The Effect of Strategic Sourcing Practice on Operational Efficiency: The Case of Ethiopian Airlines
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2017-02
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Abstract
The objective of this study is to analyze the effect of strategic sourcing practice on operational efficiency, the case of Ethiopian Airlines and further determine the extent of Ethiopian Airlines strategic sourcing practice and operational efficiency. The study used descriptive as well as explanatory research designs. In this study, probability sampling method is used. In order to undertake this research, by using simple random sampling techniques sample size at confidence level of 95% and 3% margin of error which is the amount of error from difference in the responses the researcher can tolerate when drawing a conclusion from the data. Primary type of data was collected with the help of open and close ended questionnaires and the collected data was analyzed using SPSS version 20. .
In order to examine the relationships between the variables Pearson’s correlation were used. And to determine the effect of strategic sourcing practice on operational efficiency multiple linear regression analysis were used. Finally the research comes up with the following findings.
According to Pearson’s correlation rest it was found the relationship between Ethiopian Airlines strategic sourcing practice and operational efficiency; there is a positive and strong relationship between Strategic Elevation of Purchasing Function and Contract Management practice and all component of supply chain efficiency. There is a positive and moderate relationship between supplier development practice and all component of supply chain efficiency. There is positive and very strong relationship between Supplier Relationship Management practice and all component of operational efficiency. Finally the study concluded that the strategic sourcing practice of Ethiopian Airlines is good except Suppler Development and that strategic sourcing practice has a significant effect on operational efficiency. At last the study recommends that Ethiopian Airlines Procurement and supply chain division needs to improve supplier development practice
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Strategic Elevation, Purchasing Function, Contract Management