SCHOOL OF BUSINESS SCIENCE AND MANAGEMENT

MASTER OF SCIENCE IN SUPPLY CHAIN MANAGEMENT

TOPIC: Adopting effective fleet management practices contributing to significant

improvement in the operational efficiency of firms in the FMCG sector in Zimbabwe. A
Case of OK Zimbabwe Limited.

NAME: LEOBA TANATSWA GWEKWERERE

REG: C15126284O

EMAIL:[email protected] CELL NO: 0774547015

DISSERTATION Draft of Chapter 1

SUPERVISOR Dr. S. Ruturi

 DECLARATION

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Dissertation
 DEDICATION

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Dissertation
 ACKNOWLEDGEMENTS

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Dissertation
 ABSTRACT

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the whole Dissertation
 TABLE OF CONTENTS

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Contents as you develop each Chapter
 CHAPTER 1

INTRODUCTION TO THE STUDY

Introduction to the Chapter

Effective transport management especially fleet management is an important activity in every

successful organization in the Fast Moving Consumer Good Sector (FMCG). Businesses that
seek to achieve success through operational efficiency must excel in their fleet management
strategies. In today's competitive environment, business must adopt effective and robust
managerial strategies to coordinate resources and enable them to gain competitive advantage.
The quest to enjoy competitive advantage is putting pressure on management to deliver faster
and cheaper through effective fleet management practices that result in lower operating cost
(Gitahi and Ogollah, 2014: Jonson, 2008; Waters, 2009). The thesis states the specific topic,
and often lists the main (controlling) ideas that will be discussed in the main body. This chapter
is going to outline the background of the study, problem statement, study objectives, the
research questions derived from the objectives, statement of the hypothesis, significance of the
study, the study assumptions, delimitations of the study, limitations as well as the chapter
summary.

1.1 Background of the Study

Globally, fleet management is a challenging aspect of most supply chain operations. The need for
fleets has steadily increased in recent years, even during crises and such as; it can even be called
a necessary evil, especially with the increasing speed of industrialization and globalization.
Transportation and logistics play an important role in the global economy and contribute
significantly at the national and local levels in any country. The sector is the foundation of the
economy, allowing for the efficient movement of goods, services and people. The increase in
demand for simultaneous management of fleet operations has exceeded human mental capacity
as advances in vehicle dynamics and design technology increase year by year. Over the past
decades, firms have faced unprecedented changes such as globalization and internationalism, the
rapid advancement of information technology chan and peel(1998), higher value of completion
Car (2000), increased availability and flexibility of product/service Ahmad and Schoeder, (2001)
as well as greater internal and external customer's needs (Marjanovic, 2000).

Source: Goggle Play store (2023)

Fig 1.1: Growth of Fleet Management Solutions

From the diagram above it is shown that there is an increase in the growth of fleet management
solutions from 2021 to 2028. This growth in fleet management solutions can be attributed by fast
changing in technological advancement, increased fleet safety concerns, increased demand due
to the e-commerce boom and focus on improving customer service, streamlining compliance,
maximizing vehicle utilization and assets as well as improve energy efficiency.

The fleet management services market is showing strong growth and maturity. This trend is
expected to continue in the coming years for the following reasons: It meets the essential needs
of consumers: Advanced fleet management capabilities have been shown to improve customer
satisfaction. Customers often request real-time shipment status updates. Therefore, what used to
be a tool to differentiate a brand from its competitors has now become a necessity? Improved
communication: Team management software enables seamless communication between different
stakeholders, helping to foster initiative among team members. This in turn improves
productivity and customer satisfaction. Offers cost reduction opportunities: large volumes of data
collected can be analyzed to provide insights into cost optimization, better fleet navigation, more
efficient management of distributed resources, and business decision making better overall.

Improve efficiency: As the saying goes, Supply chain transparency can reveal areas where
resources are being underutilized and where corrective action can be taken. Faster Deployment:
Fleet management solutions take an average of 3 to 6 months to deploy, making them relatively
faster and less resource intensive.

