Fleet Management and Its Effects on Supply Chain Performance of Alpha Marine Shipping Service Ltd Limbe

ABSTRACT

Despite the development of technological control tools like the Global Positioning System(GPS),  to ensure better fleets management, AMSS Limbe is still faced with the challenge of effectively and efficiently managing their fleets so as to improve supply chain performance. Problems of proper vehicle maintenance, vehicle tracking, and lack of vehicle telematics, still hamper AMSS Limbe. The main objective of this study was to investigate the effects of fleet management on supply chain performance. The research design adopted for this study was descriptive research design. A purposive sampling technique was used for this study with a sample size of 30 employees from AMSS. The Pearson’s correlation coefficient was used to test hypothesis for the study using SPSS 21. The findings reveal that, there exist positive relationships between both variables. The R value is 0.648 represents a strong correlation between the dependent variable (supply chain performance) and the independent variables Corrective maintenance technology and manual recording keeping.  The p value is 0.002. Therefore, the results are significant. The study concluded that fleet management practices are important factors to enhancing competitiveness of firms thereby improving supply chain performance.  It was recommended that advanced fleet management methods should be adopted like GPS technology, smart tags in order to improve fleet efficiency and improve supply chain performance

Key words: Fleet management, supply chain performance, Alpha Marine Shipping Service Ltd.

CHAPTER ONE

INTRODUCTION

• Background of the Study.

Globally, fleet management has been a challenging aspect in most supply chains, as most organizations find it difficult to manage their fleets in order to increase their organization’s performance. The demand of fleets keeps increasing in recent years even in the midst of crisis and as; one can even term it as a necessary evil especially with the growing rate of industrialization and globalization. According to Ahmad and Schoeder, (2001), increase in the concomitant management requirement vehicle fleet operations has outweighed the human mental capacity as advances in the technology of vehicular dynamics and design increase year after year. Transport and logistics plays a major role in the world’s economy Ahmad and Schoeder, (2001) and is a significant contributor at both national and local levels in any country. This sector underpins the economy, enabling the efficient movement of goods, services and people. Over the past decades, firms have faced unprecedented changes such as globalization and internationalism, the rapid advancement of information technology Chan and peel(1998), higher value of completion Car (2000), increased availability and flexibility of product/service as well as greater internal and external customer’s needs (Marjanovic, 2000).

    The ability to track and control the movement of vehicles every minute may translate into hundreds of dollars as regards an organization’s bottom line. Necessary cost, such as fuel and employee over time, may be closely monitored and verified to ensure that a company is operating at optimal efficiency so as to increase its supply chain performance. For example excessive vehicle idling does not only uses fuel, but also causes unnecessary engine wear and tear which leads to an increase in organizational cost. Firms are thus, no longer able to satisfy the various demands of their customers effectively with just product and price. They must also increase the performance of the product in terms of reaction speed, delivery policy, information services and flexibility. For this reasons, firms are, in many instances, being forced to redesign their internal processes using different method.  Chan & Land (1999:311), stipulated that   information technology (IT) is recognized as one of the most prevalent facilitators of such process changes in today’s competitive world. IT does not only enable firms to redesign their internal processes but it also help to improve their competitiveness in both local and international markets(Motwani & Kumar, 1998:964).

       Adriansen & Nielsen (2005); Bodaner(2001); Stopher et al.,(2007) ascertain that the best aspect of GPS use have been conducted in  countries like Europe and America. With real time tracking and by accessing the appropriate reports, fuel use may be drastically reduced by as much as 20%. Some companies have even rewarded their employees for paying attention for their fuel use; that is driving with the interest of the company in mind. Overtime cost are another significant expense that may be decreased with real time monitoring, as timesheets maybe compared to a report that lists a vehicle’s location and movement throughout the day. Productivity is yet another benefit of real time tracking accrued in planning and scheduling. There is little information available on the use of the fleet management system in Kenya and the only readily available information is the marketing of different options of various equipment and software systems. There is, thus, little conclusive evidence of the way in which the implementation of GPS fleet management system has changed internal processes in Kenyan firms. 

                  In the developed world like Italy, large logistics companies have largely invested in information communication technology (ICT) and have actively developed information systems and applications. Trucks are fitted with computer software that measures its diagnostics and takes regular readings of different systems in the truck. This is primarily centered on the engine, but the on-board diagnostics-II (OBD) includes sensors for the chassis, frame and hours before reaching a critical state, This helps to prevent accidents by alerting drivers often before the driver even realizes the situation is getting dangerous, failure to install such a software on trucks may leave the fleet manager at a desperate situation where the drivers behaviors or safety is not well monitored which puts the entire supply chain at a risk.VST also includes Electronic Stability Control (ESC) which helps to avoid a crash by significantly reducing the risk of your car going into a skid during a sudden emergency maneuver such as avoiding an obstacle in front of you. ESC identifies this risk early and stabilizes the car by braking individual wheels thus preventing a car crash which would cause damage of goods in the supply chain.

