The Role of Transportation in Achieving Customer Satisfaction in a Private Distribution Company
A Study of Ricky Boakye Yiadom Company Limited
Research Paper (postgraduate) 2014 48 Pages
In a highly competitive distribution sector, one way to gain competitive advantage is to ensure that the customers are satisfied. It is also a fact that having a good transport system is a great factor to ensure long term services and growth the company. The study is to find the role transportation play in achieving customer satisfaction in the private distribution sector a case study at Ricky Boakye Yiadom Company Limited.
Eventually, the results are meant to improve the existing levels of customer satisfaction with the form of transportation. Specifically it seeks to uncover the factors accounting for the level of customer satisfaction in transportation of products.
The study reviewed major theoretical area to develop a framework which suggests that customer satisfaction in Distribution Company would be a function of service quality and customer orientation of service employees.
The data from the study constituted employees and customers of 35 people and was analyzed through a descriptive statistics. The study reveals that the mode of transportation does not always achieve smooth delivery and satisfaction desired but adds value to the mode of transport. It also shows that delivery times to customers are not always meet.
Most customers also agree that increase in customer satisfaction also depends on transportation. Furthermore, it is recommended on the basis of the evidence that to understand customer satisfaction better, the company must survey customers about both perceived service quality and the perception about satisfaction.
Advances in business over the years have been considerably driven development in business philosophies such as marketing, transportation and distribution, and customer demands and satisfaction for survival in an increasing competitive business world. Level of customer expectation has engendered an industry wide search for quality high level of customer service and greater cost effectiveness. Most changes not mere trends but the result of large forces which have lasting effects on an organization, example, increasing importance of customer services and ongoing changes in customer demand and preferences.
Transportation has been a major contributor to the economy and a competitive force in business. It is the activity that physically connects the business to its supply chain partners, such as suppliers and customers, and it is a major influence on the customer’s satisfaction with the company. Transporting is required in the whole production procedures, from manufacturing to delivery to the final consumers and returns. Only a good coordination between each component would bring the benefits to a maximum.
Customer satisfaction is considered to be the most important factor whether it is meant for a product or a service. In case of failure to satisfy customers, companies will be replaced by others. Industries offering various services have to be more vigilant because there is a special attitude that plays an important role attracting and retaining the customers. Whether the buyer is satisfied after purchase depends on the offers performance inrelation to the buyer expectation. In general, satisfaction is a person’s feelingofpleasure or disappointment resulting from comparing a products perceived performance relation to his or her expectations. If an organization’s transportation performancefalls short of expectationin any circumstances, the customer is dissatisfied. If the performance matches the expectation, customer is satisfied. If the performance exceeds the expectation, the customer ishighly satisfied.
Based on that, the topic under research is “the role of transportation in achieving customer satisfaction in the private sectors”. This research seeks to identify the problems and find out possible measures and solution to the problems.
1.1 Background to the Study
Transportation is a necessary end right from early history. The mobility of people and materials especially in the present days become one of the greatest needs that have to be adequately satisfied on our society and economy at large.
Transportation is referred to as the engine of the economy (Kunri 2005:79). This means that without transportation management system, the entire economy will suffer stagnation. Transportation helps to bridge the gap between producers, suppliers and industrials users as well as individual commuters.
Research has shown that transportation alone account for about 46% of the total physical distribution costs for manufacturing companies and 28 % for reseller companies.
It is important to note that not much success can be accomplish in manufacturing, distribution of goods and services including the movement of people without transportation. Transportation occupies one-third of the amount in the Logistics costs and transportation systems influence the performance of logistics system hugely.
It is as a result of the great importance attached to transportation that man has over the years developed various transportation modes in other to facilitate the movement of people and materials. The mode of transportation selected will greatly depend on price, time, delivery, condition and destination, customer’s patronage, and past purchase satisfaction.