In developed countries like Italy, large logistics companies have invested heavily in information
and communication technology (ICT) and are actively developing information systems and
applications. The truck is equipped with computer software that diagnoses and performs routine
readings of various truck systems. This is primarily motor-focused, but Onboard Diagnostics-II
(OBD) includes sensors for the frame, and hour for critical condition. VST also includes
Electronic Stability Control (ESC) systems that help avoid accidents by significantly reducing
the risk of your vehicle skidding during unexpected emergency moves, such as avoidance
obstacles ahead of you. ESC identifies this risk early and stabilizes the vehicle by braking each
wheel, thus preventing vehicle accidents that could damage goods in the supply chain. Effective
transportation management is a key activity in any successful organization in the logistics
industry and for that matter fleet management. Companies intending to excel in their fleet
management practices in today's competitive market must adopt strong and effective
management strategies to coordinate resources to facilitate for their success and enable them to
gain a competitive advantage. As a result, the search for a competitive advantage has put
pressure on management to provide faster and cheaper fleet management services, leading to
reduced operating costs through better planning. better (Gitahi and Ogollah, 2014: Johnson,
2008; Water, 2009).

Fleet management in Cameroon is not in any way different form the global perspective as it
manifests numerous inefficiencies as well which are of significant impact in the local supply
chains. Research conducted by James and Alfred (2014) revealed that there is poor fleet
management in manufacturing and transport companies where transport and logistics was viewed
as an area in which cost appear out of line with the benefits and services accruing to the
customers. It was from this perspective therefore that the government of Cameroon deemed the
issue of promotion of international and national trade to be the objective in the national interest,
and sought to advance shipments of agricultural and wood products as the country's key
commodities. However, a major obstacle to these goals is the lack of suitable delivery systems
(Gorge, 2013). From this point of view, the issue of road improvement is very important. Retail
across the Global Village operates in volatile business an environment characterized by intense
competition to be able to do gaining competitive advantage in this environment requires fleet
management Strategies for improving logistics management (Smith and Judith, 2017). Navy
management means the management of cars, vans, trucks and goods. Logistics management is an
important aspect of supply chain management as it achieves efficient forward and reverse flow,
goods warehousing and critical functions. Logistics management provide relevant information
derived from origin and place of consumption to meet customer needs (Lyton, 2018).

Fleet management contributes to improved logistics management by implementing various

strategies including exchange planning, energy efficiency, improving mutual cooperation,
etc. Fleet management is also being handed over to retailers in Africa to improve logistics
management of retailers like Choppies, OK, Spar and Shoprite. These African retail outlets stand
to benefit from fleet management software in areas such as vehicle tracking and route
management. Improving logistics management in the African retail sector for better fleet
management reduced fleet downtime by 60% and improved delivery schedules by 70%. Fleet
management has proven to be an effective guide to logistics management (Washington and
Keller, 2016).

1.2.1 Background of OK Zimbabwe Limited (OKZL) and Its Challenges

OK Zimbabwe Limited is a leading supermarket retailer listed on the Zimbabwe Stock

Exchange. OK's business includes three main categories, including groceries, basic clothing,
textiles and home appliances. Sales volume increased 22.7% over the previous year. In inflation-
adjusted terms, revenue for the year increased 34.7% to ZWL$79.9 billion from ZWL$59.3
billion the previous year. Pre-tax profit of ZWL4.8 billion was 38.5% higher than the previous
year's ZWL3.5 billion, while profit after tax increased by 48.9% to ZWL$2.8 billion from
ZWL$1.9 billion last year. According to financial reports released by OK Zimbabwe Limited
(2021), the delivery of gods has been increased to improve distribution to outlets from the central
warehouse, while information technology equipment replacement and enhancement is under way
to ensure a reliable network for the trade and systems to manage business information.
According to a snap survey conducted by industry’s representative body Confederation of
Zimbabwe Industries (CZI) in 2022, OK Zimbabwe Limited (OKLZ) have not had it easy as
supply chains were disrupted. Apparently,

1.2.2 Fleet Management Challenges Faced by OK Zimbabwe Limited

This section highlights the growing number of fleeting management Challenges faced by OK
Zimbabwe Limited and these are articulated as follows:

1.2.2.1 Declining customer satisfaction levels

Ok Zimbabwe Limited has witnessed a decrease in customer satisfaction

1.2.2.2 Delays in deliveries due to longer lead times

A 56% annual increase in fleet downtime making an award and placement of an order, the
delivery time and the duration of time between receipting and actual payment), increase in
operational costs due to the type of maintenance policy (corrective maintenance) put in place.
Vehicle repair and maintenance is done only when there is breakdown hence leading to poor
supply chain performance.

