FACTORS AFFECTING SUPPLY OF PERISHABLE GOODS IN

GOVERNMENT HOSPITALS IN KENYA: A CASE STUDY OF THE

KENYATTA NATIONAL HOSPITAL

BY
PADDY OKINYO CALEB

A RESEARCH PROJECT SUBMITTED IN PARTIAL FULFILLMENT OF

THE REQUIREMENT FOR THE AWARD OF DIPLOMA IN PURCHASING
AND SUPPLIES MANAGEMENT TO THE KENYA INSTITUTE OF
MANAGEMENT

JUNE 2016
 DECLARATION
Declaration by the Student
This research project is my original work and has never been presented to any other
examination body. No part of this research should be reproduced without my consent
or that of the Kenya Institute of Management.

Name……………………………..Signature……………………………Date…………
KIM/DPSM/19121/15

Declaration by the Supervisor

This project has been submitted for defense with my approval as the Kenya Institute
of Management.

Name………………………………Signature………………………..Date……………
Lecturer supervising

For and on behalf of the Kenya Institute of Management

Name ……………………………..Signature ………………………Date……………..

Branch Manager –Nairobi Branch

ii
 DEDICATION
This project is dedicated to my mum Mrs. Theodora and my brothers Teddy and
Zeddy who has always been there for me. May God accord her good health, joy,
peace, long life and above all, God’s everlasting love.

iii
 ACKNOWLEDGEMENT
First acknowledgement goes to all my family members for their financial and moral
support throughout this project; I also thank my friends for their support too. Secondly
I acknowledge my research supervisor Mrs. Lillian Chimungeni for her professional
advice and patience throughout this project. I would like to thank the entire KIM staff
for their continued support and also the management of Kenyatta National Hospital
for allowing me to conduct this study at their premises. Thank you all for it is every
ones individual support that has contributed to my success in finishing the project.

iv
 ABSTRACT
This research study aimed at factors affecting supply of perishable goods in
government hospitals in Kenya with reference to the Kenyatta National Hospital. The
specific objectives of the study were to determine the effects of packaging on Supply
of perishable goods in government hospitals, infrastructure, and operational cost and
to establish the effect of product quality on supply of perishable goods in government
hospitals in Kenya. This study will be significant to the management of Kenyatta
National Hospital and other researchers.

The researcher adopted descriptive research design. The design was preferred because
it is concerned with answering questions such as who, what, which, how, when and
how much. The study covered a population of 63 employees in the company and used
census where the entire target population formed the sample size. Questionnaires were
used to collect primary data. Both quantitative and qualitative methods were used for
analysis and data was presented in tables and figures.

From the study findings, 93% of the respondents agreed that packaging affects Supply
of perishable goods whereas 95% of respondent indicated that distribution channel
affects supply of perishable goods. Majority, 86% agreed that infrastructure affects
supply of perishable goods in government hospitals whereas 94% indicated that
operational cost does affect the supply of perishable goods. On product quality, 79%
agreed that it affects Supply of perishable goods while 21% disagreed.

The researcher recommended that the management of Kenyatta National Hospital

should introduce every type of packages in order to reduce risk of handling perishable
goods. Proper distribution channel should be enacted to enable efficiency and to
enhance proper flow of perishable goods. The hospital should identify an effective
model of supply-chain to enable the perishable goods to be supplied with ease and
bring the benefits to a maximum and also they should strategize on how to standardize
their operating operational costs to remain competitive. Kenyatta National Hospital
should ensure supplies are engaged competitively because this brings about products
or services that are superior to the competition on one or more of the eight
dimensions.

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 TABLE OF CONTENTS
DECLARATION……………………….......................................................................ii
DEDICATION..............................................................................................................iii
ACKNOWLEDGEMENT............................................................................................iv
ABSTRACT...................................................................................................................v
TABLE OF CONTENTS.............................................................................................vi
LIST OF TABLES.....................................................................................................viii
LIST OF FIGURES .....................................................................................................ix
LIST OF ABBREVIATIONS........................................................................................x
OPERATIONAL DEFINITION OF TERMS..............................................................xi

CHAPTER ONE
INTRODUCTION OF THE STUDY
1.1 Introduction...........................................................................................................1
1.2 Background of the Study......................................................................................1
1.3 Statement of the Problem......................................................................................5
1.4 Objectives of the Study.........................................................................................6
1.5 Research Questions...............................................................................................6
1.6 Significance of the Study......................................................................................7
1.7 Limitations of the Study........................................................................................7
1.8 Scope of the Study................................................................................................8

CHAPTER TWO
LITERATURE REVIEW
2.1 Introduction ..........................................................................................................9
2.2 Review of Theoretical Literature .........................................................................9
2.3 Review of Critical Literature..............................................................................28
2.4 Summary and Gaps to Be Filled.........................................................................29
2.5 Conceptual Framework.......................................................................................31

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 CHAPTER THREE
RESEARCH DESIGN AND METHODOLOGY
3.1 Introduction .......................................................................................................33
3.2 Study Design ......................................................................................................33
3.3 Target Population................................................................................................33
3.4 Sample Design....................................................................................................34
3.5 Data Collection Procedures.................................................................................34
3.6 Data Analysis Methods.......................................................................................35

CHAPTER FOUR
DATA ANALYSIS, PRESENTATION AND INTERPRETATION OF
FINDINGS
4.1 Introduction .......................................................................................................36
4.2 Presentation of Findings.....................................................................................36
4.3 Summary of Data Analysis.................................................................................52

CHAPTER FIVE
SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

5.1 Introduction…………….....................................................................................54
5.2 Summary of Findings..........................................................................................54
5.3 Conclusions.........................................................................................................56
5.4 Recommendations...............................................................................................57
5.5 Suggestions for Further Study............................................................................58

REFERENCES...........................................................................................................59
APPENDICES
Appendix - I Letter of Introduction
Appendix – II Questionnaire

vii
 LIST OF TABLES
Table 3.1 Target Population.....................................................................................34
Table 4.1 Response Rate...........................................................................................36
Table 4.2 Gender......................................................................................................37
Table 4.3 Highest Level of Education......................................................................38
Table 4.4 Age bracket...............................................................................................39
Table 4.5 Years Worked in the Institution …….......................................................40
Table 4.6 Departments..............................................................................................41
Table 4.7 Effects of Packaging.................................................................................42
Table 4.8 Extent of Effect of Packaging ..................................................................43
Table 4.9 Effects of Distribution Channel................................................................44
Table 4.10 Extent of Effect of Distribution Channel..................................................45
Table 4.11 Effects of Infrastructure............................................................................46
Table 4.12 Extent of Effect of Infrastructure..............................................................47
Table 4.13 Effects of Operational Cost......................................................................48
Table 4.14 Extent of Effect of Operational Cost........................................................49
Table 4.15 Effects of Product Quality........................................................................50
Table 4.16 Extent of Effect of Product Quality..........................................................51

viii
 LIST OF FIGURES
Figure 1.1 Organization Structure..............................................................................5
Figure 2.1 Conceptual Framework...........................................................................33
Figure 4.1 Response Rate.........................................................................................36
Figure 4.2 Gender.....................................................................................................37
Figure 4.3 Highest Level of Education.....................................................................38
Figure 4.4 Age bracket.............................................................................................39
Figure 4.5 Years Worked in the Institution …….....................................................40
Figure 4.6 Departments............................................................................................41
Figure 4.7 Effects of Packaging...............................................................................42
Figure 4.8 Extent of Effect of Packaging ................................................................43
Figure 4.9 Effects of Distribution Channel..............................................................44
Figure 4.10 Extent of Effect of Distribution Channel................................................45
Figure 4.11 Effects of Infrastructure..........................................................................46
Figure 4.12 Extent of Effect of Infrastructure............................................................47
Figure 4.13 Effects of Operational Cost.....................................................................48
Figure 4.14 Extent of Effect of Operational Cost.......................................................49
Figure 4.15 Effects of Product Quality.......................................................................50
Figure 4.16 Extent of Effect of Product Quality........................................................51

ix
 LIST OF ABBREVIATIONS
DPSM Diploma in Purchasing and Supplies Management
KIM Kenya Institute of Management
NRB Nairobi

x
 OPERATIONAL DEFINITION OF TERMS

Distribution Channel The main function of a distribution channel is to

provide a link between production and consumption. A
distribution channel can be very simple, with just two
layers.
Infrastructure In terms of the supply chain management
infrastructure, oil firms seek to attain effective
procedures in the importation of oil products and
effectiveness in the overall procurement of oil products.

Operational Cost Refers to the price of the goods and services. It is the
amount of money the buyer or purchasers have to pay to
obtain the product.

Packaging Is the art and technology of enclosing or protecting

products for distribution, storage, sale and use.
Packaging also refers to the process of design,
evaluation, and production of packages.

Product Quality Is the degree of excellence conformance with

requirement, the totality of characteristics of an entity
that bear in its ability to satisfy stated or implied needs,
fitness for use, freedom from defects imperfection or
contamination and delighting customers.

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 CHAPTER ONE
INTRODUCTION OF THE STUDY
1.1 Introduction
This is the first chapter of this study. It contains background of the study, the
government hospitals overview, profile of Kenyatta National Hospital, statement of
the problem, the objectives of the study, research question, significance of the study,
limitations of the study and the scope of the study.

1.2 Background of the Study

Perishable nature of the produces like fruits and vegetables play an important role
while taking decision about the pricing and marketing of the said produces. Perishable
nature of fruits and vegetables affects the pricing and marketing to a great extent. As
we know that generally when such produces keep for a long time the quality of the
produces become impossible to be maintained and in such a situation growers,
wholesalers or even retailers are bound to sell the produces at lower prices to create
the demand of the produces and this expected situation inversely force them to charge
high price at the initial stage of the introduction of said produces which causes
fluctuation in prices. One more thing which is also observed and required a great
attention is that these produces cannot be preserved for a long time and preservation
cost is also very high which also cause high prices of preserved items (Dale, 2012).

The marketing of said produces also get affected with the above-mentioned factor. As
we know that marketing is a lengthy process it takes time to make the ultimate users
aware about the produces and because of the perishable nature of Fruits and
Vegetables the marketing of these produces fail to get the full space. The Fruits and
Vegetables (F&V) sector has been a driving force in stimulating a healthy growth
trend in Indian agriculture. Given the rising share of high value commodities in the
total value of agricultural output and their growth potential, this segment is likely to
drive agricultural growth in the years to come (Arnold, 2007). It plays a unique role in
India’s economy by improving the income of the rural people. Cultivation of these
crops is labor intensive and as such they generate lot of employment opportunities for
the rural population. F&V sector is perhaps the most profitable venture of all farming
activities as it provides ample employment opportunities and scope to raise the

1
income of the farming community. It also has tremendous potential to push the overall
agriculture growth. India has been bestowed with wide range of climate and physio-
geographical conditions and as such is most suitable for growing various kinds of
F&V. This has placed India among the foremost countries in F&V production just
behind China. F&V together constitute about 92% of the total horticultural production
in India.

