ASSESSEMENT OF SUPPLY CHAIN MANAGEMENT IN CASE OF

HAWASSA FLOUR FACTORY

ARESEARCH
PAPERSUBMITTED TO DEPARTMENT OF
LOGISTICSANDSUPPLYCHAINMANAGEMENT IN PARTIAL
FULFILLMENT OF THE REQUIREMENT FORBACHLORS OF ART (BA)
DEGREE IN LOGISTICS AND SUPPLYCHAIN MANAGEMENT

BY: BELAY MOGES

ID NO: LSCM/0028/10

ADVISER: TILAHUN L. (MBA)

HAWASSA UNIVERSITY

COLLEGE OF BUSIESS AND ECONOMICSDEPARTMENT OF LOGISTICS

AND SUPPLY CHAIN MANAGEMENT

NOVEMBER, 2020

HAWASSA, ETHIOPIA

i
Acknowledgment

First I would like to thanks almighty God for his will and support throughout my life. Secondly, I would
like to say thank my adviser, Mr., Tilahun.L for his continued support, encouragement and comment in
doing this paper from start up to end. Thirdly, I would
liketothaksmanageroflogisticsandsupplychainmanagmentdepartmentinHawassaflourfactoryforhisasistantb
yprovidereliableinformation.Finally I would like to thank to our gratitude to all individual that assist
during the preparation of the paper.

ii
Declaration

I, the undersigned student, hereby declare that, this senior research project is my original work,

Which has not been presented for agree in this/elsewhere university. All sources of materials used
for this study have been fully acknowledge.

Name .....................................

Signature;...........

Date;...............................

Confirmation:

This thesis/researcher project work is conducted under my supervision and fulfills all requirements
of research standard of the program. I hereby approves the submission of this thesis/senior
research project for examination.

Advisor's name:................

Signature:......................

Date:.............................

iii
 ADVISORS' APPROVAL SHEET

This is to certify that the senior essay project entitled assessment of supply chain
management (in Case of Hawassa flour factory) submitted in partial fulfillment of the
requirements for the degree of Bachelor of Logistics and supply chain management, the
under Graduate program of the School of Business and economics, and has been carried
out by (Belay moges ID 0028/10) under my supervision. Therefore I recommend that the
student has fulfilled the requirements and hence here by can submit the project to the
department.

________________ _____________ ______________

Name of Advisor Signature Date

iv
v
 Abstract

Any organization do not exist in isolation, whether large corporation, public body, or
small business aim to meet the needs of its various customers and stakeholders. In
order to do this, any organization will acquire many of its materials equipment, facilities,
and supplies from other organizations. Now a day’s business competition takes place
between supply chains rather than between individual companies. The main objective of
the study will be to assess supply chain management in case of Hawassa flour factory in
Hawassa town. The descriptive research design will employee in this study. The
researcher will use census method to achieve the objective of the study .Data collection
instrument that the research will use are questionnaire, interview and document
analysis for both qualitative and quantitative data. Then data was collected analyzed
and interpreted through tabulation and percentage in order to arrive at certain
conclusion.

vi
Acronym

SCM- Supply Chain management

LIS - Logistic Information System

vii
 Content page

Acknowledgment…………………………………………………………………. ……………………..I

Declaration................................................................................................................................................. II

Advisor approval sheet................................................................................................................................ III

Abstract……………………………………………………………………………………………..…….

Acronym…………………………………………………………………………………………………..

Table content ………………………………………………………………………………...…………....

Chapter one……………………………………………………………………………………….……...1

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

1.1 Background of the study........................................................................….............................................1

1.2Background of the organization................................................................................................................2

1.3. Statement of the problem........................................................................................…............................4

1.4. Basic research question...........................................................................................…............................4

1.5Objective of the study…...........................................................................................................................4

1.5.1General objective…….................………………………………………………………4
1.5.2Specific objectives….......................................................................................................4

1.6. Scope and Limitation of the study….....................................................................................................5

1.6.1 Scope of the study…...............................................................................................................5

1.6.2 Limitation of the study…........................................................................................................5

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

1.8. Operational and conceptual definition of the term........................................................…......................5

1.9 Organization of the study….....................................................................................................................6

CHAPTER TWO.....................................................................................................................................7

2 Review of related literature...............................................................................................…......................7

2.1 Overview of supply chain management …...............………………………………………………7

2.2 SCM Approaches ........................................................................................…..................................8

viii
 2.2.1Traditional SCM approaches...................................................................................…................9
2.2.2 Modern SCM approaches ...................................................................................................…...9
2.3Supply chain stage ….......................................................................................................................10
2.4 Scope of Supply chain….................................................................................................................10