It is against this background that there is need to research on the impact of fleet management on
supply chain performance of retail shops in Zimbabwe, the case of OK Limited.

1.3 Statement of the Problem

The overall problem investigated in this study, is that, despite a litany of exhibits pointing to
ineffective fleet management practices, undermining the overall operational efficiency of OK
Zimbabwe Limited during the last three years, little has been done to investigate alternative
practices that could be used to reverse the negative trends. The foregoing background of the
study highlights a wide range of problem elements such as; delays in deliveries due to longer
lead times, a 56% annual increase in fleet downtime, failure to replace motor vehicle fleet on
time - after its useful economic life, the use of old and worn-out vehicle parts during the regular
motor vehicle servicing, absence of a clear fleet repair and maintenance policy, failure to provide
regular driver refresher-courses as well as driver safety training courses which lead to persistent
stock-outs and declining levels of employee and customer satisfaction. The situation further
exacerbated by the absence of an effective fleet management software. In the past three years
several interventions aimed at addressing this problem have been utilized, but the situation has
not abated. If the problem elements raised in the background of the study are not addressed with
the urgency they deserve and their effects reversed, it will lead to some serious social and
economic tragedies. Furthermore, the proposed vision of turning around the fortunes of the
OKZL and making it regionally competitive again, will become foreclosed. Therefore, it is in
this context that the researcher conducted a study to investigate effective fleet management
practices that can contribute to improved operational performance of firms in the FMCG sector
with specific reference to OK Zimbabwe Limited.

1.4 Research Objectives

1.4.1 To determine whether the deployment of an effective fleet repair and maintenance policy
can lead to a significant improvement in the operational performance of firms in the
FMCG sector.

1.4.2 To assess whether the implementation of a fuel management systems can significantly
contribute towards improved operational performance of firms in the FMCG sector

1.4.3 To determine whether the use of an automated vehicle tracking system significantly
contribute towards improved operational performance of firms in the FMCG sector

1.4.4 To evaluate whether the use of driver management programmes can significantly
contribution towards improved performance of firms in the FMCG sector.

1.4.5 To establish the key performance benchmarks of fleet management that are used to
measure improvements in the operational efficiency of firms in the FMCG sector.

1.5 Research Questions

1.5.1 Does the deployment of an effective fleet repair and maintenance policy lead to a
significant improvement in the operational performance of firms in the FMCG sector?

1.5.2 How does the use of an automated vehicle tracking system contribute towards improved
operational performance of firms in the FMCG sector?
1.5.3 How does the use of an automated vehicle tracking system contribute towards improved
operational performance of firms in the FMCG sector?

1.5.4 How does the use of driver management programmes contribute towards improved
performance of firms in the FMCG sector?

1.5.5 What key performance benchmarks of fleet management can be established to measure
improvements in the operational efficiency of firms in the FMCG sector?

1.6 Research Hypotheses

1.6.1 Main Research Hypothesis
Adopting effective fleet management practices contributing to significant improvement in the
operational efficiency of firms in the FMCG sector.

1.6.2 Specific Research Hypotheses

Create Specific Hypotheses following the example given below

H1: Effective fleet repair and maintenance policy contributes significantly towards improved
operational efficiency of FMCG retail sector.

H2: Implementation of a fuel management systems significantly contribute towards improved

operational performance of firms in the FMCG sector.
H3: Automated vehicle tracking system contribute towards improved operational performance
of firms in the FMCG sector.

H4: Driver management programmes contribute towards improved performance of firms in the
FMCG sector.

H5:

1.7 Assumptions of the study

The research is based on a number of assumptions but however the most important which are
worth mentioning are listed below:

- Data collected was accurate, complete, relevant and reliable.

- SPSS package system gives a true reflection of the practical situation the study tries to
explore.