This poor transportation management can therefore jeopardize the source of procurement of materials; goods and services, movement or people and even course increase in prices and loss of lives. Whereas customer satisfaction is extremely important in an economy where the vendors are having to work hard to win new business and keep their existing customers. If a company fails to satisfy their existing clients there are many other vendors who would like the opportunity to win the business. Therefore a company has to ensure that in every aspect with their dealings with the customer, whether it be on at order time, delivery or just simple communication, they must guarantee that they understand the needs of the customer and how those needs can be met.
A customer will stop doing business with a vendor for a number of reasons such as the goods are too expensive, the promised delivery was not met, the wrong product was sent, lack of communication, etc. When that company is looking for a new vendor, potential suitors must do their utmost to win that business and it does not always mean offering the lowest price. Companies looking for a new vendor evaluate potential suppliers based on a number of criteria that is important to them, and not necessarily important to other companies. However there are often a number of other criteria such as on-time delivery, quality, and location that can be of real importance to the customer.
When a company is making its final decision about a new vendor it may not be a clear cut decision and that is when the importance of customer satisfaction can play a significant role. If a company is deciding between two or three vendors it may have already considered price, quality, and delivery, so it will look to more subjective criteria such as customer satisfaction. A company may ask a vendor for a number of references so they can talk to a vendor’s current customers to see if the service given its customers is of high quality. Happy customers can be deciding factor on whether a company will win new business.
Providing service transportation which is adequate and appropriate is the challenges that encountered in almost all companies in the world. Companies will always have a new problem, which arise due to transportation system.
1.2 Statement of the Problem
Achieving customer satisfaction is the key objective of every company, that is, if total profit for a period is to be achieved. This cannot be achieved if the management of the transport activities in an establishment is faced with some problems such as;
- Delay in delivery of goods.
- Improper handling of materials resulting in damage of goods.
- Lack of qualified personnel.
- Inadequate transportation system in the organization.
- Improper maintenance of transporting system causing breakdown leading to late delivery.
1.3 Objective of the study
With regards to the problems above, the researcher wishes to undertake this study with the following objectives: This study sets itself to:
- Examine the degree at which the mode of transport chosen aids in achieving delivery time.
- Find out the right mode of transport is used for distribution.
- Evaluate the efficiency and effectiveness of the transport department.
- Find out the type of transportation system they used in their distribution.
- To examine the right methods they use in meeting consignment on arrival and breaking them down in to packages for delivery to individual addresses
- To evaluate the customer services activities within the organization
1.4 Research Question
This research will set to unveil of proper procedures undertaking in the transportation of goods and services to achieve customer satisfaction through the right distribution channel, right place or location, right quality, quantity and delivery time as well as adding value to the customer. Such research questions could be:
- What are some of the mode of transport used in the distribution of goods to customer?
- Does the mode of transport ensure efficient and effective movement to the point of delivery?
- To what extent does this mode of transport add value to customers and the organization?
- How often does the organization put in place activities to measure the level of customer satisfaction?
- What are some of the reactions of customers after the delivery of service?
- What are some of the difficulties in the mode of transportation encountered?
1.5 Relevance of the Study
This project work will be of great relevance to the entire management and staff of RICKY BOAKYE YIADOM LIMITED.
- It will help the researcher to know the proper ways and the method of transportation system to use in achieving customer satisfaction.
- It will help Ricky Boakye Yiadom Company Limited to know the right mode of transport to use in their distribution.
- This will help the researcher to know how efficient and effective the transport department has on distribution.
- It will help the researcher to know the type of transportation system they organization use for their distribution.
- This will help the researcher to know the right method the organization use in meeting consignment and how they break them in to packages for delivery.
- Finally, it will be of great help to any individual who intend to use it for reference purpose.
1.6 Scope of the Study
This research work aims at establishing the ‘role of transportation in achieving customer satisfaction’ at RICKY BOAKYE YIADOM COMPANY LIMITED.
1.7 Limitation of study
In an effort to embark on this project work, the researcher encountered the following problems
- The research would be conducted together with examination time and this will make it very difficult for the researcher to combine. As a result of this, the researcher will have to sacrifice part of the periods to learn for the examination to do this research.
