THE IMPACT OF INFORMATION AND COMMUNICATION TECHNOLOGY ON LOGISTICS MANAGEMENT EFFICIENCY: A CASE STUDY OF SPEDAG INTERFREIGHT UGANDA LIMITED

                                                   CHAPTER ONE

1.0 Introduction

This chapter presented the background of the study, the statement of the problem, purpose of the study, objectives of the study, research questions and the significance of the study.

1.1 BACKGROUND

1.1.1 GENERAL BACKGROUND OF THE STUDY

Information and communication technology (ICT) covers vast areas of technologies such as mobile and wireless technology, telecommunications, software development, security. Intelligent systems etc. ICT has had a huge impact on industries, the community in general and our daily lives. ICT can be applied to many fields. One of the emerging applications in recent years is in logistics (Kwok Hung Lau and Haibo Huang 2012). Information and Communication Technology is fast becoming one of the main drivers of change, posing new strategic challenges (Somuyiwa, 2010). The business environment today has been undergoing unprecedented change and many companies are seeking new ways to stand out from the competition by sustaining their competitive advantage. In today’s highly competitive global marketplace, the pressure on organization’s to find new ways of creating and delivering value to customers is growing stronger.

ICT is today being applied in many organizations in a wide range and operations areas. It has provided new ways to store, process, distribute and exchange information both within companies and with customers and suppliers in the supply chain (Somuyiwa and Oyesiku, 2010).  It is now commonly accepted that information and communication technologies (ICT) and systems provide many benefits to companies, including small enterprises to make them more efficient, effective and competitive (Chapman, et al,2000; Sarkis, et al, 2004; Fink and Disterer, 2006). Many companies conduct business using electronic commerce (e-commerce), whether focusing on business-to-business (B2B) or business-to-consumer (B2C) activities. They realize that easy access to information and communication and the delivery of their products or services are important drivers in developing and sustaining market competitiveness nationally and internationally. Having a supportive electronic logistics (e-logistics) system is very important to maintain the company’s competitiveness and efficiency in logistics operations (Sarkis, et al, 2004). E-Logistics is an emerging area of logistics field. Alike other emerging disciplines, there is not a widely accepted definition yet. It may be that the term defines a unique subset of ICT and transport logistics, or that is a redundant term, which duplicates many similar terms in use. There is a rapid development in the use of information and communications technology (ICT) in logistics management. The application of computers, internet and information communication systems can be seen in virtually all activities in the logistics industry, such as transportation, warehousing, order processing, materials management and procurement. It can help companies to achieve competitive advantages by providing customers with superior services. The source of competitive advantage is found in the ability of the organization to differentiate in the eyes of the customer, from its competition and again from operating at lower cost and hence at lower cost and greater profit. Successful companies either have a productivity advantage that gives a lower cost profile or they have a value advantage that gives the product or offers a differential over competitive offerings or a combination of the two. Companies are no longer

Staying competitive simply through focusing on product quality and pricing as customers demand is becoming higher in relation to customer service.

This issue directs the companies’ main focus today to address the customer needs in the ever-changing environment. In order to be the winners in the marketplace, timing and superior customer service are becoming the keys to attain competitive advantage for a company. Time-based competition is an important issue that many companies are facing currently as customers are becoming more time-sensitive and time-oriented in terms of better services, reliability and delivery. The ways to renew the customers’ services and how they are delivered are critical capabilities for many companies to acquire nowadays. This leads to increasing interaction between marketing and logistics where logistics is considered a platform for supporting new strategic moves on the market (Kazak and Wing, 2009).

As an increasing number of firms are under pressure from their partners to change both their traditional styles of operation and organization to replacing them with integrated systems that help increase the speed and fluidity of physical and information flows, reaching this kind of integration therefore requires investing on new Information and Communication Technologies (ICT). With the advancement of ICT, many companies have adopted the use of the technologies to improve the efficiency and effectiveness of their activities (Somuyiwa, 2010).

Spedag Logistics Company is a private limited company dealing in a wide range of logistics competencies. The research will examine the impact of Information and Communication Technology on logistics management efficiency with a case study of Spedag Logistics Company located in Nakawa Industrial Area Plot No.M284.basically because the organisation has operationalized ICT systems in its supply chain.