According to Roger (2011), A large variety of F&V are grown in India like Banana,
Mango, Apple, Papaya, Sapota, Citrus, Pine Apple, Grapes & Guava etc. in Fruits and
Potato, Tomato, Onion, Brinjal etc. in Vegetables. India has the potential to be the
world’s largest food producer which is bestowed with one of the best natural
resources in the world and several factors like Increasing urbanization, nuclear
families, working women, disposable income and changing lifestyles are gearing up
the Indian food supply chains for a better future. Organized retail and Private label
penetration, demand for functional food, and increased spend on health food are major
drivers for the growth of this sector. F&V are also rich source of vitamins, minerals,
proteins, and carbohydrates etc. which are essential in human nutrition. These are
referred to as protective foods and assumed great importance as nutritional security of
the people.

As the population is increasing, the demand for such food is also increasing. To meet
such demand and provide a food in proper quality and nutrition, Supply chain plays a
very vital role in this sector and becomes even more important because of
perishability nature and very short shelf life. It not only helps to cut costs, but also
adds to maintain and improve the quality of produce delivered, which are perishable
in nature. Owing to the very short shelf life and perishable in nature, these items
require proper transportation, handling and packaging in order to reach in fresh state
to a customer. It also manages the relationship between businesses responsible for the
efficient production and supply of fresh produce products from farm level to ultimate
consumers, to reliably meet the requirements of the customer in terms of quality,
quantity, and price. The whole supply chain is suffering from maximum inefficiency
and facing various issues which motivated authors to identify the factors affecting the
supply chain of Fruits and Vegetables sector in India (Trent, 2005).

2
The challenge for companies in managing the supply chain of perishable foods is that
the value of the product deteriorates significantly over time at rates that are highly
dependent on the environment. According to these authors, temperature and humidity
are key factors in this process. An additional latent concern about food production and
distribution system s around the world is that they must to be more reliable than
manufactory traditional systems. Supply chain of perishables is more susceptible to
economic chocks, environmental changes, or even to management errors supported by
lack of knowledge (Craizors, 2008).

Eddie (2006), the literature had indicated that in the future food system will have to
joint four major characteristics: resilience, sustainability, competitiveness, and ability
to manage and meet customer expectations. Due to diseases related to food ingestion
and food production globalization, costumers had become more conscious of origin
and nutritional contents of their own foods. As a consequence of that, an increase of
interest on traceability, freshness, and high quality patterns of food is demanded. At
the same time, producers have expanded products choice in order to attend costumers
‘wishes.

The combination of these factors results in more complicated batch size decisions and
increase of transportation costs. Another major concern is that the population is
getting continuously older in a not structured way. This will certainly impact in food
security and food availability. This is one of the reason of supply chain management
becomes an important issue in the public and corporate diaries. In this view, fresh
products as a live sea food, fresh fruits and vegetables, and also flowers become a
difficult operation at high risk levels. Both, producer and distributor may suffer
substantial losses (Eugene, 2011).

Eddie (2006) noted that grocery stores in developed Western economies may incur
losses of up to 15 percent due to damage and deterioration of perishable products. In
less developed countries that lack sophisticated means of products transportation, the
transport of fresh products can cause even greater losses. Changes in food retailing
over the past four decades have produced a quiet revolution in the status of certain
foods in the diet of Western consumers.

3
In this context, application of the supply chain management Principles for the delivery
of a variety of standardized low cost perishable food products for mass markets is a
big deal. One of the most dramatic examples is found in the supply chains of chicken.
Food retailers support the change to high quality white meat, ensuring food and then
positioning it as a central offer. The change in consumption was witnessed in most
Western economies. Chicken was the main meat consumed in the U.S. at 37 kg per
person in 2012 according to American Meat Institute (2005). Australia, with less than
a tenth of the U.S. population, reported similar consumption per person (35 kg in
2002-2012) according to Turner (2009). Chicken meat began to gain prominence in
Western diets in the mid of 70s as the real price fell quickly and, also, access to this
kind of food on the retail stores were expanded (Eugene, 2011).

1.2.1 Profile of Kenyatta National Hospital

Kenyatta National Hospital in Nairobi is the oldest hospital in Kenya. Founded in
1901 with a bed capacity of 40 as the Native Civil hospital, it was renamed the King
George VI in 1952. At that time the settler community was served by the nearby
European Hospital (now Nairobi Hospital). It was renamed Kenyatta National
Hospital after Jomo Kenyatta following independence from the British. It is currently
the largest referral and teaching hospital in the country. Kenyatta National Hospital
has a capacity of 1800 beds and has over 6000 staff members. It covers an area of
45.7 hectares. The University Of Nairobi Medical School and several government
agencies are located on the campus.

Their mission is To optimize patient experience through innovative healthcare,

facilitate training and research, and participate in national health policy while their
motto is listening and caring. Their vision is to be a world class patient-centered
specialized care hospital. Their core values are to promote high quality evidence
based health care provision at the Kenyatta National Hospital, to train undergraduate
students internal medicine, thereby help produce competent doctors, to train
Postgraduate Student Internal Medicine and so produce specialists physicians of high
repute locally and internationally, to espouse virtues of professional ethics and moral
standards in training, research and provision of health care in Internal Medicine, To
recognize and promote meritocracy among the staff in training research and practice
4
 of Internal medicine, to nature responsible professionalism through culture
mentorship and to perform beyond expectation and with dignity to clients with the
best ethics adhering to team work, professionalism, integrity and give a sense of hope
while observing best SOP with employee empowerment and environment safety.

The Hospital was built to fulfill the role of being a National Referral and Teaching
Hospital, as well as to provide medical research environment. Established in 1901
with a bed capacity of 40, KNH became a State Corporation in 1987 with a Board of
Management and is at the apex of the referral system in the Health Sector in Kenya. It
covers an area of 45.7 hectares and within the KNH complex are College of Health
Sciences (University of Nairobi); the Kenya Medical Training College; Kenya
Medical Research Institute and National Laboratory Service (Ministry of Health).
KNH has 50 wards, 22out-patient clinics, 24 theatres (16 specialized) and Accident &
Emergency Department. Out of the total bed capacity of 1800, 209 beds are for the
Private Wing.

Figure 1.1 Organization Structure of Kenyatta National Hospital

Board

C.E .0

Human Training Credit Department

Pharmacy Resource Finance
Department
Department Department

Staff Credit Officers

Staff
Staff Staff

Source: Kenyatta National Hospital (2016)

5
1.3 Statement of the Problem
The challenge for companies in managing the supply chain of perishable foods is that
the value of the product deteriorates significantly over time at rates that are highly
dependent on the environment (Gattosha, 2009). An additional latent concern about
food production and distribution systems around the world is that they must to be
more reliable than manufactory traditional systems. Supply chain of perishables is
more susceptible to economic chocks, environmental changes, or even to management
errors supported by lack of knowledge.

Due to diseases related to food ingestion and food production globalization, costumers
have become more conscious of origin and nutritional contents of their own foods. As
a consequence of that, an increase of interest on traceability, freshness, and high
quality patterns of food is demanded. At the same time, predictors have expanded
products choice in order to attend costumers’ wishes. The combination of these
factors results in more complicated batch size decisions and increase of transportation
costs. It is for these reasons that the researcher wishes to investigate the factors
affecting supply of perishable goods in government hospitals in Kenya with specific
reference to Kenyatta National Hospital.

1.4 Objective of the Study

1.4.1 General Objective
The main objective of the study was to determine the factors affecting supply of
perishable goods in government hospitals in Kenya.

1.4.2 Specific Objectives

i) To determine the effect of packaging on supply of perishable goods in
government hospitals in Kenya.
ii) To find out how distribution channels affect supply of perishable goods in
government hospitals in Kenya.
iii) To establish the effect of infrastructure on supply of perishable goods in
government hospitals in Kenya.
iv) To assess the effect of operational costs on supply of perishable goods in
government hospitals in Kenya.

6
 v) To establish the effect of product quality on supply of perishable goods in
government hospitals in Kenya.

1.5 Research Questions

i) How does packaging affect supply of perishable goods in government hospitals
in Kenya?
ii) To what extent do distribution channels affect supply of perishable goods in
government hospitals in Kenya?
iii) In what ways does infrastructure affect supply of perishable goods in
government hospitals in Kenya?
iv)To what extent do operational costs affect supply of perishable goods in
government hospitals in Kenya?
v) How does product quality affect supply of perishable goods in government
hospitals in Kenya?

1.6 Significance of the Study

1.6.1 The Management of Kenyatta National Hospital
The research will help as a reference point to the management of Kenyatta National
Hospital anytime they want to conduct an internal assessment of their operations and
the effectiveness of their current supply chain.

1.6.2 Other Researchers

The other researchers will also benefit through this research since they will use a basis
for further research from the available data and statistics in this study.

1.7 Limitation of the Study

1.7.1 Lack of Cooperation
Some employees feared that the information they would give could be accessed by their
supervisors and this affected their willingness to fill all the questions. This was solved
by showing the management the introduction letter from KIM which proved that my
study was for academic purposes.

7
1.7.2 Confidentiality
Kenyatta National Hospital limits sharing of information to most people who are not
in management or the leadership team. Thus relevant literature related to the hospital
under review was difficult to find due to its confidentiality. This was solved by
showing the management the introduction letter from KIM which proved that my
study was for academic purposes.

1.7.3 Victimization
Some sections of the hospital like financial department and planning department
are too sensitive for ordinary member of the public; the researcher was
hindered from accessing such section despite the immense and valuable
information that would be used in this study. This was solved by showing the
management the introduction letter from KIM which proved that my study was for
academic purposes.

1.8. Scope of the Study

The core purpose of the research was to analyze the factors affecting supply of
perishable goods in government hospitals in Kenya. The study was confined to
Kenyatta National Hospital which is situated in Nairobi at Upper Hill area. The study
targeted the organizations departments concerned with procurement function which
include logistics, stores and the quality assurance department with a population of 63
employees. The study was conducted within April 2016 and June 2016.

8
 CHAPTER TWO
LITERATURE REVIEW
2.1 Introduction
In this chapter the study will review the existing literature on the subject under study.
It involves review of the past studies, critical review, the summary and also the
conceptual framework.

2.2 Review of Theoretical Literature

2.2.1 Packaging
According to Kotler (2006), packaging is a science, art and technology of enclosing or
protecting products for distribution, storage, sale, and use. Packaging also refers to the
process of design, evaluation, and production of packages. Packaging can be
described as a coordinated system of preparing goods for transport, warehouse,
logistics, sale, and end use. Packaging contains, protects, preserves, transports,
informs and sells. Packaging decisions must also include an assessment of its
environmental impact especially for products with packages that are frequently
discarded. Packages that are not easily bio-degradable could draw into customer and
governmental concern also; caution must be exercised in order to create packages that
don’t infringe on intellectual property, such as copyrights, trademarks or patents, held
by others. Most packages, whether final customer packaging or distribution
packaging, are imprinted with information intended to assist the customer. For
consumer products, labeling decisions are extremely important for the following
reasons: - labels serve to capture the attention of shoppers: the use of catchy words
may cause strolling customers to stop and evaluate the product, the label is likely to
be the first thing a new customer sees and thus offer their first impression of the
product.

