveals that the respondents had almost the same percentage
of opinion regarding other strategies which can equally be useful in the organization,
4.5.0 Objective 3: benefits the organization will get after implementation of the strategies.
4.5.1 Any benefit which the organization will accrue
The respondents were asked whether there are any benefits which the organization will accrue
after implementing the strategies.
Analysis
65% of the respondents strongly agreed, 30% of the respondents agreed while 3% disagreed and
2% were undecided. The responses were categorized in the table below
Table 4.5.1 Any benefit the organization will accrue
Responses Frequency Percentage Cumulative frequency
Strongly agree 66 65% 65
Agree 30 30% 95
Undecided 2 2% 97
disagree 3 3% 100
Source: munga.
The output of the responses in the above were produced in the figure.
47. Figure 4.5.1 benefits which the organization will accrue
Findings
From the above data analysis, the findings were a mammoth of the stakeholders both internal and
external believe that the organization will benefit abundantly if risk mitigating strategies were
implemented effectively.
4.5.2 Benefits GCB will accrue after implementing SCRM strategies
The respondents were also asked to identify the benefits that the organization will get after
implementing the strategies.
Analysis
undecided,
2% disagree,3%
agree, 30%
strongly agee,
65%
undecided
disagree
agree
strongly agee
48. 40% of the respondents said there will be increased profitability and good reputation of the
organization, 25% of the respondents said there will be elimination of wastes and loss reduction,
20% of the respondents said that the growth and market share of the products will be achieved,
15% said that the business continuity and organizational competitiveness will be enhanced and
5% of the respondents went for the organization will achieve best in class standards. The table
below represents the whole data.
Table 4.5.2 benefits that GCB will get after implementing SCRM
Response Frequency percentage Cumulative frequency
Profitability 40 40 40
Elimination of waste
and reduced loss
26 25 65
Growth and market 20 20 85
Business continuity 15 15 95
Best class 5 5 100
Source: mungah
The respondents of the table were then presented in the figure .
Figure 4.5.2 benefits that GCB will get after implementing SCRM
49. Findings
The findings reveals that majority of the stakeholders believed that the implementation of the
strategies will benefit the organization largely in profitability and reputation , followed by
business growth and market share, then business continuity and competitiveness, elimination of
wastes and loss reduction and the least benefit as per their response is best in class achievement,
which is actually the most significant benefit as the organization will be able to compete in world
class standards.
4.5.3 Whether the benefits will result to growth of the organization.
The respondents were also asked whether the benefits accrued will result to the growth of the
organization.
Analysis
An overwhelming 65% of the respondents strongly agreed, 30% of the respondents agreed and
only 5% were actually undecided. The responses were indicated in the table below.
Table 4.5.3 whether the benefits will result to growth of the company.
40%
20%
25%
15%
5%
profitability
market share
wastes and loss reduced
business continuity
best class
50. Response Frequency Percentage Cumulative
percentage
Strongly agree 66 65% 65%
Agree 30 30% 95%
Undecided 5 5% 100%
Disagree 0 0 100%
Strongly disagree 0 0 100%
Source :munga
The output of the table was then presented in the figure below.
Figure 4.5.3 will the benefits lead to company growth
Findings
From the findings it’s clearly shown that a major population of the stakeholders believes that the
benefits will result to the growth of the company by 95% as indicated by the respondents who
filled the questionnaires.
0%
10%
20%
30%
40%
50%
60%
70%
51. 4.6. Objective 4: challenges faced.
4.6.1 challenges faced by GCB
The respondents were also asked to identify the challenges faced by the organization.
Analysis
45% of the respondents said inadequate risk recognition, 20% of the respondents said its
insufficient analysis of signs of risks, while 15% of the respondents said its failure to identify
suitable response activities, 15% of the respondents said its failure to set risk management
strategy and only 5% of the respondents said its inadequate risk management.
The respondents are tabled as shown.
Table 4.6.1 challenges faced by GCB
Reponses Frequency percentage Cumulative
percentage
Inadequate risk
recognition.
46 45% 45
Insufficient analysis
signs
20 20% 65
Failure to identify
suitable response
15 15% 80
Failure to set risk
management strategy
15 15% 95
Inadequate risk
management
5 5% 100
Source :munga
The responses then were outputted in the figure below.
52. Figure 4.6.1 challenges faced by GCB
Findings
The findings from the analyzed data reveal that inadequate risk recognition was the major
challenge in the organization while inadequate risk management was the least challenge, as it is
said risk cannot be managed before it is recognized and identified.
4.6.2 Whether the challenges are internally or externally caused.
Analysis
The respondents were asked if the risks were caused by internal or external sources, 65% of the
respondents said the main cause by internal source, while 25% of the respondents said its caused
by external and 10% of the respondents said the challenges are caused by both internal and
external sources. The table below represents the data.
