The Effect of Strategic Sourcing Practice on Logistics Operational Performance the Case of Federal Democratic Republic of Ethiopia, Ministry of National Defense Logistics Main Department
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Date
2024-06
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Addis Ababa University
Abstract
Strategic sourcing is rapidly expanding around the world because organizations see it as a way to achieve strategic goals, improve end user satisfaction, and provide efficient and effective services that include a comprehensive approach to lowering total costs, including quality, service, and delivery. The study sought to investigate the impact of strategic sourcing practices on the logistics operational performance of the Ethiopian national defense force logistics main department. The study followed an explanatory research design with a quantitative approach. The logistics main department's study target population was 84, and a census-sampling technique was used because the target population was small. A questionnaire was used as a key data collection instrument. Of the total respondents, 84 questionnaires were distributed, and 80 of them, representing 95.2% response rate, were collected and assessed, which was deemed adequate. The impact of strategic sourcing practice on operational performance in selected institutions was assessed using four organizational performance metrics: quality of goods/service, total cost reduction, lead-time delivery, and end-user satisfaction.
The data were examined using correlation and multiple regression analysis. According to the study's findings, the selected institutions mean score for strategic sourcing practice and operational performance in four organizational performances was moderate. The strategic sourcing practice of supplier development and developing supplier relationships have a positive and significant impact on organizational operational performance. As a result, all hypotheses were examined, with the alternative hypotheses accepted. Based on these findings, the researcher recommends improving strategic sourcing methods by investing in supplier development and relationship metrics, training, quality improvement, and technology, consequently lowering costs, improving quality, and increasing strategic sourcing resilience.
Key words: Strategic Sourcing, Supplier Development, Developing Supplier Relationship, Supplier Relationship Management, Operational Performance