Greener Journal of Business and Management Studies

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Greener Journal of  Business and Management Studies  Vol. 5 (1), pp. 001-015, March 2015

 ISSN: 2276-7827 ©  2014 Greener Journals

Research Paper

Manuscript Number: 012914073

DOI: http://doi.org/10.15580/GJBMS.2015.1.012914073

 

The Impact of Bakery Industry Supply Chain on the Pricing of Bread in Zimbabwe

 

*1Clever Vutete, 2Nomagugu Bobo

 

1MBA, BCom Marketing Management, Lecturer, ZOU-Harare Region.

2MBA (NUST), Bachelor of Business Administration, Lecturer, Zou National Centre.

 

*Corresponding Author’s Email: vusabhuku @gmail. com, Tel: 0772 458 026.


Abstract


The paper sets out to carry an exploratory study for improving supply chain activities in an effort to reduce the bread retail price. The price of bread in Zimbabwe is more than that of most African countries such as Zambia, Namibia and Malawi whose prices range from US$0.50 to US$0.75 per loaf of bread. The major problem with the bread industry today is that there seems to be a hiking of raw materials prices, labour and production costs. The major question then is why bread costs 30 cents more in Zimbabwe than in other African countries. Data was collected using100 consumer questionnaires, 100 bakery/retailer and 5 in-depth interviews. Convenience, judgemental, quota and stratified random sampling methods were used to select the respondents. Purchasing side findings were that 59% to 65% of the bakeries stated the shortage of flour in the country as the major cause behind the high price of bread Most of the flour being used by bakeries is import flour. The second purchasing side problem is that of expensive suppliers of flour. Electricity shortages and untimely stoppages of power were sited by 76% of the production side players as the major impediment to the efficient production of bread. Their assertion was that the power cuts led to low production which inturn led to high inefficiencies in the production line. Forty- two percent (42%) of customers said that bread needed improvement in quality issues such as packaging and ingredients used. They agreed that if the quality improved they would pay more for it. The paper therefore concluded that the high price of bread in Zimbabwe as compared to other countries is a result of the use of expensive suppliers along the line coupled with low capacity machinery that has led to lowered output. In the long run the lowered output has resulted in sub-optimal operations in bread factories. The researchers recommended a Government intervention through policy change in terms of reduction in duty and tariffs levels on imported raw materials. Government could also intervene through capital injection into the supply chain. Other recommendations include business to business (B2B) collaboration and partnerships between wheat suppliers, marketing boards, millers, bakeries and retailers. Backward integration and rationalisation of the supplier base by bakeries is likely to lower the price of producing bread and hence its retail price.

 

Keywords: Efficiency, pricing, supply chain.



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