The label provides customers with product information to aid their purchase decision
or help improve the customer’s experience when using the product. Labels generally
include a universal product codes (UPC) and in some cases, radio frequency
identification (RFID) tags, that make it easy for resellers, such as retailers, to check
out customers and manage inventory. For Companies serving international markets or
diverse cultures within a single country, bilingual or multilingual labels may be
needed. In some countries many products, including foods, are required by law to
9
contain certain labels such as listing ingredients, providing nutritional information or
including usage warning information. Developing new package can be extremely
expensive. The cost involved in creating new packaging include: graphic and
structural design, production, customer testing, possible destruction of leftover old
packaging, and possible promotion to inform a customer of the new packaging. When
companies create a new package it is most often with the intention of having the
design on the market for an extended period of time. In fact, changing a product’s
packaging too frequent can have a negative effect since customers become
conditioned to locate the product based on its package and may be confused if the
design is altered (Lyson, 2006). Waste prevention is a primary goal; packaging should
be used only where needed. Proper packaging can also help prevent waste. Packaging
plays an important part in preventing loss or damage to the package-product
(contents). Usually, the energy content and material usage of the product being
packaged are much greater than that of the package. A vital function of the package is
to protect the product for its intended use: if the product is damaged or degraded its
entire energy and material content may be lost.

The packaging and labels can be used by marketers to encourage potential buyers to
purchase the product. Package graphic design and physical design have been
important and constantly evolving phenomenon for several decades. Marketing
communications and graphic designs are applied to the surface of the package and the
point of sale displays. Packaging can play an important role in reducing the risks of
shipment. Packages can be made with improved tamper resistance to deter tampering
and also can have tamper- evident features to help indicate tampering. Packages can
be engineered to help reduce the risks of package pilferage. Some package
constructions are more resistant to pilferage and some have pilfered indicating seals.
Packages may include authentication seals and use printing to help indicate that the
package and contents are not counterfeit. Packages also can include anti-theft devices,
such as dye-packs, RFID tags, or electronic article surveillance tags that can be
activated or detected by devices at exit points and required specialized tools to
deactivate using packaging, in this way it is a means of loss presentation (Lyson,
2006)

10
Packaging is a very important marketing strategy to glamorize product in order to
attract the consumer’s attention. Sometimes packaging is so important that it cost
more than the product itself in order to lure the consumers to buy it. Packaging should
definitely be included in the 4 major P’s of marketing. Without attractive packaging,
who would buy it in order to try it? Your first step to enter the market is crushed if the
packaging is ugly. The basic function of packaging is to “preserve product integrity”
by protecting the actual food product against potential damage from “climatic,
bacteriological and transit hazards (Lyson, 2006)

However, the first to define packs as the “silent salesman” was Alphones in 2005,
who argued that the pack must come alive at the point of purchase, in order to
represent the salesman. About 30 years later, Lyson (2006) expanded further on
Allophone’s views, stating that “good packaging is far more than a salesman; it is a
flag of recognition and a symbol of values”. Given that only a small minority of
brands is strong enough to justify the investment that national promotion requires, for
the rest, packaging represents one of the most important vehicles for communicating
the brand message directly to the target consumer. As the retail environment becomes
saturated with competitors varying for consumers’ attention, packaging has to work
harder than ever if the product is to be noticed through the congestion of competitive
products. Alongside this challenge, retailers are faced with the realization that
consumers not only differ in how they perceive brands but also in how they relate to
these brands. It on this premises that this research paper wishes to examine the impact
of product packaging on product performance with special reference to PZ Cussons
Nigeria Plc.

Alphones (2005), indicated that packaging is all activities of designing and producing
the container or wrapper for a product. Kottler (2006) defines packaging as all
materials products used for the containment, protection, hard delivery and
presentation of goods. Packaging is the protecting products for distribution, storage,
sale and use, packaging also refers to the process of design evaluation and production
of packages. Packaging can be described as a coordinated system of preparing goods
for transport, warehousing information and sell. It is fully integrated into government
business, hospitalal, industry, and personal use.

11
Alphones (2005), believes that better protective packaging is especially important to
manufacturers and wholesalers, who may have to absorb the cost of goods damaged in
transit. Sometimes the cost of such damage can be charged to the transportation
agencies. Moreover, goods damaged in shipment may delay production or cause lost
sales. Packaging is vital to retailers, they benefit from both the protective and
promotional aspects of packaging. Packaging which provides better protection,
company operators claim, can reduce store costs by lessening breakage, shrinkage and
spoiled, preventing discoloration and stopping pilferage. Packages that are easier to
handle can cut costs by speeding price marking, improving handling and display, and
saving space. Lyson (2006) says that packaging can increase sales by such
promotionally oriented moves as offering smaller or larger sizes more multipacks,
better pictures of the product itself, illustrations of the product in use and more
effective use of color.

Packaged goods are regularly seen in retail stores and may actually be seen by many
more potential customers than the company’s promotion. An effective package
sometimes gives a firm more promotional impact than it could possibly afford with
conventional promotion efforts. Promotionally oriented packaging also may reduce
total distribution costs. An attractive package may speed turnover so that total costs
will decline as a percentage of sales. Rapid turnover is one of the important
ingredients in the success of self-service retailing. Without packages, self-service
retailing would not be possible (Lyson, 2006)

Costs may rise because of packaging and yet everyone may be satisfied because the
packaging improves the total product, perhaps by offering much greater convenience
or reducing waste. Packaging is associated with the art and science of designing and
producing the container or wrapper for a product Kotler (2006), in which the product
is offered for sale and on which information is communicated. Package as the
product of packaging has two major layers-primary and secondary package and for
international marketing especially by shipping, the third layer referred to as container-
product of containerization, is necessary for storage and product identification.
Package is expected to showcase information about the product as label.

12
Inspite of these package related frauds and mis-representations, modern packages
have contributed to the generation of sales. This is attributed to the fact that modern
package compared to previous forms of packages offer self-service based on their
ability to perform sales tasks of attracting attention, giving the product in offer and
their features, good quality description; creation of confidence in the consumers as
well as creation of overall favorable impression of the product. It is also augured that
contemporarily, consumers are becoming more affluent hence can afford to pay
higher for packages that offer convenience, dependability and prestige as well good
quality in appearance (Mark, 2004).

From the producers’ point of view, packaging has continued to be in vogue given its
efficiency in contributing to the instant recognition of the product, the producer
(company) or and the brand of the product especially given outdoor advertisement, as
well as the innovative ability packaging offers producers given its unique materials
and features. This work asserts the impact of packaging on sales volume for made in
Nigeria products compared to foreign products given the relative low per capita
income in Nigeria and the high level of poverty among consumers; especially for
household consumables as well as the poor attitude to environmental concerns among
Nigerians (Prassana, 2008)

Good packaging in design aids shoppers identify their needs especially in crowded,
ever-changing shelves of health and wellness products, as they focus on the
information that is most crucial in the consumers’ minds. Packages highlights benefits
or ingredients of the shelved products thus make it easier for shippers as the goodness,
simplicity and naturalness of the ingredients are showcased. Dutch Boy Paint re-
packaged its product in new containers that cost a dollar or two more than the
traditional cans and secured their loyalty of over 50% of its customers and new stores
(Chandra, 2008).

2.2.2 Distribution Channel

Arnold (2007) states that distribution in the physical slow of goods through channels.
Channels are comprised of a coordinated group of individual of firms that perform
functions adding utility to a product or service. The major two types of channel utility
are place time form and information. Since these utilities can be a basic source of

13
competitive advantage and product value, choosing a channel strategy is one of the
key policy decisions marketing management must make. Marketing channels
decisions are among the most important decision that management force. A
laboratory’s channel decision directly affects every other marketing decision.
Distribution channel decisions are the most complex and challenging decisions facing
the firm. Each channel systems create made a different level of sales and costs. Once
a distribution channel has been chosen, the firm has to stick with it for a longtime.

Wholesalers link manufacturers and business at the point of sale. Who are seeking to
resell the products for retailer than personal use. Traditionally, the wholesalers do not
own only part product or services themselves; however they seek out product and
services, which they own and also sell to customers via the travel agency network.
Lyson (2006) stated that, when foreign laboratory begins producing and selling in
more than one country and becomes a global distribution. It is the time to consider the
concept of logistics that is a total systems approach of management of distribution
process that includes all the activities involved in physical moving raw materials in
process inventory and finished goods inventory from the point of origin to the point of
user of consumption.

Distribution is the movement of drugs from the initial producer until they reach the
final consumer. In the course of distribution commodities will pass through channel
of distribution involving line middlemen. Middlemen are the people engaged in
distributing commodities as they move from the initial producer to the final
consumer. They include wholesalers, retailers and many other agents. Achieving
efficient production in factories and on firms is one problem, but putting the
consumer in possession of the complication there is an intricate maze of middlemen
and markets which goods have to pass during their journey from producer. The paths
which they follow are known as the channels of distribution (Turner, 2009).

Distribution is a system of getting firms products to the intended customer.

Distribution is therefore a link between the manufacture and the consumer. This
link covers transportation, storage whole selling and retailing. There can also be
agent's brokers who only link the customers and supplier. A firm needs and
efficient distribution network for its products in order to reach its wide market in

14
time states. An organization should be aware of strategies to expand it total
demands and also protect its current market share (Gikunda, 2009).

Distribution occurs between every pair of stages in the supply chain. It is regarded as
a key driver of overall profitability of a firm because it directly impacts both the
supply chain cost and customer experience during distribution process, channels of
distribution are identified and the best is outsourced. In his book Logistics
Bloomberg (2008) highlighted that channels of distribution develop primarily
because intermediaries reduce the number of channel transaction making the
marketing more effective and efficient. He said that the design of distribution
channels will be determined by the following factors. Market average objective
Product characteristics Customer service objectives Profitability

Bill (2002) argues that there are different distribution channel some channel are short
and through one or more middlemen .These channels of distribution are broadly
divided into four types. Producer- customer this is the simplest and shortest channel in
which no middlemen involved and producer directly sell their product to the
consumer. It involves only two people who are producer and consumers. It is fast and
economical channel as distribution under it the producer entrepreneur performs all the
marketing activities himself and has full control over distribution. A producer may
sell directly to customers through door to door salesmen, direct mail or through his
own retail stores. Big firms adopt channels to cut distribution costs and sell industrial
product of high value small producer s and producers of perishable commercial also
sell directly to local consumers Producer- retailer customers, this distribution channel
involves only one middleman called “retailer ‘under it producer sell his products to
big retailers or relatives who buy goods in large quantities who in turn sells to the
ultimate customers. It involves only three process thus is, first the producer, secondly
the retailer who breaks item into small quantities, and finally the customer who buys
item in the final. This channel relieves the manufacturer from the border of selling the
goods himself and at the same time gives him control over the process of distribution.