1.2 STATEMENT OF THE PROBLEM

According to the current trend of ICT development, Information and communication technology is an important tool to enhance efficiency and responsiveness in modern-day supply chains. The introduction, implementation and usage of ICTs in logistics companies is usually motivated by an attempt to reduce costs. The objective is to obtain a more efficient freight transport, which consumes fewer resources in terms of fuel, labour, space etc. Owing to fierce market competition and rapidly changing business environment, organisations are forced to focus on their core competencies and outsource their logistics operations as firms. In order to work hand in hand with customers to meet their day today logistics needs, logistics companies have been forced to make use of ICT for efficient communication with clients and coordination of activities. However these companies have faced various challenges in the adoption of ICT like physical distribution, containerisation, networking, the regulatory complexity, labour and infrastructure productivity, among others. This has in return deteriorated the efficiency of logistics management in organisations. Although logistics management efficiency may be attributed to many factors under play, this study questions the extent to which information and communication technology has had an impact on logistics management efficiency of organisations with specific reference to Spedag Interfreight Uganda Limited.

1.3 PURPOSE OF THE STUDY

The study aimed at establishing the impact of information and communication technology on Logistics Management Efficiency with a view of providing the role of Information and Communication Technology on logistics management efficiency of organisations.

1.4 SPECIFIC OBJECTIVES OF THE STUDY

The overall objectives of this research were;

1. To establish the level of Information and Communication Technology usage in carrying out logistics operations in Spedag Interfreight Uganda Limited.
2. To assess the various Information and Communication Technology systems being employed in Spedag Interfreight Uganda Limited.

• To establish the benefits of adopting Information and Communication Technology in logistics operations in an organisation.

1.5 RESEARCH QUESTIONS

The following research questions shall guide the study;

1. What is the level of ICT usage in carrying out logistics activities in Spedag Interfreight Uganda Limited?
2. What are the various ICT systems being employed in Spedag Interfreight Uganda Limited?

• What are the benefits of using ICT in logistics operations in an organisation?

1.6 SCOPE OF THE STUDY

The scope of this study was divided into subject, geographical and time scope.

1.6.1 SUBJECT SCOPE

The study specifically looked at the impact of ICT on logistics management efficiency in an organisation.

1.6.2 GEOGRAPHICAL SCOPE

The study was carried out in Kampala district and Spedag Interfreight Uganda Ltd was the case study. It’s located in Nakawa Industrial Area, Plot M284

1.6.3 TIME SCOPE

The study covered the period from March to August of this year (2013).

1.7 SIGNIFICANCE OF THE STUDY

The findings of the study provided the management of Spedag Interfreight Uganda Limited information on finding solutions to some of the challenges they are facing in implementing information and communication technology.

It helped logisticians to predict the future prospects of information and communication technology and logistics management efficiency.

It also assisted future learners who were carrying out research in related areas with references.

CHAPTER TWO

LITERATURE REVIEW

2.0 INTRODUCTION

This chapter presented an overview of the existing literature based on other writers’ opinions, findings, and view points on the impact of Information and Communication Technology on logistics management efficiency.

2.1 LOGISTICS MANAGEMENT IN THE CHANGING ENVIRONMENT

Logistics management is that part of supply chain management that plans, implements, and controls the efficient, effective, forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption it’s also the art of managing the flow of physical material and information from the source to the user. It encompasses all of the information and material flows throughout an organization and inter-organizations. It includes everything from movement of a product or from a service that needs to be rendered, through to management of incoming raw materials, production, storing of finished goods, its delivery to the customer and after sales service. The role of logistics function is a key determinant of business performance to ensure that there is smooth flow of material and information throughout a company’s supply chains. Logistics has also become more prominent as a critical success factor in competitive advantage through reducing costs and improving service level or responsiveness to customers. Problems arising in small firms include delayed and inaccurate information, incomplete services, slow and inefficient operation, and a high product damage rate (Somuyiwa, 2009 & Oyesiku, 2010).

