CHAPTER ONE

1.1 Background of the Study

A fundamental objective of all organizations that interact with the outside world is customer satisfaction. In other words, reaching out to the consumer population is a basis for the sustenance of a great number of organizations. Manufacturing organization must sell their product, service providing organizations must reach out to a reasonable number of customers of clients if they must exist. Supply chain which is a network of facilities and distribution options that performs the functions of procurements of materials transformation of these materials into intermediate and finished products, and distribution of these finished product to customers should not been taken for granted. However, the question of vertical communication between the product and the consumer has, until recently been taken granted in the light of availability and need, and this led to inadequate planning of resources vital to the provision of the necessary amounts of goods and services.

Though production and resource planning is vital of customer satisfaction, direct communication is still primary sustenance of any organization. This producer-customer communication has been achieved through supply of goods and services. Therefore, any organization, whether in the manufacturing of service industry, should maintain an effective supply chain management system.

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