The Effect of Supply Chain Agility Practice on Operational Performance: The Case of Ethiopian Airlines Maintenance, Repair and Overhaul Unit (ET-MRO)
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Date
2021-01
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Addis Ababa University
Abstract
In most researches related to Supply Chain Management, it is concluded that efficient supply chain management is basic key factor for the success of a company’s operational performance. Even though different studies are conducted on the areas of supply chain management in relation to company’s operational performance, much is not done on Supply chain agility and company’s operational performance particularly in the area of Ethiopian Airlines, Maintenance, Repair and Overhaul (MRO) unit. Thus, this paper examined the effect of supply chain agility on operational performance of Ethiopian Airlines exclusively on Maintenance, Repair and Overhaul (ET- MRO) unit. ET-MRO is a core unit to Ethiopian Airlines Group giving all required MRO service to the Airline as well is a major profit center for Ethiopian Airlines Group (ETG) by selling MRO services to third party Airlines. The study used the most common dimensions of supply chain Agility i.e. Alertness, accessibility, decisiveness, swiftness and flexibility as an independent variable and the three important operational performance indicators which are Time, Cost and Quality as a dependent variable to examine and answer the research objective and questions. The survey of the study is based on 150 filled questionnaires and 6 interview results from a sample size of 204 employees from the purposive target population of 290 employees with 95% confidence interval and 0.05 error margin employing Taro Yamane, (1967), simplified formula. Questionnaire and interview that are adopted from previous related studies were used to gather primary data and the company’s source like reports, portals etc. are used to gather secondary data. Descriptive and Explanatory research design is employed and the approach was mixed type i.e. Qualitative and Quantitative. Multiple linear regression model was applied to test the association between the independent and dependent variable. The study shows that Ethiopian MRO had adopted Supply Chain Agility practices (Alertness, Accessibility, Decisiveness, Swiftness and flexibility) to a small extent. Besides, the study indicates that Supply Chain Agility practices of the organization have positive and significant effect on the Ethiopian MRO overall operational performance.
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Keywords
Supply Chain Agility, flexibility, Maintenance Repair, Overhaul (MRO), Operational Performance