ASSESSMENT OF LOGISTIC PERFORMANCE ON ORGANIZATION PRODUCTIVITY CASE

STUDY ON: DIRE MOTORS AGENCY

FOR THE PARTIAL FULFILMENT OF THE REQUREMENT OF THE BACHELOR OF ART DEGREE

DIRE DAWA UNIVERSITY

SCHOOL OF BUSINESS AND ECONOMICS

SUBMITED TO: DEPARTEMNET 0F LOGSTICS AND SUPPLY CHAIN MANAGEMENT

Prepared by: Taju Mustefa Advisor: Girmey (M.A)

ID NO R/2597/04

June 2014

DIRE DAWA, ETHIOPIA

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Acknowledgment

Firstly would like to thanks Allah the Almighty God creators and sustainers of the heaven and
the absolute to whom alone all worship is due.

Next, I would like to express my sincere appreciation and gratitude to my advisor Girmay. A For
his encouragement and valuable guidance in my engine senior essay as well as my deepest love
apparition and gratitude go to my family for their financial and moral support

Finally, I would like to thank the workers and manager of Dire Dawa Motores Agency transport
P.L.C who cooperate with me in the logistics area for completing the distributed
questionnaires specially who stand beside me through of this paper.

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i

ABSTRACT

This study focus on the assessment of logistic performance on organization productivity in Dire
Motors Agency. The object of the study is to improve the logistic performance on the
organization productivity, the researcher was prepared the paper by using both the primary
and secondary data. The primary data are collected through questionaries’ and interviews. The
secondary data was collected from internets, books and other written documents related to the
document. Sampling techniques that the researcher used for the study was used non
probability sampling technique.

Finally, some idea was for warded as conclusions and recommendation.

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Table of content

Contents Page

Acknowledgement…………………………………………………………………………………………..….i

Abstract……………………………………………………………………………………………………………….ii

Chapter one

Introduction……………………………………………………………………………………………………….1

1.1 Back ground of the study……………………………………………………………………………….1

1.2 Company profile…………………………………………………………………………………………….3

1.3 Statement of the problem………………………………………………………………………………3

1.4 Objectives of the study…………………………………………………………………….……………4

1.5 General objective…………………………….……………………………………………………………4

1.6 Specific objective…………………………..……………………………………………………………..5

1.7 Significance of the study……………………………………………………………………………….5

1.8 Scope of the study………………………………………………………………………………………..6

1.9 Limitation of the study……………………...………………………………………………………….6

1.10 Definition of the study………………………………………………………………………..….6

Chapter two

2 Literature review ………………………………………………………………………….............7

2.1 Businessdefinition.. ……………………………………………..…………………………….7

2.1.2 Military definition ……………………………………………………..……………………......7

2.1.2.1 Historical back ground of logistics…………………………………………...…………7

1.2 The logistics mission ……………………………………………………………………………….8

2 .3The logistics service …………………………………………………………………………..…..8

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2.4 The logistical total cost………………………………………………………………………………9

2.5 Importance of the logistics management………………………………………….………9

1.6 Responsibly of the logistics manager………………………………………..………………10

1.6.1 Develop buck- up plans…………………..………………………………………………………10

1.6.2 Conduct inventor…………………………….………………………………………………….…10

1.6.3 Prioritize needs ……………………………………………………….………………………..….10

1.6.4 Schedule shipping……………………………………………………………………………….…10

1.6.5 Track goods…………………………………………………………………………………………..11

1.6.6 Coordinate paper work………………………………………………………………….………11

1.6.7 Prepare budget ……………………………………………………………………………………..11

1.6.8 Training employee………………………………………………………………………………..…11

1.6.9 Apprise supervisor ………………………………………………………………………………….11

1.6.10 Find inefficiencies …………………………………….….………………………………….…..11

1.7 Duties of a logistics manager ……………………………….…………………………….………12

2.7.1 Monitoring stocks……………………………..…………………………………………………....12

2.7.2 Processing and packaging …………………………………………………………………………..12

2.8.3 Communicating and working with team ……………………………………………………..12

2.9 Logistical operation integration …………………………………………………………………...12

2.9.1 The work of logistics ………………………………………………………………………………….12

2.9.2 Integrated logistics………………………….………………………………………………………….13

2.9.3 Barriers of internal integration ……………………………………………………………..……14

2.10 Areas that increase (improve) logistical performance in organizations ….….15

2.11 The role of finance capacity to perform logistics performance…………………..15

2.12 Organizations four logistical decisions ………………………………………………………..16

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2.13 Supply chain relationship ……………………………………………………………….………….16

2.14 Logistical measurement ……………………………………………………….…………………..17

2.14.1Dimension of performance measurement …………………………….………………..17

2.14.2Objective………………………………………………………………………………………….……..17

2.14.3Respective ……………………………………………………………………………….……………..18

2.14.4 Internal performance measurement ……………………………………………………..18

Chapter Three

3. Research methodology …………………..…………………………………………….….…………..20

3.1 Research design ……………………………………...………………..………………….…...........20

3.2 Nature and source of data……………………………………………………………………….…..20

3.3 Sample size and method……………………………………………………………………………..20

3.4 Data gathering tools……………………………………………………………………………………21

3.5 Procedure of data collection …………………………………………………………..…….….21

3.6Method of data analysis…………………………………………………………………..………….21

Chapter Four

4. Data presentation, Analysis, and Interpretation…………………………………….…..22

4.1 Summary of the number and percentage of respondents by sex…………………22

4.2 Summary of the number and percentage respondent by age…………………...…23

4.3 Summary of respondent by education ……………………….………………………………….23

4.4 Summary and number of respondents work experience by years………………….24

4.5 How logistical performance can increase ……………………………………………..……….24

4.6 How to describe the assessment of logistic performance ……………………………..25

4.7 Logistics expenditure and service desired …………………………………………………..….26

4.8 The financial capacity of the organization to perform logistic performance …….26

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4.9Logistical performance measurement ……………………………………………………………..27

4.10 Logistic performance …………………………………………………………………………….………..27

4.11 How the organization accomplished transportation ………………….……..………….…28

4.12 How organization applies integrated logistics in its operations …………………………29

4.13 Integration of logistic activity…………………………………………………………………………….30

4.14 About sharing of information …………………………………………………………………..……….30

4.15 Problem related with logistic activity ……………………………………………..………………….31

4.16 Satisfaction of the logistic activities………………………………………………..….…………….31

4.17 Problem due to logistic performance …………………………………………..…………………….32

Chapter five

5. Summary, conclusion, and recommendation ……………………………………..……………....34

5.1Summary ……………………………………………………………………………………………………………….34

5.2 Conclusion …………………………………………………………………………………………….………………35

5.3 Recommendation ………………………………………………………………………….………………………36

5.4Appendix…………………………………………………………………………………………………………………..38

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CHAPTER ONE

1 INTRODUCTION

1.1 Background of the study

First of all, any nation organization or individual must know the importance of logistics in order
to a chive the overall total lowers cost and customer services.

