The Effect of supply chain integration on the operational performance of food manufacturing industry in Ethiopia: The case of FAFFA Foods Share Company
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Date
2018-06-03
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Addis Ababa University
Abstract
This study examined the effect of supply chain integration on the operational performance of food manufacturing industry in the case of FAFFA Foods Share Company. The objective of the study was to assess the effect of internal, customer and supplier integration on the operational performance of FAFFA Foods Share Company. Both the primary and secondary sources of data were employed to gather the necessary information. As a primary source of data, structured questionnaire was distributed for 102 respondents to gather the necessary data of which 91 was correctly filled and returned for further analysis. The study used both descriptive statistics (mean and standard deviation) and regression analysis (Pearson correlation matrix and multiple linear regression model) to examine which variables significantly affects the operational performance of the organization. The result of the study indicates that there is positive relationship between the dependent variable operational performance and the independent variables internal integration (r= .593), customer integration (r= .773), and supplier integration (r= .719). In addition, the regression analysis showed the two variables customer and supplier integrations significantly affect the operational performance of FAFFA Foods at one percent significance level (99 percent confidence) with β= .427, sig= .000 and β= .324, sig= .001 respectively. Whereas, internal integration affects the operational performance of FAFFA Foods at 10 percent significance level with β= .149, sig= .086. Therefore, the study concluded that all supply chain integration variables have a direct significant effect on the operational performance of the organization. In order to enhance the operational performance, Creation of a platform that drives to frequent interaction with selected supplier collaborates, provision of training on new production process to internal workers and creation of frequent departmental contact within the internal functions are advisable. In addition, adopting flexible production techniques based on market demand, sharing adequate information with strategic customers may be beneficial to the organization
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Supply chain, Operational, performance