Abstract

This study is aimed at examining the extent to which logistic costs affect an organization (Nego Titans- Douala). The researcher used both primary and secondary sources of data collection. Primary data was collected with the use of questionnaires distributed to the workers of Nego Titans Plc company. Nego Titans has 85 staff of which 65 are men and 20 are women with the lowest staff being an advanced level holder. Data was analyzed with the use of descriptive statistics and inferential statistics with the aid of SPSS statistical package. The results showed that 100% of the respondents agreed that Logistics cost is incurred by Nego Titans.

The findings were that 85% of the respondents agreed that Logistics management is of importance in the pursuit of the activities of Nego Titans this is through the improved customer care and satisfaction, efficient material handling, effective communication plus stock control and recycling of wastes. The researcher also found out that the challenges encountered in the management and that of’ logistics in Nego Titans include: limited capital to coordinate the logistics.

According to the objectives set out in this the researcher observes that Logistics cost has a positive effect on organizational performance as per the evidence showed by the findings of the study. It was recommended that All departments should be vigilant in pursuing their activities effectively because the logistics cost is an aspect for everyone, so coordination of the logistics function will yield better results for Nego Titans.

CHAPTER ONE

 INTRODUCTION

1.1 Background to the Study

Generally, organization round the globe are striving hard to minimize logistics cost in other to boost organizational performances and to stay highly in their global competitive market.in face of the current economic scenario, it is necessary to stay in constant evolution, update in y from field expertise in technological issues, agility in processes, speed of delivery and provide instant information to stakeholders (Natasha et al 2017).

To keep your continuity, before current difficulties, have to draw intelligent methods reduction of logistic cost, maintain quality standard and deliver what customers want at the right time, produce consciously, reduce waste, always in search of new alternatives, that do not  result environmental damage, give the correct destination of water generated within the organization and be responsible for reverse logistics of product and or packages that generate environmental damage (GOVINDAN; SOLEMANI; KANNAH,2015).

organization has adopted different theories and methodology such as the six-sigma methodology, the poka yoke to improve on their quality with cost effective management in organization to meet up with the changing market demand so as to achieve their main objectives such as profit maximization, gaining the largest market share, increase customer service cost minimization, employee’s satisfaction, creating of good relationship with their suppliers etc. Some developed countries in the world for example, United States of America especially in organizations whose majority of products are not the cash cow, yet still do proper cost examination.

In addition, cost associated with funding, resource allocations must be taken into account (Frazzle, E. 2002). A survey which was conducted by experts of the IMF in 2015 showed that most organizations were affected because of poor systems in monitoring logistics costs such as procurements cost, transportation cost, warehousing charges and cost of handling merchandises and as such many organizations break even and some even close down completely.

Logistic cost are all of the expenses incurred moving product from sourcing raw materials to delivering customer orders and every step in between. the effective and efficient management of logistics cost play a very vital role in improving organizations performance globally, this cost includes distribution cost, warehousing cost, transportation cost, inventory cost., handling cost and procurement cost (Harrison, A., & Van, R. 2008).

The concept of logistics cost management has played a measure role in the success of meeting up with the changing needs of the customers and hence customers satisfaction. In advance nations like American countries, Asian and Europe the is a high degree of the use of cost-effective tools lie the six-sigma methodology which talks of the participation of every employee in quality improvement processes to avoid wastage of resources and the kaizen which made emphasis on continuous improvement until the best is gotten.

Globally, most Africa countries faces the problem of high costs in their operations but there are some exceptions like Nigeria, south Africa and Ghana which are newly industrialist countries are striving hard to adopt and apply different costs effective tools like the kaizen, the cause-and-effect theory in most African countries, there is an endemic lack of adequate production materials most especially in small organization.