Table 4.6.4.2 whether the challenges are internal or external sourced.
45%
20%
15%
15%
5%
inadequate risk
recognition
insufficient analysis signs
failure to tdentify suitable
response
failure to set risk
management strategy
inadequaterisk
management
53. Respondents frequency Percentage Cumulative
percentage
Internal 66 65% 65
External 25 25% 90
Both internal and
external
10 10% 100
Source: munga
The output was the presented in the figure below
Figure 4.6.2 challenges caused by internal and external sources
Findings
The findings revealed that the major cause of the risks were from internal sources while both
internal and external sources took the least share.
4.6.3 ways in which the organization can minimize the challenges it faces.
The respondents were then asked to suggest ways in which the organization can minimize the
challenges it faces.
Analysis
internal , 65%
external,
25%
both internal
and external,
10%
internal
external
both internal and external
54. The responses were as follows, 55 percent of the respondents said the use of communication and
reporting structure can minimize the challenges faced by the organization, 30 percent the use of
overall risk management strategy can reduce the challenges while 15 percent of the respondents
said the use of guidelines and procedures can reduce the challenges.
The following table shows the data
Table 4.6.3 ways in which the organization can minimize the challenges it faces
Respondents Frequency Percentage Cumulative %
Communication and
reporting structure
56 55% 55%
Overall risk
management strategy
30 30% 85%
Guidelines 15 15% 100%
The output of the table was presented in the figure below.
Figure 4.6.3 ways in which the organization can minimize its challenges.
Findings
0%
10%
20%
30%
40%
50%
60%
70%
strongly agree
agree
undecided
55. The findings from the analyzed data show that communication and reporting structure is like to
be the key strategy in solving the organization’s challenges. From downwards for
implementation of policies, upwards for suggestions and horizontal for ensuring uniformity in all
departments is paramount to ensuring challenges are minimized.
4.6.4 Other challenges faced by GCB
The respondents were asked to suggest other challenges which GCB faced in its daily operation.
Analysis
35 percent of the respondents said there was no enough knowledge and skills to identify risks, 45
percent of the respondents said the organization lacked implementation strategies, 20 percent of
the respondents said unsuitable strategies were implemented which could not align with the
organization’s objectives.
The respondents were tabled in the table below.
Table 4.6.4 other challenges faced by GCB
Respondents Frequency percentage Cumulative %
Lack of knowledge &
skills
35 35% 35
Lack of
implementation
strategies
46 45% 80
Unsuitable strategies 20 20% 100
Source :munga..
The output of the table was presented in the figure below.
56. Figure 4.6.4 other challenges faced by GCB
Findings
the findings from the data showed that, the organization lacked implementation strategies by a
large percentage and a frequency of 46 respondents, further the data depicted that the
stakeholders lacked skills and knowledge to identify the threats and lastly, if there was
implementation then unsuitable strategies were implemented which did not align with the
organizational strategies.
4.6.5 If the challenges can be minimized by implementing SCRM strategies.
The respondents were also asked whether by implementing the supply chain risk management
strategies the challenges faced by GCB will be minimized.
Analysis
Their responses were 65 percent of the respondents strongly agreed 25 percentof the respondents
agreed while 8 percent were undecided and 2 percent disagreed.
The table below shows the responses
35%
45%
20%
lack of knowledge & skills
lack of implementation
strategies
unsuitable strategies
57. Table 4.6.4.5. If the challenges can be minimized by implementing SCRM
Responses Frequency Percentage Cumulative %
Strongly Agree 66 65% 65
Agree 25 25% 90
Undecided 8 8% 98
Disagree 2 2% 100
Source :mungah..
The responses were in turn presented in the figure below
Figure 4.6.4.5 if the challenges can be minimized by implementing SCRM strategies
Findings
The results obtained indicated that 90 percent of the stakeholders with a frequency of 91 believed
that implementation of SCRM strategies will reduce the challenges faced by the organization.
0%
10%
20%
30%
40%
50%
60%
70%
strongly agree agree undecided disagree
58. CHAPTER FIVE
5.0 Summary, Conclusion and Recommending
5.1 Chapter overview
This chapter summarizes the findings from chapter four, develops a conclusion and outlines the
recommendation which will help in reducing the effects of supply chain risks in GCB and
suggests areas for further study.
5.2 Summary
The research established that the management of GCB had no ability to identify the sources of
risks, hence reactive measures were usually taken to mitigate the risks.
From the data gathered the respondents pointed out that the risks originated from both internal
and external sources. For this reason it was clear that poor selection of suppliers, physical
network, informational network-which entails flow of information inwards and outwards the
organization, relational network, innovational network- like product design, were all contributing
to disrupting the supply chain of the organization. Further a mammoth percentage of 84 percent
of the total population stated that the organization did not have any mitigating strategy in place to
enhance supply chain management and thus all the strategies like data mining analysis, failure
effect analysis (FMEA), vulnerability analysis should all be implemented.