2.1.1 INFORMATION AND COMMUNICATION IN LOGISTICS

ICT comprises a number of technologies, which may, but need not be internet-based. In a logistics setting, Wit and Van (2006) distinguish between transaction systems, operational planning systems, and control Journal of Emerging Trends in Economics and Management Sciences (JETEMS) systems. These may be computer mediated (extranets, intranets) or based on internet or web technology Transaction system;

Electronic Data Interchange (EDI) is the electronic transfer of structured data by agreed message standards from one computer application, with a minimum of human intervention, connecting all parties in a supply chain), interactive telephone systems, and ecommerce, e.g. business-to-business (B2B) e-marketplaces, for the global procurement of inputs; contracting of logistics services, directly by the shipper or by the so called third-party logistics service provider (3pls); or business-to-consumer (B2C) on-line sales to consumers.

Operational planning system: all sorts of logistics decision support and route planning software, e.g. Advanced Planning and Scheduling (APS), enabling the design, planning and operation of supply chain, including performance measurement for all participants in the chain.

Enterprise Resource Planning; (ERP) systems, enabling the processing, recording and fulfilment of orders, e.g. in warehouses or stores; and route planning software designed to avoid congested roads based on digital maps and real-time traffic information.

Control system: Mobile communication (phones), tracking and tracing systems (Barcode scanning for packages and pallets), tracking vehicles with Global Positioning System (GPS), measuring vehicle performance with ‘black boxes’ (containing logistic data), and Automatic Equipment Identification (AEI).

2.2 LEVEL OF INFORMATION AND COMMUNICATION TECHNOLOGY USAGE IN LOGISTICS OPERATIONS IN OGARNISATIONS

ICT is widely used in logistics operations especially through tracking information about the items in transit of an organisation, communication through using emails, internet, business websites and other telecommunications. During the past few decades we have experienced an ever increasing rate of globalisation. This situation requires constant innovation and a higher level of Information and Communication Technology (ICT) adoption especially in the areas of transport, supply chain and logistics services in general. It is well recognised that ICT facilitates the” integration of supply chain activities which enables the seamless globalisation of services and can afford greater specialisation  for the service provider as operations become more sophisticated. Indeed, the innovative usage of ICT in the supply chain context can be referred to as the use of ICT applications that support the supply chain’s objectives of improved efficiency and responsiveness, based on the needs of the current stakeholders in the supply network” (Goh and Fraser, 2012). The Ugandan logistics industry is worth 1.5 million and represents 1.2 percent of the Gross Domestic Product (GDP) (MacGowan, 2011; Queensland Transport and Logistics Council, 2012).

ICT systems may change the structure of the logistics industry, and even modify the rules of competition. The fact that ICT systems offer new value added services that previous paper-based administration cannot. Due to the adoption of ICT in the transportation of goods, it has led to increased efficiency and effectiveness in the logistics activities due to the use of computers in obtaining information about the various good quality items, the condition of items in transit, the date of arrival the names of the supplier and the country of origin. This affects their competitiveness. The search for new opportunities in the company has led to the adoption of new technologies and innovation in companies has increased competence.

Moreover, in their annual 2011 report there was no executable proposition or specifically defined steps on how the ICT penetration should increase and what the positive effects of the e-freight portal may have on the logistics industry in Victoria (Freight futures, 2011).

ICT systems are critical for managing logistics operations, but the adoption rate depends

Upon the company size (Pokharel, 2005; Azevedo, Evangelista and Sweeney, 2006). “Economic literature suggests that the ongoing diffusion of ICT and e-business technologies among firms in the economy at large is a striking example of the possible dynamics of technological change and economic development” (Hidalgo and Albors, 2010 :). Moreover, the internet has enabled ICT systems to have the ability to link activities between the different stakeholders involved and that way providing real-2 time data both within the company and with its outside suppliers, channels, and customers (Azevedo et al., 2007). In addition to this, the internet has become the most economically accessible technology to SMEs that can further improve Business-to-Business (B2B) exchanges and e-procurement (Sing and Thompson, 2002). Such a national e-marketplace for freight will have various benefits not only for the transport companies in general, but also for shippers. Shippers can use e-marketplaces to find more suppliers, get better prices and decrease purchasing costs. National e-marketplace will be the most beneficial for the industries which are characterized as weak in their logistics; these include food processing and distribution, textile and clothing, agricultural/horticultural industries and construction (Mollenkopf and Dapiran, 2004).