A research done by Boniface (2002) on the input of cost sharing on access, equity and quality of businesses in Rachuonyo district in Kenya indicated that the quality of their products had not increased for a number of years due to inadequate materials and equipment. This equipment is expensive and form a fixed cost in business (depreciation charges on transportation vans), which brought about low profits to these organizations. Further studies done in other parts of Africa reveal the similar problems.

In Cameroon being a developing country, most organizations either profit making or none profit organization suffers high logistics cost and which greatly affects their performance. Based on findings it was discovered that most companies in Cameroon faces much difficulties in managing their logistics cost   and as such they finds it difficult to improve on their performance especially when it comes to employees management for instance organizations like PAMOL Plantation Plc., Cameroon Development Cooperation (CDC), located in the South West Region are faced with the problems of storage and transportation of palm oil and; palm oil bi-products and  this has gone a long way to affect their performance negatively . the management of logistics cost should be the main priority of every organization in Cameroon who wish to make abnormal profit and increase other performance variables should strictly manage.

Specifically, Douala is the economic capital of Cameroon where all the major industries of the country are located including the one in case study. Aware of the congested transport system of Douala, is a blow toward easy distribution of goods and services and communication of organization with the immediate market (Liu, L. and Luo, D. 2008).

The importance of analyzing the effect of cost in an organization is seen in the effective utilization and mobilization of resources of the organization. Logistic cost here includes costs such as ordering cost, storage cost, transport cost, personnel expense, holding cost according Kintel (2001). He further opines that the availability, adequacy and relevance of costs in an organization can influence management styles, profit levels, decision making which can have positive effect on the organization’s performance. The insight from Kintel (2001) on linking logistics costs to enterprise performance serve critical in the provision of a good costing policy.

According to theories of cost analysis, Burke and Litwin Model 2018, the formation of a well-designed cost structure in an organization have always permit the business to achieve organizational goals without fighting externalities. This is so because logistics cost such as storage cost help to determine the actual selling price of a product to maximize profits. This allows the organization to pursue cost reduction policies in the organization.

1.2 Statement of the Problem

Based on assessment and studies carryon it was discovered that Nego Titans plc finds it difficult to effectively manage their logistic cost and as such the company faces a lot difficulties to improve on their performances (Fugate, B. S., et al 2010). Nego titans is a distribution company in Douala precisely in Ndonbong. they have the role to distribute Guinese products in some confine areas in Douala. On findings it was discovered that the company is facing a lot of problems regarding the management of logistics cost and a lot of attentions have been given to this sector. These problems are;

There is insufficient warehouse, the company has only one warehouse and as such the finds it difficult to store drinks from the Guinese. As a result of these, they find it difficult to satisfy their customers on time. Because, when customers give their orders, they will have to wait until it reaches a full van load before they can initiate supply. Hence leading to less customer satisfactions. Also, insufficient equipment uses for delivery. the company has a very poor distribution network, the company has only two vans use for delivery and one of the vans is very old and as such the is constant breakdown with this customer are always kept waiting. thirdly the company also faces low inventory management in which expecting to fine a particular brand in a certain location but realizing that its actually placed elsewhere fourthly

Never the less there is delay in delivery which will always increase queue of customers in waiting for delivery of others which is one of the problems faced by Nego titans plc. To this effect, the organization has to increase distribution bands to meet up with customers demand from different destination, each band demands a driver and an agent, these has let to increase transport cost of fueling the van personnel wages. As a result, repairs and maintenance cost are daily programs of the organization Also poor inventory management, insufficient trained personnels, inadequate equipment use in the warehouse and lastly poor customers service.All the above problem great affects the outputs Nego Titans

1.3 Research Questions

1.3.1 Main Research Question

What are the effects of logistics cost on the performance of Nego Titans?

1.3.2 Specific Research Questions

1. What are the effects of distribution cost on the performance of Nego titan’s plc Douala?
2. How does warehousing cost affect the performance of Nego titans pls
3. What are the challenges faced by Nego Titan in reducing their logistics costs?

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