Transportation Management and Economic Performance of Selected
Textile Firms in Lagos State
ADEDUGBA ADEBAYO T.1, ASIKHIA OLALEKAN1, INEGBEDION DANIEL1,
OGUNNIAKE OLALEKE2
1Department of Business Administration, Caleb University, Ikorodu, Lagos State,
NIGERIA
2Department of Business Management, Covenant University, Ota, Ogun State,
NIGERIA
Abstract: The study aims to examine the effect of transportation management on economic performance in
selected textile firms. The reason for this is the sustenance bottleneck such as low-profit margin which is due to
poor transportation management and optimization in the textile firms. The study population consisted of
fifteen(15) textile firms in Lagos State. Given this, the study utilized the purposive technique and total
enumeration model to infer specific information from a selected population. The study was conducted in 2021
targeting transportation and logistics employees. The study questionnaires were distributed to the transportation
and logistics managers working in these companies. Consequently, 550(five hundred and fifty) questionnaires
were administered however, four hundred and ninety(490) were valid for analysis. The study utilized partial
least square(PLS) statistical model to examine the information harvested. The findings show that transportation
management has an appreciable effect on economic performance. Furthermore, a synergy exists between
transportation management and economic performance at 0.58 which shows a strong connection. Therefore,
textile firms with an optimal mix of transportation proficiency can lead to maximum economic performance
such as profitability.
Keywords: Transportation Management; Logistics; Economic Performance; Textile firms
Received: April 30, 2022. Revised: July 6, 2022. Accepted: August 8, 2022. Available online: September 7, 2022.
1 Introduction
Transportation is a strategic function in any
production network that furnish 40–60% of logistics
operational costs. Decisions in the context of
transportation management are firmly examined by
managers searching for the most economical
conveyance alternatives. This decision considers
minimizing the cost of production network and the
cost of completed items. The implication of this is
maximum returns and incentives for entrepreneurs
i.e investors. This demonstrates the criticality of the
economic optimality approach to transportation and
the adherence of different echelons in a production
chain. Transportation is not just a channel of
movement but a mechanism for industry and
economic advancement.Transportation management
assumes an essential part in the optimization of
production in any business [18]. Given this, present-
day transportation mode decisions, for example,
land transportation, air transportation, and high-
velocity rail routes have an interchanging course,
consequently adding accessibility that will boost
economic opportunities for textile firms in Lagos
State, Nigeria.Transportation is therefore a
significant supporting echelon for production, local,
metropolitan, economic, and social development
[15].Subsequently, it is critical to address the
accessibility of transportation operations, making it
a vital component of economic outcomes.
Transportation can effectively optimize the
progression of multiple variables of production and
profitability in the textile industry. This helps to
determine the layout and improvement of various
businesses[1].Nations in various phases of
development have different requests for
transportation on land.Nations in the later and center
phases of industrialization have increased populace
agglomeration and economic outcomes[34].In
contrast, for under-developing nations like Nigeria
in the beginning phase of industrialization and
development, the fundamental supply mode of
transportation is land. Therefore, transportation
operations are characterized by phased demand, this
implies that the request and the sort of product at
various formative stages are essentially unique [23]
; [2]. The satisfaction of requests enhances
economic performance, industrialization, and other
variables[29]. Thus, numerous textile firms have
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DOI: 10.37394/23207.2023.20.1
Adedugba Adebayo T., Asikhia Olalekan,
Inegbedion Daniel, Ogunniake Olaleke
E-ISSN: 2224-2899
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different transportation models to address the
challenges of economic performance such as
profitability. According to [22] transportation
management entails the following indicators such as
fleet management system, fuel management system,
vehicle scheduling, tracking system, disposal policy,
and route planning. Studies have shown that
effective transportation management enhances
economic performance[10] ; [26]. The complexity
of the textile logistics chain is informed by the fact
that it is a sector that is fragmented and
heterogeneous. Extant studies stated that textile
firms have not incorporated vehicle scheduling,
universal positioning satellite tracking framework,
route planning, and optimization as a mechanism of
sustainability in the textile industry in Lagos State,
Nigeria. Moreover, it is argued that the key to the
development of the textile industry is sustainability.
