IMPACT AND MANAGEMENT OF FOOD SUPPLY IN TOURISM AND HOSPITALITY INDUSTRY

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IMPACT AND MANAGEMENT OF FOOD SUPPLY IN TOURISM AND HOSPITALITY INDUSTRY

CHAPTER ONE

INTRODUCTION

1.1    Background of the study.

With the increasing number of world – class competitors domestically and abroad, organizations have to rapidly improve their internal processes to stay competitive. They have to become increasingly flexible and responsive to modify existing products, services, and processes or to develop new one to meet ever – changing customers needs. In the 1990s, with the improvement of organizational

capabilities, Managers realized that ability to meet customer needs. This led to the increased focus on the supply base and the responsibilities of purchasing. Managers also realized that producing a quality product was not enough. Getting products and services to customers – when, where, how, in the quantity required and in a cost effective manner – constituted an entirely new type of challenge. (Monezka et al 2002) More recently, the era of the “Logistics Renaissance” was also born, spawning a whole set of time reducing information technologies and logistics networks aimed at meeting these challenges.

As a result of these changes, organizations now find that they must be involved in the management of all upstream firms (suppliers ) that provide direct and indirect inputs. They must also be concerned with the network of downstream firms responsible for delivery and after market service of the product to the end customer. According to Bailey, et al (1994). Logistics involves the flow of materials from suppliers, through the organization and out to the customers of the organization. The activities include, coordination of receipt of orders from customers, developing a network of warehouses, picking carriers to get products to customers and setting up an invoicing system to receive payments. The smooth operations of these flows are essential for the effective management of supply chain. These functions need to be managed in such a way that they maximize their contribution to the management of the supply chain and that all non – value adding activities are eliminated. The supply chain encompasses all activities associated with the flow and transformation of goods from the raw materials stage, through to end users, as well as the associated information flows (Monezka et al (200) ). Materials and information flows both up and down the supply chain. The supply chain includes: systems management, operations and assembly, purchasing, production scheduling, order processing, inventory management, transportation, warehousing and customer service. Supply chains are essentially a series of linked suppliers and customers; every customer is in turn a supplier to the nest down stream organization until a finished product reaches the ultimate end user. Supply chain management if the integration of supply chain activities through improved relationships to achieve a sustainable competitive advantage (Monezka et al 2002). It involves the strategy of the product or service. A big piece of planning is needed in developing a set of metrics to monitor the supply chain so that it is efficient, cost less and delivers high quality and value to customers. The increasing importance of food supply chain management is forcing organizations to rethink their distribution, purchasing and sourcing strategies.

Food SCM is differentiated from traditional SCM (e.g., auto parts) due to an additional dimension of safety concerns in addition to quality. The Food Safety failures have led to the development of standards like HACCP (Hazard Analysis and Critical Control Point), GAP (Good Agricultural Practice), GMP (Good

Manufacturing Practice) and various protocols have been introduced by Codex Alimentarius and International Standard Organization (ISO). The latest on the list is ISO22000 that directly associated with the SCM.

1.2    Statement of the Problem

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 food supply chain management.

1.3    Objectives of the study

  1. Studying the implications of food supply chain management on

organization.

  1. Assessing the impact of food supply chain management in adding value to quality, the flow of value to customers and low prices on the suppliers.
  2. Examining the basic supportive activities for effective food supply chain management.
  3. Coming up with recommendation for better and effective food supply chain management.

1.4     Research Questions

This assessment of effective food supply chain management on organization will aim at addressing the following questions:

  1. What are the benefits of effective food supply management in an organization?
  2. Why do materials remain longer in non- value-added state?
  3. Why are information flows incomplete and incorrect?
  4. How can effective management eliminate supply chain waste?
  5. What are the factors considered in supplier selection?
  6. How can the organization pursue zero defects throughout the chain?
  7. How can the organization coordinate the movement of inventory?
  8. What are the problems created excessive material handling and raw material inventory?
  9. How would problems of overproduction and unnecessary production steps e eliminated?

1.5    Hypothesis:

Ho: There is no significant relationship between food supply chain management and organizational efficiency

Hi: There is significant relationship between food supply chain management and organizational efficiency.

1.6    Significance of the Study

supply chain management deals with the total concept of managing materials in a positive way, all aspects from the suppliers and subcontractors through purchasing, stock control, production and distribution to the final customer. Hence the significance of this research includes:

  1. It will help organization to reduce materials and inventory waste, which Makes them inefficient producers vulnerable to challenges from cost efficient producers.
  2. It will help organizations see the need for continous supply relationships which ensures quality and flow of value to the customers and pressures for low prices on the suppliers.
  3. It will reveal the necessities of effective food supply chain management and also add to the existing literature and knowledge, considering the importance of supply chain to the growth of organizations and the satisfaction of customers, the research will motivate and provoke more research in the field for improved food supply chain management to the betterment of organizations and satisfaction of customers and the society.

1.7    Limitations of the study

The food supply chain management seems to be a new concept and broad. There seemed to be inadequate or insufficient coverage on the project due to the time frame in conducting the research, but what ever materials I did lay my hands on had already justified its being considered an interesting and just project.

1.8    Scope of the study:

The area of study for this research will be an assessment of food supply chain management in British American Tobacco Zaria covering year2000 to date.

1.9    Definition of Key Terms

Logistics: Is the art and science of managing and controlling the flow of Goods, energy, information and other resources like product, services and people from the sources of production to the market place (Arnold 1991).

In Bound Logistics: Involves all the activities, which impact upon the flow of Goods into the organization, and therefore include purchasing, contract management, incoming transportation and receipt of materials (Bailey, 1994).

Supply Chain: Encompasses all activities associated with the flow and transformation of goods from the raw materials stage through to end users, as well as the associated information flows (Monezka, 2002).

Supply Chain Management: Is the process of planning, implementing and controlling the operations of the supply chain with the purpose to satisfy customer requirements as efficiency as possible (Monezka, 2002).

 

IMPACT AND MANAGEMENT OF FOOD SUPPLY IN TOURISM AND HOSPITALITY INDUSTRY

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