research

CHAPTER TWO

LITERATURE REVIEW

2.0Introduction

This chapter reviews available literature on information systems managed inventory, and customer satisfaction.

2.1Theoretical frame work:

Systems theory by Berthalany and Bouldingas cited by Kerzner, (1987), applied to organization , considers the organizations to be made of different sub-systems which are intergraded into whole , for example sub-systems in an information systems to meet set organizational goals in order to fulfil customer expectations and requirement. Korzner, (1997) and Borciejet al, (2006) advance that information systems operate as an open systems it further asserts that if information systems are properly implemented in an organization meeting of customers needs in timely and efficient manner is realised by an organization.

2.1.2The unified theory of acceptance and use of technology.

Venkatesh & Davis, (2000) unified theory of acceptance and use of technology state that four elements play significant role as a direct determinant of user acceptance and usage behaviour, and customer satisfaction.

Borciejet al, (2006) further asserts that with better implementation of information systems in an organization an there is timely and effective management of commodities leading to customer satisfaction in an organization. According to Lysons, (2006), an information system creates reliability of products in the market, timelines of information, and this ultimately creates customer satisfaction.

This concept is pegged on a hypothesis that there is relationship between information systems and customer satisfaction.

The UTAUT suggests that Informational systems acceptance can be explained by the factors pertaining to the information systems influence on customer satisfaction mechanism in an organization. The perceived usefulness of information systems crucial to acceptance of the information systems automation is not seen as strategic resource, it will hamper its acceptance, information systems acceptance is hampered by a fundamental lack of usability. The use of technology since time is very scarce resource and learning takes time. In addition to this, the acceptance of information systems automation is hampered by the lack of information systems infrastructure in the organization.

This lack of information systems infrastructure makes the use of technology combined with annoyance and anxiety. This provides a firm foundation for adopting this theory in this study based on these research works and due to its firm roots in information systems resource inform of organizational support systems, information systems infrastructure and acceptance.

2.1.3The Diffusion   of innovation theory

This theory suits the study of information systems. The diffusion of innovation theory adds that diffusion is innovation of an organization in order to determine the success of an organization its crucial for the effective implementation of information systems in an organization so that customer satisfaction is realised by an organization in its goal of satisfying customers, (Haung  $kapur, 2007). Rogers, (2009) asserts that there are different forms of information systems in an organization like computers, internet which require organizational support in order for an organizational to provide satisfaction to its customers in terms of reliability, and timelines.

Rogers (2003), asserts that there are different levels of adopters of information systems managed inventory systems in an organization which require organizational support as they interact with new innovations to be able to change their different perceptions, according to Rogers (2003), a social systems denotes the bound community in which the innovation diffuses, it involves bad group of interrelated units with a common goal.

Rogers ,(2003), as cited by Ahummuza , (2003), describes as information systems as an idea practice or object that is perceived  as new by an individual or other unit of adoption. In specific reference to technological innovation, technology is a demise that helps to solve an individual perceived problem however it may create uncertainty when little is known about its consequences (Abirim, 2006).

The diffusion of innovation theory predicts that information systems managed inventory has got great influence on the timeliness of information and reliability of products in the market.

The diffusion of innovation theory predicts that media as well as interpersonal contacts provide information and influence opinions in judgment leading to reliability of products in the market. The theory further asserts that customer satisfaction is derived from having products in the market in timely manner and communication channels and the roles of opinion leaders play in them, will determine the likelihood that the innovation will be adopted, (Catwright $ Hummond, 2007).

2.2Conceptual frame work

Figure 1 conceptual frame work for information systems managed inventory on customer satisfaction at crown beverages.

Independent variable (information system)    Dependent variable (customer satisfaction)

Adopted and modified from the systems theory of Bertalanffy, (1951), Rogers, (2003), theory of diffusion of innovation and the unified theory of acceptance and the use of technology, (Venkatesh, et al, 2003).

This study conceptualizes the relationship between information systems managed inventory (the independent variable) and customer satisfaction, (dependent variable).

Information systems indices are information systems infrastructure and know-how which are predictors of customer satisfaction indices; reliability, timeliness, (Mosleh and Shannak, 2009), Pearlson and Saunders ,(2006), however it is conceptualized that the impact of information systems managed inventory like , user knowledge and skills, information systems, Infrastructure which are critical to the function of customer satisfaction.

2.3 TYPES OF INVENTORY MANAGEMENT SYSTEMS

According to McLaren et al., (2004) there are basically two types of inventory management which include manual and automatic inventory management system.

2.3.1 Automatic inventory management systems

During the growth of a competitive global environment, there is considerable pressure on most organizations to make their operations, tactical, and strategic processes more efficient and effective. An automatic inventory management system is a group of components which can increase competitiveness and gain better information for decision making. Therefore various organizations have chosen to apply this group of components to their associations (Spalding, 1998). Consequently, the organizations decide to implement IS in order to improve the effectiveness and efficiency of the organizations. Automatic inventory management systems have become a major function area of business administration. The systems, nowadays, plays a vital role in the e-business and e-commerce operations, enterprise collaboration and management, and strategic success of the business (Hevner et al., 2004).