Industry analysis further revealed that poor
transportation efficiency and management was one
of the factors that led to the collapse of textile firms
in Nigeria such as the Kaduna textile industry [25].
As a result of this lacuna one major sustenance
problem that the textile industry is facing is
economic performance such as lean profits and
sometimes loss due to poor operational efficiency.
According to [21] the textile industry is faced with
the challenge of poor fleet/vehicle management
systems such as tyre maintenance which needs
constant replacement and other engine parts that are
poorly maintained. It is on this premise that the
study seeks to examine the effect of transportation
management on economic performance and its
relationship. In the context of demand for
transportation routes, economic growth was
measured in different works of literature. However,
the connection between the variable of
transportation management and economic
performance has been given little consideration?
The satisfactory approach to examine the effect and
connection between transportation management and
economic performance? Therefore, this research
adds to the understanding of the connection between
transportation management and economic
performance by deciding the variables that mirror
the consequences of transportation on economic
outcomes utilizing empirical paradigms.
2 Literature Review
In this segment transportation management is
explained; fleet management system, fuel
management system, route planning, tracking
system, disposal policy, and vehicle scheduling.
2.1. Fleet Management System and Tracking
System
[8] elucidated that fleet management allows
organizations that rely on transportation in business
to minimize the risks associated with vehicle
venture, proficiency, efficiency, and transportation
cost. These capacities can be managed by an in-
house fleet department or an external firm. The fleet
handling strategy aims at reducing fuel consumption
and improving fuel-efficient operations and in doing
so the vehicle minimizes fuel utilization, cost and
improves security [4]. Fleet frameworks according
to [24] regulate, organize, and work with different
vehicle-related procedures that cover vehicles
associated with the progression of products. [32]
reaffirmed the concept of fleet management as a key
to the development of an organization. For some
organizations, fleet coordination is a fundamental
activity in the transportation chain. [7] asserted that
a tracking framework incorporates an automated
gadget and programming at an operational base to
find the position, timing, and versatility of a vehicle.
It utilizes a universal positioning satellite alongside
a global system for mobile communication to
determine the vehicle status in terms of time.[12]
stated that a vehicle tracking system is utilized by
fleet management for tracking vehicles.[5] also
posited that the vehicle tracking framework entails
tracking and security.Therefore, vehicle
management and metropolitan vehicle business
utilize a fleet framework for various purposes such
as schedule of transport and locations.
2.2 Fuel Management System and Routing
Planning
A fuel management framework is fundamental
within any organization in other to reduce theft. [19]
further explicated that fuel consumption reduction is
a strategy in fuel management systems because of
long operational periods. The reason behind control
frameworks in vehicle allocation and fuel utilization
makes it a successful methodology for minimizing
energy utilization.[27] described fuel management
system as a monitoring framework that takes data on
real-time bases through a sensor, wherein the
information is accessed from any place utilizing a
web application. Subsequently, a programmed or
dynamic fuel estimating framework at a retail cost is
amended daily in line with changes in global costs.
Programmed fuel estimation makes the fixation of
costs more straightforward and coherent since fuel
value assumes an essential part in economic
performance. The study by [14] researched the
effect of cost smoothing on purchasers' behaviour
and attempted to figure out the effect of
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Adedugba Adebayo T., Asikhia Olalekan,
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programmed fuel estimation on purchasers'
behaviour.The outcome indicated that purchasers
were positive towards a daily update of costs and
accepted that daily cost correction was transparent
in fuel cost and scaled-down fuel cost.Route
planning is utilized to decide the course to take at
the beginning of a trip.The yield of route planning
estimation is the path to take, which selects every
road and intersection to take from an optimal point
to the demand location.[28] described the
complexity of route planning, customer
expectations, and budget planning to be crucial in
decision making and business income.There are
several benefits of route planning according to [3]
and this includes cost optimality and control.