“Australian e-markets do not have the experience and the infrastructure required to support

e-procurement for large organizations due to the low adoption rate of ICT systems” (Sign $ Thomson, 2002). Due to this they fail. Opportunities exist to exploit the potential of discovering new suppliers to a business and buyers through e-marketplaces (Sign and Thomson, 2002).

According to Balocco et al. (2010), after a first euphoric phase of development, e-marketplaces have quickly exceeded expectations in procurement and supply chain management processes. Australian failed attempts to establish e-marketplace question the real effectiveness of this e-business model web based technologies and their impact on the logistic industry in Victoria. However they realise that the penetration of ICT application is still very low and logistics industries still mainly rely on telephone, email and fax services.

2.3 THE VARIOUS ICT COMPONENT SYSTEMS BEING USED

Information sharing is an important prerequisite relevant function in the supply chain management concept, or securing information accessibility to all supply chain partners involved in logistics operations. The creation of distributed databases accelerates the development of relationships with other operators in the supply chain. In addition, information transfer which is probably the most relevant function in the supply chain management concept ensures the widespread dissemination of the internet and e-business

technologies which allows to a large extent overcoming problems relating to systems and

applications interoperability. Finally, in supply chain operation planning, ICT also plays a major role to the extent that the benefits obtained from the application of SCM logic depend almost entirely on a company’s capability to establish electronic links with customers, suppliers and third party logistics 3pls (Fink and Disterer, 2006). In the light of all these, the dissemination of ICT has opened up new opportunities for the development of new roles and functions in the supply chain, the so called inform diaries or on-line freight, e-market places.

The purpose of these web-based intermediaries is to give added value to transport and logistics business through greater efficiency and information transparency (Somuyiwa, 2009 & Adewoye, 2010 and Somuyiwa and Oyesiku, 2010). The faster information flows along the supply chain, the faster operational decisions can be made. The faster material and cash flow along the supply chain, the faster a company’s money is freed from the manufacturing or procurement cycle. One of the main areas of interest that has emerged in recent years concerns;

2.4 COMPONENTS OF ICT SYSTEMS EMPLOYED IN ORDER TO ACHIEVE LOGISTICS MANAGEMENT EFFICIENCY

 EDI. This is an exciting development in the 1980s. EDI is a technique based on agreed standards which facilitates business transactions in a standardized electronic form in an automated manner directly from a computer application in one organization to an application in another organization. The growth of microcomputer usage in logistics is to direct electronic transmission of data and standard business forms between the buying organization and its suppliers. This helps the buyers and sellers to obtain and provide more timely and accurate information flow during the transportation of goods permitting greater administrative efficiency through paper work reduction. According to Monczka and Trent, 75% of the business units they surveyed have EDI capability with their various suppliers. The real growth of EDI comes in the increasing volume of transaction handled electronically. In the same survey, Monczka and Trent reveal that respondents reported that most businesses would be connected to 60% of their suppliers by 1997 even though by 1995 only 18% were connected to their suppliers. Electronic Data Interchange and the internet have made flow and exchange of information once an EDI system is in place and functioning properly, it produces a number of clear-cut operating benefits for the buying firm. An obvious reduction in paperwork and related administrative contributes noticeably to increased productivity. Because data is transmitted directly between computers, accuracy of the data throughout the process typically increased. For the same reason, more complete and faster feedback of order status information is possible.

According to Bialy et al, technological progression necessitates that organizations should have formulated plans to handle development for example in the development of EDI as one of the information technologies used in supporting logistics activities. It is imperative that purchasing has an appropriate supplier who can jointly develop and use this technology.

In addition to the above, there has been different views concerning the integration of materials and information flows, both internally and externally for example; MRP, MRP II and integrated information systems such as EDI and supply chain concepts such as value streams and pipeline or logistics management.

According to Christopher (2005:180), organizations with quite different internal information systems can now access data from customers on sales or product usage and can use that information to manage replenishment and to alert their suppliers of forth coming requirements. This can be achieved by use of extranets.