According to McLaren et al., (2004), Organizations operating automatic inventory management system, but provide highly efficient and effective product availability to customers at minimal operation costs, is one of the key factors that determine the success of their businesses, institute different mechanisms to achieve efficiency and effective within their operating systems, as result many organization have adopted automatic information systems managed inventory management systems as one of the mechanisms managers can use to achieve efficient and effective organizational performance.

World over, automatic inventory systems are known to be one of those key factors in determining the success of organizations. Mustaffa& Potter, (2009) as cited by Mogore et al., (2013) points out that, automatic inventory management systems within organizations operations leads to high customer service levels and improvements in key supply chain variables such as decreasing stock outs and elimination of the bullwhip effect. Wal-mart for instance, through its automatic inventory management system has eliminated the need for purchase orders, while Ford’s automated accounts payable function has eliminated the need for 300 staff positions.

According to, Gaines et al., (2011), automatic inventory management systems has helped many organization across the globe cut on their total operational costs this has thus helped such organizations to improve on their overall organizational performance  and remain competitive and above all achieve maximum customer satisfaction.

The adoption of Automatic inventory management systems among global companies like Tesco, wall mart, has led to the growth of such multinational organization , Scholars like Mogore, et al., (2013),  Kurbel (2013  , Neely et al, (2001), explore the benefits of automatic inventory management systems, but one common factor such scholars agree on, is that, such systems aid in the effective and efficient data collection, assessment, and dissemination within and out an organization, which makes it a valuable resource in the achievement of improved organization performance, thus competitive advantage, (Gaines, et al., 2011).

Automatic inventory management system has standard system for calculating the quantities of components, subassemblies and materials required to carry out a production programme for complex products (Rushton, et. al., (2011). Mogore, et al, (2011). It is a formal, mechanical method of supply scheduling whereby the timing of purchase or production output is synchronized to meet period-by-period operating requirements by offsetting the request for supply from the requirements by the length of the lead time, (Ballou, 2004), while Mogore, et al., (2011) contends that, such systems are computer-based and are used in production planning or inventory control, such as production scheduling and management.

Automatic inventory management systems helps an organization in forecasting or projecting requirements for finished products at the point of demand, (Lysons& Farrington, 2006), The system translates the sophisticated inventory management techniques in an organization system by realizing planned orders from the various distribution centres to become inputs to the material plan of the central supply, (Arnold & Chapman, 2004), According to, (Ballou, 2004).  Automatic inventory management systems has helped different organizations to be able to management multiple supplies in among all to fore cast future demand for a given products and plan effectively. while , Monczka, (2002) contends that automatic inventory management systems performs more functions other than  helping regulate stock levels, which include among others, transport planning, vehicle loading and scheduling. These components are crucial in ensuring that customers order are fulfilled appropriately in the most efficient and effective manner, hence improved customer satisfaction.

2.3.2 MANUAL INVENTORY MANAGEMENT SYSTEM

Manual inventory management system is essential, for a very small business that carries a limited amount of inventory or that turns over inventory slowly, a mechanized inventory system is unnecessary. The business owner can easily keep track of how much merchandise is on hand with a manual system, or simply by applying the “eyeball test” to see if it is time to order more. The owner won’t need to spend money on inventory software or take the time to learn how to operate it, (Lysons, 2006).Farrington and Lysons (2006) further assert that, a manual system gives a small business owner a greater sense of control. Rather than relying on a computer to indicate when it’s time to reorder, the owner can manage the process on his own. The need to view his merchandise on a regular basis, such as when counting stock before placing an order, gives him the opportunity to assess the condition of his merchandise, reducing the chance of a customer receiving damaged goods.

Bailey, (2004) contends that, a disadvantage of manual inventory systems is that they can be highly labor-intensive to operate. They require continuous monitoring to ensure that each transaction is accounted for and that products are maintained at the appropriate stocking levels. It is also more difficult to share inventory information throughout the business, because the lack of computerization makes accessing inventory records a more cumbersome process. The time spent monitoring inventory levels could be used on more productive activities for the business.

A manual inventory system relies heavily on the actions of people, which increases the possibility of human error. People might forget to record a transaction or simply miscount the number of goods. This results in needless additional orders that increase the company’s inventory carrying costs and use up precious storage space. Inaccurate physical counts could also result in not ordering enough of a product, meaning the business could run out of a crucial item at the wrong time.(Thai,  2004).

2.3.3 COMPONENTS OF INFORMATION SYSTEMS MANAGED INVENTORY

Electronic Data Interchange, 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 customer to obtain more timely and accurate information about a good or a service from a manufacture so as to be able to make quick decisions to save them from costly expenses. According to Monczka and Trent, 75% of the business units they studied have EDI capability with their various suppliers. The real growth of EDI comes in the increasing volume of transaction handled electronically. In the same study, 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 systems used in supporting customer satisfaction, (bailey et al, 2004).

