The Effect of Supply Chain Management Practice on Operational Performance: The Case of Ethiopian Pharmaceutical Supply Agency (EPSA)

Abstract

The main goal of supply chain practice is to produce the right product or service, in the right quantity, at the right time and at minimal cost with the purpose of satisfying customer requirement and internal target as efficiently as possible. Supply chain practices are initiatives that influence the whole supply chain. Even though, these practices have great influence on the operational performance of any organization, it is affected by contextual factors such as type of industry, firm size, and length of supply chain. Therefore, the general objective of this study was to investigate the effect of supply chain management practices on the operational performance: the case of EPSA Jimma branch. In order to meet the objectives of this research, the study adopted quantitative method and the relationships proposed in the framework were tested using descriptive research method. The primary data was collected from 97 employees of EPSA. The collected data were analyzed using descriptive statistics, correlational and regression analysis. The major finding of the study indicated that supply chain management practices i.e. strategic supplier relationship management, customer relationship, internal integration, and logistics management have positively affected the operational performance of the organization. However, the organization has expected to improve its supply chain practices in order to improve the operational performance even further. Specifically, EPSA has to improve involvement of suppliers in planning and goal setting, the company should also provide on time and accurate information to its suppliers ‘to integrate the external part with the internal one. In addition, the organization should improve its determination to meet the customer needs and demands