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IMPACT OF CONTAINERIZATION IN INTERNATIONAL PURCHASING

ABSTRACT

This project is made up of five chapters which contains different information about the project. The importance of containerization as a marketing tool was examined with the aim of assessing its contributions towards the purchasing of industrial products. To carryout research work, a total of One Hundred (100) industrial buyers were used as sample while was drawn from Aba Road, Port-Harcourt, Onne. To gather data, personal interview and two sets of questionnaires were used one for industrial user and the other for staff. In analysis of the results, percentage was used while chi-square technique is adopted in testing the hypothesis and it was tested at 5% level of significance. The following hypothesis were tested, containerization of a product attracts a buyer, containerization of a product affects user’s decision to buy, in the course of the research useful findings were made which among others include, using of good colour combination materials and adequate shape and design to attract buyer’s attention. It was also found that containerization play an important role or impact for promotion of product apart from its traditional role of protection. The belief in that container is a silent sales man. Apart from this, industrial buyers are motivated to buy particular material by their terms of delivery, quality, price and quantity; therefore, for a company to achieve its goals, management should give containerization and intelligent leadership and support since container in a dynamic complex and controversial business area. This involve improving their containerization policies are properly implemented. Container or packaging as the name implies has many users VIS: protecting a product, identification of a product, differentiation of a particular brand for storage purpose est. 

CHAPTER ONE

1.0 INTRODUCTION

1.1 BACKGROUND TO THE STUDY

Containerization in a modern phenomenon in transportation since its emergence, it has swept all the modes of transportation like will fire. Through it, different modes of transportation and transport vehicles can combine with one another in imitating and completing journeys in cargo transportation. Containerization is the use of large metal boxes for packing goods to be transported on long distances in order to facilitate handling and transfer among different vehicles Since its emergence in transportation, containerization port authorities, government and industrialists. 

According to Amanze (1989:24-25) containers help to economies the number of movements and handling required in conveying a given quantity of cargo and ensure they than otherwise. However, the boxes that serve as containers in transportation generally posses’ three unique features, these are: (a) THY ARE STANDARDIZED: They must be of the same size, shape and material so that they can easily be carried by the different vehicles in the different modes of transportation in different countries and contents.

(b) THEY ARE STRONG AND WEATHER PROOF: Transport containers must be strong or tough and weather proof so that can withstand the harsh conditions as the seas and ports and ensure the safety of the goods they are carrying. For this reason, containers are made of steel, aluminum or combination of these and other metals which do not rust easily. (c) THEY ARE LARGE: Container must large so that they can be used to carry bulk materials. Where containers are very small, the amount of trans- shipment handling required would be much, thereby defeating the aim of containerization. However, containers must not be so large to the extent that they cannot fit into the vehicles used for carrying large cargo in the different modes of transportation.

The use of large containers for inland and overseas transportation and distribution of goods began in the early part of the Twentieth century. But in 1926 London Midland and Scottish Railways were the first firms to use containers. After 1956, an American shipping line called sea- land whose original business was road haulage started a containership service between New York and Porto-Rico. According to the American container trade journal in edition (1966:11-12), the main break through in containerization was attained by sea- land in 1965 with the intention to enter the trans- Atlantic trade with containership. This decision seemed to have jotted other shipping lines from slumber.  Nigeria become involved in the containerization revolution in 1968 when the first substantial container vessel landed a with over 100 tones general cargo at the Apapa- wharf part containerization has also made a significant impact on road and railway transportation since August 1980 when inland containers (Nigeria) Ltd, (ICNL) made its trail-blazing relationship from Lagos kano will a single container within ten days.