- Accessibility to information would not be very easy because management and some employees will not be prepared to give out information
- In reality, the research work would involve other distribution organizations but due to lack of funds and time constraint, the research would be restricted to the Ricky Boakye Yiadom Company Limited
- Lack of adequate research materials at the school library would be compelled the researcher to visit the internet and other public libraries in order to obtain much information relating to the study.
- Due to the technical nature of the study area, thirty five people (35) and ten (10) customers of them would selected to represent the sample size.
1.8 Operational Definition
Transportation is any device used to move people or items from one location to another or the movement of people, animals and goods form one location to another which includes air, sea, road, water, cable , pipeline and space.
Distribution is the process of making a product or services available for use or consumption by consumers or business users, using direct and indirect means with intermediaries.
Distributor is an intermediary entity between the producer of the product and another entity in the distribution channel or supply chain such as a retailer or a value added reseller or an entity that buys non competing products or product lines, warehouses them and resells them to retailers or direct to the end user or customers. The distributor performs some of the same functions that a wholesaler does but generally takes a more active role. Distributors provide strong man power and cash support to their supplier or manufacturer’s promotional efforts. They usually also provide a range of services such as product information, estimates, technical support, after sales services and credit to the end user or customer.
Customer service is the provision of services to customers before, during and after a purchase or a series of activities to enhance the level of customer satisfaction that is the feeling that a product or service has met the customer expectation.
Customer satisfaction is the measure of how products and services supplied by a company meets or surpasses customers expectation or the percentage of total customers whose reported experience with a firm, its products, or its services ratings exceeding specified satisfaction or goals. When customers have high expectations and the reality falls short, they will be disappointed and will likely rate their experience as less than satisfying.
1.9 Organisation of the Study
As a matter of fact, the study has been arranged in a logical manner and therefore has been grouped into five chapters:
The first chapter introduces the research topic, gives a background to the study, explains the statement of problems, objectives, relevance of the research, significance of the research, scope, limitations and operational definitions.
Chapter 2 provides an extensive review of the literature in three parts. The first part examines the literature in a transportation, it modes transport and the factors to consider when selecting the modes of transport. The second part is the literature in transportation analysis, vehicle acquisition and the role of transportation. The last part looks at customer service and customer satisfaction, the importance of customer satisfaction, levels of customer satisfaction and cost and the relationship between transportation and customer services.
Chapter 3 is a presentation of the research methodology for each research task based on the research design, population, sample size, strategy, and research instrument and data analysis.
Chapter 4 is the lists of results, findings and discussion with various interpretation of research questions and it evaluations. Lastly,
Chapter 5 offers a summary of the research, conclusions about the contributions to the research and recommendation to the problems of study, future research efforts to expand the body of knowledge.
1.9 Chapter summary
The first chapter introduces the research topic, gives a background to the study, explains the statement of problems, objectives, relevance of the research, significance of the research, scope, limitations and operational definitions and organization of the study.
This chapter emphasizes on the theoretical aspect of the study. This takes into consideration what various professionals have written on the topic in respect to transportation and customer satisfaction. The discussions would be based on what goes on in transportation and how those activities can contribute to customer satisfaction.
2.1 Definitions of Transportation
Baily (1987) Transportation can therefore be define as the process of making goods and services available to a named destination.Wales (2010) definedtransportation “as the movement of people and goods from one location to another.The Collin’s Dictionary explains that, to transport means to convey from one place to another.
Chopra (1998) defined transportation “as the process of conveying goods, services or materials from the manufacturing industries to customers both within and outside country.”
Others also defined transportation as a physical movement of goods from the point of manufacture to the point of consumption or from the place where they are made and to where they are needed.
Chopra and Meinal (2007) defined transportation “as the movement of inventory from one point to another point in the supply chain.Coyle, Bradi and Langley (1976) define transportation systems “as the physical link connection a company’s customers, raw material suppliers, plant, warehouses and channel member – (the nodes).