This is usually suited for distribution of consumer durables and products of high
value. Producer –wholesaler- retailer-customer, this is the most common and
traditional channel of distribution. Under it, two middlemen i.e wholesalers and

15
retailers are involved. This is the same as the above channel only the difference is the
addition of wholesalers in the channel. Here the producer sells his products to
wholesalers, who in turn sell it to the retailers and retailers finally sell the products to
customers (Mentzer, 2008). This is channel is suited for the producers having limited
finance, narrow product line and who needed expert services and promotional
supports of wholesalers, this is mostly used for the products with widely scattered
market. Producer agent-wholesale-retailer-customer; this is the largest channel of
distribution which three middlemen are involved. These middle men are agent,
wholesalers, retailers, and finally the customers. This is used when producer wants to
be fully relieved of problem of distribution and thus hands over to entire output to the
selling agents. The agents distribute among a few number of retailers who finally sell
it to the ultimate customers. This channel is suitable for wider distribution of various
industrial products.

2.2.3 Infrastructure
Infrastructure is a heterogeneous Term, including physical structures of various types
used by many industries as inputs to the production of goods and services. This
description encompasses “social infrastructure” (such as hospitals and hospitals) and
“economic infrastructure. Supply fluctuation was due to capacity adjustment
distribution channel, production distribution channel; order processing delay and
order wait time. Gross (2005) observes that the reversed bullwhip effect is caused by
factors such as deficient information sharing, insufficient market data, deficient
forecasts and capacity issues. Facilities with mass production are responsive to supply
variability while customization platforms are prone to longer production distribution
channels. Business processes sub optimization by design or default can lead to a
butterfly effect where a small variation can lead to system wide variation. Most
companies are no longer simply contented with price as a determinant in procurement
services but also sustainability of the supply and ability to meet unpredictable and
short notice supply instructions. Ability and expertise override costs where the cost
curve minimization is already achieved. Managing the information flows is the most
critical of these activities. This is because the flow or movement of materials or
money is usually triggered by associated information movement. Current
developments in systems thinking and continuous system simulation, when applied

16
within the context of an operations management framework, may offer the good
design of supply chain and improve in supply chain performance.

Kottler (2006) stated that, a typical perishable goods industry supply chain is
composed of an exploration phase at the wellhead, crude procurement and storage
logistics, transportation to the oil refineries, refinery operations, and distribution and
transportation of the final products. The upstream activities (exploration, development
and production of crude oil or natural gas) and downstream activities (tankers,
pipelines, retailers and consumers) are two important activities in the perishable goods
industry. SCM in O&G industry requires the company to integrate its decisions with
those made within its chain of customers and suppliers. This process involves
relationship management of the company to their customers and suppliers.

A firm can create long-term strategic relationships with their suppliers and in most
cases there is a collaborative process between the oil and gas company with its
suppliers. Connel (2011) conducted a study on supply chain management challenges
in Kenya perishable goods industry and noted that Kenya’s perishable goods industry
faces supply chain challenges such as lack of strategic stocks, relatively high
perishable goods prices compared to other East African countries, frequent fuel
shortages, sub-standard products and diversion of products destined for export back
into the country. The latter includes energy, water, transport, and digital
communications.

Conceptually, infrastructure may affect aggregate output in two main ways: (i)
directly, considering the sector contribution to GDP formation and as an additional
input in the production process of other sectors; and (ii) indirectly, raising total factor
productivity by reducing transaction and other costs thus allowing a more efficient use
of conventional productive inputs. Infrastructure can be considered as a
complementary factor for economic growth (Gross, 2005). The answer is critical for
many policy decisions for example, to gauge the growth effects of fiscal interventions
in the form of public investment changes, or to assess if public infrastructure
investments can be self-financing.

17
The empirical literature is far from unanimous, but a majority of studies report a
significant positive effect of infrastructure on output, productivity, or long-term
growth rates. Infrastructure investment is complementary to other investment in the
sense that insufficient infrastructure investment constrains other investment, while
excessive infrastructure investment has no added value. To the extent that suboptimal
infrastructure investment constrains other investment, it constrains growth (Newbery,
2012).

According to Chandra (2008), it is necessary to realign the nation’s infrastructure to

the changing world economy. The UK’s infrastructure must be secure, flexible, and
well inter-connected in order to support the UK’s long term economic growth.
Infrastructure security and stability concerns the quantity of spare capacity (or
security of supply). Instead of acting on the efficiency frontier, infrastructure projects
must operate with spare capacity to contribute to economic growth through ensuring
reliable service provision in energy and transport. For instance, it was the spare
capacity generated by Victorian and later transports investments that provided for the
structural shifts in London jobs over the past forty years, from manufacturing (mainly
in outer London) to services (much more centrally located).

Greater flexibility in infrastructure systems is necessary to respond to changing

economic needs. For instance, within the energy sector the UK needs to ensure energy
security and at the same time meet the de-carbonizing target in the coming decades. If
energy could be supplied by different sources both aims could be easily achieved, but
this would require a different -and more flexible-energy system than the one currently
in place. The solution can be the development of a “super grid”, i.e. an international
network of electricity cables, which integrates offshore renewable generation into the
transmission system, as well as allowing electricity to be traded across borders. The
opportunity to connect houses, and hence the final consumer, to the grid (through the
smart grid) would further increment the flexibility and efficiency of energy supply.
London’s “Oyster “card is another example of flexible technology that has the
potential to introduce flexible pricing policies to public sector networks (Eddington,
2006).

18
Finally, interconnection and complementarities across different infrastructure sectors
are key elements for increasing service efficiency, supporting the adoption of
innovative technologies and supporting growth. Good connection between cities and
airports, via rail, roads and underground, decrease the travel time and costs and
increase airports ‘appeal for both airlines companies and passengers. Other examples
include broadband and ICT, which play a critical role in the development, installation
and operation of the smart grid across UK: smart grids manage the supply and
demand of power through the national distribution network more effectively by
introducing high-tech communication to the system. Interconnection influences also
the implementation costs and feasibility if a given project. Moreover, in a crowded
and busy network decisions have knock on effects –for example the absence of Cross
rail would influence the “business as usual” benefits and costs associated with a dense
location (Rosewell, 2012)

A growing awareness of the wide-ranging social and economic impacts of

transportation infrastructure has led decision makers to ask how desirable transport
investments and policies can best be identified. This report is directed towards
meeting the needs of public administrations and transportation professionals
concerned in particular with the relationship between transport infrastructure
investment and general economic performance and with the identification and
measurement of socio-economic impacts in specific geographic areas. Transportation
projects can contribute to different goals of government. A set of economic objectives
relates to the overall volume of economic activity. Transport infrastructure investment
can contribute to growth by expanding the stock of capital available for use in
producing goods and services. With more capital and more efficient production, both
real income levels and standard of living can be expected to rise. There is an
abundance of literature on the productivity of infrastructure investment. The general
conclusion reached is that public capital has an impact on private capital, on labour
productivity and hence on economic growth, but the magnitude and significance of
these effects are not clear (Arnold, 2007). The key issue in any analysis of these
complex interrelationships is the understanding of this relationship and the direction
of causality (the extent to which high investments are the cause or the result of
economic growth is not always clear).

19
The relationship between transport investment and economic growth becomes much
more complicated when a broader view of economic development is taken, linked to
the concept of sustainable growth. This takes into account the effects on the
environment, society and the economy both local and national. In this report, this
broader view has been adopted. This reflects, in a way, the changes in transport
infrastructure investment policy in Europe, for example, as summarized by Turner
(2009). The policy focus has shifted from priority to rural areas (investment in road
and rail extensions to existing motorways in the “peripheral” countries in 1950-70), to
economic integration and social cohesion objectives, the Trans-European road
network and the high-speed-rail network

A second type of economic objective concerns the distribution of transportation-

generated economic benefits and changes in the incidence of these benefits across
locations. There have also been strong (both urban and regional) distributional
arguments for investment in transport infrastructure. The regional development
policies in the European Union, where powerful and substantial investment has been
transferred from rich countries to areas where this investment is needed, are a good
example of this. The argument used by the EU is that regional development policy
strengthens integration and cohesion in the EU as a whole, while at the same time
reducing the disadvantages of poorly connected countries (Mark, 2009).

There remain, however, many unresolved questions. It is unclear whether such a

policy provides greater benefits to the poorer regions and whether it will lead to
overall economic development in the longer term. Little empirical evidence is
available on whether infrastructure investment at the regional level actually
strengthens the recipient, since it extends market area and permits migration of labour
to the centre where opportunities are perceived to be greater. It is difficult to
determine whether the local economy in that region benefits over the longer term
(Lucey, 2005). At present, it is impossible to determine unequivocally whether
expansion of the transport infrastructure will encourage economic development in
underdeveloped regions. An obvious reason is that development has many dimensions
and can, for example, be expressed in economic, social or environmental indicators
that should be weighed against each other. Another reason is that the distribution of
the benefits of investments in regions is unclear, and that what is beneficial for one
20
region may be detrimental for another. Clearly, it is extremely difficult to detect the
exact relationship between investment in infrastructure and regional economic
development. One method allowing this issue to be dealt with, at least in theory, is the
development of a spatial general equilibrium model (Connel, 2011)

2.2.4 Operational Cost

Cost is an amount that has to be paid or given up in order to get something. In
business cost is usually a monetary valuation of effort, warehousing, resources, time
and utilities consumed, risks incurred and opportunity forgone in production and
delivery of a good or service. All expenses are costs. Cost refers to the price of the
goods and services. It is the amount of money of the buyer or purchasers have to pay
to obtain the product (Trent, 2005)

Cost management is the process by which companies control and plan the costs of
doing business. Individual projects should have customized cost management plans,
and companies as a whole also integrate cost management into their overall business
model. There is no single accepted definition for this term, because it has such broad
applications and possible strategies. When properly implemented, cost management
will translate into reduced costs of production for products and services, as well as
increased value being delivered to the customer. For a company's management to be
effective overall, cost management must be an integral feature of it. It is easiest to
understand this concept if it is explained in the context of a single project. For
instance, before a project is started, the anticipated costs should be identified and
measured. Taking this approach to cost management will help a company determine
whether they accurately estimated expenses at first, and will help them more closely
predict expenses in the future. Any overspending can also be monitored in this way,
and either eliminated in future projects or specifically approved if the expense was
necessary. Cost management cannot be used in isolation; projects must be organized
and tailored with this strategy in mind (Craizors, 2008)

Starting a project with cost management in mind will help to avoid certain pitfalls that
may be present otherwise. If the objectives of the project are not clearly defined at
first, or are changed during the course of the project, cost over-runs will be more
likely. If costs are not fully researched before the project, they may be
21
underestimated, thereby inflating the expectation of the project's success
unrealistically. Effective cost management strategies will help a team deliver a
finished project within the allocated budget, while also making it as valuable as
possible to the company. There is always the possibility of unexpected costs, but
preparation in the form of cost management will likely make them much easier to deal
with when they occur. Cost management is the process of planning and controlling the
budget of a business. Cost management is a form of management accounting that
allows a business to predict impending expenditures to help reduce the chance of
going over budget (Roger, 2012).