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 systems in order to improve on the level of customer satisfaction.

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, Wit and Van (2006).

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 business 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 business process this helps in the creation of customer satisfaction, (Somuyiwa, 2009 &Oyesiku, 2010).

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 this helps to ensure that customers are served the right products an also promotes trust between the supplier and the customer hence promoting customer satisfaction, (Pokharel, 2005; Azevedo, Evangelista and Sweeney, 2006).

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 which promotes customer satisfaction, this is specifically due to the increased certainty of the supply of the product to the customer, (Aberdeen group 2005).

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 business, 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 conducting business between one organization and another this therefore increases customer satisfaction, Nair, (2006),

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, this therefore ensures that, despite the numerous demerits form enterprise resources planning it directly leads to  customer satisfaction .

2.4 RELATION BETWEEN INFORMATION SYSTEMS INFRASTRUCTURE ON CUSTOMER SATISFACTION

Since the introduction of computers in the middle of the twentieth century, the potential of Information Technology (IT) to transform organizations has been a constant subject of analysis for both organization studies and information systems research. Each new generation of technology and every major technological innovation has been followed by strong claims that organizations, businesses, and society in general, would have to be radically and fundamentally transformed to take into account the new opportunities offered by the innovations in technological capabilities. The changes brought about by technologies in organizations have been discussed examining how technology can help to reorganize work activities or improve their management. A very similar debate characterizes the dispute on the role of information infrastructures in supporting economic activities in contemporary society. As a result of the increased diffusion of information technologies in organizations and in society, the level of interdependence among single information systems is escalating such that today, it is very difficult to think about independent information systems as opposed to Information Infrastructures, (Hanseth, 2004).

An information infrastructure is defined by Hanseth (2002) asa shared, evolving, open, standardized and heterogeneous installed base and by Pironti (2006) as all of the people, processes, procedures, tools, facilities, and technology which supports the creation, use, transport, storage, and destruction of information.

In quality perspective customer satisfaction is defined as a result of comparison between what one customer expects about services provided by a service provider and what customer receives as actual services by a service provider, (carvanna 2003).

Organizational management must demonstrate a willingness to create an efficient inventory management technique so as to be able to allow information exchange between customers and buyers this will create an efficient certainty of the availability of products in the market to the customers this will create customer satisfaction, (Chwen, et al. 2006).

According to Nakatani, (2003), efficient information systems infrastructure creates reliability between the different parties in the demand chain, reliability is a relative concept that grows following the development of trust between parties in the demand chain and customers are certain of their demand being meant in time thus a premise needed for the establishment of a strong inventory management to create customer satisfaction. Simatupang and Sridaharn, (2004) on the other hand agree that reliability is the most essential feature for the success of customer satisfaction in the demand chain.

Katrina, (2003) on the other hand reveals that efficient information systems infrastructure creates commitment which is an essential component in the creation of customer satisfaction. For example, there is greater commitment in collaboration to allow companies share a vision and employ sophisticated processes such as joint planning and operation in the service of that vision. Parties are able to develop demand chain collaborations if they invest a great deal of resources, cultivate trust -and commitment, and share long-term strategic goals; this creates customer satisfaction in the sense that manufacturers are able to integrate their plans with customer’s perspective.

The sharing of inventory data precludes information distortion thus minimizing the bull whip effect whose implications include: excess costs, excess inventories, slow response and lost profit, this increases customer satisfaction, (Ntayi, et al. 2009; Vereercke et al, 2006). The elimination of the bull whip effect that creates uncertainties in production and distribution in the demand chain given its effect on demand forecasting, order batching, and rationing inventory, allows demand chains to create reliable and timely customer service, (Zhenxin, et al. 2004). It was observed that, among the means to reduce delivery costs, is through application of better inventory management techniques, (Gunasekarana, et al. 2004).

A high degree of web-based inventory management creates faster customer service and integration between manufacturers’ and customers that can lead to the high levels of operational performance for manufacturers in terms of; faster delivery times, reduced transaction costs, greater profitability, and enhanced inventory turnover, (Vereercke and Muylle. 2006), identified increased quality, variety, customer service, speed and responsiveness (Ntayi, et al. 2009) as some of the benefits accruing to demand chains as a result of faster response to customer service.

2.5.0 RELATIONSHIP BETWEEN KNOWLEDGE AND SKILLS AND CUSTOMER SATISFACTION

Knowledge has huge impact on customer satisfaction the following are some of the ways it affect customer satisfaction according to different scholars;

The concept of Knowledge Management (KM) has attracted the attention of researchers over the last decade since it is considered an important tool to achieve innovation and sustainable competitive advantages (Cooper, 2006; Marques and Simon, 2006).  Nonaka (1998) noted that in highly uncertain economies the only sure source of lasting competitive advantage is knowledge.  Several studies found that firms that adopt knowledge management practices perform better than competing firms that do not (Pathirageet al., 2007; Marques and Simon, 2006).  Knowledge management practices have been implemented in a wide range of industries including manufacturing, consulting, tourism, and call centers (Kohet al., 2005).

