Supply Chain Management and Performance: A Study on East African Pharmaceuticals PLC (EAP) in Addis Ababa, Ethiopia

Abstract

The objective of this study was to assess supply chain management and performance of EAP PLC. The study used descriptive as well as explanatory research designs. The study employed census. Primary type of data was collected with closed and open-ended questionnaires. In order to analyze the data collected, Pearson’s correlation and multiple linear regression analysis were used. The study findings showed that strategic supplier partnership is the key factor that has a strong positive and statistically significant effect on supply chain management performance followed by information sharing practice and contract management practice. The level of supply chain management performance is not at a strong level yet. Furthermore, that scarcity of local supplier base was a big challenge for the EAP with the current foreign currency shortage, lack of communication, lack of clearly defined specifications/requirements with detailed technical specification, delivery time promised to customer are supply chain management challenges of EAP PLC. The supply chain management practice of EAP is weak; it is not well managed, and implemented to get the maximum possible benefits resulting from effective supply chain management. It is recommended that EAP should strengthen its supply chain management by putting greater effort to the implementation of some key best practices. Specifically, the following green supply chain practices should be improved on prequalification of suppliers that are aware of environmental issues, preparation of specifications with suppliers, procurement of recyclable material, and involvement of key suppliers in planning, the company should enhance their technological capacity so as to accommodate greater collaboration and information sharing between the institution and suppliers as well as internally. Finally, EAP should engage in training of the work force and developing supply chain management skills through workshops and systematic training programs and promote learning from relevant successful experiences in this area. Future research can expand the domain of SCM practice by considering additional dimensions such as geographical proximity, JIT/lean capability, cross-functional coordination, logistics integration, and agreed supply chain leadership, which have been ignored from this study. The future study can also test the relationships/dependencies among dimensions of SCM practices.