1.1 Introduction
Supply chain management is widely regarded as the backbone of modern business operations, serving as a bridge between production processes and customer satisfaction. It is defined as the integration of key business processes from end-users through original suppliers that provide products, services, and information to add value for customers and stakeholders (Mentzer et al., 2001). In a globalized economy where competition is no longer between individual firms but between supply chains, effective supply chain management is not merely a support function but a strategic tool for achieving efficiency, cost reduction, and sustainable growth (Christopher, 2016).
In the Nigerian context, where infrastructural challenges, fluctuating fuel prices, policy instability, and high logistics costs dominate business operations, the importance of supply chain management in ensuring efficiency cannot be overstated. Companies that operate within industries dependent on bulky raw materials and large-scale distribution networks, such as the cement industry, rely heavily on robust supply chain systems (Lambert & Cooper, 2000).
As a prelude to other parts of this study, this chapter will discuss the background upon which this study was initiated, the statement of problems that led to this study, the Aim and Objectives of the study. Others are Significance of the study, Scope of work, Research hypothesis and questions, Limitation of the study and Definition of terms.
1.2 Background of Study
Supply chain management has emerged as one of the most important drivers of organizational efficiency and competitiveness in today’s global economy. According to Christopher (2016), supply chain management is a philosophy that seeks to improve the long-term performance of individual companies and the supply chain as a whole by integrating and coordinating activities across functions. Mentzer et al. (2001) reported that supply chain management is not only about logistics and procurement but also about fostering collaboration among suppliers, manufacturers, and customers to deliver value at minimal cost. Lambert and Cooper (2000) asserted that companies that effectively manage their supply chains are more likely to achieve improved productivity, customer satisfaction, and profitability compared to those that do not.
According to Ballou (2007), the concept of supply chain management evolved from traditional logistics, which initially focused on transportation, warehousing, and inventory control, into a broader system that integrates suppliers, manufacturers, distributors, and customers. Chopra and Meindl (2013) stated that the historical development of supply chain management is linked to the globalization of markets, increased competition, and advancements in technology, which demanded greater efficiency in how organizations manage their resources and deliver value.
In the Nigerian context, the adoption of supply chain practices has been influenced by industrial expansion and the increasing demand for efficiency in manufacturing and distribution. Lambert and Cooper (2000) affirmed that the late 20th century witnessed the recognition of supply chain management as a strategic necessity rather than a support function, as firms began to realize that competitive advantage lies not only within the firm but also across the entire supply chain. This transformation is particularly relevant for industries like cement, where operations require the movement of heavy raw materials and large-scale distribution across different markets.
In the Nigerian industrial landscape, the importance of efficient supply chain systems is particularly significant due to numerous challenges such as poor road infrastructure, unstable power supply, fluctuating government policies, and rising logistics costs. Simchi-Levi et al. (2008) stated that businesses operating in developing economies often face a higher degree of complexity in managing their supply chains, which directly affects efficiency and competitiveness. Dangote Cement Plc, as one of Africa’s largest cement producers, is an example of an organization that depends heavily on its supply chain for raw material acquisition, production processes, and wide-scale distribution. The company’s operations span across multiple regions, requiring efficient coordination to ensure the availability of cement for construction, which is a vital component of economic growth.
Efficiency in the cement industry has a ripple effect on the broader economy, as cement is a fundamental input in construction and infrastructure development. Chopra and Meindl (2013) affirmed that supply chain efficiency is crucial for firms that deal with heavy materials and wide geographical distribution, as delays, disruptions, or inefficiencies could lead to increased costs, reduced customer trust, and loss of market share. On the other hand, firms that integrate modern supply chain practices, such as real-time tracking, inventory optimization, and strong supplier relationships, are better positioned to gain competitive advantage.
Scholars also contend that globalization and technological advancements have transformed supply chain management from being a supportive function to a strategic necessity. Harland (1996) reported that organizations that fail to adopt efficient supply chain strategies are more likely to experience operational bottlenecks and struggle in meeting market demands. For Dangote Cement Plc, with its leading role in Nigeria’s industrial sector, the ability to manage supply chain challenges effectively is crucial not only for maintaining its dominance in the market but also for contributing to national economic development. This study is set against the backdrop of examining how supply chain management influences business efficiency in Dangote Cement Plc.