2.5 Importance SCM .........................................................…......................................................................10

2.6 objective of SCM ...............................................................................................…...............................11

2.7 process views of supply chain................................................................................................…............12

2.8 Decision phase in SCM .................................................…....................................................................12

2.8.1 Supply chain strategy or design .......................................................................................…......12

2.8.2 Supply chain planning .......................................................…......................................................13
2.8.3Supply chain operation decision phase.......................................................................…...............13

2.9 SCM Strategy: Responsiveness and efficiency ….......................................…………………….…….13

2.10 Coordination in the supply chain .................................................................................................…...14

2.10.1 Views of collaboration and trust build ......................................................................................15

2.11 Demand forecast in SCM.........................................................................................................…........15

2.12 Supply chain drivers ..................................................................................................…....................17

2.12.1 Inventory management ....................................................................................................…......18

2.12.2 Facilities ............................................................................................................................…....19

2.12.3 Pricing .................................................................................................................................…...20

2.12.4 Distribution ..................................................................................................................…..........21

2.12.5Transportation .............................................................................................................................21

2.12.6 Information .................................................................................................................…...........21

CHAPTER THREE.............................................................................................................................23
3 Research Methodology………………….......................……………………………………………23
3.1 Back ground of the study area.................................................................................…....................23
3.2 Research design..............................................................................................….............................23
3.3 Target population..................................................................................................….......................23
3.4 data type and Source…………......................………………………………………….………….24
3.4.1 Data type……………………………………………….........................…………………….24
3.4.2 Data source...................................................................................................................….......24
3.5 Method of data collection..................................................................................…..........................24

ix
 3.6 Method of Data analysis and interpretation.......................................................…..........................24
3.7 Ethical consideration…………………...........................…………………………………………25

CHAPTER FOUR........................................................................................................................…...26
4. Data analysis, presentation and interpretation ....................................................................…..........26
4.1Introduction…..................................................................................................................................26
4.2 Analysis of demographic background of the respondents …..........................................................26
4.3 Analysis of major finding of the paper.....................................................................................…...28
4.4 analysis of information gathered through interview .......................................................................37

CHAPTER FIVE.................................................................................................................................39
5 Conclusion and recommendation ………………………...............………………………………39
5.1 Conclusion …………………………….................……………………………………………39
5.2 Recommendation ……………………………...........…………………………………………40
Reference………………..............………………………...……………….…………………….……42
Appendix………………..............…………………………………………………………………….43
Appendix1………………………………………………………………….…………………………43
Appendix 2 Interview question ................................................................................................…........44

List of Table ........................................................................................................................26

Table 4.1 analysis of sex structure of the respondent……………………...…………………….26

Table 4.2 analysis of age of the respondent...........................................................................…....27

Table 4.3 analysis of marital status of the respondent …………….....………………………….27

Table 4.4 analysis of educational level of the respondent……………....……………………….28

Table 4.5 analysis of year of experience of the respondent…………………...…………………29

Table 4.6 analysis of respondent to presence of efficient supplier of raw material…...............…29

Table 4.7 analysis of respondents related with speed to process and

Delivers the order...........................................................................................................................30

Table 4.8 analysis of respondents response regarding to reliability and

Sustainability of supplier……………………………………………………….......……………30

Table 4.9 analysis of factory acquire sufficient raw material from the supplier………..........….31

Table 4.10 analysis of source of supplier that the factory used..............................................…...31

Table 4.11 analysis of factory distribution facility to its downstream..................................….....32

x
Table 4.12 analysis of challenges that the factory face while distributing the

Flour to the customer..........................................................................................................….......33

Table 4.13 analysis of company to compute with other during the

Distribution of the product......................................................................................................…...33

Table 4.14 analysis of the company regarding to provide transportation service ...............…….34

Table 4.15 analysis of the overall experience of the factory distribution policy…............…….34

Table 4.16 analysis of company’s smooth relationship with the chain member……...........……35

Table 4.17 analysis of the financial capacity to create sustainable supply

Chain collaboration………………………………………………………….……………….......36

Table 4.18 analysis of respondent’s attitude related with rate of customer

Response about the factory’s product……………………………………...…………………… 36

xi
xii
 CHAPTER ONE

1. INTRODUCTION

1.1. BACKGROUND OF THE STUDY.

Supply chain is the network of interconnected organization or organizations entities developed
with the goal of getting the right product to the right price at the right time. The supply chain
includes not only the manufacturer and suppliers, but also includes transporters, warehouses,
distributers(wholesalers and retailers) and even customer themselves are part of it. It is a core
activity of any business, because every manufacturing industry spent above half of their cost on
transportation, warehousing, distribution and associated inventory management. (Chopra &
Meindls, 2007)

Supply chain is the network of entities through which material flows. Those entities may include
suppliers, carriers, manufacturing sites, distribution centers, retailers and customers (Lumms and
Alber (1997).