The respondents clearly stipulated that the usage of only one type of risk mitigating strategy is
not enough to enhance SCM. By extension the respondents agreed that the level of risk should be
aligned with risks to determine which strategies to be implemented. From the data collected the
respondents suggested :- carrying buffer stock and improving inventory management , having
multiple suppliers, using contracts to manage price fluctuation, quality initiative-quality
certification program and auditing suppliers to assure they meet the required standards, as other
strategies which an organization can adopt to enhance SCM.
On the benefits which the organization will accrue from implementing SC mitigating strategies,
95 percent of the respondents agreed that the organization will benefit from such
implementation. The benefits highlighted by the respondents included, increased profitability and
59. reputation, growth and market share, business continuity and competitiveness, elimination of
wastes and loss reduction, best in class achievement. These benefits are consolidated and
summarized into three words as –efficiency of operation, effectiveness of the process, efficacious
strategies. The respondents concurred that this result into organizational growth.
On the other hand, they pointed out the challenges faced by the organization as –innadequate risk
recognition, insufficient analysis of signs of risks, failure to identify suitable risk response
activities, failure to set a risk management strategy, inadequate risk management, where the
respondents further stated that the challenges are caused by both internal and external sources.
The suggested ways of minimizing the challenges faced by the organization includes proper
implementation of – communication and reporting structure, overall risk management strategies,
the guidelines and procedures on risk mitigation. The respondents further pointed out other
challenges faces by the organization as – lack of knowledge and skills to implement the
strategies, unsuitable risk management strategies and poor implementation of strategies.
5.3 Conclusion
This research aimed at examines the effect of supply chain risks in manufacturing companies. In
regard to the findings of the study, the study concluded that GCB had no strategies to mitigate
supply chain risks. In regard to objective two which was to identify sources of SCR at GCB, the
study concluded that there were both internal and external sources in the organization.
In regard to the third objective which sought to identify the methodologies for enhancing SCM
that can be adopted by GCB, the respondents concluded that the organization can adopt various
methodologies such as Data mining analysis, Failure mode effect analysis (FMEA), vulnerability
analysis in order to mitigate supply chain vulnerability. By adopting the methodologies the study
concluded that the organization can accrue many benefits including;- efficiency operations-
leading to increased profitability and reputation, growth of the organization and market share,
effective process – leading to elimination of wastes and loss reduction, and efficacious strategies
– leading to business continuity and competitiveness in the field.
The study also concluded that the challenges faced by GCB included inadequate risk recognition,
insufficient analysisof signs of risks. Failure to identify suitable risk response activities, failure to
60. set a risk management strategy and inadequate risk management which can be minimized by use
of communication and reporting structure , overall risk management strategy and guidelines and
procedures on risk mitigating strategies.
5.4 Recommendations
The researcher recommends the following
The GCB management should initiate training of employees and all the staffs in risk recognition
strategies.
The organization should also initiate communication. There should be effective both horizontal
as well as vertical communication among all the group members within the organization.
Especially the employees being the group that is exposed to most of the risk should have an
effective communication with the management. This will lead to fast and effective decision
making with the organization.
Further the organization should adopt democratic management style where everybody in the
organization from all levels will make contributions in decision making and suggested ideas will
be amalgamated with corporate decisions in order to achieve the organizations set goals.
5.5 Other areas of study suggested
The researcher suggested that a further research can be conducted in the following areas:
Factors to consider when implementing risk mitigating strategies.
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Mitroff, I and aplpasan ,M (2003) Preparing for Evil, Harvard Business Review
Gunasakaran A and E. W. T Ngai (2004) virtual supply chain management and control
Journal of social – cultural environment and its effects on purchasing(2006)
Journal of operation and management , pgs 501-522
Steven Walton (2005) integrating environmental management and supply chain strategies.
62. Richard Germain (1998). Supply chain risks. Oklahoma state university USA, Michgan state
university USA.
63. APPENDIX 1
Munga mrina
p.o. box 9-80405
kinango.
Email: mungamrina@gmail.com
September 2014.
The Manager
Gold Crown Beverages
P.O.Box 16453.
Mombasa.
Dear sir / madam
RE: REQUEST FOR EDUCATIONAL RESEARCH IN YOUR COMPANY
I am a student at Mount Kenya University pursuing a diploma in purchasing and supplies
management and currently working on my research project. In view of this, I kindly request you
to allow me collect data for the said research in your organization. The topic of my research is
the effects of supply chain risks on the performance of an organization: case study golden crown
beverages limited – Mombasa.
Data collection process will entail distributing questionnaires to the employees and other
members of the staff. The findings will then be processed and used strictly for academic purpose.