Logistics is crucial to get product and services where they are needed and when they are desired
the overall goals of logistics would be to a chive the lowest total cost and satisfy the customer
needs and wants.

To a chive this goals logistics involved the integration of information, transportation, operation,
and inventory were housing, material handling and packing (logistic in management).

Logistic is not specific to any product and public sectors every organization in the country has
recently been trying to increase the integration of logistics the organization both in the
government and government organization because any firms requires to support and cooperate of
any others business to complete the overall logistic process in case study Dire motors agency
share company.

However there are many factors that affect to assess the logistic performance those factored

 Distance
 Shipping facility
 Information technology and other factory

To sum up the researcher intended analyze and describe factor which assess logistic performance
as well as to point out the result of those factors on the achievement of the goal (Bruer sox and
class 1996)

No other area of business operations involves the complexity or spans the geography of logistics.
All aroundthe globe 24 hours of every day, 7day a week, during 52 weeks a year logistics is
concerned with getting product and service where they are needed at the précis time desired. It is
difficult to visualize accomplishing any marketing manufacturing or international commerce

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without logistic most consumers in highly developed industrial nations take a high level of
logistical competency for granted. When they purchase goods at retail store over the telephone or
via the internet they expect product delivery will be performed.

Although logistics has been performed since the beginning civilization, implementing last
century best practice is one of the most exacting and challenging operational areas of supply
chain management of order processing, all inventories and transportation and the combination of
were housing material handling and packing all interpreted through out of met work facilities.

The goal of logistics is to support procurement, Manufacturing and customer and

accommodation and supply chain operation requirements. Within a firm the challenge is to
coordinate functional competency in to an integrated supply chain focused on serving customers.

Logistics refers to the responsibility to design and administer system to control movement and
geographical positioning of raw material, work in process and finished inventories at the lowest
total cost.

The term logistics is not specific to the business or public sector over the years, common titles
used to described all or parts of the business logistics, physical distribution, material logistics
management, material management, physical supply, and logistics of distribution, marketing of
logistics, inbound logistics and total distribution in 1991 the counsel of logistics is management
modifies is –

1976 definition of physical distribution management by first changing the term to logiest and
change the definition as follows.

Logistics is the process of planning, implementing and controlling the efficient, effective and
storage of goods, services and related information from the point of origin to the point of
consumption for the purpose of conforming to customer requirement(logistics management
Donall J. Brouers sox).

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 1.2 Company profile

A Dire motor was established in 1992.Dire Motors Agency PLC is a private company
established by shareholders as per the Commercial Code of Ethiopia and Memorandum and
Articles of Association. The initial capital of the Company is Birr 1,400,000...

The company is established for the purpose that follows:

 Operate as sales agent for new and used Automobiles

 Operate a modern Automobile service/repair center
 Engage in Sales of new and used Automobile spare parts
 Engage in Sales of Automobile accessories
 Engage in car rental business
 Engage in Tour and Travel business

Dire Motors Agency, PLC is the sole agent for Yang fan Motors PLC (producers of Lifan
Motors) for the Eastern part of Ethiopia, including Dire Dawa Administrative Region, Harari
Regional State, Somali Regional State, and Eastern and Western Hararge Zones of Oromia State.
Dire Motors will maintain a showroom to promote and market Lifan cars, as well as a modern
service/repair center to service Lifan and other brands of cars.  In addition, our company will
also be providing quality spare parts and accessories for both Lifan and other brands of cars  

1.3 Statement of problem

The primary goal of logistics was to achieve a target level of customer services at a lowest
possible total cost. Logistics involves detected and complex work. So logistics manager should
be responsiblefor planning and administrable for different duties and responsibilities. A useful
way for logistics competency to develop an integrated frame work that define and relate the key
concept such

As integrated frame work service as to relates the finite aspect of the logistics to the overall
industry stages

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The individual who work in activities of logistics should have understand how to their jobs fits in
to the whole systems of the organization. It is in disputable the superior competitive logistic
performance can became the corner stone of the overall strategy.

So the study would try to examine how to increase the logistic performance, customer service,
reduce cost and how to bring the real logistical activities to the organization. The main motive of
this paper would be to identify the problem of logistical performance that appear in the
organization by raising the following research questiongive possible recommended depending on
the finding to the overcome the problems.

Therefore, the researcher tries to answer the following question;

1. What are the factors that affect logistical performance on organization productivity?
2. What are the problems related with logistics performance on organization productivity?
3. What are the improvements that are taken by organization to improve logistics
performance on organization productivity?
4. How logistical performance on organization productivity?

1.4. Objective of the study

1.4.1 General objective

The general objective of this study is to analyze the assessment of logistics performance on the
organizational productivity and improve possible suggestion for the problem that is identified
case study on Dire Motors Agency.

1.4.2 Specific objective

The specific objective of this study are as follows;-

 To assessing factors that affect logistic performance on the organization productivity.

 To identify the problem related to the logistic performance on the organizational
productivity.

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  To find out the improvement of that is taken by the organizational to decrease the
problems of logistical performance on the organization productivity.
 To evaluate and improve logistics performance on the organization productivity.
1.5Significance of the study

The significance of this study is to understand the assessment of logistic performance on

the organization productivity and to find out the ways in which it helps the researcher by
giving the chance to apply the different theories that learned in the class.
Additionally it helps the researcher to develop the experience and skills that help him to
face the challenging of workers environment like;
 To increase the efficient and effectiveness of logistic in organization
 To serve as a reference for other researcher.
 To enables the researcher to do other related researcher depending on this
study.
 To reduce the factors that affects the logistic performance on the organization
productivity
 It would help the organization to improve the logistics performance by
understanding the logistics problems in the organization.