The process of containerization has been surged over the last several decades, but Nigeria ports and their supporting container distribution networks have struggled to increase capacity to match this expansion. This article seeks to review and organize existing container network capacity literature into a taxonomy based on the interrelated stakeholders of container flows. The artily first establishes the industry capacity influences from stakeholders, including shippers, port authorities, terminal operations, long shore labour, railroads, drayage carries, intermediaries, ocean carries, governments and local communities. The centralized distribution activity receives cargo that must be sorted before transshipment to the (SSA) supply support Activities or owing unit. The majority of cargo will arrive in 20- and -40- foot containers. Single consignee cargo and ammunition will not pass though the centralized distribution activity but will be throughout to the users.

1.2 STAEMENT OF THE PROBLEM

Containerization is very essential and useful in the selling of industrial goods; hence, it is often referred to as the nearest company’s salesman.  There are exiting problem associated with containerization on transports and distribution of industrial goods and services. Expanding system- wide container capacity is extremely difficult.(1) For one container flows involves a series of linked capacity factors driven by different stakeholders such as ports, railroads, truck carriers, and steamship lines. (2) While on the surface the problem appears to be a direct application of Goldrath’s theory of constraints. (3) Container flows may be identified as the drum constraint but their handling involves a series of linked factors controlled by the stakeholders. (4) The further compounding the problems are unpredictable changes in security requirement, terrorist activities military deployment. (5) Up dating if list of authorized person in the organization due to constant movement of staff as a result of promotions, resignation and transfers, formal list of person which are able of request stock and sample signature are very difficult to maintain properly and tend to become out of data very quickly. (6) Non- employment professional in the organization – the staffs employed in the organization have professional who can be highly competent in the execution of the job. This is due to the fact that there are no employees (i.e. professional) who read purchasing and supply management.

1.3 OBJECTIVE OF THE STUDY

It is necessary to look or to identify the social and psychological past in order to appreciate what we are tying to do in the present so as to do better in the future. The study will provide marketing opportunities, challenges and prospects that exist for marketers to improve on their packaging through repeat purchases. The aim of this research survey is to:

(1) To identify the supplier willingness to meet the need of the customers no matter how urgent.

(2) To examiner a verity of option on shipment load carriers.

(3) To examiner maximize customer service while minimizing cost.

(4) To determine safe delivery of merchant dice.

(5) To identify the speed at which orders are treated.

(6) To examine the readiness of the supplier to accept replacement of defective suppliers.

(7) The availability of technical know how in terms of installation and after- sales services from the supplier in Nigerian brewery Enugu.

1.4 RESEARCH QUESTION

The following are the research question which this research work is set out to tackle:

(1) Does a container have any effect on the buying pattern of the industrial users?

(2) What is the role of container will reference to price, quality and quantity?

(3) How does container affect the decision to buy by the users of Nigerian brewery Enugu product?

(4) Does container serves as a competition tool in the marketing of industrial product?

(5) Can container help to maximize profit in the company?

1.5 STAMENT OF HYPOTHESIS

In conducting this research, the following hypothesis will be tested.

(1) Hi: The containerization of a product attracts a buyer.

(2) Ho: The containerization of a product does not attract a buyer.

(3) Ho: The containerization of a product affect consumers buying decision 

(4) Hi: The containerization of a product does not affect consumers buying decision.

1.6 SIGNIFICANTION OF THE STUY

The research study is very significant in that it will be immense benefit to students in the purchasing and supply management department and interested persons in related fields of study and work who are research minded. The research work is indeed very significant and a treasure chest for the research minded students and scholars because of the comprehensive nature of this investigative survey and realistic write up. The study will certainly serve as a dependable reference guide for students in the purchasing and supply management.

It also show how need for effective planning and control can work hand in hand with purchasing section to achieve greater organization efficiency. It is also for the partial fulfillment of the award of higher National Diploma (HND). It is equally significant because it will outline the various needs for the impact of containerization in international purchasing in comparison with other department can be used to improve the overall organization concept. It also gathers towards creating sound need for the impact of containerization in international purchasing in Nigerian Brewery Enugu.  This study is significant because it will increase the body of academic knowledge available as a research study. It is also relevant in the sense that it will serves as reference to future researchers on issues connected with the present research problem.