1.8 Significance of the Study

1.8.1 Theoretical

Currently there is a serious shortage of extant literature and research methodologies to inform
academia, students, and the research fraternity on effective fleet management strategies that
could be used to eliminate the challenges and improve the performance of firms in the Fast-
Moving Consumer Goods (FMCG) sector in Zimbabwe. Therefore, this researcher sought to
build a new and instructive body of knowledge as well as developing appropriate research
methodologies and statistical tests that could be used at institutions of higher learning when
undertaking similar studies on fleet management in the FMCG sector.

1.8.2 To the organization

Research is important for an organization to remain competitive in the market. This, will also
open doors to form new business units by finding new geographical locations that will prove
favorable in terms of increasing sales figures of the company. Zimbabwe retail sector can use the
investigation to come up with plans to use corporate governance indicators as a tool to improve
their material well-being of the society and workplace at large. The company can adopt some of
the recommendations suggested by this study to be as a tool to growth and development of the
area.

1.8.3 To the industry

Conducting a very detailed and intense industry analysis can provide valuation analysts with
specific knowledge needed to determine an appropriate conclusion of value. As a general rule, a
company's performance is commensurate with the industry to which it belongs. Thus, in fact
asking questions and researching answers or recommendations will be essential for making
major business decisions thereby leading to the expansion of the industrial sector in the economy
considering the fast rate of technological changes (digitization), since they have the potential to
contribute significantly 12.5% to the country's GDP according to statistics released by RBZ
(2022).

1.8.4 To Policy Makers

Policy makers and practitioners use researches in various ways, including instrumental,
conceptual, political, imposed, and process uses. Increased knowledge of these nuances should
enable researchers to produce more useful work and better engage with various stakeholders
during business breakfast meetings and dialogues. By generating new concerns for the policy
agenda, guiding decisions regarding policy content and direction, and assessing the effects of
policy, research evidence can help the health policy process.

1.9 Delimitation of the Study

 This research focuses on the effects of fleet management on supply chain performance of
the supermarket retail organizations. The researcher’s focus was based on information
extracted from the FMCG retail companies listed on the Zimbabwe Stock Exchange.

1.10 Limitations of the study

The researcher encountered the following limitations:

 The research had time constraints to complete the study within a period of five months within
which to complete the study.
 The study focused on the performance of Supermarket retail firms, with specific reference to
the operational performance of OKZL during the last 6 years.

 Finance has always been known to be a major constraint when it comes to many things
and the investigator is likely to be constrained by this since there is going to be a lot
travelling, printing, and telephoning. The investigator will be aided in his research with
internet to minimize costs taking advantage of the available Wi-Fi to send emails as well
as accessing secondary Data.
It may prove very difficult to access information pertaining to future strategies like competition
strategies as well as financial plans due to their confidentiality however the investigator is going
to try to get as much relevant information t as possible and use their time during work related
learning within the organization to his advantage.

1.11 Structure of the Dissertation

This research includes of five chapters:

 Chapter 1 – Introduction
 Chapter 2 – Literature Review and Theoretical Framework
 Chapter 3 – Research Methodology
 Chapter 4 – Findings and Discussion
 Chapter 5 – Conclusion and Recommendations
In Chapter 1, the research’s background, motivation, aim, scope, and significance will be
discussed.

Chapter 2 validates the necessity of the research by reviewing previous research. Various
studies will be reviewed to find out what has been done and what has not been done, and from
there, a research gap will be identified. Also in this chapter, the author will discuss the theoretical
framework on which this study is built and the conceptual framework that describes the
mechanism of the research.
 Based on the theoretical framework and conceptual framework set up in Chapter 2, Chapter
3 discusses the suitable research methodology and research design to achieve the aim stated in
Chapter 1. In this chapter, the sampling method, questionnaire design and running, as well as data
collection and analysis methods, will be introduced.

Chapter 4 presents the results of data analysis, how these results support or disprove the
hypotheses stated in Chapter 2, and the discussion about these results.