Additionally, the study would help other researcher who interested in doing the research on the
topic by providing him additional information as a secondary data.

1.6 Scope of the study

The study focused on the Dire Motors Agency transportation P.L share company
specially to analyze factors which assessing logistic performance and the activities to
overcome this is to achieve the desired objective of the organization .

1.7 Limitation of the study

The researcher faced different problem while collecting the available information to
prepare the real researcher. Some of the problem that faced the researcher is;-

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 Lack of accurate data from the organization within a required time.
 Involuntariness to give response to the questionnaires.
 Absence of cooperative and shortage time.
 Financial constraints
 Lack of enough knowledge to conduct the study

1.8 Definition of the key term

 DMAPLC= Is the Dire Motors Agency private limited company that found in
Dire Dawa town to provide logistics and transportation services and the
associated activities for society.
 Logistics= refers to the function that is responsibility for the flow of materials
from the supplier to an organization through the operations within the
organization and out the organization.
 In bound logistics; is the movement of materials in to the organization from the
suppliers
 Out bound logistics; is the movement of materials out the organization to the
customers

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Chapter; two

2. Review of literature

2.1 Review Literature

Logistics refers to the responsibility of design and administer system of control movement and
geographical position of raw materials, work in process and finished inventory at the lowest total
cost. Logistics management is that parts of supply chain management that plan implements, and
control the efficient, effective for work and reveres flow and storage goods services and related
information between the point origin and the point of consumption in order to meet customers,
logistics management an integrated function, including marketing sales manufacturing, finance
and information technologies.

2.1.1 Business definition

Logistics defined as business planning frame work for management of materials, service,
information and capital flows that include the increasingly complex information, communication
and control system that required in today’s business environment (logistics partner or, Helsinki fi
1996)

2.1,2 Military definition

Logistics is the science of planning and caring out the movement and maintenance of force those
aspects of military operation that deals with the design and development. Acquisition, storage
movement, distribution of materials movement evacuation and hospitalization of personal
acquisition of furnishing services (jcspub L-02 expert)

2.1 Historical back grounds of logistics

The history of logistics management manuscript began in 1958 as same readers are aware early
contributionspresented in to edition of physical

Published in 1961, represented the initial attempt integrate physical distribution activities in to a
single book.

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In 1968 the second edition of physical distribution management against collaboration was
substantially rewritten as new book because of the development in the filed on the next seven
years an early version of logistical management published in 1974. The view of total logistic
management published in 1075. As in 1986 edition within new authors offered a refinement of
select material and extended the breadth and scope of logistical responsibilities. To recognize the
significance of change in both the discipline and the next in 1996 edition is given an extended
title and designated as the first edition. Now under the author ship of bower sox and class and
published by MC grew –Hill, logistical management ones again expected the material and
prospective to reflect the increasing role of logistic in global competitive strategy. (Donald J
ETAL 1996, P, 1-2)

2.2 The logistical mission

Logistics exists to satisfy customer requirements by facilitating relevant manufacturing and

marketing operations. At strategy is level logistics manager seeks to achieve a previously agreed
up on quality of customer service through state of competency (martin Christopher 1998 p=23-
24)

2.3 The logistical service

If a firm is willing to commit the necessary resourced any levels of logistical service can be
achieved. The limitation factors in today’s operating environment in not technological but
resource for instance a dedicated level of environment in to technologic but resource for instance
dedicated level of inventory can be maintained on real time basis between the customers and
entry.(Donald. J et al, 1996 p=8-9)

The basic logistical service is measured in terms of the following;

Availability;-refers to having sufficient inventory to consistently customer requirement basic

logistical service can be measured in terms of the following three activities

Operational performance

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Deals with the elapsed time from order to delivery speed and consistence of a firm operational
performance can be reviewed in terms of customer requirements including services failure on a
day in a day out basis.

Service reliability;-it in values the quality attributes of logistics this key to qualityis accurate
merriments of availability and operational performance. However all logistic competence that
satisfy the key customer expectation at the realistic total expenditure .Therefore logistics costs
are related to the desired levels of performance this is the greater designed performance the
higher total logistics cots will be to develop a balanced effort of service performance and total
expenditures the three areas of performing as an integrated and coordinated process can be
improve operational management of materials, seem- finished product moving between location,
supply source and customer of an enter price (Donald’s j-et, al 1996=9-12)

2.4 The logistic total cost

Total cost was mentioned to include all expenditure that necessary to perform in for logistical
requirements. The author illustrate an electronic part of distribution strategy where in the high
variable costs direct factors to customer air transport was more than offset by reduction in
inventory and filed ware house costs. They concluded that least total cost of logistical ways to
provide the desired customer service was to centralized inventory in one were house and make
delivery air transportation. This concepts of total cost although basic had not prevail been
applied to logistical apply sis probability because of this economic, climate of time and the
radical departure is suggested practice performance by accounting and financial control was to
focused on attention to achieving the logiest possible cost for each function of logistics (Donald
j.et. al 1996=10-12)

2.5 Importance of logistical management

Logistics is add, value when inventory is correctly positional to facilitate sales.

The primary goals of logistics are to achieve a targeted level of the customer at the lowest total
cost. Logistics involves the complex and detailed work and managers are responsible for a
planning and administering that challenging the responsibilities duties. A use full ways which is
related to the most finite aspects to develop an integrated frame to over the all enterprises

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strategy individual who is involved in a day logistics can have basic understanding to how their
job fist in to the whole systems of the organization it is indispensable that competitively superior
logistical performance can become the corner stone of the overall enter pries strategy to complete
order to delivery 0perations. (Donald waters, 2003p=15)

2.6 Responsibilities of logistic managers

According to Michael wolfed logistics managers are in charge of shipping, for handling the
movement of goods and people along a supply chain, usually for a company none profit or the
government agency. Specific tasks very, but usually the logistics managers must make sure that
all material personal necessary for the organization to function are mode available to the parties
that need them, the task accomplished by coordinating the most aspect of involving shipping are
important (http/ /www.chow,com)

They are many responsibilities of logistics manages, from those the main responsibilities are.