2.3 Disposal Policy and Vehicle Scheduling
[16] highlighted the aim of disposal and renewing
policy to the end that they are sold as soon as
possible at a maximal cost. An arrangement for
removal and redesign of vehicles should involve the
re-establishment, picking of channels, picking of
providers, and identifying the opportunity to sell the
vehicles at an optimal price.[6] described the
replacement of an asset as an enormous investment
therefore, this necessitates the drive to extend the
lifetime of assets through repair and maintenance.
Another variable of transportation management is
vehicle schedule which deals with the allotment of
vehicles from the beginning to the arrival time in
other to minimize operational costs [11].[17]
described vehicle scheduling as a planned schedule
to shift, as opposed to a fixed plan. The fleet
depends on timetable trips that minimize operational
costs by planning the vehicles to cover each
excursion at a corresponding origin.[9] also
explicated that vehicle scheduling is linked to
profitability in that it deals with the allocation of
vehicles utilizing timetabled trips daily. The study
also formulated a model V = {V1, V2, . . . , Vm} and
T = {t1, t2, . . . , tn} respectively.
2.4. Empirical Review
2.4.1Transportation Management and Economic
Performance
[13] stated that a given inventory of items is
accessible at various origins, with predefined
interest for the product at various locations, and the
transportation cost between each source-location is
identified. In an unpredictable case, the unit
transportation cost is consistent. Therefore, the
bottleneck is to decide on an optimal movement for
the delivery of items from different sources to the
location of request at a transportation cost. Two
techniques were utilized the are; MODI'S Method
and the Proposed new Vogel estimation technique.
The primary objective of the model is cost
minimization. This will impact profit in the long run
and increase market share. [33] examined the fixed
charge transportation issue which is a traditional
transportation issue in which a fixed expense is
incurred, autonomous of the sum moved, alongside
a variable cost that is relative to the sum delivered.
[20] stated that transportation is identified with time
and location utility where time utility is alluding to
the progression of the items conveyed from the
sender to the recipient. This makes transportation
the fulcrum of logistics that influence delivery by
diminishing idealness within the framework. The
study by [31] explained the development of mobile
technology and its adoption. The discoveries of the
review showed that mobile technology represents a
combination of mobile frameworks, infrastructure
and processing innovation, and cell phone gadgets.
The growth and impact have influenced the
economic activities and outcomes. [30] stated that
socio-economic variables on monetary inclusion
were evident from several constructs. Out of 18
factors, 12 were critical at 5% significance, and
three others were ok at 10%. It clearly shows that
development and innovation are enthusiastic
instruments to accomplish economic inclusion by
including monetary variables.
3 Methodology
The review utilized the purposive technique and
total enumeration model to assemble explicit details.
Consequently, information was assembled using a
closed-ended questionnaire. Furthermore, the study
populace entails 15 textile firms operating in Lagos
State, Nigeria as of 2021 with high trade volumes.
Therefore, five hundred and fifty (550) surveys were
dispersed to the staff of the transportation and
logistics division. In any case, four hundred and
ninety (490) responses were recovered and
completed for analysis. Partial least square (PLS)
was used to examine the information accumulated.
It was on the bases of explicating the impact and
association between the dependent and
unconstrained variables objectively.
3.1 Common Method Bias
Collinearity estimation (variance factor) was
utilized to measure for common model bias.The
study noted that if a variance factor occurs more
than 3.3 times, the formulation is probably going to
be impacted by common model bias. Given this, the
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Adedugba Adebayo T., Asikhia Olalekan,
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element-level variance factor from a total
collinearity test is equivalent to or under 3.3
therefore, the formulation does not experience any
form of common model bias. Subsequently, the
variance factor values for each estimation variable
and construct for transportation management and
economic performance are under 3.3. This infers
that the hypothesis H01 formulation introduced is
free from common model bias.
