EFFECTS OF STAKEHOLDER INVOLVEMENT IN IMPLEMENTATION OF SUSTAINABLE FOOD VALUE CHAIN IN MANUFACTURING INDUSTRIES: A CASE STUDY OF BIO FOOD PRODUCT LIMITED.
BY;
LUCY WACHEKE NJUGUNA
VICKY JEPKEMOI KIPLAGAT
CHRISTINA MUTHONI NJAU
A RESEARCH PROJECT SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF DEGREE IN PURCHASING AND SUPPLIES MANAGEMENT DEPARMENT OF OPERATIONS AND SUPPLY CHAIN
MANAGEMENT SCHOOL OF BUSINESS MANAGEMENT AND ECONOMICS OF DEDAN KIMATHI UNIVERSITY OF TECHNOLOGY.
JULY, 2020
NYERI, KENYA
DECLARATION
Students Declaration
We, the undersigned, declare that this research project is our original work and has not been submitted to any other institution, college or university for examination.
Sign: ……………………. Date: …………………………
LUCY WACHEKE NJUGUNA
B011-01-0360/2017
Sign: ……………………. Date: ……………………….
VICKY JEPKEMOI KIPLAGAT
B011-01-1731/2017
Sign: …………………… Date: ………………………
CHRISTINA MUTHONI NJAU
B011-01-0332/2017
Declaration by the Supervisor
This project has been submitted for defense with my approval as Dedan Kimathi University of Technology Supervisor,
Sign …………………………..Date ………………………………………
Dr. David Kiarie Mburu
Lecturer, Department of Operations and Supply Chain Management,
School of Business Management and Economics,
Dedan Kimathi University of Technology
DEDICATION
We dedicate this research proposal to our beloved parents for their moral and financial support and also to our friends who have supported us in doing the research.
ACKNOWLEDGEMENT
We acknowledge the Almighty God for His mercy and grace throughout the research project. We give gratitude to Dedan Kimathi University of Technology, school of Business Management and Economics for imparting us with knowledge and skills in the business sector that has assisted us to relate, practice and learn more knowledge in relevant our study in the proposal.
We would like to sincerely acknowledge the efforts of our supervisor Dr. David Kiarie Mburu, for his guidance through the various stages of the study. His influence and thinking have been our greatest motivation.
ABSTRACT
The term stakeholder refers to the shareholders, employees, consumers, suppliers, environmental and animal groups. This means that anyone who affects or is affected by an organization is a stakeholder of the company. The objectives of this study will be to determine the effects of stakeholders’ involvement in sustainable food value chain, to establish the effects of information management on consumers’ involvement in promoting a sustainable food value chain. Another objective is to determine how organizational structure affects employees’ involvement in having a sustainable food value chain. The literature review showed the effects of stakeholders’ involvement in implementation of sustainable food value chain in maintenance of industries. This research will adopt a survey research design. The data collection instrument will be questionnaires which will be administered. The collection of data will then be analyzed by the use of tables .The study aims to show the effects of stakeholders’ involvement in implementation of sustainable food value chain in maintenance of industries.
Table of contents
Declaration………………………………………………………………………………………………………………………… II
Dedication…………………………………………………………………………………………………………………………. III
Acknowledgement……………………………………………………………………………………………………………… IV
Abstract…………………………………………………………………………………………………………………………….. V
Table of contents……………………………………………………………………………………………………………….. VI
List of tables………………………………………………………………………………………………………………………. IX
List of figures…………………………………………………………………………………………………………………….. X
List of acronyms/abbreviations……………………………………………………………………………………………. XI
Operational definition of terms……………………………………………………………………………………………. XII
CHAPTER TWO: LITERATURE REVIEW
2.3.1 Eco supplier’s selection
CHAPTER THREE: RESEARCH DESIGNS AND METHODOLOGY
3.4 Sampling and Sample Design
3.5 Data collection and Procedures
3.6 Data Analysis and Presentation on the methods
CHAPTER FOUR: DATA ANALYSIS, PRESENTATION AND INTERPRETATION OF
4.2.2 The Extent of Adoption of green procurement
4.2.3 Findings on Eco Supplier’s Selection
4.2.4 Findings on Reverse Logistics
4.2.6 Findings on Green Packaging
4.3.1 General Information Analysis
4.3.2 The adoption of green procurement Analysis
4.3.3 Eco Supplier’s Selection Analysis
4.3.4 Reverse Logistics Analysis
4.3.6 Green Packaging Analysis
CHAPTER FIVE: SUMMARY OF THE FINDINGS, CONCLUSIONS AND RECOMMENDATIONS
5.3 Conclusion and Recommendations of the Study
APPENDIX 1: INTRODUCTION LETTER
LIST OF TABLES
Table 3.1 Target Population ……………………………………………………………….…..20
Table 3.2 Target population with sample size………………………………………………….21
Table 4.1 Age distribution …………………………………………………………………….24
Table 4.2 Level of Education…………………………………………………………………..25
Table 4.3 Work Experience…………………………………………………………………….25
LIST OF FIGURES
Figure 2.1 Conceptual framework ………………………………………………………..13
Figure 4.1 Response rate………………………………………………………………………24
Figure 4.3 Gender of the respondents ……………………………………………………26
Figure 4 5 Performance Appraisal on Stakeholder Involvement………………..28
LIST OF ACRONYMS/ ABBREVIATIONS
SFVC- Sustainable food value chain
FVCs- Food value chains
BFPL- Bio food products limited
ICT- Information Communication Technology
IT- Information Technology
VC- Value chain
OPERATIONAL DEFINITION OF TERMS
Stakeholders- It’s an individual, group or organization who is impacted by the outcome of a project (Peter Landau, 2017).