2.6.1 Develop back-up plans

As goods logistics manages hopes for the best but prepares for the worst.

Managers would be anticipate the likely sours of foul-ups or delays and prepare back-up plan for
fix the situation and keep goods moving.

2.6.2 Conduct inventory

What can on hand to be shipped but he must first known what the company has on the hands.
Therefore often the responsibility of logistic manager to take investor of organization is stock of
goods.

2.6.3 Prioritize needs

Logistic manager must often handle the compacting need of several parties within single
organization coordination with the organizational leader ship. They most prioritize needs and
organization the supply chain.

2.6.4 Schedule shipping

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Logistic manager must be worth with relevant parties to develop a plan for what goods need to
be shipping when and where it also should make sure that all parties including, shippers,
transports and receivers are clear on their duties

2.6.5 Track goods

Logistic manager must be track all goods moving within a supply chain, making sure that they
have beak shipped and received according to schedules. When mistake occurs, the manager must
be correct the error and recon figure the logistic plan accordingly.

2.6.6 Coordination paper work

A logistic manager must be anticipated and prepare all relevant legal paper work and that
necessary documentation is made available to authorities.

2.6.7 Prepared budget

A logistic manager must also prepare and present regular budget estimating the cost of moving
goods-up on the receipt of the final, approved budget the manager must edit the logistic plans
according to any change that have been made.

2.6.8 Train employees

Logistic manager must be occasionally training employees in proper method of shipping and
handling goods, as well as relay any special instructions

2.6.9 Apprise supervisor

Logistic manage should always keep their supervisor informed of how operations are
proceeding, as well as notify them of any issues needing special attentions

2.6.10 Find in efficiencies

Logistic manager should always be on the lookout for supply chain in efficiency of both
economic and material and the if possible, reconfigure the supply plan to eliminate them.

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2.7 Duties of logistic managers

According to much lisle logistic managers contribute to the success of the companies. He also
play an important role within the companies that manufacture or distributed goods and service
they use their organizational technical and industrial specific skills to help the companies ensure
they have enough of the right product or service available in the right locations. (Webster’s
dictionary) same duties of logistic managers are

2.7.10 Monitor stock

Logistics manager use computer programs and other tools to monitor the level of the various
stocks. Doing this help he ensures that the company maintains a sufficient supply to meet the
demand of the customers. When inventory get low, the logistics manager will place orders with
the appropriate vendors or ware house to increase stock to the required level of the customer
needs. (Donald .j.1996-p=9).

7.8.2 Processing and packing

Logistic manager responsibility for making sure the end consumers, receiving the products or
service he ordered as well as he truck the delivers much in the same ways

7.8.3 Communicate and work in team

The logistic manager work with many people inside or outside of the organization .During the
course of her day, he will work with many other people to help the company maintain and
provide the necessary amount of good and service (internet http/ /www.chow. com).

2.8 Logistical operation integration

2.8.10 The work of logistics

Logistics competency is achieved by coordinating the following activities.

 Net work design; it is requirement is to determine the number and location of all types of
facilitate required to perform the logistic work what inventory and how much to stock at
each facility and where to assign

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  Information; current technology capable of handling the most demanding information
requirement, managers is learning how to use
 Such information technology to device the new and unique logistical solution
(Donald .jet al 1996=p=2628)

 Transportation; transportation requirement can be accomplished in three ways.

 Contract may be arranged
 Privet effect of equipment may be operated and
 Common carriage may be use

There are three factors that are found a mental of transportation performance

1. Cost;- the cost of transportation is the payment four movement between two geographical
locations and expense related to administration and maintain in transit inventory
2. Speed;-refers to the time required competing specific movement.
3. Consistency; - refers to variation in time required performing specific movement.

2.9.2 Integrated logistics;

Logistics is viewed as the competency the ticks and enter price with its customers and suppliers
as materials are procured a value added inventory flow is initiated products to customers thus the
process is viewed in terms of toinnervated efforts that are inventory flow and information flow.

Inventory flow

Figure2.1 integrated logistics

For clear understanding of logistical operation should be divided in to three ways.

 Physical distribution;-is concerning with managing work in process inventory as it flows

between stage of manufacturing.
 Procurement;-are the purchasing and arranging in bound movements of materials’ parts
and or finished inventory from suppliers to manufacturing or assembly plants. Ware
house or retailed stores.

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  The overall objective of an integrated logistical process is to coordinate the overall
values added inventory management (Donald .j.et, al 1996-p=34-35)
2.9.3 Barriers to internal integrations

It’s important recognize hinders or barriers that often serve to inhabit internal process integration
it’s originated inter additional practices related to the following things.

 Organizational structures;- the traditional organization structure for conducting business

prevents any cross functional process from being implemented most traditional
organizations structured to divided authority and responsibility according to functional
work (Donald j.etal1996-p==45)
 Network design;-is to determine the number and location of type perform logistics work.

What inventory and much to stock at each facility and were to assign customers. The design of a
network must consider geographical location variations.The network design requirement is to
determine the number and location of all types facilities required to perform logistic work.
(Donald j.19996=26-27)

 Information;-currently technology is capable of handling the most demanding

information’s requirement is manager is learned how to use each information technology
to device and unique logistical solutions. Howeverdeficiency in the quality of information
cane createscount recess operation problems Therefore for casting and order
managements is two areas of logistical work that depend on work of information.

 Transportation; it’s an operational arc logistic that geographically positions inventory,

because o it’s fundamental important and visible cost. Transportation requirement can be
accomplished in three basic types.
 A private fleet of equipment operated
 Contract may be arranged
 An enterprise may engage the service
 Measurement performance;- to success full integration of logistics function anew score
card must be developed as well as the manager must encourage to view their strategic
function as a part of process rather than grand alone activities.