Supply chain is the integration of key business process, across the supply chain for the purpose
of creating value for customers and stakeholders (lambert 2009).

The responsibility for managing that spending falls squarely on the shoulders of supply chain
professionals. While the role of supply chain professionals may differ from company to company,
the goods are similar to develop and position a company’s supply chain in order to compete and
win today’s global market place. Also a successful supply chain initiatives can make it possible for
companies to meet customer needs more quickly, less expensive, better quality, and more reliable
goods can reach the market sooner. However, the concepts of working with suppliers and
customers as old as commerce itself, but the modern idea of supply chain is fairly recent. (Bowen
Kim, (2005)

The influential book “Competitive advantage” illustrated how a company could become more
profitable by strategically analyzing the five primary process on which its supply chain frame
works built: inbound logistic, operations, outbound logistics, sales, marketing and services. (M.
Porters, 1995)

1
As defined by Ellram and Copper (1993),”supply chain management is an integrating philosophy
to manage the total flow of distribution channel from supplier to ultimate customer”.

Monczka and Morgan (1997) state that “integrated supply chain management is about from
going the external customer and the managing all the process that are needed to provide the
customer with value in a horizontal way”. They believe that the supply chain not firms compete
and that those who will be the strongest competitors are those that “can provide management and
leadership to the fully integrated supply chain including external customer as well as prime
suppliers, their suppliers and their suppliers’ suppliers”.

Quinn (1997) defines supply chain management as all of those activities associated with moving
good from row materials, stage through the end user. This include sourcing procurement,
production scheduling, order processing, inventory management, transportation, ware housing
and customer service. Importantly it also embodies the information system sow necessary to
monitor all of those activities

Supply chain management has been defined as the design, planning, execution, control, and
monitoring of supply chain activities with the objective of creating net value, building
competitive structure, leveraging worldwide logistics, synchronizing supply with demand and
measuring performance globally.

From these definitions, summary definitions of supply chain can be stated as; all the activities
involved in delivering product from raw material through to the customer including sourcing raw
material and parts, manufacturing and assembly, warehousing and inventory tracking order entry
order management, distribution across all channels, delivery to the customer information system
necessary to monitor all of these activities in to a seamless process. It links all of the partners in
the chain including suppliers, carriers, third party companies and information system providers.
Managers in companies across the supply chain take an interest in the success of other
companies they work together to make the whole supply chain competitive. They have the facts
about the market, they know a lot about competition, and they coordinate their activities with
those of trading partners. It encompasses the processes necessary to create, source, make to, and
to deliver to demand. They use technology to gather information on market demand and
exchange information between organizations. A key point in supply chain management is that
the entire process must be viewed as one system any in efficiencies incurred across the supply
chain (suppliers, manufacturing plants, warehouses, customers etc.) Must be assessed to
determine true capacity of the process.

1.2Background of the organization

Hawassa flour factory was established 25yearsago (in1987) with the capital of 186 million
Ethiopian birr, it is one of the public enterprises. Asofmay2, 2012 as Hawassa flour supply chain

2
Operates as subsidiary of ATL trading plc. The factory is found in Hawassa city which is 273 km
far from Addis Ababa the capital city of Ethiopia. Hawassa flour factory produces 100% wheat
and each flour product range such as wheat, maize flour etc. Currently, the company produce 120
quintals of flour on daily basis and earns around 10 million birr monthly. THE factory also
exports its product to neighboring country like Kenya.

HAWASSA flour factory has large scale volume in 60% local and 40% sale volume in capital
city markets. It was also have member of employee who have native and dynamic in 1997.
Currently the factory has around 260 employees according total quality management department
in flour factory.

1.2 Statement of the problem

The focus of supply chain managements on co-operation, trust and the recognition that, properly
managed the whole can be greater than the sum of its part Martine (2007:3). In addition, as
stated that supply chain management is upon the management of relationship in order to achieve
a more profitable outcomes for all parties in the chain, this brings with it some significant
challenges since, there may be occasions when the narrow self-interest of one party has to be
subsumed for the benefit of the chain as a whole. Anon (2007).