4 Results
Table 1. Descriptive Analysis of Transportation
Management
Transportation
Management
Practice
Yes
No
Fleet
management
system
196
294
Fuel
management
system
221
269
Vehicle
Scheduling
247
243
Tracking
system
291
232
Disposal
policy
278
212
Route
planning
305
185
Sources: Researcher, 2021
The study was interested in knowing which of the
following transportation management practices
was adopted in the selected textile firms. The
result is depicted in Table 1.The analysis of
transportation practice was estimated utilizing six
variables.The goal is to examine if the respondents
adopted a fleet management system. 196 were of
the view that textile firms adopted fleet
management systems and 294 had a contrary
opinion. The researcher also wanted to find out if
textile firms adopted fuel management systems.
221 believed that they used a fuel management
system, while 269 had a conflicting opinion.
Furthermore, the researcher examined the
utilization rate of vehicle scheduling by textile
firms. 247 believed that they used vehicle
scheduling, while 243 had an opposing view.
Based on the findings 291 utilized a tracking
system, while 232 had a contrary view. 278 opined
that they utilized disposal policy and 212 had
opposing views.Table 2 further shows that 305
participants utilized route planning while 185 had
an opposing view.
Table 2. Analysis of Transportation Management
Practices
VG
E
GE
ME
SE
NA
120
120
124
85
54
30
130
121
177
12
100
54
131
159
46
31
101
120
180
18
215
83
67
102
23
10
240
145
79
16
Source: Researcher, 2021
VGE: Very Great Extent ; GE: Great Extent ; ME:
Moderate Extent ; SE: Small Extent ; NA: Not at
All
Table 3. Analysis of Economic Performance
Economic
performa
nce
VG
E
GE
ME
SE
NA
We have
expanded
the market
stake and
developme
nt rate.
6
114
171
189
10
Increased
growth in
profit
margin
130
170
103
77
10
Increased
level of
productivit
y
101
107
195
47
40
Increased
growth in
sales
99
50
101
205
35
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Lessen the
expense of
production
and
production
per unit
100
190
167
31
2
Expanded
market
stake and
developme
nt rate
10
167
228
78
7
Source: Researcher, 2021
The analysis of transportation management
practice was estimated utilizing six (6) variables as
portrayed. The factors utilized in the course of this
estimation were to figure out the degree to which
textile firms utilized transportation management
practices.Table 2 and 3 also shows variables
utilized to estimate the extent to which textile
firms utilized transportation management
frameworks. It was explained in the descriptive
analysis of the respondents that opined on the
utilization of transportation operational variables
and its extent on economic performance dynamics
in textile firms.
H01:Transportation management has no
significant effect on the economic performance
of selected textile manufacturing firms in Lagos
State, Nigeria.
The researcher inquired into the effect of
transportation management on the economic
outcome of selected textile firms in Lagos State.
R-square, underlying path integer (β-value), t-
measurement value, and p-values were utilized to
obtain credible information about the formulated
hypothesis. The algorithm assists in determining
the path co-efficient, and the direct relationship
between transportation management and economic
performance. Also, the bootstrapping P-values
help in determining the coefficient's significance
level. At the same time, the t-statistic value
represents the measured variations in standard
error units.
Table 4. Path Coefficients for Transportation
Management and Economic Performance
Source: Researcher, 2021
Table 4 depicts the statistical results. It shows that
transportation management has a significant effect
on economic performance at (β = 0.58, R2= 0.313, t-
value = 11.718 > 1.96).The Path coefficient of 0.58
indicates that transportation management and
economic performance have a significant
relationship. R2 outcome of 0.313 portrays that a
31.3% shift in economic performance can be
explicated by transportation management.
5 Discussion
The findings show that transportation management
has an appreciable relationship with economic
performance. The considerable effect of
transportation management on economic
performance is estimated at 0.58. However, it was
discovered that route planning has a more prescient
outcome, followed by tracking systems, disposal
policy, vehicle scheduling, fuel management
system, and fleet management system in that order.