Many businesses employ cost management plans for specific projects, as well as for
the over-all business model. When applying it to a project, expected costs are
calculated while the project is still in the planning period and are approved
beforehand. During the project, all expenses are recorded and monitored to make sure
they stay in line with the cost management plan. After the project is finished, the
predicted costs and actual costs can be compared and analyzed, helping future cost
management predictions and budgets. Implementing a cost management structure for
projects can help a business keep their over-all budget under control. Several business
intelligence (BI) programs, such as Oracle Hyperion, offer cost management software
to help businesses monitor costs and increase profitability (Craizors, 2008).

While the software may help, it is not imperative that software is used when executing
a cost management plan. Vendors may refer to cost management software
applications as cost accounting, spend management or cost transparency products.
Cost management is equally important to all companies, regardless of size. Small
companies generally have tighter monetary controls, mainly because of the risk with
the failure of as little as one project, but with less sophisticated control techniques.
Large companies may have the luxury to spread project losses over several projects
whereas the small company may have few projects. Cost management is not only
“monitoring” of costs and recording perhaps massive quantities of data, but also
analyzing the data in order to take corrective action before it is too late (Craizors,
2008).

22
Cost management should be performed by all personnel who incur costs not merely
the project office. Fidelity National Financial and First American Financial, the two
leaders in title insurance, reached the top by pursuing different strategies. Fidelity
bought market share through acquisitions, a strategy that resulted in quick increases
but has failed to hold gains over the longer term. First American took the other path
and internally expanded its business, a strategy that has led to more steady market
share increases over time. What's more, Fidelity has attempted to diversify out of its
main product line through a number of acquisitions in unrelated businesses,
weakening its economic moat. While both companies are exposed to the same
industry conditions, we think management style is a differentiating factor between the
two and drives our more positive view of First American (Eddie, 2006).

In 2010 and again in 2008, Fidelity made major acquisitions, each of which gave the
firm the leading position in title insurance at the time the transactions closed.
Acquisitions make sense in this industry, as economies of scale and cost reductions
from eliminating duplicate functions can quickly add to margins. Some fall-off in
market share immediately after the acquisition is expected, as a few sales
representatives, agents, and even customers will seek alternatives. However, over time
the combined entity should gain advantage from improved economies of scale,
competitive position, and assimilating the best employees of the companies. But even
though Fidelity made sound acquisitions of good title insurers on favorable terms,
management has allowed these advantages to slip away. In 2008, after the
LandAmerica acquisition, Fidelity's market share increased from about 27% to 46%.
However, by the end of the third quarter of 2011, its share had fallen to less than 35%,
with more than half of the gained market share gone. On the other hand, First
American has pursued gradual internal growth, aided occasionally by a small
acquisition (Craizors, 2008).

Strategy is inherently better, as it builds loyalty and stickiness among customers. We

think this strategy speaks well for First American's management. First American has
primarily focused on building the title insurance business, although it has devoted
resources at times to ancillary products that have strengthened operations and
customer loyalty. Without the distraction of numerous unrelated businesses,

23
management has focused on building and maintaining its core title operations, and the
results are readily apparent. Although Fidelity has twice jumped ahead through
acquisitions, its management team falters in maximizing the value of the acquisitions.
(Eugene, 2010)

Since the housing crisis, Fidelity and First American have both embarked on major
programs to increase profitability in core operations. They cut costs, raised prices, and
struck better deals with agents, all of which resulted in increased underwriting
income. The combined ratios for both insurers improved beginning in 2009, but First
American has improved at a faster rate. For the past three years, the two companies'
combined ratios have been virtually identical. Management Is the Difference we think
the management teams have a major impact on the changing dynamics that affect the
two firms. A notable point of difference is the focus of the executives. Fidelity views
its core title insurance operations as a launching point for investment in nonrelated
business; while First American seems more centered on improving the core title
insurance business' margins and market share. One of the reasons that First American
has closed the gap in margins and market share is the increased presence it has
developed in its national commercial business. Following Fidelity's acquisition of the
title insurance operations from LandAmerica in 2008, which increased Fidelity's share
to 46%, and possibly higher in commercial lines, First American has gained ground
quickly (Eugene, 2010)

2.2.5 Product Quality

Quality is the conformance to a valid customer requirements, that is as long as an
output fell within acceptable limits called specifications limits around a desired value
called the nominal value or target value it was deemed conforming good or
acceptable. Stressing quality can produce all the desired results less rework, great
productivity, lower limit cost price flexibility, improved competitive position,
increased demand larger profits more jobs and more secure jobs vendors get
predictable long sources of business and investors get profits therefore we say they
everybody wins (Weber, 2007).

24
In today’s global competitive market place the demands of customers are forever
increasing as they require improved quality of products and services. This
fundamentally tends to trigger organizational activities when it comes to quality to a
suppliers in case the sourcing organization does not have quality a major factor in the
business quality revolution that has proven itself to be one of the 21 st century most
powerful creators of sales and revenue growth, genuinely good jobs and soundly base
and sustainable business expansion (Dale, 2012).

According to Kathryn (2011), the evolution of quality coordinated activities to direct

and control an organization with regard to quality. BSEN ISO9000 (2008) is
described through the stages of inspection quality control Quality assurance and
onwards to total quality management for quality therefore to be realized there should
be its eight features that is durability aesthetics’, reliability response, serviceability,
conformance and features. All these comprise of what is called quality.

The primary purpose of purchasing department to purchase is to continue to the

profitability of an undertaking by obtaining the best quality products or services in
terms of fitness for use at least possible total cost. Therefore the purchasing
department staff is the intermediaries between the user and the supplier .They are
therefore responsible for checking the completeness of product or service
specifications (Lysons, 2006).

According to Lysons (2006) quality preceded the ISO 9000 services as a method by
which organizations could increase their reputation for quality and profitability,
compliance with ISO standards and ISO certification is widely regarded as providing
the framework and essentials first step to qualify. The current BSEN ISO.9000:2008
series provides the principals that are put into practice by the BSI system for the
registration of firms. Assessed capability for a company to be registered it is required
to have a documented quality system that complies with the appropriate parts of
BSEN ISO 9000 and a quality assessment schedule that defines in precise terms the
scope and special requirements relating to a specific group of processes or service.

25
Organizations aiming to reduce costs while at the same time increasing flexibility and
speed of response to customers are virtually forced to adopt a lean production
approach whereby it focuses on minimization of buffers and a concentration and just
in time supply approach. So quality systems establishes a framework of reference
points to ensure that every time a process is performed the same information method,
skills and controls are used and applied in a consistent manner. In this way it helps to
define clear requirements communicate policies and procedures, monitor how works
is performed and improve team work.

The ISO 9000 series gives buyers an assurance that the quality of the products and
services provided by a supplier meets their requirements .The services of standards
define and sets out define the list of features and characteristics which it is considered
should be present in an organizations management control systems through
acuminated policies manual and procedures which help to ensure that quality is built
into a process and is achieved. Amongst other things it ensures that an organization
has corrective and preventive standardized methods that ensure defects are monitored
and correctors and preventive action systems are in place and that management
reviews the system (Howard, 2005).

Quality and management and the associated continuous improvements are worked by
many organizations or the means by which they can survive in increasingly aggressive
markets and maintain a competitive edge over their rivals. Organizations that do not
manage this change will automatically fail and as a result of the efforts made by these
organizations to respond to these market place demands the quality of products,
services and processes has increased considerably during the recent past (Dale,2012).
Quality is the totality of features and characteristics of a product that are on the ability
to satisfy stated or implied needs and providing excellence in the product or services
that an organization produces, fast detection and correction of unsatisfactory quality
and ultimately higher quality of purchased products. Quality is therefore determined
by balancing technical considerations of the hospital such as fitness for use,
performance, safety and reliability with economic factors including price and
availability (Lysons, 2006)

26
According to Mentzer (2010), most organizations need to go outside and look at their
suppliers with the focus on improving production through Total Quality Management
and business process reengineering. With faster product innovations, decreased
product life cycles and rapid imitative competition, only organizations that are agile
and flexible survive. Agility is the ability to respond quickly to changes in the
marketing environment. Agile organizations are able to successfully market low-cost,
high quality products with short distribution channels in varying volumes that provide
enhanced value to customers through customization. Flexibility is the capability of
changing from one task to another rapidly when changing conditions are defined
ahead of time

According to Loannou (2005) quality is the degree of excellence conformance with

requirement, the totality of characteristics of an entity that bear in its ability to satisfy
stated or implied needs, fitness for use, freedom from defects imperfection or
contamination and delighting customers. Quality has been defined as meeting or
exceeding customer requirements. This meant that product or service was fit for
customer use. Fitness for use was related. Value received by the customers and to
customer’s satisfaction only the customer can determine the quality not the producer.
Customer satisfaction was a relatively concept which varied from one customer to
another as each person defined quality in relation to his or her own needs. Product
should continuously start to improve quality. Continuous improvement was a never
ending process and it was driven by knowledge and problem solving.

The total quality philosophy takes a matter a stage further and was based on the active
involvement of all concerned. Total quality in a supply chain would mean that the
supplier as well as the customers and workforce would be involved in determining
quality inspection and supplier assessment are superseded by a shared approach to the
elimination of objective work, with emphases on prevention rather than defection and
curve. Supplier must as aliens in this process. It was no longer appropriate that buyer
should “vet” supplier, who should be bringing as much enthusiasm commitment to
quality management as their customers (Baily, 2005).

27
According to Roger (2006), quality planning develops products and process to meet
the customers’ needs and quality control ensures that the execution proceeds as per the
quality planning without any deviation. Therefore, quality control determines the
control points at progressive stages of planning, measures actual performance against
the quality planning and notes the deviation or the difference. Quality control was
defined in ISO 9000 as ‘part of the quality management focused on fulfilling quality
requirement’. A quality requirement was a need or expectation that was either stated,
implied or obligatory by the customer.

2.3 Preview of Critical Literature

Lyson (2006) packaging decisions must also include an assessment of its
environmental impact especially for products with packages that are frequently
discarded. Packages that are not easily bio-degradable could draw into customer and
governmental concern also; caution must be exercised in order to create packages that
don’t infringe on intellectual property. Whereas this is true, the author has failed to
show us how packaging affects supply of perishable goods in government hospitals in
Kenya and therefore conducting a study was important in filing the gap.