Extensive research has demonstrated the importance of customer-employee interactions in customers’ evaluation of overall quality and/or satisfaction with services (Bitneret al., 1990; Dolenet al., 2004).

Management theory researchers view knowledge as individual and organizational competencies such as skills, knowhow and know what , (Nonaka&Takeidi  1995; Davenport &Pruska 1998), While management information systems researchers and practitioners regard knowledge as an object that can be controlled and recognized in a computer based information system, (Hoon, 2003). Knowledge is considered a specific strategic resource that does not depreciate in the way traditional economic productive factors do but appreciate with use, (Curado&Bontis, 2006).

Knowledge researchers argue that firms exists because they have unique often historically dependable abilities to accumulate specific resources that lead to different levels of firm performance, (Reed &Defillipp, 2000), whereas barney, (1991), regarded knowledge as separate resources on equal footing with other resources. He again argued that firms gain competitive advantage if they have the capability to transform other resources. Capabilities and resources have three distinct features which make them different to imitate, they are historically determined, and socially embedded, (Barney, 1991).

As the firms capabilities are knowledge based, this makes knowledge a resource that forms the foundation of the firm’s capabilities that transform into core competencies when they present a domain in which a firm excels, (Marr & Neely, (2004). At an employee level it includes personal knowledge, skills and talents while at a firm level it includes infrastructure, networking relations, technologies, routine, trade secrets, procedures and organizational culture, Individuals with their intellectuals abilities, the knowledge they poses and their capability to learn and acquire more knowledge at all hierarchical levels constantly contribute to the firms competitiveness by creating customer satisfaction, (Marr & Neely, 2004).

Mac GregorBinker and Vrazaloe (2006) highlights that small business tend to avoid information systems into their business, it is seen as complex to use, This is not surprising because SMES always lack skills amongst work force to use information systems,  (Spectrum, 1997). Paul and Pascal (2003) finings dearly indicate that information systems adoption is positively related to user knowledge and skills.

Syed and Mohand (2009) suggest that it is very important for an organization to determine employee’s knowledge or skills of information systems because those knowledge or previous experiences may influence organizations decisions in adopting and utilizing of manager or the owner in information systems knowledge or skills is definitely likely to increase the opportunity of information systems utilization.

Kaynolds, savage and Wilthans (1994) found that small business owners, managers are likely to adopt more sophisticated technologies if they are not familiar with the basic ones, Rittat (2007)

one of the most critical issues in information systems research is whether and how information creates value for the organizations and institutions that implement them many studies have offered empirical evidence of the business value of the business value of the information system (e.g. Brynjolfisson and HiH 2003) but these studies usually show that the value appears with lag. one potential explanations for the lagged effects is that, due to the complexity and novelty of information system some experience may be required for firms and individuals users to capture value from the, (Brynjofsson, 2003).

Knowledge Management 3 processes to meet customer goals (Salomannet al., 2005).  Initiatives emerging from this effort have been labeled as ‘customer knowledge management’ (CKM) or ‘knowledge-enabled CRM’ (Gibbertet al., 2002; Gebertet al., 2003).  Croteau and Li (2003) note that an organization’s KM capabilities are an important factor affecting CRM impact.  However, recent studies indicate an underutilization of KM practices in the hospitality/tourism industry (Cooper, 2006; Sigala and Chalkiti, 2007; Hallin and Marnburg, 2007).

There is substantial evidence of the impact of knowledge management practices in building strong relationships with customers, and enhancing customer satisfaction and organizational performance (Marques and Simon, 2006; Pathirageet al., 2007).  However, no prior studies have investigated the influence of KM practices in a service encounter context.  KM begins with an understanding that knowledge is broadly classified as explicit knowledge and tacit knowledge.  Each has very particular characteristics, discussed more fully later in this paper, that influence KM.  This paper commences analysis at this foundational level to ask how consumer reactions differ when service providers use one or the other form of knowledge.  More specifically, this study examines the influence of KM practices on consumer satisfaction and consumers’ repurchase intentions.  This study focuses strictly on the dyadic interaction between service provider and customer – the service exchange.  KM practices outside these bounds are not within the scope of this study.  Therefore, the focus of this paper is on the influence of two fundamental knowledge management components, namely tacit and explicit knowledge, on consumer reactions.  The next section reviews relevant literature and provides a discussion of CRM and the service product to establish the conceptual basis of this study.

Price and Value, Values are ideas and beliefs which individuals hold of what is right and wrong, what is good and bad. What satisfies and what does not satisfy, what is preferable and what is not, what is of importance and what is not important. Valued product or services are those of higher preferences to customers of importance in use/available and affordable. (Anderson, 2013).