At the same time, organizations can successfully run a home shopping and delivery systems for consumers over the internet. Within these businesses, intranets are put in place to enable information be shared between stores and this facilitates communication across the business making the internal operations become much more efficient as a result. For example, by capturing customer demand data sooner, better utilization of production and transport capacity achieved through proper planning and scheduling.

According to Preben Koch, head of ICT development at vital, Forsaking USA, explains “We needed to ensure cost-effective growth of the business by making our processes fast and accurate, using technology to save duplication of effort. Our administration system was outdated. The long and complex forms required several steps of validation and this slowed up the process of handling cases.”

Koch still explains that by use of TIBCOS BPM suite that TIBCO software inc developed for vital paper mark and staff have been reduced by 25% and 35% while maintaining its level of service and also that case handlers now have instant access to client data  on screen including all contact details and the current status of applications and claims. As a result, customers can be kept well informed about their affairs and human mistakes can be avoided.

Bar codes and scanners                                                   

This system of Bar code and scanners represents a series of alphanumerical characters, bar code readers to interpret bar code zymology, and bar code printers to reliably and accurately print bar codes on labels, cartons, and/or picking /shipping documents. The review is included here because bar code systems are the foundation for many paperless warehousing systems, but the review is meant only as a brief introduction to bar code system. In logistics, bar coding is useful in receiving inbound materials. This helps in quick and accurate data entry, faster checking and clearing of shipments, automatic tracking of the shipments throughout the logistics.

Satellite

This is a technology that allows communication across a very wide geographical area. Satellite communication provides a fast and high volume channel for information movements. Satellite technology facilitates real time interaction which provides up to date information about location and delivery information about the products in transit. The satellite devices can also be used in tracking and tracing the materials in transit.

Image processing

This uses fax and optical scanning technology to transmit and store freight bill information and supporting documents such as POD or BOL. Through image processing, the buying company is in position to get timely customer shipment information which is transmitted through the central Data base therefore, providing improved customer service in the form of more timely and accurate delivery, quick shipments, tracing and quicker transfer of sales and inventory information.

Internet

The strategic importance of information is recognized by most people and organizations. The internet thus far is primarily a tool for information sharing between the buying company and the selling company with the potential for electronic commerce being explored. Some companies are setting up private internet used to share data with workers and provide access to the larger internet. In logistics, the internet is used in order to enhance efficient, effective and timely communication between the buying and selling organization, tracking and tracing of the cargo during the actual process of logistics.

Enterprise resource planning:

Enterprises Resource Planning is the English term for a business system. Again, another term that is used for business system is Enterprises System (ES). To describe an ES in a simple way one could say that ES is an information system that manages all the resources available in a company. It is a common term for a co-operating software that manages and co-ordinates much of a company’s resources, assets and activities (Boyle, 2004). Gartner Group developed the ERP concept under the 90’s. The term ERP is defined by them as: “ERP is a planning and communication system that affects all the resources of a company.” Boyle (2004) defines it as: “not a system, but a framework that includes administrative (finance, accounting), human resources (payroll, benefits), and Manufacturing Resources Planning (MRP) (procurement production planning). ERP units’ major business processes- order processing general ledger, payroll, and production within a single family of software modules.” There can be numerous benefits of using enterprises systems and according to Davenport (2002.) the most significant

Include’:

Cycle time reduction

Faster information transactions

Better financial management

Laying the groundwork for electronic commerce and making tacit process knowledge explicit (transferring knowledge from an aging workforce into the ES).

But there are not just benefits with enterprises; there are also both technical and business perspectives that are negative:

Inflexibility. One of the greatest difficulties in any ES project is to match the system to the preferred ways of accomplishing a business process or activity. It is just too difficult to fit an ES to a business-both for the first time and for subsequent changes.

Long implementation periods. 3 to 5 year project duration is fairly common for implementing an ES in a large company, and for companies in the rapidly changing business world these projects are insupportable.

Overly hierarchical organizations. A third criticism of ES’s is that they impose a hierarchical, “command and control: perspective on organizations.

Antiquated technology. A final criticism of ES’s is that most are based on obsolete technology; that is, that they are thinly disguised main frame programme ported into the client/server world.