Stakeholder involvement- It is a term that covers the full range of efforts to understand and involve stakeholders in a given organizations activities and decisions (OCED, 2015)
Stakeholder interest- Stakeholders are characterized as a group that has a stake in the organizations operations because of their influence since they have their own needs and expectations (Yogita M.Waghmare, 2016).
Information management- It’s the process of ensuring that the right people acquire the right information at the right time (Makori, 2009)
Sustainable food value chain- It is a market-oriented and systems-based approach for measuring, analysing and improving the performance of food value chains in ways that help ensure their economic, social and environmental sustainability (Robert Townsend, 2018).
CHAPTER ONE: INTRODUCTION
1.1 Introduction of study
This chapter focuses on the background of the study that is the stakeholder involvement that affects the implementation of sustainable food value chain in manufacturing industries. This chapter contains the background of the study, statement of the problem, objectives of the study, research questions, significance of the study and scope of the study.
1.2 Background of the study
The issue of sustainability has increasingly become an area of interest. This has been caused by imperfections in the surrounding such as concern for human health and global warming.
1.2.1 Stakeholder Involvement
Stakeholders have different interests and roles in supply chain; hence stakeholder management is a key factor to consider before deciding on how to implement sustainable supply chain practices in an organization. Stakeholder involvement should be considered as a critical element of any sustainable development plan. This is because it will not only lead to achievement of sustainable supply chain management goals in an organization but also meet the stakeholders’ expectations .The pressures of the customers in this case is said to be a driving force to sustainability in food value chain. Organizations are working together in the world to waste disposal by through recycling and reusing (David & Frank, 2012). Many countries across the globe such as the USA have adopted an Environmentally Preferred Purchasing (EPP) scheme that ensures that the waste is being recycled. Supply chain management has undergone a lot of sustainability developments. For instance, Sustainability Reporting Guidelines are the most used as they provide a framework for companies to report their sustainability efforts and
accomplishments (Kinderyte, 2008).
Companies are continuously working on recycling mostly indirectly as compared to reverse logistics. Bio Food Product Limited has an organizational structure that ensures that the company runs smoothly and it mainly involves stakeholders as they are the backbone of the company. The company has succeeded due to the stakeholders’ involvement in ensuring that they achieve the organizational goals. Stakeholders of a company are a group of people that have an interest in a company and either affects or could be affected by the business. These stakeholders include employees, customers, investors, suppliers, shareholders, government and creditors. Evan and Freeman (1990) described stakeholders as the groups that are vivacious to the existence and success of the corporation.
Sustainability is important to ensure that resources do not become over exploited. It is therefore important to identify all the stakeholders and their respective roles or influence as far as sustainability developments are concerned. Having poor stakeholder involvement in a project can lead to poor project performance. Therefore, it is important to consider some critical issues such as effective communication and information flow, early stakeholder involvement in decision making process and design stage (Ankukumah, 2016).Organisations are now realizing the importance of engaging stakeholders while
implementing SSCM. (Mulwa et al, 2015).
1.2.2 Sustainable supply chain management in bio food products limited
Bio Food Product Limited is the largest dairy food company in Kenya that is in existence for over 25 years. The Company strives to ensure that they delight their customers through making the cleanest and the best tasting dairy products that they can enjoy. Bio Food Product Limited produces yoghurts, creams, flavoured milk, long life milk, mayonnaise, muesli, honey and pudding. The company supplies its products to all East African countries as it is known for the best milk as well as their prices. These products are important in that they are fresher and contain no preservatives hence making it last for a long period of time. Also, they have nutritional value in the bodies of the customers. The company being the largest contributes to the economic growth of the country as it makes a lot of sales. What is more is that the company has also contributed to the dairy growth of East African countries since it is the main supplier of these dairy products.
