Assessment Of Critical Factors Of Inbound Logistics Performance (The Case Of UN-WFP White Maize Procurement Under Purchase For Progress)
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Date
2017-06
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Addis Ababa University
Abstract
The United Nation World Food Program (UN-WFP) implements P4P (Purchase for Progress) program in Ethiopia since 2010. The program mainly procures White Maize from different Farmers Cooperative Unions (FCUs). But, the total average Maize price of those smallholder farmers found a 2% to 11% higher than the price of a MT of Maize from traders. As a result, the WFP divert much of its purchase to traders even if its corporate strategy aimed to save 10% from total purchase value through buying 10% of the quantity from those Smallholders farmers’ organizations. So the research aimed to identify the critical inbound logistical factors that can play a significant role for the success of 10% saving by procuring commodity from Smallholder farmer organization at lower price that traders. The researcher used quantitative approach by designing the study in both descriptive and explanatory methods in order to measure the relation of logistics activities with performance of inbound logistic. In order to test the variables, both primary and secondary data were collected. Primary data collected using a survey methods and applying questionnaire as a tool. Responses of 34 were analyzed using Bivariate Ranked correlation test Kendall’s tau-b method. On the other hand, the secondary data analyzed using percentage to reveal the practice of Forward Delivery Contract execution. Accordingly, the findings indicated that customer response management activity of logistics play a major role and FCUs are suffered due to lack of clear organizational structure that encourage management to apply their capacity to develop ideas and giving prompt decision to increase competitiveness of the Union with regards to Maize supply to WFP. Also, the commodity has bundle cost that did not add value to the product but affect the competitiveness adversely. Then, a recommendation on the necessity to study FCUs current organizational structure and adopt the change to bring effectiveness was given. Also, the need to revise cost components of Maize recommended together with provision of continuous capacity training for FCUs management particularly on developing strategy & setting performance evaluation model that take in to consideration financial and non-financial part of the business
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Keywords
Competitive advantage, Logistics, Inbound Logistics