Customer order cycle: The customer order cycle: occurs at the customer/retailer interface and includes all process directly involved in receiving and filling the customer’s order. Typically, the customer initiates this cycle at a retailer site, and the cycle primarily involves filling customer demand. The retailer’s interaction with the customer starts when the customer arrives or contact is initiated and ends when the customer receives the order.

2.5 THE ADVANTAGES OF USING INFORMATION AND COMMUNICATION TECHNOLOGY IN LOGISTICS OPERATIONS IN AN ORGANISATION

Standardized transportation process, including improved quality control, shorter delivery  time, greater efficiency through the use of information and communication components like internets, satellites among others that enables tracking and tracing of the goods in transit, during shipment as well as giving up to date information to the buyers about the goods. This according to (Kotler 2000) enables the trading parties to minimise inefficiencies such as pilferage, theft among others during the logistics of the goods hence improving logistics efficiency and effectiveness.

Simplified logistics and supply chain process. The introduction of information and communication technology has not only simplified the logistics process but has also improved on the whole supply chain process including control over suppliers, improved process cycle time, close cooperation relationships, improved supply chain efficiency, raw materials on time for suppliers. According to (Kenneth Lysons 2000), simplified logistics and supply chain process has brought about shorter lead times and has enabled the materials to be available as and when they are required by the buyers for production purposes.

Process Automation. With the use of information and communication technology components such as Bar coding, Satellite, internets and Image processing among others in the process of managing logistics efficiency, there has been reduction on paper work thereby leading to a substantial reduction of errors, as well as increased capability to obtaining and exchanging real time information. This is possible through the use of information technology systems such as Bar code and scanners which represents a series of alphanumerical characters, bar code readers to interpret bar code symbology, and bar code printers to reliably and accurately print bar codes on labels, cartons, and/or picking /shipping documents. This review is included here because bar code systems are the foundation for many paperless warehousing systems, but the review is meant only as a brief introduction to bar code system. In logistics, bar coding is useful in receiving inbound materials. This helps in quick and accurate data entry, faster checking and clearing of shipments, automatic tracking of the shipments throughout the logistics. (Trent and Monczka 2000)

Improved Logistics process. Logistics management is the process of managing the efficient, costs effective way of transporting goods, supplies and related information from the point of origin to the point of consumption Kenneth Lysons (2000). The introduction of communication and information technology has brought in tremendous improvements in the flow of materials from the point of origin to the point of consumption including reduced arrangement costs and handling times, shortened response time for purchasing, improved order process speed and reduced labour costs.

Improved warehousing facilities. Warehousing is the primary link between the producers and the consumers; it is used for storing products (raw materials, in process inventory and finished goods) before they are finally worked upon or delivered to the ultimate consumers. Through the implementation of information and communication technology, ware house efficiency and effectiveness has improved greatly through using opportunities such as e- warehousing, e- receipts and e- issuing. These have brought about accurate operations in the warehouse hence complementing logistics management efficiency (R.J Carter, 1990)

Reduce product delivery time. Through the implementation of information and communication technologies in organizations like Spedag Interfreight company the organizations’ processes of making payments to their suppliers have improved greatly including faster payment systems like using ATMS, credit cards among others. This reduces among others interest rate, credit risk among others (Aberdeen group 2005).

Improved distribution process. According to Donald W Dobler and David Burt (2001) With improved tracking and tracing as a result of using internet, satellites among others, the company that is to say the distributing company is assured of efficiency and effectiveness in the distribution process as their trucks are properly tracked and traced so that in case the deliveries are made to a different location, the mistake can easily be rectified. This has therefore, improved Logistics efficiency in organizations and this has all been because of the introduction of information and communication technology. Other benefits include; delivering on time, reduced delivery enquiring time and improved distribution management.