The upcoming technology in the Bio Food industry has made it easier for most food companies to ensure that they have a smooth food value chain. However, in future, technology will keep on developing and therefore they have to ensure that they keep up with these trends. The success of this company will be highly dependent on the stakeholders such as the employees who have to ensure that they produce products in accordance with these trends. Therefore it means that due to the changes that occur in a business stakeholders have to ensure that they maintain the sustainability of the food value chain. A study carried out by Lewis Akenji (2010), shows that stakeholders are the backbone to ensuring that the food value chain is sustainable. However, the stakeholders have some effects in their involvement of implementing a sustainable food value chain. Therefore the purpose of this research is to show the effects that the stakeholders have in the involvement in the implementation of a sustainable food value chain.
- Statement of the Problem
Unsustainable food value chain has become a very great challenge in the supply chain of the country. The highest contributor of this problem is the involvement of the stakeholders in the implementation of a sustainable food value chain. The major negative effect of these problems is unsatisfactory performance which is exhibited through, among other things, declining competitiveness and low profits (Industrial Development Corporation 2017). The availability of these problems presents the food industry with the challenge to progress and improve in order to meet the needs of customers and the rapidly changing world of manufacturing. The raw materials of the Bio Food Products mainly come from the farms for example the dairy farms. Study shows that only 38% of the world’s total land area was used for agriculture in 2007 while agriculture is responsible for over 70% of global fresh water consumption. Economic activities influence the use of natural resources and the generation of pollution in three perspectives; production, consumption and material usage. Fossil fuel driven industries, including housing and mobility are causing the depletion of fossil energy resources, climate change and a wide range of emissions-related impact (Mark, 2013). The inefficiency in our food production is encouraged by diet preferences in developed countries but increasing worldwide is alarming. Agricultural processes have an inherently low efficiency of resource use, which renders food, fibres and fuels from agriculture among the more polluting resources compared to industrial activities (Mark, 2013).There is increased consumption of animal products which is a problem because it correlates strongly with both population growth and economic growth.
Food production is receiving more pressure due to the increased demand for energy thus encouraging more bio-fuel production from edible crops like corn and sugar. However, it is important that these problems be investigated through empirical research in order to develop a better understanding of the developments taking place within the industry, especially within the supply chain management context (Kumar et al, 2013). Given such importance to the Kenyan economy, continued research is warranted to generate updated information which can be used to solve various problems experienced in this industry and to make decisions necessary for its further growth and success. Based on the above, the aim of this study is to investigate the effects of stakeholder involvement in the implementation of sustainable food value chain.
- OBJECTIVES OF THE STUDY
- General Objectives
- To determine the effects of stakeholder involvement in implementation of sustainable food value chain in manufacturing industries
- Specific Objectives
1.To evaluate the effects of food manufacturers in implementation of sustainable food value chain in manufacturing industries
- To establish the effects of industry groups in implementation of sustainable food value chain in manufacturing industries
- To find out the effects of consumer associations in implementation of sustainable food value chain in manufacturing industries
- To examine the effects of environmental groups in implementation of sustainable food value chain in manufacturing industries
1.5 RESEARCH QUESTIONS
- How do food manufacturers affect suppliers’ involvement in implementation of sustainable food value chain in manufacturing industries?
- In what ways do industry groups affect their involvement in implementation of sustainable food value chain in manufacturing industries?
- How does environmental groups affect employees’ involvement in implementation of sustainable food value chain in manufacturing industries?
- How does consumer associations affect customers’ involvement in implementation of sustainable food value chain in manufacturing industries?
1.6 SIGNIFICANCE OF THE STUDY
1.6.1 To other manufacturing industries.
Also, this research project can be borrowed by other manufacturing industries who may be interested in achieving sustainability in supply chain. Or as a way of benchmarking, those other manufacturing companies can get to benefit from this research work indirectly.
1.6.2 To Future researcher
This study will add to the pool of knowledge on the under researched area on challenges facing stakeholders involvement in implementation of sustainable Food VC. Future researchers will have a reference point from the information gathered that will contribute to understanding the challenges facing manufacturing industries.
1.6.3 To the management of FVC
This research will help the management of Food Value Chain (FVC), it will provide ways and solutions to ensuring sustainability within the company by considering factors such as ethical practices, IT, packaging cost and time for delivery of goods
1.7 LIMITATIONS OF THE STUDY
The research is based on questionnaires to collect information from the institution. The researcher might receive dishonest answers, unanswered questions and some questions might be difficult to analyse and respondents’ differences in understanding and interpretation might pose a challenge to the researcher. Lack of personalization by questionnaires also poses as a limitation whereas some respondents might have a hidden agenda.
1.8 SCOPE OF THE STUDY
The study is based on the effect of stakeholder involvement in implementation of sustainable food value chain in manufacturing industries in Kenya and the focus is on the Bio Food Product Limited. It is located in Nairobi County, Off Road C, Industrial Area, after Sameer Industrial Park, Nairobi. The study covers the effects of stakeholder involvement with respect to sustainability issues. All levels of employees from the top to lower levels will be given questionnaires.
CHAPTER TWO: LITERATURE REVIEW