According to Byras (2009) the drug distribution network in private laboratories is in a

state of chaos because it consists of open markets, patent medicine stores, community
pharmacies and private laboratories, wholesalers/importers and pharmaceutical
manufacturers. It is a common scene in private laboratories to see petty traders who
sell kola nuts, cigarettes, and oranges, among other items, in market kiosks, motor
parks, and road sides hawking drugs that range from over the counter items to
antibiotics. Whereas this is true, the author has failed to show us how distribution
channel affects supply of perishable goods in government hospitals in Kenya and
therefore conducting a study was important in filing the gap.

Management of the perishable goods supply chain is a complex task due to the large
size of the physical supply network which dispersed over vast geography, complex
refinery production operations, and inherent uncertainty. Maul (2012) stated that
uncertainty arises in realistic decision making processes and has a huge impact on the
refinery planning activities. Three major uncertainties that should be considered in
refinery production planning include: market demand for products; prices of crude oil

28
and the saleable products; and product or production yields of crude oil from chemical
reactions in the primary crude distillation unit. Whereas this is true, the author has
failed to show us how infrastructure affects supply of perishable goods in government
hospitals in Kenya and therefore conducting a study was important in filing the gap.

Cost is another major factor which affects supply of perishable goods in government
hospitals. In business, cost is usually a monetary valuation of effort, warehousing,
resources, time and utilities consumed, risks incurred and opportunity forgone in
production and delivery of a good or service (Roger, 2011). Whereas this is true, the
author has failed to show us how operation cost affects supply of perishable goods in
government hospitals in Kenya and therefore conducting a study was important in
filing the gap.

Wheeler (2008) states that quality is the totality of features and characteristics of a
product that are on the ability to satisfy stated or implied needs and providing
excellence in the product or services that an organization produces, fast detection and
correction of unsatisfactory quality and ultimately higher quality of purchased
products. However the authors have failed to us how product quality affects supply
of perishable goods in government hospitals in Kenya and therefore conducting a
study was important.

2.4 Summary
The research will achieve information on importance of effectiveness of supply of
perishable goods in government hospitals. There is need to ensure that effectiveness
of supply of perishable goods in government hospitals is successful. Success meaning
that customers are satisfied and organization goals are well accomplished. Further
research will be required to find out the benefits of a centralized store operations.
Approaches to warehouse need to review organization to know which approach is
suitable to use throughout the practices. The rapid advancement and proliferation of
technology continues to present TMC operators with both great challenges and great
opportunities. Already, most TMCs have developed from primarily having a
monitoring role into one requiring much more decision-making and proactive control,
often involving multiple agencies and jurisdictions.

29
Food products may have very short life cycle although the routing from factory to
distribution centers and finally to wholesale can include several options. Due to
competition in the market, there is very much pressure on cost effectiveness. The
delivery time is also crucial: the value of the product may disappear in few days. The
consumer behaviour is also linked to lead-time. Freshness of food is connected to
health, which is increasingly important parameter perceived by consumers in many
cultures.

The issue of the importance of improving road infrastructure, and in particular rural
roads, is not new in the development community. This topic has long been at the
centre of development policies, supported by the popular assumption among
development theorists that remote areas’ disadvantageous position vis-à-vis economic
opportunity and social welfare could be remedied with road building. Investments in
road infrastructure were considered to have important positive effects on distribution
planning and trade, and governments and donors invested heavily in the development
of roads and transport corridors.

Much more importantly, however, the entire supply chain can then be optimized and
managed as a single entity. This brings potential advantages of cost reduction and
service enhancement, not only for the retailer, but also for the supplier. It should also
mean that products reach the stores more rapidly, thus better meeting sometimes
transient customer demand. In some instances it may mean the production of products
in merchandisable ready units, which flow through the distribution systems from
production to the shop floor without the need for assembly or disassembly. Such
developments clearly require supply chain co-operation and coordination. We may be
describing highly complex and advanced operations here.

Government hospitals are increasingly spread across the world. Hospitals may have
thousands of stores in a number of countries, with tens of thousands of individual
product lines. They may make millions of individual sales per day. Utilizing data to
ensure effective operation amongst retailers, manufacturers, suppliers, logistics
services providers, head office, shops and distribution centers is not straightforward.
There is thus always a tension between overall complexity and the desire for the
simplest possible process. To achieve maximum effectiveness of supply chains, it

30
became clear that integration, or ‘the linking together of previously separated
activities within a single system was required.

2.5 Conceptual Framework

A conceptual framework is diagrammatic representation of the dependent and
independent variables or a schematic presentation of variable relationship.

Figure 2.1 Conceptual Framework

Independent Variables Dependent Variable

Packaging

Distribution Channels

Supply of Perishable Goods in

Infrastructure Government Hospitals

Operational Costs

Product Quality

Source: Author (2016)

2.5.1 Packaging
Packaging is the art and technology of enclosing or protecting products for
distribution, storage, sale and use. Packaging also refers to the process of design,
evaluation, and production of packages. Packaging can be described as a coordinated
system of preparing goods for transport, warehousing, logistics, sale and end use for
better positioning of the products in the market.

31
2.5.2 Distribution Channels
The main function of a distribution channel is to provide a link between production
and consumption. A distribution channel can be very simple, with just two layers. By
the time a product is placed on a grocery store shelf, it has traveled countless miles
and has been handled by many people. Each person has evaluated and scrutinized the
product to assess its risk and opportunity. Each has considered quality, price,
packaging, labeling, and marketing plans. By the time the product is purchased, the
manufacturer, broker, distributor, and retailer have all determined it to be viable and
profitable, and the end consumer has deemed it to be of significant value.

2.5.3 Infrastructure

In terms of the supply chain management infrastructure, government hospitals seek to

attain effective procedures in the importation of oil products and effectiveness in the
overall procurement of oil products. Supply chain management is crucial to
operational effectiveness of the government hospitals and therefore companies
consider constrained infrastructure to be an important factor in ensuring an efficient
and effective supply chain management system.

2.5.4 Operation Cost

Cost is usually a monetary valuation of effort, warehousing, resources, time and
utilities consumed, risks incurred and opportunity forgone in production and delivery
of a good or service. Managing cost in supply of perishable goods in government
hospitals more effectively helps in reducing wastage and gain competitive edge.

2.5.5 Product Quality

As far as quality specification are concerned of materials due to lack of expertise
knowledge of human resources, machineries and materials it has offered for many
organizational to carry out source globally. Issues of market edge and product
differentiation gives an organization a unique margin in the market share in terms of
product choice and quality measurements.

32
 CHAPTER THREE
RESEARCH DESIGN AND METHODOLOGY
3.1 Introduction
This chapter dealt with research methodology and procedures that was used in
carrying out the study. It described the methods that the researcher applied in carrying
out the study. It detailed the research design, target population sampling techniques
instruments for data collection and data analysis.

3.2 Research Design

According to Mukerje (2010), research design is the plan and structure of
investigation so conceived as to obtain answers to research questions. The plan is the
overall program me of the research and includes an outline of what the investigator
will do from writing of the hypothesis and theoretical operational implications for the
final analysis of the data. The researcher used descriptive research design. The design
was preferred because it is concerned with answering questions such as who, what,
which, how, when and how much. A descriptive study was carefully designed to
ensure complete description of the situation, making sure that there is minimum bias
in the collection of data and to reduce errors in interpreting the data collected.

3.3 Target Population

Kothari (2004) defines target- population as universal set of the study of all members
of real ‘or hypothetical set of people, events or objects to which an investigator
wishes to generalize the result. The target population of the study was derived from
three departments in Kenyatta National Hospital. The research used a target
population of 63 employees.

33
Table 3.1 Target Population
Category Target Population Percentage

Quality Assurance 33 52
Department
Stores Department 11 17

Logistics Department 19 31

Total 63 100

Source: Author (2016)

3.4 Sample Design

Kothari (2004) defines a sample as a definite plan for obtaining a sample from a given
population. Sampling is a procedure by which some elements of the population are
selected as representatives of the total population through the use of probability to
acquire a representative degree of reliability in the selected area. The researcher used
census to come up with the right sample size where the entire population was
selected. This method was applied because the target population of the study was very
small.

3.5 Data Collection Instruments

3.5.1 Questionnaires
Kothari (2004) defines a questionnaire as a method for elicitation, recording, and
collecting of information. The researcher chose the self administered questionnaire
method for all correspondents as it was inexpensive and allowed the respondents to
complete the questionnaire at a convenient time. A questionnaire is printed form
containing a set of questions for gathering information administered by the researcher
or his or her assistants, or self administered under supervision or unsupervised. The
questionnaires were answered by each of the individual respondents independently.

3.5.2 Validity and Reliability of Research Instruments

Validity and reliability of the data collected was vital to ensure good product quality
research. Reliability has to do with the product quality of measurement. In its

34
everyday sense, reliability is the consistency or repeatability of your measures.
Validity concerns that whether the concept really measures the aimed concept. Pre-
testing of the instrument enabled the researcher to access clarity of the instrument and
its ease of use. Mugenda and Mugenda (2003), suggests that pre-testing allowed the
errors to be discovered as well as acting as a tool for Distribution channel a research
team before the actual collection of the data begins.

3.6 Data Analysis Methods

This involved qualitative and quantitative analysis. The data collected by use of
various instruments was first edited to get the relevant data for the study. The edited
data was coded for easy classification in order to facilitate tabulation. The tabulated
data was then analyzed by calculating various percentages where possible. Kothari
(2004) argued that presentation of data was in form of pie-charts and bar-graphs
where it provided successful interpretation of the findings. Qualitative data was
provided in form of explanatory notes.

35
 CHAPTER FOUR
DATA ANALYSIS, PRESENTATION AND INTERPRETATION OF
FINDINGS
4.1 Introduction
This chapter presents and discusses the analysis of data collected from the various
respondents. The chapter covers findings of the study as guided by the objectives as
well as the information of the respondents.

4.2 Presentation of Findings

4.2.1 Response Rate
Table 4.1 Response Rate
Category Response Percentage
Responded 43 83
Did not respond 9 17
Total 52 100

Source: Author (2016)

Figure 4.1 Response Rate

Source: Author (2016)

As indicated in Table 4.1 and Figure 4.1, out of 52 questionnaires administered only
43 were returned. This means that 83% of the respondents responded to questions
with only 17% failing to respond. A response rate of 83% was therefore considered
sufficient for the purpose of analysis.
36
4.2.2 Response by Gender
Table 4.2 Response by Gender

Category Frequency Percentage

Male 36 84

Female 7 16

Total 43 100

Source: Author (2016)

Figure 4.2 Responses by Gender

Source: Author (2016)

As it can be observed from Table 4.2 and Figure 4.2, the female respondents were
16% of the response rate while male respondents were 84% of the response rate. Thus
male respondents were most as compared to the female.
37
4.2.3 Highest Level of Education
Table 4.3 Highest Level of Education
Category Frequency Percentage

University 8 19

Tertiary 17 40

Secondary 13 29

Primary 5 12

Total 43 100

Source: Author (2016)

Figure 4.3 Highest Level of Education

Source: Author (2016)

Table 4.3 and figure 4.3 indicated that 19% of the respondents were graduates. A
population of 40% of respondents had college education while 29% had secondary
education. A population of 12% of respondents had primary education. This implies
high literacy level.