Proper monitoring. The introduction of information and communication technology in logistics management has brought about efficient and effective monitoring of the materials during transit to their various destinations. This is done through use of technologies that allows communication across a very wide geographical area. Satellite communication provides a fast and high volume channel for information movements. Satellite technology facilitates real time interaction which provides up to date information about location and delivery information about the products in transit. The satellite devices can also be used in tracking and tracing the materials in transit. Tracking is specifically achieved through the use of internet and others, this therefore enables both the delivering organization or the supplier and the buyer to know where specifically the goods in transit is and also in case of any problem encountered say by the truck being used for the transportation purposes, it can easily be recognised by the parties concerned (Kenneth Lysons 2003)

Better communication and connection links. According to Nair N.K (2006), the introduction of information communication technology, communication between the buyers and the suppliers has been eased. Logistics is an old age industry that has been one of the greatest holdouts against the waves of computerization that has swept the world. Until recently, most organizations were still using traditional systems like fax and letter writing among others as a means of communication. However with the introduction of information and communication technologies such as telephones, internets and satellites among others, communication has not only been eased but also made efficient and effective.

Faster information transfer. Information and communication technology equipments like internet, satellite and telephones enables a speedy transfer of information between the supplier and the buyer. Therefore, all the necessary information that the supplier needs to give to the buyer regarding how the goods in transit should be handled, stored and packed are given to the buyer prior to delivery so that special attention is taken by the buyer where necessary( Van Horne 1994)

Reduce inventory levels. According to (Thomson and Singh 2001) information and communication technology helps the buying organisation to order the needed items at the right time and once the need arises then an order will be placed. This helps the organisation to do away with bulk stock levels hence solving the problem of inventory costs like obsolescence and dampness leading to losses this leads to efficiency and effectiveness in the logistics operations.

 In conclusion, a number of key factors that inhibit the widespread adoption and use of ICT, include the cost of technology, uncertainty over the business benefits and impacts, and the lack of relevant internal ICT expertise. Day today challenges such as dependence on external consultants and vendors and the unreliability of systems, potentially owing to technological obsolescence and technical complexity, were also important constraints on ICT use.

The findings therefore will have important implications for policy aimed at ICT adoption and use by manufacturing companies in the sense that governments should facilitate manufacturing companies’ gain full participation in global value chains through policy initiatives in specific areas.

Promotion of technological upgrading is critical in order to encourage manufacturing companies to capture more value added from participation in logistics activities. Policy in this area should aim to support training and capacity building via skill development programmes; promote partnerships between manufacturing companies and organizations overseas that can develop or transfer technology, products, processes or management practices; and to facilitate the technological upgrading through various financial schemes, such as credit lines for upgrading.

Facilitation of compliance procedures through adoption of product and process standards has several well-known benefits for firms. It enables them to introduce new technology and integrate business practices that ameliorate their overall performance.

However, different and concurrent standards can become barriers to transmission of information and to trade. Also, the costs of compliance to required standards are proportionally too high for firms. The problem is aggravated when these firms have to cope with an increasing number of private standards set by customers in addition to mandatory ones. Governments should ensure that national certification systems do not impose an excessive burden on firms and encourage manufacturing company’s participation in the standard-setting process. Promotion of skills development as the effectiveness of aforementioned policy measures, to a certain degree, is contingent on having skilled human resources in manufacturing companies. Participation in logistics activities can accelerate manufacturing companies upgrading of human and technological resources, through technology and knowledge transfer and implementation of new business practices.

CHAPTER THREE

METHODOLOGY

3.0 INTRODUCTION

After reviewing the literature in the previous chapter, the researcher came up with methods which were used in the data collection exercise. This chapter therefore presents the methods and processes that the researcher used in the study. The description of the selected methodology included the sample size, research design and procedure of the study

3.1 THE RESEARCH DESIGN

In carrying out the research, the researcher used descriptive methods to analyse the data about the assessment of information and communication technology in logistics management efficiency. The data was analysed manually which allowed the use of both quantitative and qualitative methods.

Qualitative data was used to analyse in narrative form, then interpretations related to the study questions were obtained and then conclusions were drawn.

Quantitative data was in tabular format, graphs, measures of correlation based on percentages to point out the salient relationships and trends.

3.2 AREA AND POPULATION OF THE STUDY

The study was conducted from Spedag Interfreight Uganda limited. This population mainly comprised of managers, heads of departments, the procuring and disposal entity and other staff members from the related fields in the organisation.

