Determinants of Milk Supply Chain Integration in Oromia National Regional State: The Case of Sululta District
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Date
2018-06-04
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Addis Ababa University
Abstract
The main objective of this paper was aimed to analyze the determinants of milk supply chain
integration in Sululta District. Specifically, it tried to identify the most determinant factors that
affect milk supply chain integration and tried to prioritize factors that affect milk supply chain
integration across the supply chain actors based on information integration, coordination
resource sharing and organizational relationship linkage. Data were gathered from 97 milk
producing households and 20 milk traders through questionnaire survey and Likert scale-based
factor evaluation were applied. Hence, data from the survey were analyzed and presented using
descriptive statistics. The results showed that, in most cases regardless of the significant
importance of information, integration for effective and efficient business performance, majority
of respondents from producers and traders affirmed that lack of joint replenishment forecast,
absence of real time information, and lack of sustainable and compatible information sharing
system to improve collaborative market planning and decision making as the most important
challenges for milk supply chain integration in study area. It also indicated that, the level of trust
among supply chain partners is limited. This implies that, the organizational relationship linkage
in the study area is very limited for cross-functional integration in milk supply chain initiatives.
The result also showed that, there were great challenges of coordination of resource sharing and
this lead to high cost of supply chain integration among supply chain partners. The three
dimensions of milk supply chain integration were prioritized from the most to the least
determinant factors in the study area. Information integration, organizational relationship
linkage and coordination resource sharing were prioritized as first, second and third by their
virtue of their mean of mean score of Likert scale of 4.84, 4.83 and 4.62 respectively. This
implies that, information integration is an essential for the effective functioning of the whole
supply chain integration. Which leads to sustainable relationship linkage and trust among supply
chain partners and lastly, the integration of coordination resource sharing might be brought
among supply chain partners due to high level of trust. In general, milk supply chain in the study
area seemed to be un-integrated and separately performed. Thus, the study recommended that,
the government should establish legal framework and written contract agreement platform to
maintain trust, facilitate compatible information technology system and provide frequent
training to supply chain partners on the best practices in the form of seminars and workshops.
Moreover, the study also recommended that, supply chain partners should introduce
coordination resource sharing in order to increase quality and minimize cost of milk supply
chain integration. These all need to be due attention in-order to enhance dairy business
development through increasing efficiency and effectiveness among milk supply chain partners
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Keywords
integration, determinant, milk