Effects of Supply Chain Management Practices on Operational Performances: In the Case of Private Pharmaceutical Importers in Addis Ababa
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Date
2019-06
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Addis Ababa University
Abstract
SCM is an issue in many organizations as companies realize the importance of creating an integrated relationship with their suppliers and customers. The general objective of this study is to assess the effect of supply chain management (SCM) practice on operational performance (OP) with special focus in the case of Addis Ababa private pharmaceutical importers (PPI). This research conceptualizes and develops four dimensions of SCM practice (strategic supplier partnership, customer relationship management, level of information sharing and quality of information sharing) and tests the relationship and effect with/on OP of PPI. The study utilized a descriptive study design. Using a self-administered close-ended questionnaire instrument primary data was collected. The data for the study was collected from 50 PPI representatives. The relationships proposed in the framework were tested using Pearson correlation, and the causal relations were analyzed using regression analysis. From the output of the analysis, there is average SCM practice with mean value of 3.4623.462. And it is concluded that there is a strong relationship between SCM practice and OP with Pearson correlation coefficient 0.655 (r=0.655) and significance value less than 0.001. In addition, SCM practices have an influence on OP in which, 41.90% of variability in OP explained by SCM practices. There was a positive significant influence by Level of Information Sharing practice (p=.008) on OP. Therefore, in order to achieve advancement in quality, dependability in delivery and cost/price in the long-run through enhancing OP, it is better for the PPI to give due significant emphasis to the constructs of SCM practice such as strategic supplier partnership, customer relationship management, level of information sharing and quality of information sharing.
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Supply Chain Management, Supply Chain Management Practice, Operational Performance