In Chapter 5, some recommendations and implications will be provided based on the

discussion in Chapter 4. The conclusion, some evaluation of the study, limitations, and suggestions
for future research will also be included in this last chapter.
 CHAPTER 2
LITERATURE REVIEW

2.1 Introduction

This chapter provides a critical review of extant literature on the effective fleet management
practices which firms in the Fast-Moving Consumer Goods could use to improve
operational efficiency. The Chapter begins with explanation of the on the development of
the theoretical foundations and conceptual frameworks. The literature reviewed has been
carefully delineated from the research objectives state in Chapter 1 from where five key
thematic areas have been developed. Each thematic area ends with a conceptual
framework used to test the hypotheses through a review of the literature. The first key
concept focuses on the deployment of an effective repairs and maintenance policy,
followed by Effective fleet repair and maintenance policy contributes significantly
towards improved operational efficiency of FMCG retail sector, Implementation of a fuel
management systems significantly contribute towards improved operational performance
of firms in the FMCG sector, Automated vehicle tracking system contribute towards
improved operational performance of firms in the FMCG sector, Driver management
programmes contribute towards improved performance of firms in the FMCG sector and
ends with a chapter summary and conclusion.

2.2 Theoretical Foundations and Conceptual Framework

2.3 Deployment of effective fleet repair and maintenance policy to improve operational
performance of firms in the FMCG sector.

It is typical for operational aims, strategy, and performance measurements to be at odds with the
stated overall business strategy when it comes to the formulation of maintenance objectives and
key performance indicators (KPIs) (Phase 1) (Gelders et al., 1994). The balanced scorecard, or
BSC, can help to prevent this undesirable condition (Kaplan and Norton, 1992). The BSC is
unique to the organization for which it was designed and permits the development of KPIs to
gauge the effectiveness of maintenance management in line with the strategic goals of the
company.

Fig 2.1: Maintenance Management Model

2.3.1 Unscheduled repairs for fleet vehicles

Because of the delays in the production and delivery of new replacement vehicles, fleets are
keeping their units in service for longer periods of time. Due to the scarcity of replacement units,
fleets are now more inclined to spend money on expensive repairs, such as replacing drivetrain
components. In addition, there has been a decline in the supply of parts and labor and an increase
in their pricing. D Jewell (2021) All of these elements have contributed to an increase in repair
costs, as has the usage of vehicles.

2.3.2 Scheduled maintenance support

The methodical actions aimed at improving and carrying out maintenance are known as
maintenance practices. In order to keep an organization competitive and productive, maintenance
is essential. It mostly depends on the goals, output, organizational structure, and internal and
external limitations that the organization must operate under. These allow for the identification of
different components and facets of maintenance procedures. It is feasible to determine an
organization's performance in comparison to other comparable organizations by analyzing its
maintenance methods. A clear framework for identifying and assessing maintenance practices
does not exist.

2.3.3 Preventive maintenance

The proactive, normal, and periodic maintenance of automobiles, machinery, and other company
assets is known as preventive maintenance, or PM. Maintaining assets in optimal condition,
optimizing availability, and averting costly, unexpected breakdowns and ensuing downtimes are
the goals. While their assets and cars are still in good working order, fleet managers carry out
preventative maintenance. Scheduled maintenance, car inspections, repairs, lubrication, cleaning,
adjustments, part replacement, and testing are examples of PM activities.

2.3.4 Vehicle replacement cycles

2.3.5 Data Collection

2.3.5.1 collecting data about the work needed

2.3.5.2 collecting data about the date of maintenance
2.3.5.3 collecting data about parts required and source
2.3.5.4 collecting data about the cost of parts
2.3.5.5 collecting data about labor costs
2.4 Conceptual framework on effective fleet repair and maintenance policy to improve
operational performance of firms in the FMCG sector.
2.5 Contribution of fuel management systems towards improved operational performance
of firms in the FMCG sector
2.6 Contribution of automated vehicle tracking system towards improved operational
performance of firms in the FMCG sector
2.7 Contribution of driver management and training programmes towards improved
performance of firms in the FMCG sector.
2.8 Establishing the key performance benchmarks in fleet management that measure
improvements in the operational efficiency of firms in the FMCG sector.
2.9 Empirical Evidence on Fleet Management Practices and their impact on Operational
Efficiency of Firms in the FMCG retail Sector
2.9.1 Sainsbury UK

2.9.2 TESCO UK

2.9.3 SHOPRITE South Africa

2.10 Overall Conceptual Framework on Effectiveness Fleet management Practices ob

Operational Efficiency of FMCG retail Sector.

2.11 Chapter Summary and Conclusion