3.3   SAMPALE SIZE AND POPULATION

3.3.1 POPULATION SAMPLE

The study was carried out in Spedag Interfreight Uganda Limited located in Nakawa Industrial Area Plot M284. The company has a population of over 35 employees of both the staff and the managers. In order to have a balanced view of the stakeholders, the entire stake holders were interviewed both directly and indirectly especially those involved in making logistics a feasible and profitable department. Because of that, basically people from the logistics and the procurement departments were consulted.

3.3.2 SAMPLE SIZE

The sample size comprised of 35 respondents taking considering  issues of procurement and logistics- stores management at Spedag Interfreight Uganda Limited in Nakawa Industrial Division.

Table 1: Categorization of respondents

3.4 SAMPLING TECHNIQUES

The researcher used stratified random technique which emphasized obtaining appropriate sample size. In this case the researcher derived the study population into groups (strata) according to their titles giving each group of personality equal opportunity of representation in the study. The researcher used stratified random sampling because it was cheap, reduces the level of biases, time saving, improves on the level of accuracy and enhanced cooperation in the field.

3.5 DATA COLLECTION SOURCES

The researcher collected data using both the primary and the secondary sources.

3.5.1 Primary sources

This helped to obtain data in its raw form from the field. This was done by use of questionnaires to collect people’s views, opinions and perspectives about the study. With this kind of source of data collection method, first hand information was obtained.

3.5.2 Secondary sources

This was obtained through the review of internal documents of Spedag Interfreight Uganda Limited. For example reports on the subjects under the study that showed the past performance. Also information was got from the external records which include journals, magazines, newspapers reports and research papers relevant to the topic at hand. This helped the researcher to make informed judgement about the study since it was compared with the primary source

3.6 DATA COLLECTION INSTRUMENTS AND TOOLS

The researcher used various methods of data collection and they included direct observation, questionnaires and interviews as presented below.

3.6.1    Questionnaires

These were designed with appropriate questions for managers and heads of departments and members of staff enough to make sure the objectives of the study were met, since these people have little time for interviews with the researcher because of their tight schedules in nature.

The researchers personally administered questionnaires because they were cheap and easy to administer, they saved much time compared to focus group discussion and they also required less skills to administer them.

3.6.2 Interviews

Here the researcher asked questions and at the same time recorded the responses. A semi- structured Interview guide was used for reasons like; Provision of first-hand information, Rich data was collected, it is less costly and speedy, it has the ability to clarify questions, it cleared doubts and allowed addition of new questions where necessary among others.

3.6.3 Direct observation

This was used to confirm the availability of the information technology systems in place and read through facial expressions, feelings of pleasantness and unpleasantness or stress which was expressed in emotions or vocalization.

3.7 PROCEDURE OF THE STUDY

The researcher picked an introductory letter from the Dean of School of Management and Entrepreneurship. The researcher then used the letter to introduce her to the area of study. Then the researcher then identified the respondents and proceeded to distribute questionnaires or interviewing them.

3.8 DATA PROCESSING, ANALYSIS AND PRESENTATION

After gathering the data from both sources (primary and secondary), the data was edited first for accuracy and completeness, organized by use of tabulations and percentages thereby creating a platform for summarization of data. Appropriate analytical methods were applied so as to manipulate the data, its relationship and quantitative meanings were then derived.

3.9 DELIMITATIONS OF THE STUDY

The researcher met the following challenges while carrying out her research.

• Unwillingness by some of the respondents to provide information thus rendering the questionnaires improperly answered. Also some respondents felt bothered and uneasy to let certain company facts and details to the researcher. The researcher ensured that all respondents were assured out confidentiality in relation to the information provided by them and also rendering one personally responsible for the consequences in case such happens.
• There were also threats of time limits and deadlines that the researcher needed to work against, considering the fact that the study was conducted alongside other activities like lectures, course works, and tests. The researcher drew a plan to ensure that these questionnaires were administered to before the deadlines.
• The researcher was faced with financial constraints since data collection involved transport costs, stationery, printing, feeding, and fear of some officials whom the researcher thinks asked some money before giving out some information.
• A lot of money was spent on internet access and other e- communications. This was compounded by travel costs, secretarial expenses and other costs related to booking of appointments with respondents. The researcher must however put some money aside to fund all her activities from the employer.

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