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  Inventory ownership;-traditionally it is a maintenance of deciliter supply to gain comfort
and protect against demand and operational uncertainty.
 Knowledge transfer capability;- knowledge is a power in all most all business situations.
In ability to share experience as there is no substitute the appropriate experience can
definitely add barrier to logistical integration failure to transfer knowledge suppression
fends to faster the functional orientation by developing a work force composed or
specialist as well as also creates a barriers to continued used integration when an
experience employee retires or for some reason levels the firm.
 Information technologies;- it is the resource to achieve the logistical integrations. The
need to share information has resulted in the development of data ware house that exist
for the sole purpose of sharing information between systems (Donald . j et al 1996-p=45-
46)

2.10. Areas that increases (improve) logistic performance on organization productivity

 Just-in time:-is any inventory management philosophy aimed at reducing waste and
redundant inventory delivery products, components or materials just when an
organization need the
 Quick-response:-is a retail sectors strategy which combines a numbers of factices to
improve inventory management and efficiency, while spending inventory flow.
 Quality:-is the ongoing process of building and sustaining relationship by assessing,
anticipating and fulfilling stated and implied needs.
 On time delivery:-is no special continuing in which event occurs apparently invisible
succession from the past through the present to the future
2.11 The role of financial capacity to perform logistic performance
 Ability to contribute and to corporate logistic cost.
 Ability to improve all logistical performance and activities.
 To perform better competence of a firm and to response the dynamic global market.
 To allocate a sufficient financial and personal recourses as well as ability of a firms to
move their goods and etc. (Webster’s dictionary)

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2.12 Organizations for logistical decisions:-in the survey of career patterns 2000 conducted
the Ohio state university logistic research groups. It was reported that organizational
incorporate the logistics in to their corporate structure one of four ways.
1. As a part of each corporate division
2. As a separate logistics division
3. As a centralized logistics staff and
4. As a combinations of divisional and centralized activities organization form is
mostly used

From 1997 to 2000 survey respondents reported more director subtitles and fevers managers
titles with the number of vice president starting about the same.

There are 52%reported being housed in logistic deportment and grouping number 918% of work
with a supply chain management of goods in to and out of an organizations and the potential
effect of profits.(Palgrave. Metal, 1998)

Large firms have a separate logistic service departments with the specialist in areas such as
selection of supplier’s good tracking of goods that specialized even further based on the purpose
of shipments.

In the medium size and small organizations the numbers of logistics decisions may not be large
enough to warrant at full time logistics specialist and the logistics decision are controlled by the
buyer and purchasing manager, these means the buyer and purchasing manager have enough
knowledge to make decision on the logistic activities (john oxlephil crouber,1998=peg.=139)

2.13 Supply chain relation ship

 Channel structure:-the channel structure is the areas within which free market systems
performance. Ownership exchange of product and service and it’s also abetted filed of
business where a firm’s ultimate the success and failure is determined
 Channel relationship:-the channel relationship is the Conner ion way intra and extra
company agents and dealer, products or service is marketed (Donald and Brower sox,
1996=peg=900

23
 2.14 Logistical measurements

The combination of slower economic growth and increased competition has formed firm in every
industry to concentrate on efficient deployment of logistical resource one result of these effort
has been the emergence of new corporate position devoted to logistical controllership. The
logistical controller is concerned with continuous measurement process, controller’s ship focus
on the assessment of resource deployment and global attainment.

2.14.1 Dimension of performance measurement

Substantial effect has been expended to improve the quality of information that logistics
managers have at their disposal to measure compare and guide logistical performance. In most
firms old, reporting format has to be redesigned to take advantage of new computer-based
control systems.

2.14.2 Objective:-the three objectives for developing and implementing performance

measurement system included monitoring, controlling and directing logistic operation.

I. Monitoring: measures track historical logistic system performance for reporting to

management and customers. Typically monitoring measure includes service level and
logistic cost components.
II. Controlling: measures track ongoing performance and are used to refers a logistics
process order to bring it in to compliance when it exceed control standard. An example of
control application is transformation damage tracking. If a system is in place to
periodically report product damage, logistics management can be identify the cause and
adjust the packaging or loading process as needed.
III. Directing: directing measures are designed to motivate personnel typical example
include, pay four performance practice used to encourage ware house or transportation,
personnel to achieve high level of productivity. Especially, consider ware
House material handlers or delivers who questionnaires 0 are pay for eight hours of work
based on standard productive rate:

If the material handler can complete the assigned task less than allotted time, they are allowed
personal or un assigned time on the other hand, if they required more than allotted time, they

24
destine time is that they are not compensate for the additional time. In some cases employees are
actually given a bonus when the task is completed in less than the allotted time .When such
directed measures are used, it is important that the both positive and negative performance be
measured. For example, the completion of an assignment task such as order selection in less than
standard time must be traded off against increased error damage.

2.14.3 Perspective:-the appropriate measurement perspectives must also be evaluated an

determined. The continued of possible range from all activity based measures to process based
measures.

1. Activities based measures: focus on individual task requirement to process and ship
orders examples. Included customer orders interred, cases received from supplier and
cases to customers.
2. Process measures: process measures consider the consumer satisfaction delivered by the
entire supply chain. They examine total performance cycle time or total services. Quality,
both each measures the collective effectiveness of all activities required to satisfy
customer.

2.14.4 Internal performance measurements: internalperformance measure focus on

comparing activities and processes to previous operation and goals. Research
suggested that logistics performance measures can generally be classified in to these
categories.
 Cost
 Customer service
 Productivity
 Asset management
1. Cost:- actual incurred to accomplished specific operating objectives in the most direct
reflection of logistic performance. Logistics performance on organization productivity is
typically measured in terms of total dollars. As a percentage of sales or as a cost per a
unit volume.
2. Customer service: the second common set of logistics performance measurement focuses
on customer service. It examines a firm’s relative ability to satisfy customers.

25
3. Productivity: is a relationship (usually ration or an index) between output (goods and
services) produce and quantities of inputs (recovers) utilized by the system to produce
that output.
4. Asset measurement: it focus on the utilization of capital investment in facilities and an
equipment as well as working capital application to inventory to achieve logistic goals,
logistics facilities equipment and inventory can represent a substantial segments of a firm
assets. (Donald Et al Peg .669)

26
CHAPTER THREE

3. RESEARCH DESIGN AND METHODOLOGIES

This part of paper is to present the methodological considerations taken by the researcher to
study, research methods, source of data and information needed for study, data collection
techniques and population of interests.