1.7 SCOPE OF THE STUDY

The activities of purchasing function in industry among the industry are the same throughout the country. The have problems and objective exception policies and management style which are at individual discretions, since the project explores how the need for the impact of containerization in international purchasing improve the level of productivity in the organization.
However, there are a lot of industries in Nigeria and as a result it will be extremely difficult and impossible for the researcher to study all of them considering the time given. I deride to use Nigerian Brewery Enugu to enable me carry on in depth study of the organization.

1.8 LIMITATION OF THE STUDY 

The limitation study include:

(1) Inadequate financial and material resources with which to carry out such an elaborate product.

(2) Inability of the respondent i.e. those interviewed to give the relevant information on the variables under study.

(3) Most importantly insufficient time for through work since the researcher still had to attained lectures for the completion of this course works.

(4) Natural factors hinders this study. The project work disturbed from effects of regular rainfalls and the hot sun which hinders the researcher’s movement in his bid to collect data or information and distribution of questionnaires to respondents. 

(5) Constant power failure by PHCN- due to unsteady hight caused by PHCN, frustrated at might where hight will be steady but at times, PHCN disappoints by taking the hight unexpectedly and thereby putting the researcher into confusion. even some people in the organization do not give a reliable data or information to researchers problem associated with unreliable data or information, poor audience by respondent is a big limitation to this project. 

(6) Time factor – the schedule f academic activities for every final year student in HND’S of the polytechnic is hectic. The researcher needs to attend classes, other course est. These makes the research inability to collect response from many company as he would have intended to do.

1.9 DEFINITION OF TERMS

The definition of terms include;

(1) CONTAINERIZATION: Is an advancement of the concept of unit load. A container in a box with steel framework, a strong floor base, paneled sides and a roof. Containers can equally be classified according to their sizes. We have the (ISO) that is the international standard organization. Standard container of 8x8ft. containers vary with respect to length. The lengths are 10ft, 20ft and 40ft are used to suit a peculiar need.

(2) THE DISTRIBUTION PROCESS: Begins when a supplier receives an order from a customer. The customer is not too concerned with the design of the supplier’s distributive system, nor in any supply problems. 

(3) ORDER PROCESSING: Is the first of the four stages in the logistical process. The efficiency of order processing has a direct effect on lead time. Orders are received from the sales team through the sales department. Many companies establish regular supply performs satisfactorily. Very often contracts are drawn up and repeat orders forming part of the initial contract are made at regular intervals during the contract period. 

(4) INVENTORY: Is a critical area of (international purchasing) because stock levels have a direct effect on levels of service and customer satisfaction. The optimum stock level in a function of the type of market in which the company operates. Few companies can say that they never run out of stock, but if stock- outs happens regularly, their market share will be lost to more efficient competitors. Techniques for determining optimum stock levels are illustrated later in this chapter. The key lies in ascertaining the re- order point.

(5) WAREHOSUING: International marketing texts pay more attrition to warehousing than do local once. This is mainly because of the relatively longer distances involved in distributing internationally, where it can sometimes days, weeks or even months to get to customers. The logistics of warehouse can therefore, be correspondingly more complicated. However, the principles remain the same, and indeed the European Union should be viewed as a large home market, currently, many companies function adequately with their own on- site warehouse from where goods are dispatched direct to customers. 

(6) TRANSPORTATION: Usually represents the greatest distribution cost. it is usually easy to calculate because it can be related directly to weight or numbers of units. Costs must be carefully controlled through the mode of transport selected amongst alternatives, and these must be constantly reviewed. During the past 50 years, sea transport has become the dominant transportation mode in internationally purchasing. The patterns of retailing that have developed, and the pressure caused by coin stock holding and short lead times, have made sea transport indispensable. Where the volume of goods being transported reaches a certain level, some companies purchase their ownership, rather than use the service of cargo contractors. 