(Fornell, 1992) argue that price is the way in which value is transferred and it could be major determinants in the position and value of the product or services in the market. If the product or services does not meet the expectation, the customer feels unhappy, disappointed and perhaps even cheated. The benefit you provide and the needs should be directly related to the cost and how it compares with the customer’s perception of its value. To be able to do this, the organization should identify customer feelings of the value or acceptability of your products or service. When you have a well-designed inventory management system, you are able to reduce the amount of time that products sit on your shelves. When you don’t carry extra inventory for extended periods of time, your inventory costs decrease. This is a savings that you can pass on to clients in the form of lower pricing.

In good time delivery, according to (Wallim, 2006) customers are more satisfied if the time taken to deliver their products is less than the time they are willing to wait once they have placed an order ,  flexibility is dominant in meeting the delivery deadlines(Gunasekara, 2010) and therefore information shared is required.

Sharing is required to enable the members of the supply chain to meet specified delivery dates by the customers (Ellram, 1999). A study carried out by (Yin-mei, 2013) shows that effective customer delivery influences customer satisfaction and service quality. Customers are said to be more satisfied if their suppliers are able to meet and fulfil their orders within the required time (Widing, 2003).

Knowledge and skills helps in the improvement of quality of the products,Quality is defined as meeting the customer’s requirements and expectations.  Quality of product and service of are those with unique characteristics or attributes, having advantage over those alternatives and are more suitable for the anticipated use. Suitability of a product or service depends on its capacity to function satisfactorily and continue to meet customer’s requirements over a period of time or its reliability (Oakland, 1993).

Quality has to be managed since it cannot just happen. (Smith, 1994) asserts that quality is the output of the standard agreed which implies that quality is designed or planned and to among others the reputation of a firm is built on.

The level of customer satisfaction varies depending on the operating environment scarcity of the commodity and other factors. If a firm is operating in a market where quality appears to be a minor or a non-existent issue, its management may feel that it is possible to disregard quality

The quality of tangible product is usually straightforward. Forward determination for customers to make comparison between physical products is a matter of feature to feature analysis. The

Challenge for customers and for organization lies in evaluating service quality which may be the only way customers truly differentiate between one complete product offering, and another. For this reason organization and their marketers live or die by understanding how consumers judge service quality.

Based upon the nature of customer viewpoints and behavior quality service is typically measured by the customer in terms of products the customer expects to receive. Thus it is important for every organization especially service organizations to determine what customers expect and then develop service products that meet or exceed their expectations (Lornergman, 2001).

It helps in the creation of customer loyalty, Customer loyalty is the willingness of customers buying existing brands frequently as opposed to choosing those of competitors (Wyse, 2012). A study carried out by (Mitchell, 2004) illustrates that customer satisfaction results to customer retention which in turn creates a loyal customer stand in an organization. Customer loyalty requires that companies convey on their customers’ expectations fully in a predictable and an ongoing relationship (Campton, 2004). Customers frequently judge the quality of the services that they receive using their perceived expectations which often lead to customer satisfaction and loyalty (Colburn, 2013). According to (Cacioappo, 2000), an increase in customer loyalty by five percent can lead to an increase in a company’s profits by 25 to 85 percent.

Loyal customers according to Eckert (2005) are six times more likely to purchase or to recommend the purchase of a company’s products and services to someone else. Various studies have also shown that dissatisfied customers are likely to tell nine others while satisfied customers are likely to tell five other people about the good service and treatment that they have received (Cacioappo, 2000). Manufacturers need to provide customer purchase satisfaction before and after a purchase since this is likely to lead to customer brand loyalty (Agarwal, 2007).

Customer service is the provision of service to customers before, during and after a purchase. According to (Turban et al, 2002) “Customer service is a series of activities designed to enhance the level of customer satisfaction that is, the feeling that a product or service has met the customer expectation.”

The importance of customer service may vary by product or service, industry and customer. The perception of success of such interactions will be dependent on employees “who can adjust themselves to the personality of the guest. Customer service can also refer to the culture of the organization, the priority the organization assigns to customer service relative to other components, such as product innovation or low price. In this sense, an organization that values good customer service may spend more money in training employees than average organization, or proactively interview customers for feedback. From the point of view of an overall sales process effort, customer service plays an important role in an organization’s ability to generate income and revenue. From that perspective, customer service should be included as part of an overall approach to systematic improvement. A customer service experience can change the entire perception a customer has of the organization and is an extremely important part of maintaining ongoing client relationships that are key to continuing revenue. For this reason, many companies have worked hard to increase their customer satisfaction levels. Often there are many more people working behind the scenes at a company than there are customer service representatives, yet it is primarily the personnel that interact directly with customers that form customers’ perceptions of the company as a whole, from the above discussion it shows that customer satisfaction can be observed

In stock, a good inventory management system means that you have an up to date inventory count at all times. Part of giving good customer service is giving accurate information even if the customer does not plan on making a purchase that day. By being able to give clients accurate inventory information, you improve the image of your company and add one more element to customer retention.