More so a copy of the research findings will be forwarded to your organization for internal use.
I’m looking forward for a positive response from you.
Thank you!
Mrina Munga
64. APPENDIX 2
QUESTIONNAIRE
This questionnaire is for academic purpose and aims at identifying the effects of supply chain
risks in Golden Crown beverages limited in Mombasa. All information given in the questionnaire
will be treated with utmost confidentiality.
Please respond to all the questions by putting a tick in the appropriate box, or by filling in the
correct information in the space provided.
Part 1
Section A : Background information
1 Gender male [ ] female [ ]
2 Marital status
Married [ ] single [ ] divorced [ ] widowed [ ]
3 Highest educational level and training
O level/KCSE [ ] certificate/Diploma [ ] bachelor degree [ ]
Masters degree [ ]
Part 11
Section B : sources of risks in the organization.
1 Is the management able to identify sources of risks in golden crown beverages ltd?
Yes [ ] No [ ]
65. 2. What are the measures usually taken to mitigate the vulnerability of the organizations supply
chain?
Proactive measures [ ] reactive measures [ ]
3. In your own opinion, where do risks originate from?
a) Internally b) Externally c) Not aware d) both internal & external
4. Suggest other sources of risks in golden crown beverages ltd.
………………………………………………………………………………………………………
………………………………………………………………………………………………………
…………………………………………………………
Section C: strategies to enhance supply chain management
1. Does the organization have any risk mitigating strategies in place?
a) Yes [ ] No [ ]
2. If yes which of the strategies should the organization implement to enhance its SCM ( indicate
by ticking)
a) Data mining analysis [ ]
b) Failure mode effect analysis (FMEA) [ ]
c) Vulnerability analysis [ ]
d) All the above [ ]
3 Can the usage of only one type of strategy be enough to enhance SCM?
a) Yes [ ] No [ ]
4. Do the level of risk determine the type of strategy to be used?
66. Strongly agree 5 [ ]
Agree 4 [ ]
Undecided 3 [ ]
Disagree 2 [ ]
Strongly disagrees 1 [ ]
(Indicate by ticking in the appropriate box)
5. Give reasons to your answer
………………………………………………………………………………………………………
………………………………………………………………………………………………………
6. Suggest other strategies that Golden Crown Beverages can use to enhance efficient supply
chain management?
………………………………………………………………………………………………………
………………………………………………………………………………………………………
………………………………………………………………………………………………………
Section D: benefits the organization will accrue.
1. Is there any benefit which the organization will get from implementing supply chain
mitigating strategies?
Strongly agree 5 [ ]
Agree 4 [ ]
Undecided 3 [ ]
Disagree 2 [ ]
Strongly disagree1 [ ]
67. (Indicate the degree of your argument by ticking in)
2. What benefits will Golden Crown Beverages accrue after implementing the supply chain risk
mitigating strategies?
………………………………………………………………………………………………………
………………………………………………………………………………………………………
3. Will the benefits if any result into the organizational growth?
Strongly agree 5 [ ]
Agree 4 [ ]
Undecided 3 [ ]
Disagree 2 [ ]
Strongly disagree 1 [ ]
4. Give reasons for your answer
…………………………………………………………………………………………………
Section F: Challenges faced
1. Which of the following challenges are faced by Golden Crown Beverages Ltd? (indicate
by ticking in the appropriate box)
a) Inadequate risk recognition [ ]
b) Insufficient analysis of signs of risks [ ]
c) Failure to identify suitable risk response activities [ ]
d) Failure to set risk management strategy [ ]
e) Inadequate risk management [ ]
68. 2. Are the challenges caused by internal or external risk
source………………………………………………………………………………………
………………………………………………………………………………………………
…………………
3. Suggest ways in which the organization can minimize the challenges it faces?
………………………………………………………………………………………………
………………………………………………………………………………………………
…………
4. What other challenges which Golden Crown Beverages faces in its daily operation?
………………………………………………………………………………………………
………………………………………………………………………………………………
……………………………………………
5. Can the challenges be minimized by implementing supply chain risk management
strategies?
(Tick the degree of your argument on the given choices)
Strongly agree 5 [ ]
Agree 4 [ ]
Undecided 3 [ ]
Disagree 2 [ ]
Strongly disagree 1 [ ]
69. APPENDIX 3
WORK SCHEDULE
ACTIVITY TIME (WEEKS)
Topic information
1
Introduction and background
1
Literature review
3
Research methodology
2
Data collection instruments
2
Data collection
1
Analysis and presentation
2
Summary, conclusion and recommendation
2
Typesetting, printing and binding
2
Contingency
1
Total time
17
70. APPENDIX 4
BUDGET PLAN
ITEM COST
Transport
3000
Stationary
4000
Secretarial work
4500
Air-time
2500
Contingency
1000
Printing and binding
7000
Total
22000