3.1 Research design

The researcher was used descriptive research design and analytical design method because these
methods is useful to clearly describe the present state of area of investigation to cover wide
magnitude in order to obtain precise information concerning the current state of phenomena.

3.2Nature and source of data

First of all the researcher is used to describe research types that it use for those studies which are
concerned with the describing the characteristics of function of particular individuals and group
of the phenomena.

The researcher is used to describe research design types by using both primary and secondary of
data. The primary source of data would be collected directly from subjects that are through close-
ended questionnaires, open-ended questionnaires and personal observation as well as the
secondary data is collected from different related documents, books, internet and written
documents from the organization

III.3 Sample size and method

Sampling is the process of using the small number of items from the whole population. Therefore
the researcher used to non-probability sampling techniques mainly the judgmental or purposive.
The researcher is taken from 120 target populations by selecting the 20 sample to represent the
whole population and distributed the questionnaires to collect the primary data. However the
researcher collects the logistics department, customer service, inventory control department as
well as top managers.

27
 III.4 Data gathering tools

There is many method or techniques of data collections instruments that would use for different
research activities. The researcher used closed ended questionnaires, open ended questionnaires
and observations method for collecting primary source of information for the research. The
secondary data will obtained from books, written documents as well as internet.

III.5 Procedure of data collections

To carry out this research the following procedures of data collection was used

 Adjustment of the statement of problem

 Selection of respondent
 Formulation of questionnaires and interview
 Collection of response
 Inter parting the data
 Analyzing the response
 Presentation

III.6 Method of data analysis

The collected data was carefully edited, coded, tabulated and organized base on the type of basic
questions and nature of data analysis. Table and percentages will be the most appropriate
interpretation and analysis of data.

28
CHAPTERFOUR

4. Data presentation, analysis and interpretation

The general analysis of this data was carried out on dire motors agency p.L.c. It deals with
interpretation and analysis of data collected from both primary and secondary source.

The sample techniques used to carried out the research was judge mental purposive, deliberate
sampling to this 20 total copies of questionnaires

I. Questions relating with personal information

Table 4.1summary of the table and percentages of respondents by sex.

Questionnaires and possible Respondents

answer
Number Percentage
Male 12 60
Female 8 40
Total 20 100

Source: own survey 2014

As it show from the about table number 4.1 indicate that 60% are male and the remaining 40%
females this implies that the number of female in the organization is very low. Therefore, from
this the researcher can understand that the number of male exceeds the number of female in the
organizations.

29
Table 4.2 summary of the number and percentage of the respondent by ages:

Question and possible Respondent

answer
Number Percentage
18-25 4 20%
26-35 10 50%
36-45 3 15%
46-55 2 10%
Above 56 1 5%
Total 20 100%

Source: own survey 2014

AS it is shown from the table above number 4.2 the age of respondent years 26-35 is very large
as well as very high. Therefore from this the researcher can understand that the number of the
respondents that mean the most respondent is founded in the productivity age.

Table 4.3 summaries of respondents by educational level:

Question and possible Respondent

Answer
Number Percentage
Completed primary 1 5%
Diploma 3 15%
Certificate 1 5%
Degree 14 70%
Completed secondary 1 5%
Master - -
Total 20 100%

Source: own survey 2014

30
As it shown on the above table number 4.4 the number of respondent 70% is degree graduated
and the number of diploma as 15% and also the remaining are less than diploma as well as 5%
are completed primary, certificate, and completed secondary in the organization.

Table 4.4 summary and numbers of respondents work experience by years:

Questionnaires and possible Respondent

answer
Number Percentage
<5 years 8 40%
5-10 years 8 40%
10-15 years 2 10%
Above 15 years 2 10%
Total 20 100%

Source: own survey 2014

As it is shown the above table above number of 4.4 the number of respondent hovered in the
organization between less than 5 years and 5-10 years are 40%and the 4 remaining 10%
respondent are served between 10-5 years and above 15 years therefore, from this point of view
the researcher can conduct that large numbers of employees does not long experience.

Questions related to the knowledge of respondents.

Table 4.5 how logistic performance can increase.

31
Questions and possible Respondent
answer
How logistic performance can Number Percentage
be increased in your
organization
Interims of on time delivery 7 35%
Interims of just in time 1 5%

Interims of quality 6 30%

Interims of quick response 6 30%
Total 20 100%

Source: own survey 2014

As it shown in the above table numbers 4-5 35% and 30% of respondent replied that logistic
performance can increased interims of on time delivery interims quality and quick response as
well as 5% of their respondent replica that logistic performance can be increased interims of just
in time from this the researcher can understand that quality is the most crucial to increase logistic
performance and the organization.

Table 4.6 how to describe the assessment of logistic performance organization productivity.

Question and possible answer Respondent

How do you describe the Number Percentage
assessment of logistic
performance in your
organization
Excellent 3 15%
Very good 13 65%
Good 4 20%
Total 20 100%

32
As it show in the table number 4.6 indicate that the assessment of logistic performance is very
good therefore from the above table 65% and 20% is very good and goods respectively.
Therefore, the researcher can understand that the assessment of logistic performance is good in
the organization.

Table 4.7 logistic expenditures and service desired

Question and possible answer Respondents

Does the logistic expenditure Number Percentage
balance with the desired
customer’s service in your
organization?
Yes 9 45%
No 11 55%
Total 20 100%
Source: own survey

As its shows the above table number 4.7 indicate that 55% of respondents responded that
logistics expenditures is not balanced with the desired service and 45% of respondents respond
the logistic expenditure is balanced with the desired service from the above table the researchers
can understand that most of logistic expenditure is not balanced with the desired customer
service.

Table 4, 8 the financial capacity of the organization to pet formation

Question and possible answer Respondent

How do you express the Number Percentage
financial capacity of the
organization to performance?
Moderate 4 20%
Effective 16 80%
Total 20 100%
Source own survey 2014

33
As its shown in the above table number 4,8 indicates that the financial capacity of the
organization to perform logistic performance is effective from this information the researcher can
understand that the financial capacity of the organization is very much enough to perform
logistics interims of effective and moderate

Table 4.9 the logistic performance measurement

Question and possible answer

How logistical performance Number Percentage
can be measured in your
organization?
In terms of availability 4 20%
In terms of operational 12 60%
performance
In terms service reliability 2 10%
In terms of all the above 2 10%
Total 2o 100%
Source: own survey 2014

As it’s shown in the above table number 4.9 (60%) of the respondents replied that logistical
service can be measured in terms of operational performance and (20%), (10%) of the
respondents responded that logistic service can be measured in terms of availability and (10%)is
in terms of service reliable city and in terms of all the above respectively.