Repeated buying, Customer loyalty is often shows in repeat purchases (Allen & Wilburn, 2002). (Tuli&Bharadwaj, 2009) observes that satisfied customers are likely to adapt a behavior of increase in purchase as well as a continuous purchase from the firm. (Agarwal, 2007) asserts that provision of customer purchase satisfaction before and after a purchase results in repeat purchases. Provision of satisfaction before the actual purchase by the customer would include aspects such as provision of quality products, fair pricing of products as well as flexibility (Amini et al, 2005). Post purchase customer satisfaction on the other hand would include activities such as provision of repair services and efficient operations of reverse logistics (Howgego, 2002).

2.5.1 CHALLENGES FACED IN INFORMATION SYSTEMS MANAGED INVENTORY

Information Fragmentation, Information fragmentation is a core difficulty for information systems managed inventory, practices and a direct consequence of the availability of a wide range of tools and technologies to the end-user (Jones, 2007, p. 453). System integration is an important issue, leading to the fragmentation of information sources such as paper documents, email, office productivity software, storage supports, mobile devices and Web pages. The lack of interoperability between different formats of documents or software versions is also increasing the challenges pertaining to this fragmentation (Bondarenko et al., 2010). In the workplace, the challenges related to information fragmentation entail labor-intensive information search, task interruptions, complicated data backup procedures and continuous switching between paper and digital information (Ravasio et al., 2004; Jones, 2007; Bondarenko et al., 2010). The separation between information systems also leeds to unwanted redundancy in the various storage locations (Ravasio et al., 2004, p. 168) and confusion caused by the presence of different passwords and access methods (Barreau, 2007, p. 314). For Boardman and Sasse (2004), synergies between tools should better be leveraged to facilitate not only the integration of different information pieces, but also to better support individual users in their specific tasks.

Task management is a core challenge in many studies related to personal information management in an organizational setting, as employees do not use a system to perform information practices but rather to accomplish work-related tasks. Several studies have examined the problems arising when employees try to accomplish their work with systems having poorly adapted functions to the requirements of the job (Boardman &Sasse, 2004; Dabbish& Kraut, 2006; Barreau, 2008; Bondarenko et al., 2010; Karr-Wisniewski & Lu, 2010). For Jones (2007), information management and task management are simply “two sides of the same coin”.

Email overload is a phenomenon documented in numerous studies (Whittaker &Sidner, 1996; Venolia et al., 2001; Bellotti et al., 2003; Whittaker, Bellotti&Gwizdka, 2006; Sumecki et al., 2011). In the organizational context, email overload is commonly defined as the act of receiving a large number of messages daily, overwhelming the employees and affecting their overall productivity. In the recent years, email management has become a daunting and time-consuming task and an important source of stress for the employees.

2.6.0 INFORMATION SYSTEMS SUPPORT SYSTEM

ZangMcAllough and support system (2004) asserts that organizational support system with in the organizational literature. They instutionalize how people interact with each other how power relationships are defined (Hall, 1987). The structure of an organization and support to organizational members reflects the value base choices made by that organization (Quinn, 1988) it refers to how obs and tasks are formally divided group and coordinated.

Researchers have conceptualized organizational structures and groups from different perspectives. According to Khadwalla (1977), organizations structure and information systems support system can take many forms, ranging from highly mechanistic to highly organic mechanistic structures are highly formalized, non-participative, hicrachial, tightly controlled and flexible  and offer little support to the organizational members, organize structures on the other hand are characterized by informality, decentralization of authority, channels of communication, high support systems to organizational members.

Organic structures on the other hand are characterized by informality, decentralization of authority, open channels of communication, high support systems to organizational members and flexibility.

2.6.1 Top management support and customer satisfaction

Pinto and Millet (1999) asserts that top management needs to establish willingness on the part of the organizational members by creating a climate of cooperation, demonstrating the efficiency of a new system of doing things. They argue that the degree of acceptance or resistance to the information systems projects will be due to the degree of the management support for the project.

Phelps (2002) argues that engaging leaders information system trading enables them to reach greater understanding of potential technology in challenges and encouraging performance.

Harris and development (2005) argue that information system is some of the most important tools available to achieve customer satisfaction. In order to excel and are widely used in different organizations worldwide citing an example of the finance industry which has been the most progressive in this regard as evidenced by wide spread usage of ATMs in transforming business.

Moreover, Fuilan (2005) contends that no successful, large scale change on information system has advanced without support of the top management.

Hope, Kelly and Guyden (2000) noted that leaders should use technology and modeling the practice to the staff.

2.6.2. Peer support and customer satisfaction

Deansupprs and walker (2005) assert that innovation diffusion needs a sharing and learning organizational environment among peer members.

They add that learning and sharing Knowledge amongst staff is important for innovation diffusion. Rogers (1996) argues that learning is a key factor in innovation development. He suggests that training and development should be shifted to experimental style learning.

