Impact of Just-in-time inventory on supply chain efficiency in Mozambique's Fast Food Sector

An investigation into the impact of
Just-in-time inventory on improving
supply chain efficiency: A case of
Mozambique's Fast Food Sector
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Contents
1. Introduction..................................................................................................................................3
2. Background..................................................................................................................................4
3. Research Problem........................................................................................................................5
4. Aim of the study...........................................................................................................................6
5. Research Objectives.....................................................................................................................6
6. Research Questions......................................................................................................................7
7. Significance of the study..............................................................................................................7
8. Literature review..........................................................................................................................9
What are the challenges of the just in time inventory for KFC within Mozambique's Fast Food
Sector?.........................................................................................................................................9
What is the impact of the just in time inventory on supply chain efficiency?...........................11
What is the intervention that can improve just-in-time inventory and supply chain efficiency of
KFC within Mozambique's Fast Food Sector?..........................................................................13
9. Research design and methodology.............................................................................................15
9.1 Research Methodology........................................................................................................16
9.2 Sampling strategy................................................................................................................16
9.3 Data collection instruments:................................................................................................17
9.4 Data analysis........................................................................................................................19
9.5 Pilot study............................................................................................................................19
10. Ethical Considerations.............................................................................................................20
11. Chapter Organisations..............................................................................................................20
12. Proposed Timetable.................................................................................................................21
REFERENCES..............................................................................................................................24
Appendix........................................................................................................................................27
Questionnaire.............................................................................................................................27
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1. Introduction
Just-in-time inventory refers as an effective strategy of decreasing waste and increasing
efficiency by receiving goods only as they are required within production process, thereby
decreasing inventory costs. In addition, JIT is an effective tool of inventory management and
type of lean methodology that is design to enhance efficiency, cut costs and reduce wastage by
receiving products only as they are required (Banerjee and Mishra, 2017). Therefore, just-in-time
inventory is an essential manufacturing process that helps an organisation in fulfilment of
customer’s need without wasting any time and cost. Just-in-time approach has the capacity or
facility, when sufficiently applied to the company, to enhance the competitiveness of business in
the marketplace extensively by reducing wastes and improving production efficiency as well as
the product quality. One of the main objectives of JIT inventory in the organisation is to reduce
any type of wastage such as inventory waste, waste of time, waste from product defects,
transportation waste, waste from over production and processing waste. These are main wastage
that has negative impact over business performance of company.
This dissertation proposal is based on Mozambique's Fast Food Sector that supplies catering
services or facilities on the fast turnover basis. This sector comprises chicken, hamburger, pizza
and many other food outlets, pastry and ice-cream shops, coffee, ethnic food shops as well as
home delivery facilities for some of these. For this, KFC is a given company that works under
Mozambique's fast food sector. KFC is an American fast food restaurant chain that is mainly
specialise in fried chicken. It was founded by Harland Sanders in 1952 and headquartered in
Louisville, Kentucky. Company use Just-in-time inventory that has both positive and negative
effects on supply chain efficiency (De Steur and et. al., 2016). In positive way, JIT inventory
helps KFC by lowering inventory holding cost, improving cash flow and eliminating risk of
overproduction. This will also helps in improving higher customer satisfaction due to continuous
communication with the potential and target customers. In negative manner, just-in-time
inventory creates issues in order fulfilment, transportation costs would be comparatively high,
changes are quit high etc. Therefore JIT inventory has effect on supply chain efficiency of
company. Main purpose of this research is to identify the importance of just-in-time inventory in
improving supply chain efficiency within Mozambique's Fast Food Sector.
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2. Background
Supply chain network of an organisation include the activities related to ascertainment of
raw materials from suppliers and delivering of the final product to end consumers for their
consumption. Its efficiency has large number of benefits for an organisation like customer
satisfaction, meeting market demands and no blockage of cost in inventory, less production cost
etc. In relation of to the organisations of fast food sector, its management is important because
business function requires daily need of fresh raw materials. A supply chain introduces as an
effective network between an organisation and its suppliers in order to produce as well as
distribute a particular goods to the final customers (Filippini and Forza, 2016). This network
includes various numbers of activities, entities, people, information, resources etc. There are
some examples of supply chain activities that will be require by KFC for improving efficiency
and effectiveness. These examples are faming, refining, design, producing, manufacturing,
packaging and transportation. All these are effective for an organisation in improvement of
efficiency in its supply chain. Just-In-Time is an extremely easy idea but one that is important in
contemporary supply chain management. Just-in-time sets out to decrease costs by decreasing
the amount of products and materials an organisation holds in stock. Just-in-time involves,
producing as well as delivering finished goods to the end users. Therefore, Just-in-time inventory
impacts in improving of supply chain efficiency.