Table 4.10 logistical performance

34
Question and possible Respondents
Answer
Which logistical performance Number Present
can be in your organization?
Physical distribution 11 55%
Manufacturing support 4 20%
Procurements 5 25%
Other - -
Total 20 100%
Source: own survey 2014

As its shown in the above table number 4.10 (55)of the respondents replied that logistics
performance can applied in terms of physical distribution that link whole seller and retailers in
the market as such as etc., and (25%) of the respondents (20%) of them were responded in terms
of logistic performance is not enough applied by procurement and manufacturing. This implied
that the organization has not sufficient applied of logistic performance.

Table 4.11 how the organization accomplish transportation

Question and possible Respondents

Responses
How your organization Number Percentage
transportation
requirement
Private fleet 4 20%
Private fleet and 2 10%
contract
Common carriage 12 60%
Private fleet and 2 10%
common carriage
Total 100%
Source: own survey

35
As it is shown in the above table number 4.12 shows that the most the respondents (60%)
responded that the organization accomplish transportation requirement in the form of common
carriage and (20%) of respondents private fleet and contract respectively. From the above table
the researcher can understand that the organization mostly uses common carriage to
accomplishtheir transportation requirements.

Table 4.2 how organizations applied integrated logistics in its operation

Question and possible Respondents

answer
How your organization Number Percentage
applies an integrated
Logistics support in its
operations?
Excellent 5 25%
Very good 13 65%
Good 2 10%
Total 20 100%
Source : own survey 2014

As its shown of the above table number 4.12 indicates that the organization applies integrated
logistics in its operations are almost very goods i.e. (65%) and (25%) are very good and excellent
respectively. From this the research can understand that the organization largely applies an
integrated logistics in its operation is very good.

36
Table 4.3 integration of logistic activity

Question and possible Respondent

answer
Is there integration of logistics Number Percentage
activity in you organization?
Yes 16 80%
No 40 20%
Total 20 100%
Source: own survey 2014

As the above table shows (80%) of the respondent replied there is no an integration of logistic
activity in the organization as well as (20%) of the respondents replied there is an integration of
logistic activity in there organization.

From the above result of this study we can conclude that majority of the respondents don’t agree
with the concept, that there is an integration of logistic activity in the organization.

Table 1.14 about sharing information

Question and possible Respondent

answer
Do you think all there is Number Percentage
information sharing in the
organization?
Yes 10 50%
No 10 50%
Total 20 100%
Source: own survey 2014

As clearly describe in the above table (50%) of the respondents replied that there is information
sharing within the organization on the other hand (50%) of the respondents answered that there is
information sharing.

37
According to the above data majority of the respondents said that almost there is moderate
information sharing among the employees of an organization.

Table 4.15 problems related with logistic activity

Question and possible Respondent

answer
In practicing logistic a Number Percentage
performance on organization
productivity is there any
problem with in
Yes 16 80%
No 4 20%
Total 20 100%
Source: own survey 2014

The above data implies that from the total sample respondent (80%) of them said that in
practicing logistic performance there any plenty of problems within the organization on the other
hand (20%) of the respondent said there is any clear cut problems in relation to practicing
logistic performance on the organization productivity.

Table 4.16 satisfaction of the logistic activities

Question and possible Respondent

answer
Are you satisfied by the Number Percentage
logistic performance of your
organization
Yes 16 80%
No 4 20%
Total 20 100%
Source: own survey 2014

38
As indicated in the above table from the total respondent (80%) of them replied that as they as
satisfied by the logistic performance of their organization on the logistic performance of their
organization from the above result of this study we can understand that the most of the
respondents are satisfied by the logistic performance of the organization.

Table 4.17 problems due to logistic performance

Question and possible

answer
Have you ever faced any Number Percentage
problems due to logistic
performance in your
organization?
Yes 7 35%
No 13 65%
Total 20 100%
Source: own survey 2014

As it is shown the above table number 4.17 shows that most of the respondents i.e. (65%)
have faced problem due to logistic performance and the remaining (35%) replied the inverse
from this information the research can generalize that the organization have a problems on
logistic performance.

4.18 As it is shown on the tables above the problems that face the organization are listed by
many respondents as follows.
 Problems of a good measurement performance
 Problems of sometimes the measurement decide response
 Do not decide problems of the organization on time
 Problems of lead time that is refers to the gap between ordering received and ordering
deliver or is the time from when a customer place are quest for a products and services to
the time when that request is met.

39
Interview for the Manager

Mentioned on the introduction part of this chapter, the researcher use interview
gathering information from manager of logistic concerned the interviews which
contain four questions.

Q1. What seems to be logistic activity in your organization?

The manager said that, logistic performance in their organization seems to be good, specially, in
grouping and distributing for the customer at a time and preparing qualitative good product.

Q2. Whatdo you think of the problems that affect the wellbeing logistic activity?

The manager said that, the most common problem are lack of access skilled man power, shortage
of row materials and lack of experience are highly affect the organization.

Q3. Is there any improvement with regard to the practice of logistic performance on
yourorganization productivities?

The manager replied that, yes to some extent there in an improvement with regard to the practice
of logistic performance for instance the organization is on the way of introducing new
technological providing training courses for the employees.

Q4. Is there any training program for the employees in relation to logistic performance?

Themanager state that some time there is a training course for the employees about logistic
performance organization productivity, but it is not satisfactory enough. Because the source is
very limited in case of content and give within short period of time.

CHAPTER FIVE

40
 5. SUMMARY,CONCLUSION AND RECOMMENDATION

5.1 S UMMARY

The main objective of the study is to identify the assessment that affect the logistic performance
on the organization productivity in Dire Motors Agency PLC and to find out the possible answer
to the basic questions that raisedof the beginning of the study. Logistic is defined by the council
of logistic manager as the target of the supply chain that plans, implements and controls the
effect and effective information from the point of origin to the point of consumption in order to
meet consumers requirement.Therefore, based on the analysis of data collecting the following
finding (summary) are obtained.