This implies that the echelon of transportation
management within the production chain of the
textile firms has a considerable effect on the
operational cost and profit margin. This also implies
that the textile firms should prioritize transportation
operations to optimize sales and production
transportation costs. This also validates the
submission of [8]. Furthermore, the efficiency and
effectiveness of the paradigm of transportation
management reduces movement and improves
operations which in turn minimizes transportation
costs. At the same time, it helps the organizations to
oversee, coordinate and facilitate various transport-
related activities which cover vehicles involved in
the movement of goods through an effective
management system. The present transportation
framework is not solely based on shipping items to
demand locations but it includes the integration of
all component in the design of production
operations. This will impact the overall performance
as it influences the progression of items in the
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Adedugba Adebayo T., Asikhia Olalekan,
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production network. Transportation management is
also connected to timeliness where it alludes to the
progression of items conveyed from the producer to
beneficiary at an optimum time. Therefore, the
adaptability of conveyance and timeliness can be
linked to profitability. Then again, in guaranteeing
viable transportation mechanism textile firms should
optimize distribution practices by utilizing
models to minimize transportation costs and
optimize transportation routes.
6 Conclusion
The overriding objective behind this study was to
examine the effect of transportation management on
economic performance in selected textile firms. The
discoveries of the study indicate the validity that
explained the effect of transportation operational
mechanisms on economic performance such as
profitability and increased market segment. This
implies that fuel management system, route
planning, fleet management system, tracking
system, disposal policy, and vehicle scheduling
considerably influence increased market stakes and
growth in profit margin, level of productivity, and
increased sales, among others. The findings also
imply that if textile firms give the required attention
to transportation management, it will help in
enhancing market stakes, profit margin, sales
growth, and minimize production vacillations.
Therefore, the ability of the textile firms to
continuously optimize transportation will in turn
increase productivity. Therefore, if textile firms give
the required attention to transportation management,
it will help in enhancing market stakes, and profit
margins. This study adds to the extant literature on
transportation management and economic
performance respectively. First, the contribution
provided oddity explaining the indicators in
transportation management and its interconnecting
dynamics. The study also examined inner
transportation mechanisms through endogenous
variables from an internal perspective. Similarly,
these endogenous variables impacted economic
performance. The discoveries from this study can be
utilized to achieve transportation optimality that will
lead to profitability maximization. Therefore,
transportation management as an echelon within the
framework of logistics and production should be
operationalized to achieve profit and market
optimization. Furthermore, the discoveries
demonstrated that transportation management is a
significant variable. Subsequently, the
administrators of the textile firms need to build a
balanced transportation framework that meets
demand. In addition, the management should
likewise invest resources in transportation usability
in-other to limit cost and optimize routes. As a
supplement, the administrators of the textile firms
should furnish clients with reasonable, detailed, and
organized conveyance in an appropriate way thus,
clients will have less hesitation which will lead to
expanded satisfaction and client reliability.
6.1. Limitation of the Study and Scope for Future
Research
Regardless of the study contribution, the study
recognizes a few constraints and limitations in the
study. To begin with, all respondents came from the
transportation and logistics segment. Thus, this
sample may be unable to capture the entire
manufacturing designated populace. Future
investigations need to grow the population size to
arrive at the entire manufacturing populace that will
include other segments. Finally, this study did not
quantify the effect of transportation mode.
Therefore, future studies should capture the mode of
transportation to provide a more robust outlook.
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Contribution of Individual Authors to the
Creation of a Scientific Article (Ghostwriting
Policy)
Adedugba Adebayo Tolulope carried out the
conceptualization, analysis, interpretation, and
composition. Asikhia Olalekan and Inegbedion
Daniel carried out information overview, analysis
check and draft arrangement. Ogunnaike Olaleke
reviewed and corrected.
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2023.20.1
Adedugba Adebayo T., Asikhia Olalekan,
Inegbedion Daniel, Ogunniake Olaleke
E-ISSN: 2224-2899
8
Volume 20, 2023
Sources of Funding for Research Presented in a
Scientific Article or Scientific Article Itself
No funding was received for conducting this study.
Conflict of Interest
The authors have no conflicts of interest to declare
that are relevant to the content of this article.
Creative Commons Attribution License 4.0
(Attribution 4.0 International, CC BY 4.0)
This article is published under the terms of the
Creative Commons Attribution License 4.0
https://creativecommons.org/licenses/by/4.0/deed.en
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