Kentucky Fried Chicken or KFC is the second one biggest global fast-food chain subsequent
to McDonald’s. This American fast food chain, specialising in fried hen, opened its first
franchise in 1952 at Utah, and due to the fact that then has opened over 21,000 franchises in 123
nations internationally (History of KFC Corporation, 2020). In a marketplace monopolised by
way of hamburgers because the most effective rapid meals of desire, Colonel Harland Sanders
changed into an entrepreneur who delivered innovation and variety to the quick grocery store
with fried chicken, and branding himself as ‘Colonel Sanders’, he speedy rose to emerge as one
of the most acknowledged discern in American history.
Supply chain management is main aspects for an organisation in ensuring that a business
runs successfully and smoothly. Unless each and every face of the supply chain is more strong
and functioning or performing at its optimal stage of performance a manufacturing organisation
cannot work at its complete potential. As of boosting customer satisfaction level to reducing
operating costs, efficient supply chain management system goes an extended way in maximising
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the bottom line and customer base also. But it is also essential to remain the correct balance
between entire components, for example: KFC in the United Kingdom, the emphasis on reducing
costs broken up within disrupting the punctual time of delivery the chicken, causing loss of
profits as well as perception of customers towards brand (Ghadge and et. al., 2018).
3. Research Problem
The main problem researched here is related to the impact of supply chain inefficiency over
the functioning of daily operations within fast food businesses. The number of aspects or
problems focused includes impact upon cost of production, ability to meet customer demand and
preferences, profit margins and working capital requirements. For KFC to remain competitive
within the international marketplace, incessant supply chain enhancement and supply chain
efficiency are needed. Changing a system of supply chain management takes maximum time,
financial investment and human resources also. It is a main issue that are faced by most of the
organisation in their business operations due to poor supply chain management system. If
organisations not implement supply chain system properly, there will be service redundancy,
wasted labour and missed deadlines that output in significant costs (Godinho Filho, Ganga and
Gunasekaran, 2016). Along with this, integrating a new management system into a supply chain
working is complex as well as repeatedly needs restructuring or team-member training. Supply
chain management process must include detailed planning, effective communication, or it could
output in expensively mistakes and too much employee turnover. Therefore, ineffective or poor
supply chain management has negative impact which creates biggest issue for an organisation in
improvement of its business operations.
An organisation should be hyper emphasised on decreasing wastage to make cost savings as
well as decrease risk in their supply chain. On the other hand, many enterprises approach this
activity from a perspective that doesn’t make sustainable outputs and may even create
unintended consequences or costs. As an organisation develops organically and pivots some
strategy in explore of profit centres, its supply chain efficiency will often reflect this. While this
type of strategy is essential to the growth and success of KFC, it locks inefficiencies and
ineffectiveness into the supply chain as it favours speed on efficiency. On the other hand, as an
organisation stabilizes and scales, these inefficiencies turn out to be significant disadvantages, as
well as it takes more than incremental transform to remove them. Therefore supply chain
inefficiency is a main issue that have negative impact over business growth and success of
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company. Along with this, there is requirement for improving supply chain efficiency. For this,
there are different methods that will be used by KFC for enhancing efficiency of its supply chain.
These ways are imaging a new supply chain, partner with current suppliers, collaborate with
internal operations, and drive large scale efficiency with suppliers. Therefore all these are more
effective and essential ways for improving supply chain efficiency. This turn to help KFC by
increasing its sales and maximising number of customers within lesser time period (Jardini, El
Kyal and Amri, 2016).
4. Aim of the study
Research aim is important and essential part of the research because it will support
researcher in conducting of full dissertation systematically. Thos part of the dissertation express
the aspiration and intention of the research project (Lii and Kuo, 2016). Research aim
summarises in a single sentence that will be clear and understandable. Along with this, aim of the
research helps researcher in doing of research effectively. There are main aim of this research
which are shown as below:
Main aim of this research is “An investigation into the impact of Just-in-time inventory on
improving supply chain efficiency of an organisation: A case of KFC within Mozambique's Fast
Food Sector.
5. Research Objectives
Research objectives are considering main part of the dissertation because it will help in
completion of full project effectively. Research objectives are based on two variables which are
dependent and independent. Both variables are important in completion of research
systematically and effectively (Lorenc and Szkoda, 2015). According to the research aim or title,
improvement of supply chain efficiency is a dependent variable that is completely depends on
Just-in-time inventory. Therefore, both variables are essential for conducting this research.
According to the dependent and independent variables, some valuable objectives will be
prepared. These objectives are shown as below:
 To determine the challenges of the just in time inventory in Mozambique's Fast Food Sector.
 To examine the impact of the just in time inventory on supply chain efficiency.
 To recommend an intervention that can improve just-in-time inventory and supply chain
efficiency in Mozambique's Fast Food Sector.
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