From out of total respondents of 12(60%) are male employee, 8(40%) female are between age
18-35 in teams of educational level out of total respondents 14(70%) have degree work
experience. The company measure logistic service in term is of all i.e. availability, operational,
performance and service reliability, out of total respondents 12(60%) are replied logistic
performance can be applicable in the organization was physically distribution, out of this (55%)
are replied logistic performance can increased mostly in terms of delivery, out of total number of
respondents 13(65%) are replied and assessment of logistic performance in the organization are
very replied and goods out of total number of respondents 11(55%) are replied and finally the
logistic expenditures and service desired in the organization are mostly no, out of total number of
respondents 13(65) are replied.

41
5.2 conclusions

Based on the data presentation and analysis, the researcher are had been able to examine
the general highlight of logistic and its performance on organization productivities in
Dire Motors Agency P.L.C.the following conclusion.
When the researcher can see the company employees experience most of employee have
no more excellent experience except few employees. When the researcher can see about
the assessment and the work of logistic performance information shows in the
organization the company has practiced all logistic service in the company the manager
use to performed logistics performance it is used common carriage as well as private fleet
and almost are good but the manager has apply some responsibilities and duties like
prepare budget, conduct inventory and monitoring stock.The organization utilizes the
financial capacity, as information shown the financial utilization of the company is
moderate and effective responsibility.
The other are the organization that regarding with logistic service level this is practiced in
terms of all specially in terms of service reliabilities. Mostly the company face problem
regarding with logistic performance such as lead time, good measurement performance,
do not decided the problems of the organization on time as well as measurement decide
responses but in same level the company has to resist and solve those difficulties.

The other one is activities relativities relating with the logistical performance that
applying in the organization such as physical distributions manufacturing support
procurement as well as others performance.
In this the organization mostly applies other logistical performance like of store keeper
andinventory control and physical distributions next to the listed others.

5.3 Recommendations

42
After the researcher identified the strength as well as the weakness of the organizations,
the researcher also would like to suggest on the problems mentioned in the conclusion or
summary. The researcher believes that the organizations manager are very positively take
the out comment in to account and give attention as follows:
The overall goal of logistic activities is to minimize the total logistic cost. Hence the Dire
Motors Agency p. l. c
The organization manager should work hard to have skilled and more experienced
employees as well as aspects to expand of logistic outside the company to gain more
advantages from logistic customer.
The company should have it is own transportation equipment to perform logistic so as to
decrease the logistic total costs.

The organization should also perform the customer service level effective and cost
efficiently as the major objective of performance measurement is services in logistic
activity

It is also should expect to measure its performance interims of deferent variable rather
than only by focusing on the customer service level and operational performance like
customer satisfaction

Finally the organization should be expected to learn from its previous mistake it should
have to adjust a better logistical performance and building the effective coordination.

43
 Bibliography

1. Donal.J.Bower sox and David Class (1996), Logistics management,

theintegrated. Supply chain process, 3rd edition.
2. Donal.j. Bower and Helsink.I (1996), Supply chain management , 3rd edition
3. Donald water (2004 ), logistical an introduction of supply
chainmanagement macmillan, 5th edition
4. John oxley phil croucher (1989), Introduction to logistics, 6th edition
5. Donald waters (2004) and martinchritophers (1998), introduction
ofsupply chain management, 2nd edition.
6. Internet http: // www chow. Com
7. Par grave macnillan (1999), logistic and introduction to supply
chainmanagement, 4th edition.

44
 APPENDIX

DIRE DAWA UNIVERSITY

45
SCHOOL OF BUSINESS AND ECONOMICS

DEPARTEMANT OF LOGISTIC AND SUPPLY CHAIN MANAGEMENT

Dear: Respondents

My name is Taju mustefa studying at Dire Dawa University and school of business and
economics, department of logistic and supply chain management (LSCM).Currently conducting
the research on “The assessment of logistic performance on organization productivity” as a
partial fulfillment of BA degree in LSCM. The objective of these questionnaires is to collect
relevant data pertaining to practice and challenges from the target population of the study.
Hence, the researcher kindly requests you to service respond to the questions knowing that you
responses will be used only for academic researcher propos and remain confidential. Thank you
very much in advance indeed for your corporation. I hope that the research work will help your
organization.

Section 1: personal information:

1. Sex: male female

2. Age 18-25 26-35 36-45

46-55 Above 56

3. Educational level: completed primary completed secondary

Certificate diploma degree master

4. Work experience: <5 years 5-10 years

46
10-15 years years> 15

Section 2: Basic questioners

5. How logistics performance can be increased in your organization? (you can thick
more than one alternative )

In terms of on time delivery In terms of quick response

In terms of just-in time in terms of quality

6. How do you describe the assessment of logistic performance on organization

productivity?

Excellent Very good Good

7. Does the logistics expenditures balance with describe customer survives

Yes No

8. Dow do you express the financial capacity of the organization to performs logistics
activities?

Effective Moderate ineffective

47
 9. How logical performance can be measured in your organization?

In terms of availability In terms of operational

In terms of service reliability in terms of all the above

10. Which the logistical performance can be applied in your organization?

Physical distribution procurement

Manufacturing support

11. How your organizations fulfill transportation requirements?

Private fleet common carriage

Private fleet and contract private fleet and common carriage

12. Is integration of logistics performance on the organization productivity?

Yes No

13. How organization applies an integrated logistics support in its organization?

48
Excellent very good good

14. Do you think all there is information sharing in the organization?

Yes No

15. In practicing logistics performance on organization productivity is there any problems

within organization?

Yes No

16. Are you satisfied by the logistic performance for the productivity of your
organization?

Yes No

17. Have you ever faced any problems due to the poor logistical performance?

Yes No

49
 18. If you answer for question number 17 is yes please list the problems
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………

Section 3: Interview

19. Whatseems to be logistic activity in your organization?

20. Whatdo you think of the problems that affect the wellbeing logistic activity?

21. Is there any improvement with regard to the practice of logistic performance on your
organization productivities?

22. Is there any training program for the employees in relation to logistic performance?

50