38
4.2.4 Response According to Age Bracket
Table 4.4 Response According to Age Bracket
Category Frequency Percentage
Below 21 years 11 26
21-30 years 23 53
30-40 years 7 16
Over 40 years 2 5

Total 43 100

Source: Author (2016)

Figure 4.4 Responses According to Age Bracket

Source: Author (2016)

Table 4.4 and Figure 4.4 indicate that 26% of the respondents are aged below 21
years. A population of 53% were aged between 21-30 years, 16% are aged between
30-40 years while 5% were above 40 years. Based on study it can be concluded that
majority of the respondents were between the ages of 21-30 years.

39
4.2.5 Years Worked in the Institution
Table 4.5 Years Worked in the Institution
Category Frequency Percentage
Less than 5 years 2 5
5-7 years 7 16
8-10 years 19 44
11-13 years 12 28
Above 13 years 3 7
Total 43 100

Source: Author (2016)

Figure 4.5 Years Worked in the Institution

Source: Author (2016)

Table 4.5 and Figure 4.5 shows that 7% of the respondents have worked in the
institution for above 13 years, 28% have worked between 11-13 years, 44% between
8-10 years, 16% are between 5-7 years of experience and 5% have been in the
institution for a period of less than 5 years. Based on the study it can be concluded
that a large number of the respondents have worked in the institution for a period of 8-
10 years.
40
4.2.6 Departments
Table 4.6 Departments

Category Frequency Percentage

Quality Assurance Department 19
44
Stores Department 8
19
Logistics Department 16
37
43
Total 100

Source: Author (2016)

Figure 4.6 Departments

Source: Author (2016)

As it is shown in figure 4.6 and table 4.6, most of the staff are in the quality assurance
department which is represented by a 44% of the respondents; stores department are
19% of the respondents while 37% is logistics department.

41
 4.2.7 Effect of Packaging
Table 4.7 Effect of Packaging on Supply of perishable goods in government
hospitals
Category Frequency Percentage

Yes 40 93

No 3 7
43 100
Total

Source: Author (2016)

Figure 4.7 Effect of Packaging on Supply of perishable goods in government

hospitals
Percentage

Source: Author (2016)

Category

As it is shown in figure 4.7 and table 4.7 it is evident from majority of the
respondents, 93% indicated packaging affects supply of perishable goods in
government hospitals in Kenya. Few respondents 7% on the other hand indicated that
packaging does not affect supply of perishable goods in government hospitals. From
the study it can be concluded that packaging had an effect on supply of perishable
goods in government hospitals in Kenya.

42
4.2.8 Extent of Effect of Packaging
Table 4.8 Extent to Which Packaging Affects Supply of perishable goods in
government hospitals
Category Frequency Percentage
Very Great Extent 10 23
Great Extent 20 47
Moderate Extent 10 23
Low Extent 3 7
Total 43 100

Source: Author (2016)

Figure 4.8 Extent to Which Packaging Affects Supply of perishable goods in

government hospitals

Source: Author (2016)

Table 4.8 and figure 4.8 shows how the packaging in the institution was rated. The
study findings indicated that 23% of respondents felt it was very great, 47% felt it was
great while 23% felt it was moderate while 7% of respondents felt it was low. This
indicates that the majority of respondents rated packaging in the institution is great.
4.2.9 Effects of Distribution Channel
43
Table 4.9 Effects of Distribution Channel on Supply of perishable goods in
government hospitals

Category Frequency Percentage

Yes 41 95

No 2 5

Total 43 100

Source: Author (2016)

Figure 4.9 Effects of Distribution Channel on Supply of perishable goods in

government hospitals

Source: Author (2016)

Table 4.9 and figure 4.9 show the effect of distribution channel on supply of
perishable goods in government hospitals in Kenya. Based on the analysis 95% of the
total respondents indicated that distribution channel affected supply of perishable
goods in government hospitals in Kenya 5% of the total respondents stated that
distribution channel did not have an effect on supply of perishable goods in
government hospitals in Kenya. From the analysis it can be concluded that
distribution channel greatly affected supply of perishable goods in government
hospitals in Kenya.
4.2.10 Extent of Effect of Distribution Channel

44
Table 4.10 Extent to Which Distribution Channel Affects Supply of perishable
goods in government hospitals
Category Frequency Percentage
Very Great Extent 24 56
Great Extent 16 37
Moderate Extent 2 5
Low Extent 1 2
Total 43 100

Source: Author (2016)

Figure 4.10 Extent to Which Distribution Channel Affects Supply of perishable

goods in government hospitals

Source: Author (2016)

Table 4.10 and figure 4.10 shows how the respondent rated distribution channel: 56%
of respondents rated the effect of distribution channel as very great, 37% rated it as
great, 5% rated it as moderate while 2% of the respondents rated it as low. This can be
concluded that the majority of respondents rated the effect of distribution channel as
very high.
4.2.11 Effects of Infrastructure

45
Table 4.11 Whether Infrastructure Affects Supply of perishable goods in
government hospitals
Category Response Percentage
Yes 37 86
No 6 14

Total 43 100

Source: Author (2016)

Figure 4.11 Whether Infrastructure Affects Supply of perishable goods in

government hospitals

Source: Author (2016)

Table 4.11 and figure 4.11 show the effect of infrastructure on supply of perishable
goods in government hospitals in Kenya. Based on the analysis 86% of the total
respondents indicated that infrastructure had an effect on supply of perishable goods
in government hospitals in Kenya while 14% of the total respondents stated that
infrastructure had no effect on Supply of perishable goods in government hospitals in
Kenya. From the study it can be concluded that infrastructure had an effect on supply
of perishable goods in government hospitals in Kenya.
4.2.12 Extent of Effect of Infrastructure
46
Table 4.12 Extent to Which Infrastructure Affects Supply of perishable goods in
government hospitals
Category Frequency Percentage
Very Great 17 40
Great 13 30
Moderate 7 16
Low 6 14
Total 43 100

Source: Author (2016)

Figure 4.12 Extent to Which Infrastructure Affects Supply of perishable goods in

government hospitals

Source: Author (2016)

Table 4.12 and figure 4.12 indicate how they rated infrastructure. Based on the
analysis, 40% of the total respondents rated infrastructure as very great, 30% of the
total respondents rated it as great, while 16% of the respondents rated Infrastructure as
moderate and 14% of the total respondents rated infrastructure as low, from the
analysis it can be concluded that majority of the respondents had rated infrastructure
as very great.
4.2.13 Effects of Operational Cost

47
Table 4.13 Whether Operational Cost Affects Supply of perishable goods in
government hospitals
Category Frequency Percentage
Yes 41 94

No 2 6

Total 43 100

Source: Author (2016)

Figure 4.13 Whether Operational cost Affects Supply of perishable goods in

government hospitals

Source: Author (2016)

Table 4.13 and figure 4.13 shows the effect of operational cost on supply of
perishable goods in government hospitals in Kenya. Based on the analysis 94% of the
total respondents showed that operational cost had an effect on supply of perishable
goods in government hospitals in Kenya while 6% of the total respondents stated that
operational cost did not affect Supply of perishable goods in government hospitals in
Kenya. From the study it can be concluded that operational cost had an effect on
supply of perishable goods in government hospitals in Kenya.
4.2.14 Extent of Effect of Operational Cost

48
Table 4.14 Extent to Which Operational Cost Affects Supply of perishable goods
in government hospitals
Category Frequency Percentage

Very Great Extent 12 28

Great Extent 20 46

Moderate Extent 8 19

Low Extent 3 7

Total 43 100

Source: Author (2016)

Figure 4.14 Extent to Which Operational Cost Affects Supply of perishable

goods in government hospitals

Source: Author (2016)

Table 4.14 and figure 4.14 indicated how respondents rated the effect of operational
cost. Majority of the respondents 46% rated operational cost as great, 28% rated it as
very great, 19% rated it as moderate while 7% of respondents rated operational cost as
low. From the analysis it can be concluded that majority were of the opinion that
operational cost affects supply of perishable goods in government hospitals in Kenya
greatly.
4.2.15 Effects of Product Quality

49
Table 4.15 Effects of Product Quality on Supply of perishable goods in
government hospitals
Category Frequency Percentage
Yes 34 79

No 9 21

Total 43 100

Source: Author (2016)

Figure 4.15 Effects of Product Quality on Supply of perishable goods in

government hospitals

Source: Author (2016)

Table 4.15 and figure 4.15 show the effect of product quality on supply of perishable
goods in government hospitals in Kenya. Based on the analysis 79% of the total
respondents indicated that product quality had an effect on supply of perishable goods
in government hospitals in Kenya while 21% of the total respondents stated that
product quality did not affect Supply of perishable goods in government hospitals in
Kenya. From the study it can be concluded that product quality had an effect on
supply of perishable goods in government hospitals in Kenya.
4.2.16 Extent of Effect of Product Quality

50
Table 4.16 Extent to Which Product Quality Affects Supply of perishable goods
in government hospitals
Category Frequency Percentage

Very Great Extent 11 26

Great Extent 23 53

Moderate Extent 6 14

Low Extent 3 7

Total 43 100

Source: Author (2016)

Figure 4.16 Extent to Which Product Quality Affects Supply of perishable goods
in government hospitals

Source: Author (2016)

Table 4.16 and figure 4.16 indicate how they rated product quality. Majority of the
respondents 53% rated product quality as great, 26% rated it as very great, 14% rated
it as moderate while 7% of respondents rated product quality as low. From the
analysis it can be concluded that most of the respondents were of the opinion that
product quality is a critical factor on supply of perishable goods in government
hospitals in Kenya.

51
4.3 Summary of Data Analysis
For qualitative analysis the data collected was carefully grouped and discussed in
details after doing the analysis. This was an analysis of the expressed judgmental
opinion of the respondents. The respondents’ opinion was therefore described and
presented as follows.

4.3.1 General Findings

Based on the analysis, response to questionnaires; 83% of the respondents responded
to the questioners while 17% did not. On the basis of gender, 84% of the respondents
were male while 16% were female. According to the level of education, 12% were
primary dropouts, 29% were certificate holders, 40% were diploma holders while
19% were degree holders. Based on age, 26% of the respondents were below 21
years, 53% were between 21-30 years, 16% were from 30-40 years while 5% were 40
years and above. According to the years worked in the company 5% indicated they
had worked in the company less than 5years, 5-7 years were 16%,8-10 years were
44%,11-13 years were 28% while 7% had worked in the company more than 13
years. Most of the staff are in the Quality Assurance Department which is represented
by a 44% of the respondents; Stores Department are 19% of the respondents while
37% is Logistics Department.