A report by World Bank (2005) on  issues in trade logistics in Kenya  showed that transport costs and delays are significant in supply chain and that the fleet running costs in Africa amount to75% of the operating costs while in Europe it amounts to 60%.Kenya was seen to be far from being an efficient sub regional logistics hub. It was established that it is more expensive for express carriers to move cargo between east Africa than to or from Europe. A Study by Turku School of Economics and Business administration in Finland in 2004 rated Belgium, Switzerland and Hongkong as the leading countries in Overall logistics perception index with Kenya ranked at position 70 which is an indication of low level of logistics service and specifically in regard to transportation which is a risk to the supply chain. 

           Fleet management in Cameroon is not in any way different form the global perspective as it manifests numerous inefficiencies as well which are of significant impact in the local supply chains. James and Alfred (2014) revealed that there is poor fleet management in manufacturing and transport companies where transport and logistics was viewed as an area in which cost appear out of line with the benefits and services accruing to the customers. It was from this perspective therefore that the government of Cameroon deemed the issue of promotion of international and national trade to be the objective in the national interest, and sought to advance shipments of agricultural and wood products as the country’s key commodities. A major obstacle to these goals, however, was the lack of adequate distribution systems (Gorge, 2013). From this stand point, the issue of road improvement was a critical one.

     Simon (2013) reviewed that a greater number of roads continued to be flooded during the rainy season, and while the percentage of paved roads increased from 7.6% in 1982 to 12.3% in 1995, the figure remains low and the ongoing need for better road maintenance and re-habitation capacity is recognized so as to better the transport sectors and hence improve the supply chain performance of organizations in the country.  It is important to note that fleet management for most organizations is seen as having short term effect and short response periods (Martinez 2010) there are varied services offered through transport and most of these. Base on these background information, some issues were raised on fleet management and its effects on supply chain performance of Alpha Marine Shipping Service Ltd limbe, South West Region of Cameroon.

1.2 Statement of the problem

Despite the development of technological control tools like the Global Positioning System(GPS), Satellite technology, smart tags or barcodes to ensure better fleets management, ALPHA MARINE SHIPPING SERVICE Ltd(AMSS) Limbe is still faced with the challenge of effectively and efficiently managing their fleets so as to ensure supply chain performance. These problems include; insufficient vehicles, poor communication, repair and maintenance, fuel management, shortage of drivers.

          There have been delays in deliveries at Alpha marine as a result of insufficient vehicles. The company owns just few vehicles that does supplies and deliveries to many different clients and customers in different places and as such the company finds it difficult to serve about three different customers at a time especially when they are located in different places say chantier naval and Bota or Douala which has led to increase in customers complaints

       Also, inadequate knowledge on the implementation of tracking devices like the GPS, satellite technology, smart tags, has led to poor communication between the drivers and the company and as such it becomes so difficult for the company to know the exact position of a vehicle when it is on transit leading to longer lead times.

Apparently, AMSS Limbe has witness a decrease in customer satisfaction, delays in deliveries due to longer lead times (which is time taken in preparation of bids, making an award and placement of an order, the delivery time and the duration of time between receipting and actual payment), increase in operational costs due to the type of maintenance policy (corrective maintenance) put in place. Vehicle repair and maintenance is done only when there is breakdown hence leading to poor supply chain performance.

 Repair and maintenance is another challenge that has led to longer lead times at AMSS (customer order cycle time), which is the time in which a customer is ready to wait for an order to be served. This research seeks to find out fleet management and its effects on supply chain performance. However, as a result of the above challenges, some research questions were realized to guide the study.

1.3   Research Questions

• Main Research Question.

• What are the effects of fleet management on supply chain performance of AMSS Limbe
  • Specific Research Questions
• What are the fleet management methods used by Alpha marine service (AMSS) Limbe to improve supply chain performance?
• What are the effects of corrective maintenance, technology and manual record keeping on supply chain performance of AMSS Limbe?
• What are the challenges faced by AMSS Limbe in managing their fleets in order to improve supply chain performance?

      1.4Research Objectives

1.4.1Main Research Objectives

• To investigate the effects of fleet management on supply chain performance of AMSS Limbe

1.4.2 Specific Research Objectives.

• To find out the   fleet management methods used by AMSS Limbe to improve  supply chain performance
• To investigate how corrective maintenance, technology and manual record keeping affects supply chain performance of AMSS Limbe
• To proffer measures to some challenges to fleet management of AMSS Limbe to improve supply chain performance.

TRANSPORT AND LOGISTICS PROJECT TOPICS WITH MATERIALS

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