The Effect of Logistics Management Practices on Organizational Performance in the case of Ethiopian Pharmaceuticals Supply Agency

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Logistics as a business function plays important role in company’s performance through the planning, implementation and control processes linked to material, information and financial flows. The main objective of this study was to examine the effect of logistics management practices on organization performance in the case of Ethiopian Pharmaceuticals Supply Agency. These included the managements of practices in customer service, warehouse and inventory, transportation, information flow and supply. During conducting this study the researcher applied Descriptive and explanatory research designs as well as quantitative research approach. The population of the study consisted of employees of the Ethiopian Pharmaceuticals Supply Agency working in operation processes. The operational areas included forecasting and market shaping, warehouse and inventory management, procurement (contract and tender management), distribution and fleet management, capacity building and operational research, laboratory quality control and Fund administration (Project/program and Revolving drug fund) from which the sample was drawn. The appropriate sample has been drawn through applying stratified random sampling. The primary and secondary data sources were used for this research. A self-administered questionnaire was designed to collect relevant information from the selected 148 respondents. Among this 140 questionnaires were returned and analyzed using Statistical Package of Social Science (SPSS) version 24. The percentage, mean and standard deviation of descriptive analysis were employed. The inferential analysis including Pearson correlation and multiple linear regressions were also employed. The study indicated that logistics management practices in Ethiopian Pharmaceuticals Supply Agency were frequently practiced. The study showed that logistics management practice contributed in the form of financial and market measures to the Ethiopian Pharmaceuticals Supply Agency organizational performance to a large extent. The investigation also brought out that there was significant and positive effect of logistics management practices on organizational performance in the Agency. The study further revealed that practices of customer service, warehouse and inventory management, transport management, information flow management and supply management have predicting power on organizational performance of the Ethiopian Pharmaceuticals Supply Agency. Moreover, the study revealed that the Ethiopian Pharmaceuticals Supply Agency faced logistics management challenges to a great extent. Some of the challenges were shortage of foreign currency, lack of collecting receivables, inaccuracy quantification and increasing logistics cost. The study recommended to enhance the logistics management practices and to deal with concerned government bodies to alleviate and overcome shortage of foreign currency, make effective collection of receivables and balance level of logistics service and cost.


A Thesis Submitted to College of Business and Economics at Addis Ababa University in Partial Fulfillment of the Requirement for the Degree of Master of Business Administration


Logistics management practices, Information flow management, organizational performance, Transport management