1.3 Statement of Problems
Investigation revealed that suppliers, distributors, and retailers often operate in silos rather than as an integrated system, which is resulting in poor coordination, duplication of efforts, and misalignment of objectives. This lack of synchronization is affecting overall efficiency and causing unnecessary delays in service delivery (Simchi-Levi et al., 2008). On the other hand, globalization and increasing competition place additional pressure on organizations like Dangote Cement to optimize their supply chains, not only to remain profitable but also to maintain their market leadership in an industry that is capital intensive and highly competitive.
Furthermore, supply chain disruptions caused by external factors such as economic instability, inflation, fuel scarcity, and government regulations is aggravating operational inefficiencies. These external challenges make it difficult for companies to forecast demand accurately, manage inventory efficiently, and control costs, which is ultimately reducing business efficiency (Lambert & Cooper, 2000). It is against this backdrop that this study seeks to examine the effect of supply chain management on business efficiency, using Dangote Cement Plc as a case study.
1.4 Aim and Objectives of Study
The aim of this study is to investigate the effect of supply chain management on business efficiency with specific reference to Dangote Cement Plc.
The specific objectives of the study are as follows:
- To examine the relationship between supply chain management and business efficiency in Dangote Cement Plc.
- To identify the challenges facing supply chain management practices in the company.
- To assess the impact of supply chain management on cost reduction and timely delivery of cement products.
- To evaluate the role of technology in improving supply chain performance in Dangote Cement Plc.
- To suggest strategies for enhancing supply chain management to improve business efficiency.
1.5 Research Questions
Based on the objectives of the study, the following research questions have been formulated:
- What is the relationship between supply chain management and business efficiency in Dangote Cement Plc?
- What are the major challenges confronting supply chain management practices in the company?
- How does supply chain management affect cost reduction and timely delivery of cement products?
- What role does technology play in improving supply chain performance in Dangote Cement Plc?
- What strategies could be adopted to enhance supply chain management for improved efficiency?
1.6 Significance of Study
It is believed that at the completion of the study, the findings will provide Dangote Cement Plc with practical recommendations that will improve cost efficiency, customer satisfaction, and competitiveness. In addition, policymakers will equally find the study useful, as it will provide evidence on the role of efficient supply chains in boosting industrial growth and contributing to national economic development.
The study will also contribute to the existing body of knowledge by providing empirical evidence from the Nigerian manufacturing sector. Furthermore, the study will serve as a reference point for future researchers interested in the relationship between supply chain management and organizational performance.
1.7 Scope of Study
The research study is limited in scope to Dangote Cement Plc in Lagos State, Nigeria, and concentrates on how supply chain management influences efficiency in the company’s operations.
1.8 Limitations of the Study
Several limitations were encountered during the course of this study, which may have influenced the results and conclusions.
- Time Constraints: A study of this nature needs relatively long time during which information for accurate or at least near accurate inference could be drawn. The period of the study was short, time posed as constraints to the research.
- Financial Constraints: The research would have extended the survey to other area at the empirical level, but limitation as included cost of transportation to the source of material and the cost of time setting of the already completed work.
- Initial Cooperation Delay from Respondents: A particular limitation of this work came as a result of the respondent refusal to offer their cooperation at the initial time they were contacted. This contributed in making the success of this research study difficult.
1.9 Definition of Terms
Supply Chain Management (SCM):
According to Mentzer et al. (2001), supply chain management is the integration of key business processes across suppliers, manufacturers, and customers to create value and achieve efficiency. In this study, SCM refers to how Dangote Cement Plc coordinates procurement, production, logistics, and distribution.
Business Efficiency:
Christopher (2016) asserted that business efficiency is the ability of a company to use its resources in the most productive way to minimize waste and maximize output. For Dangote Cement Plc, this means producing and distributing cement at lower costs while maintaining customer satisfaction.
Procurement:
Lambert and Cooper (2000) reported that procurement is the process of acquiring goods and services required for production. in the context of Dangote Cement Plc, procurement involves sourcing raw materials such as limestone and gypsum.
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