Effects of Supply Chain Management Practice on Organizational Performance: The Case of Jimma Zone Farmers’ Coffee Cooperatives

Abstract

The purpose of this study is to test the effect of Supply Chain management practices on Organizational performance. A study on Jimma Zone farmers’ coffee cooperative. In this study five key dimensions of SCM practices: strategic supplier partnership, customer relationship, Quality of information sharing, Internal lean practices and training were used as independent variables complemented by different measurement tools under each variable, while financial and market performance variables have been used to measure the organizational performance. Data was collected via questionnaires from a sample of 26 coffee cooperative firms and 179 respondents. Multi-stage sampling design have been employed in order to choose respondent from target population in which purposive and stratified simple random/lottery method frame was selected as sampling technique. Quantitative and qualitative data collection instruments and techniques employed and data to be gathered and analyzed using descriptive and inferential analytical technique with the help of SPSS version 20. The descriptive statistics have used to describe, present, mean, standard deviation to summarize quantitative information. The relationships proposed in the framework have been tested using Pearson correlation and the effect of SCM practices on Organizational Performance analyzed using regression analysis. From the hypothesis test the null hypothesis of SCM dimension: Strategic supplier partnership, Quality of information sharing, Internal lean practices and training rejected and the alternative hypothesis which says each variable have a relationship with organizational performance have accepted. But the null hypothesis of Customer relationship accepted. From the research finding it was concluded that all dependent variables (Strategic supplier partnership, Quality of information sharing, Internal lean practices and training) have a positive effect on farmers’ coffee cooperative except Customer relationship which have negative effect. As a recommendation for this study, it may play an important role for managers and coffee cooperative firms through understanding the effect of supply chain management practice to increase the sales and profits.