Challenges of Strategic Sourcing and Contract Administration: The Case of Ethiopian Airlines Group

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Addis Ababa University


Strategic sourcing and procurement is a critical challenge faced by many firms involved in the latest innovation of supply chain management. Organizations are operating in an environment characterized by countless economic and political disruptions to their sources of supplies and services. In order to survive in this turbulent market place, these organizations must continually monitor their competitive position as well as their internally controllable processes- especially the procurement process. The purpose of this paper is to critically investigate the challenge of Strategic Sourcing and Contract Administration in the case of Ethiopian Airlines Group. Descriptive research design was used in this study. The study found out that Strategic Sourcing and Contract Administration face many challenges which limit from sourcing strategically out of the operational level such as lack of Human Resource and resource, supplier source and selection difficulties, lack of proper planning and forecasting, lack of understanding on total cost of ownership, complicated logistics, volatile economic and political environment, different standards and requirements between countries, supplier development difficulties, cultural and lingual difference, currency fluctuation, and contract management challenges which finally cause project delay, cost saving plan short fall and firefighting working environment. Future research can investigate further strategic sourcing challenges by increasing the size of population in the supply chain management such as including personnel from suppliers’ side, logistics management section, buying section, end user and technical support section with additional variables like obtaining the information from more suppliers, optimizing and systemizing the global sourcing process and supplier base, and keeping more long-term win-win strategic relationship with suppliers within the global scope.



Strategic Sourcing challenges, Sourcing Strategically, out of the operational level