Grantian and Nicholas (1993), state that organizational learning occurs when people in an organization collaborate to share their different visions, knowledge and skills.

Organisational learning is a key information system strategy when ICT application strategy is subjected to change (Attewel, 1992; Fichman and Moses, 1999). Gibson and similar (1991) asserts that sharing tacit information system knowledge among peers built from users’ experience cam improve information systems automation within organizations, Carlopio(1998) explains that personal change may be the best influenced by co workers, friends family and peers within an organization.

2.7.0. Information system infrastructure

Pearson and Saunders (2006) defined information  system infrastructure as everything that supports the flow and processing of information in an organization, including hard ware, live wire, software, data and network competent.

Kim and Lee (2006) specifically reported a positive significant effect between employee information system usage at I.T application and levels of employer knowledge sharing capabilities for public sector employees. This finding is amplified by Syed-Ikhsan and knowland (2004) who reported that information system infrastructure allow individuals to create and share knowledge effectively and contribute to customer satisfaction.

2.1.9. Information systems support systems and customs performance Zong, MiCullough and Ren (2004) assert that organizational support systems with in the organizational structure are most investigated organizational, Characteristics in organizational literature, they initialize how people interact with each other, how communication flows and how power relationships are defined (Hon, 1987) the structure of organizational and support to organizational members reflects the value based choice made by that organization (Quinin, 1988); it refers to how abs are formally divided and coordinated.

Researchers have conceptual and organizational structures and groups from different perspectives. According to Khondwalla,(1977) organizations structure and from different information systems support viewed as facilitating interactions and communication for coordination and count of the organizational duties.

2.7.3Top management support and customer satisfaction;

Pinto and Millet,( 1999) argue that top most need to establish willingness to be  part of the organizational members by creating a climate of cooperation, demonstrating the efficiency of the system and its benefits over the old ways of doing things. They add that the degree of acceptance or resistance of information system projects will be due to the degree of top management support from the project.

Phelps, (2002) argues that engaging leaders in information system translating enables them to reach greater understanding of potential challenges of customer satisfaction.

Harris and Devon Port (2005) argue that automated information systems are some of the most important tools available to improve customer satisfaction in order to excel and if order to excel and are widely used by many firms worldwide, citing an example of the finance of industry which has been the most progressive in those regard as evidenced by wide spread usage of automated teller machines (ATM) in transforming business.

Moreover, Fullam (2009) contends that no successful large scale change or information system adoption effort has enhanced without the support of top management, Hope, KellysGuyden (2000) noted that leaders should use technology and modeling the practice to the staff.

2.7.4 MEASURE TO IMPROVE CUSTOMER SATISFACTION

Information system (IS) is the study of complementary networks of hardware and software that people and organizations use to collect, filters, process, create and distribute data. Information Systems encompasses a variety of disciplines such as: the analysis and design of systems, computer networking, information security, database management, and decision support systems, (Jessup, and Valacich, 2008).

In quality perspective customer satisfaction is defined as a result of comparison between what one customer expects about services provided by a service provider and what customer receives as actual services by a service provider, (Carvanna, 2003). If services provided by an organization meet customer’s needs, this may lead to high customer satisfaction, (Wakeret al, 2006).

Customer Satisfaction is defined as an “evaluation of the perceived discrepancy between prior expectations and the actual performance of the product” (Tse and Wilton, 1988, Oliver 1999). Satisfaction of customers with products and services of a company is considered as most important factor leading toward competitiveness and success (Hennig-Thurau and Klee, 1997). Customer satisfaction is actually how customer evaluates the ongoing performance (Gustafsson, Johnson and Roos, 2005). According to Kim, Park and Jeong (2004) customer satisfaction is customer’s reaction to the state of satisfaction, and customer’s judgment of satisfaction level. Customer satisfaction is very important in today’s business world as according to Deng et al., (2009) the ability of a service provider to create high degree of satisfaction is crucial for product differentiation and developing strong relationship with customers.

Customer satisfaction makes the customers loyal to one organization. Previous researchers have found that satisfaction of the customers can help the brands to build long and profitable relationships with their customers (Eshghi, Haughton and Topi, 2007). Though it is costly to generate satisfied and loyal customers but that would prove profitable in a long run for a firm (Anderson, Fornell and Mazvancheryl, 2004). Therefore a firm should concentrate on the improvement of information system so that customers time is saved and charge appropriate fair price in order to satisfy their customers which would ultimately help the firm to retain its customers ( Gustafsson, Johnson and Roos, 2005).

It is a common phenomenon that the level of inventory management in an organization actually determines the level of satisfaction among its customers, than any other measure (Turel et al. 2006). Customer’s involvement is also important as when buyer consider the product important and invests time to seek information then it ultimately enhances the satisfaction level (Russell-Bennett, McColl Kennedy and Coote, 2007). This satisfaction may influence the concerned company by repurchase, purchase of more products, positive word of mouth and willingness of customer to pay more for the particular brand. Any business is likely to lose market share, customers and investors if it fails to satisfy customers as effectively and efficiently as its competitors is doing ( Anderson, Fornell, and Mazvancheryl, 2004 ).