From the above definitions it can be seen that, all authors seems to concentrate on moving goods or services from one point to another location, so therefore we can derive our definition of transportation as the activities that assist the movement of goods and services from one place to another place or the activity that facilitates physical movement of goods as well as individuals from one place to another.
In all, transportation is a very essential tool and the third factor of the operating cost of a supply chain, which transport managers should thoroughly assess before deciding on the choice of mode to use for their business. Furthermore, these various activities of movement are all base on the ability to satisfy the customers from the right sources, at the right quantity, at the right quality, at the right time, at the right price to ensure value for money spent for both the customer and the producer. But what if at the end of very transportation services or the activities of a physical movement of goods there’s no satisfaction or wrong good are transported. Poor communication on the part of customers can lead to total description in the transportation services. It is require that transportation begins right from the customers to the organization in the form of information flow and description of specification requires to the organization from the perspective of the customer.
2.2 Modes of Transport
Mode of transport simply refers to the various means by which materials can be conveyed to final customers or to their final destination. This may include Road, Rail, Air, Sea, Pipeline and Spaceflight transport.
2.2.1 Road Transport
Road transport is the most dominant mode of transporting item from one point to another; these allow for the thorough transport of goods from factory or warehouse direct to customers premises by applying the road.
2.2.2 Rail Transport
This is particularly true for bulky and heavy consignments’ that require movement over medium to long distance and where speed is not vital.
2.2.3 Air Transport
The use of air transport as an alternative transport mode has grown rapidly in recent years. Major developments in the areas of integrated units, improved handling systems and additional cargo space, together with proliferation of schedule cargo transports, have increased the competitiveness and service capability of air transport.
2.2.4 Sea Systems
Sea transport involves the shipment of large quantity of raw materials and products across seas, rivers and canals throughout the world.
2.2.5 Pipeline Transport
These are used to transport goods like liquid, gases etc. to supply centers or local firms.
2.3 Factors to Consider when Selecting the Mode of Transport
The choice of the transport mode is a fundamental part of distribution management which should be analyzed carefully because of the impact upon a company's operational efficiency. Failure to identify the most appropriate transport mode may incur higher costs than are necessary and may provide a lower customer service level than is potentially possible. The decision upon the choice of the transport mode is extremely complex because of the vast volume of choice available together with the numerous methods of examination and evaluation of each choice. The followingfactors are considered to be used in the selection of carriers, mode of transport and rout.
2.3.1 Required delivery time
The required date and time for material receipt may make the selection of shipment quit simple. If today a delivery from a distance is needed, the only viable alternative probably is air shipment. If a longer time is available, other modes can be considered, most carriers can supply estimates of normal delivery times and purchasing department also can rely on past experience with particular modes of carriers.
2.3.2 Reliability and service quality
While two carriers may offer the freight service between the points, the reliability and dependability may differ greatly.Items require extra good handling and care than other items.
2.3.3 Available service
If the item to be shipped is large and bulky, this may dictate a particular mode of transportation. Special transportation requirements may indicate only certain carriers who have the unique equipment to handle the job.
2.3.4 Cost of the transport service
The buyer should select the mode, carrier, and routing that will provide for the safe movement of goods, within the required time, at the lowest total transport cost. This requires a thorough knowledge of freight classification and tariffs. Also, the buyer should choose the lowest cost of transport that must minimize the total cost of transportation within the whole accounting year.
2.3.5 Possibility of damage
Certain items, such as fine china or electronics equipment, by their nature have high risk of damage in shipment. In this case, the buyer may select a mode and carrier by which the shipment can come straight through to its destination, with no transfers at distribution points to another carrier. It is part of the buyer’s responsibility to ensure that the packaging of goods is appropriate for both the contents and mode of transport.
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- Atlantic International University – School of Business and Economics
- role transportation achieving customer satisfaction private distribution company study ricky boakye yiadom limited