4.3.2 Packaging
Based on the analysis 93% of the total respondents indicated that packaging had an
effect on Supply of perishable goods in government hospitals while 7% of the total
respondents stated that packaging did not have an effect on Supply of perishable
goods in government hospitals.

4.3.3 Distribution Channel

Based on the analysis 95% of the total respondents indicated that Distribution channel
had an effect on Supply of perishable goods in government hospitals while 5% of the
total respondents stated that distribution channel did not have an effect on Supply of
perishable goods in government hospitals.

52
4.3.4 Infrastructure
The respondents were also asked on how operational cost has affected Supply of
perishable goods in government hospitals. A population of 86% of the respondents
indicated that operational cost determines Supply of perishable goods in government
hospitals while 14% disagreed.

4.3.5 Operational Cost

The respondents were also asked on how operational cost has affected Supply of
perishable goods in government hospitals. A population of 94% of the respondents
indicated that operational cost determines supply of perishable goods in government
hospitals while 6% disagreed.

4.3.6 Product Quality

Product quality does affect Supply of perishable goods in government hospitals and
this was shown by majority who indicated yes it does by 79% while 21% disagreed.

53
 CHAPTER FIVE
SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS

5.1. Introduction
This study intended to investigate factors affecting supply of perishable goods in
government hospitals in Kenya in Kenya. It presents a summary of main findings and
it attempts to answer the specific questions that were investigated. In addition,
recommendation for possible action and suggestions for further research are given.
The chapter provides a summary of findings obtained in the study.

5.2 Summary of Findings

5.2.1 To What Extent Does Packaging Affect Supply of perishable goods in
government hospitals In Kenya?
From the study findings, it was revealed that majority of the respondents representing
93% felt that packaging was a factor affecting Supply of perishable goods in
government hospitals while 7% did not accept. The study findings indicated that 23%
of respondents felt it was very great, 47% felt it was great while 23% felt it was
moderate while 7% of respondents felt it was low.

5.2.2 How Does Distribution Channel Affect Supply of perishable goods in

government hospitals In Kenya?
According to the research findings, majority of respondents representing 95%
indicated that distribution channel affected supply of perishable goods in government
hospitals in Kenya while 5% stated it has no effect on Supply of perishable goods in
government hospitals in Kenya. The respondents further rated distribution channel as
follows, low 2%, moderate 5%, great 37% and very great 56%. Majority indicated
that Distribution channel very greatly affected Supply of perishable goods in
government hospitals in Kenya. Therefore the researcher affirmed that distribution
channel affects supply of perishable goods in government hospitals in Kenya.

54
5.2.3 What Is The Effect Of Infrastructure On Supply of perishable goods in
government hospitals In Kenya?
The findings indicated that 86% of the respondents felt that infrastructure greatly
affected Supply of perishable goods in government hospitals in Kenya against 14% of
the respondents who said no. Thus the researcher established that yes infrastructure
Affects Supply of perishable goods in government hospitals in Kenya. Based on the
analysis, 40% of the total respondents rated infrastructure as very great, 30% of the
total respondents rated it as great, while 16% of the respondents rated Infrastructure as
moderate and 14% of the total respondents rated infrastructure as low. Majority
indicated that infrastructure affects Supply of perishable goods in government
hospitals in Kenya in a very great extent.

5.2.4 In What Ways Does Operational cost Affect Supply of perishable goods in
government hospitals In Kenya?
According to the analysis, 94% respondents indicated that operational cost affected
Supply of perishable goods in government hospitals in Kenya while 6% denied that.
From the analysis the researcher concluded that operational cost affects Supply of
perishable goods in government hospitals in Kenya. Majority of the respondents 46%
rated operational cost as great, 28% rated it as very great, 19% rated it as moderate
while 7% of respondents rated operational cost as low. Majority indicated that
operational cost affects Supply of perishable goods in government hospitals in Kenya
in great way.

5.2.5 What Is The Effect Of Product quality On Supply of perishable goods in

government hospitals In Kenya?
From the study findings, it was showed that majority of the respondents representing
79% felt that product quality was a factor affecting supply of perishable goods in
government hospitals in Kenya while 21% stated it does not affect. Majority of the
respondents 53% rated product quality as great, 26% rated it as very great, 14% rated
it as moderate while 7% of respondents rated product quality as low. Majority
indicated that product quality affected Supply of perishable goods in government
hospitals in Kenya greatly.

55
5.3 Conclusions
The respondents further indicated that packaging affected Supply of perishable goods
in government hospitals in Kenya. Packaging was rated high and hence the researcher
can conclude that packaging has been one among other factors that have affected
Supply of perishable goods in government hospitals in Kenya. They also highlighted
that many activities at home such as storage, transportations and distribution depends
greatly on packaging therefore packaging consideration related to transportation and
safety are important and numerous.

The study found out that the distribution channels of the firm made perishable goods
to be more expensive before the final user get them. This greatly affected the
purchasing power thus reducing the quantity of perishable goods being supplied. Also
some distribution channels had to hold few perishable goods leading to lack of stock
then due to that they increase price.

The large number of respondents indicated that infrastructure had an effect on supply
of perishable goods in government hospitals in Kenya. They indicated that good
infrastructure facilitates effective supply of perishable goods in government hospitals
in Kenya.

The large number of respondents indicated that operational cost had an effect on
supply of perishable goods in government hospitals in Kenya Therefore, operational
cost is a very important factor which determines the efficiency of supply of perishable
goods because when the operational costs are low the more profitable and competitive
the organization is.

Product quality was rated high and hence the researcher can conclude that product
quality has been one among other factors that have affected supply of perishable
goods in government hospitals. They further added that high product quality products
can only be supplied by trusted suppliers selected from a competitive process.

56
5.4 Recommendations
5.4.1 Packaging
Packaging is an important factor to the organization and it was recommended that the
management of Kenyatta National Hospital should introduce every type of packages
in order to reduce risk of handling perishable goods. This will increase the efficiency
in the supply of perishable goods in government hospitals.

5.4.2 Distribution Channel

The institution should ensure that goods distribution channel is used and distribution
channels should not be long and also they should set the final price for the goods. This
will ensure that the clients get at fair and reasonable price. Proper distribution channel
should be enacted to enable efficiency and to enhance proper flow of perishable
goods.

5.4.3 Infrastructure
Any disruptions arising in the supply chain can have tremendous adverse effects in
achieving operational efficiency, maintaining product quality, profitability, and
customer satisfaction. The adverse events may happen due to constrained
infrastructure and product quality of product and therefore the hospital should identify
an effective model of supply-chain to enable the perishable goods to be supplied with
ease and bring the benefits to a maximum.

5.4.4 Operational Cost

Inventory holding operational costs like taxes and insurance on inventories,
operational cost of inventory obsolescence or product shelf life and operating
operational cost involved in supply of perishable goods e.g. operational costs of heat,
light and labor, machinery and human resources influences the price of the final
product. The higher the inventory operational costs, the higher the price. The
Kenyatta National Hospital should strategize on how to standardize their operating
operational costs to remain competitive.

57
5.4.5 Product quality
As far as product quality specification are concerned of materials due to lack of
expertise knowledge of human resources, machineries and materials it has offered for
many organizational to carry out source globally. Kenyatta National Hospital should
ensure supplies are engaged competitively because this brings about products or
services that are superior to the competition on one or more of the eight dimensions.
They should buy only the best product quality food if they plan to store it for any
length of time.

5. 5 Suggestions for Further Research Study

The study focused on five key variables namely: packaging, distribution channel,
infrastructure, and operational cost and product quality. However, there are other
factors that can influence Supply of perishable goods in government hospitals but
have not been discussed in detail because they were not the main focus. This study
therefore recommends that further study should be conducted on the effects of lead
time on supply of perishable goods in government hospitals and the effects of storage
facilities on supply of perishable goods in government hospitals.

58
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Bill A. (2002), Personnel and Human resource management, 5th, edition. Book Power,
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61
 APPENDIX II
QUESTIONNAIRE

Any information given by the respondents in this research questionnaire will be

treated confidentially. Tick inside the box provided where necessary and for
explanation please be brief.

SECTION A: GENERAL INFORMATION

1. Gender
Male
Female

2. Highest Education level

University
Tertiary
Secondary
Primary

3. Age in years
Below 21 years
21-30
30-40
Over 40 years

4. Years worked in the hospital

Less than 5 years
5-7 years
8-10 years
11-13 years
Above 13 years

i
5. Which is your department of operation?
Quality Assurance Department
Stores Department
Logistics Department

SECTION B: PACKAGING
6. Does Packaging affect Supply of perishable goods in government hospitals in the
institutions in Kenya?
Yes []
No []

Explain
………………………………………………………………………………………
………………………………………………………………………………………
………………………………………………………………………………………
………………

7. To what extent does the packaging affect Supply of perishable goods in

government hospitals in the institutions in Kenya?
Very Great Extent []
Great Extent []
Moderate Extent []
Low Extent []
Explain
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………

ii
 SECTION C: DISTRIBUTION CHANNEL
8. Does distribution channel affect Supply of perishable goods in government
hospitals in the institutions in Kenya?
Yes [ ]
No []

Explain
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………

9. To what extent does distribution channel affect Supply of perishable goods in

government hospitals in the institutions in Kenya?
Very Great Extent []
Great Extent []
Moderate Extent []
Low Extent []

Explain
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………

SECTION D: INFRASTRUCTURE
10. Does infrastructure affect Supply of perishable goods in government hospitals in
the institutions in Kenya?
Yes []
No []

iii
Explain
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………

11. To what extent does infrastructure affect Supply of perishable goods in

government hospitals in the institutions in Kenya?
Very Great Extent []
Great Extent []
Moderate Extent []
Low Extent []

Explain
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………

SECTION E: OPERATIONAL COST

12. Does operational cost affect Supply of perishable goods in government hospitals
in the institutions in Kenya?
Yes [ ]
No []
Explain
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………

iv
13. To what extent does operational cost affect Supply of perishable goods in
government hospitals in the institutions in Kenya?
Very Great Extent []
Great Extent []
Moderate Extent []
Low Extent []

Explain
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………

SECTION F: PRODUCT QUALITY

14. Does product quality affect Supply of perishable goods in government hospitals in
the institutions in Kenya?
Yes [ ]
No []
Explain
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………

15. To what extent does product quality affect Supply of perishable goods in
government hospitals in the institutions in Kenya?
Very Great Extent []
Great Extent []
Moderate Extent []
Low Extent []

v
Explain
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………
Thank You for Your Time and Cooperation

vi