(7) REDUCTION IN STEVEDORING COSTS: The use of containers by water vessels for packing cargo has been shown by tenth according to Taff (1984:132)

(8) REDUCTION IN CARGO HANDLING COST: The handling of cargo at ports have been reduced to about one third as a result of the adoption of containerization. This is one of the reasons why Nigerian ports quickly embarked on the construction of special berths for handling container ships when the concept was proposed to them and after they had studied the result of its adoption in other ports.

(9) INTERMODAL CO-OPERATION (COMBINATION): Intermodal cooperation between ship and road vehicles among ships, railway vehicles and vehicles (fishy back) is made possible (and actually resulted) outing after the adoption of containerization by ports and shipping lines.

(10) FASTER INLAND DISTRIBUTION OF SHIPPED CARGO: Containerized shipped cargoes are more easily off- loaded from ships, handled and cleared at ports and takes to inland destinations faster than those that are non containerized 

(11) INCREASED SHIPPING TURN- AROUND TIMES: By facilitating handing cargoes at ports, containerization has greatly helped to increase the turn- around time of ships. When cargo are containerized, ports handling time is reduced to only about one fifth of that required in the loading and off- loading of conventional ship. 

(12) FASTER LOADING AND OFF-LOADING AT TERMINALS: Containerized cargos are normally loaded and off- loaded faster at ports. The use of rollon, rooll off operation makes these even faster.

(13) HIGH VOLUME FLOWS AT PORTS AND BETWEEN PORTS: With a drastic reduction in the time needed for handing containerized cargoes at ports and in increase in the turn- around time of ships, containerization makes possible higher volume of cargoes flow at ports and between ports. 

(14) CARGO SAFTY: When cargoes are containerized, they are not usually opened a transit terminals or when being unloaded. The reduces the tendency of pilferage. Handling of cargoes is minimized and action of weather on it is also reduced when containerized. All these help to enhance the safety of cargoes on transit and at terminals. 

(15) HANDLING OF CARGOES EASIER: The handling of cargoes is minimized and made more convenient when containerized. It becomes easier to automatic handling and makes use of material handing equipment, such as forklift, crane and rollon roll off devices.

(16) INCREASED TURN- AROUND TIMES VECHICLES: The faster handling permitted by containerization helps to quickly free vehicles at terminals and increase other turn- around times. 

(17) ENHANCEMENT OF VEHICULAR SPACE EFFICIENCY: When containers are loaded on a vehicle its cargo space is utilized more efficiently.

(18) FASTER AND CHEAPER INLAND DISTRIBUTION: By reducing the costs and time for handling cargo at terminals and combining the efficiency of different modes of transportation containerization helps to promote faster and chapter inland distribution of goods.

(19) THIN SKINNED CONTAINERS: Are constructed with the sole aim of offering protection against weather and theft they have no insulating effect with regards to temperature control.

(20) INSULATED CONTAINERS: They have no real system of temperature control they are made of thick materials, having some sort of fibre glass or other materials which reduce heat losses and gains thus giving perfect protection to cargoes against unfavorable temperature.

(21) FRIGERATED CONTAINERS: Are controlled with an in built refrigerating system it is used in the carriage of goods or maternal that requires cold temperature while in transit. 

(22) DIFFICULTY IN CARGO INSPECTION: Containerized cargoes are not normally inspected at ports or terminals. They are usually pre-shipment inspected. If pre-shipment inspection had not been properly done, there is the possibility that containers might be used to smuggle illegal goods into a country.

(23) EXTRA BURDEN OF CONTAINERS: Containers are essentially an added burden to transport vehicle and shipping lines. Apart from adding to the load of vehicles when conveying cargoes, empty containers have to be returned for them to be reused. These serves as extra burden to transports and their vehicles.

(24) POSSIBILITY OF ROUGH HANDLING OF CONTAINERS: Dock workers and others engaged in loading and off- loading contains may rough handle them without knowledge of the fragile nature of heir countents. Because of this, some containerized cargoes get damaged before getting into the hands of their owners.

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