The Customer service is a system of activities that comprises customer support systems, complaint processing, speed of complaint processing, ease of reporting complaint and friendliness when reporting complaint (Kim, Park and Jeong, 2004). Customer services are the opportunities for telecom service providers that are added to mobile network other than voice services in which contents are either self produced by service provider or provided through strategic compliance with service provider (Kuo, Wu and Deng, 2009). The improved customer services are the focal point of the telecom service providers for social as well as for economic reasons. From a social point of view, services should be available to the customers on reasonable terms. As far as economic factor is concerned, services should satisfy the needs of the customers (Turel and Serenko, 2006; Melody, 1997).

For developing satisfaction among customers, the telecom service providers need to be extra careful for the customer services they provide. Satisfaction of customer is determined by his evaluation of service provided by a brand (Gustafsson, Johnson and Roos, 2005). The study of Ahn, Han and Lee (2006) shows that when the customers, do not get their complaints considered properly, they start looking for other brands. It happens because either the customer service centers do not handle the complaints or the customers are not able to address them properly. Sometimes, telecom service providers take considerably longer time to resolve the problems like network coverage or call quality, the customers do not wait for long and hence they lose satisfaction with that particular brand (Ahn, Han and Lee, 2006).

Furthermore, the friendly attitude and courteous behavior of the service workers at service firms leaves a positive impression on the customer which lead towards customer satisfaction (Soderlund and Rosengren, 2008). On the other hand, if a telecom service provider lacks in providing services (call drops) to its customers it experiences customer churn. Kim, Park and Jeong (2004) argued that service provider should provide customer oriented services in order to heighten up customer satisfaction. It was also found that the customers get satisfied to a brand more if they get all the needed services accumulated in that very brand (Ahn, Han and Lee, 2006).

Information systems link two or more organizations to achieve results that they cannot achieve by working in isolation this linkage helps organizations to share ideas and knowledge on the best ways to provide quality goods and services and therefore ensuring customer satisfaction is achieved, Chwen, et al. (2006), Sandberg (2007) and this creates a link between the inventory department, the administrative department the distributors and the entire supply chain which work together hand in hand to satisfy customers needs.

Information systems managed inventory creates interdependence, openness and trust where there is risk, rewards and cost sharing as other dynamics demand chain through technologically managed inventory to reduce costs and to improve service levels in order to achieve customer satisfaction, (Mason, et al. 2007).

According to Lysons,(2006) the existence of trust in the supply chain caused by a well managed information systems directly impacts on the customer satisfaction since customers are certain of suppliers ability to meet their needs.

The involved parties share information, synchronize decision making and align incentives (Simatupang and Sridharan, 2005) with the help of information systems, such as Electronic Data Interchange (EDI), Radio Frequency Identification (RFID), Electronic Point of Sale (EPOS), Enterprise Resource Planning (ERP) to facilitate a smooth flow of information exchange necessary for improved information systems managed inventory in the demand chain for the purpose of ensuring customer satisfaction is achieved, (Chwen, et al. 2006; Soonhong. et al, 2005;)

Accurate and frequent information systems acquired through efficient communication technologies is essential to reduce inventory management risks and build high level of trust in manufacturer – distributor alliances. Communication in an organization using information systems fosters confidence in management and reduces on poor managerial decision making, ensure continuity of sharing organization information among different departments this reduces dysfunctional conflict which will lead to higher levels of quality decision made in management and therefore reduce the inventory management risks and achieve customer satisfaction, (Ghijsen et al, 2005).

The cause of poor management in inventory among members in the demand chain downstream is mostly because of the barriers of information systems that have not been successfully tackled; those related to communication technologies and human beings, (Sandberg. 2007).

Proper management of inventory require information systems like; EDI, Bar coding, EPOS, ERP, RFID, in their information structures to allow a seamless flow of information exchange among the members especially in management and inventory management department, (Chwen, et al. 2006). Information systems have lead to better inventory management ways, that is; better demand planning, inventory visibility, reduced inventory and cost saving and increased responsiveness, requires information sharing through EPOS data, (Soonhong. et al, 2005).

Information systems managed inventory ensures proper management of inventory in an organization, Warehousing or storage of goods should also be paid attention. There are products that are easily broken or run out over time, there are also products that demands a level of temperature in order for it to last long and do not end up useful. There are products that don’t need any of these kinds of treatment because they can go long-term. However, companies must consider that information systems managed inventory must always keep their products safe and still efficient for use until they meet their buyers. As this will be able to meet the customer’s requirement and ensure customer satisfaction. (zeithaml et el, 2003),

From the discussion, studies on relationship between information systems managed inventory and customer satisfaction have not been given much attention in crown beverages in Uganda and therefore presenting a gap to be filled by this study