According to (J. Bowers’ ox, 2007:371) Supply chain coordination requires each stages of the
supply chain to take in to account the impact its action on other stage. However, still there are
many big corporation where each of the different functions do not know what the other are
doing. a company might have promotion plan or special trade deal in place, and the SC people
are unaware of it, or the SC manager plans how much inventory to put in place or how much
capacity to invest in and does not share that with the sales and marketing people and so you may
find yourself in a situation where the sales and marketing peoples are giving special deals with
on a particular product when, in fact, you are running up to the capacity limit.

3
Lack of coordination leads to degradation of responsiveness and on increase in cost within
supply chain, but supply chain coordination improve all stages of the supply chain take action
that together increase total supply chain profit Lansadler (2007:163)

Good supply chain management is not zero sum game where one stage of the supply chain
increase profit at the expensive of others Anon (2007:3).

Now a day, many organization becomes out of the market most presumable due to inability to
design and manage supply chain flows (product, information, funds) efficiently and effectively.
In most commercial supply chain management decisions are made independently without
collaborate each other in the chain network, which created bullwhip effect that hurt the
performance of supply chain activities.

However the best practice do not just happen by throwing a lot of money at their supply chain
problems. Rather improvements come through strategy that identify and track supply chain
process early and often. Otherwise many organization will close and lock their doors. Having the
above ideas the research has trying to answer the following questions concerning the assessments
of supply chain in manufacturing industry taking Hawassa flour factory .

Having the above ideas the research has tried to answer the following questions concerning the
assessment of supply chain in manufacturing industry taking Hawassa flour factory.

1.3 Basic Research questions

1 Is there efficient raw material to produce flour product?

2 How the company distributes the product?

3 Dose the company have smooth relationship with the chain member?

1.4 Objectives of the study

1.4.1 General objective of the study

The main objective of the study was to assess the supply chain managements (in case study of
Hawassa flour factory in Hawassa town)

1.4.2 Specific objectives of study

1 To assess the supply of raw material

4
 2 To assess the distribution capacity of the factory

3 To examine company is relationship with their chain members.

1.5 Scope and Limitation of the study

1.5.1 Scope of the study

Even though supply chain would be very important issue in the world, in Ethiopia it is difficult to
conduct comprehensive as a whole due to its vast nature of the supply chain activities that needs
a long term study and huge finance. This study was concentrated only in the practice of supply
chain management (in case of Hawassa flour factory as reference).

Also the study was restricted on local partner involved in supply chain network specially:
procurement, manufacturing, distribution, customer relationships and other processing

1.5.2 Limitation of the study

When undertaking of the study there might be problems that would be encounter while in
accessibility to the internet and in adequate computer facilities, lack of cooperation from the
organizations respondent those who are concerned in giving information on with regard to the
study under the consideration.

1.6 Significance of the study

The aim of the this research activities would be assessed the problem and come up with possible
solution .therefore the researchers hope the finding of the study they provide to Hawassa flour
factory to understand the strength and weakness side of its supply chain activities .It might also
use or take measure to improve strategies in this area .

Also it serve as reference for both concept and methodology for consultant and other persons
who want to investigate further in this area.

1.7 operational and conceptual definition of the term.

1.7.1 Operational definition

Supply chain is essentially planning orientation and frame work that seeks to create single plan
for flow of product, information and funds through business ,so that supply chain management
build s up on this frame work and seek to achieve linkage and coordination between the
process of other entities in the principle .the supplier, customer and organization itself .

The focus of the supply chain management on cooperation on trust and the recognition that,
properly managed the whole can be greater than the sum of its part .in addition , as stated that
supply chain management is upon the management of relationship in order achieve a more

5
profitable out comes for all parties in the chain ,this brings with it some significant challenge
since ,there may be occasions when the narrow self-interest of one party has to be sub summed
for the benefit of the chain as a whole

1.8 Organization of the study

The overall structure of this study would organized in to five chapter .The first chapter deals with
introduction par that include, back ground of the study ,statement of the problem, research
question, objective of the study, scope of the study ,significant of the study and operational
definition of the term .The second chapter deals with review of related literature .The third
chapter deals with research methodology .The fourth chapter would also deals with data
processing and analyzing and the final chapter was also deals with conclusion and
recommendation of the result .

6
 CHAPTER TWO

2. LITERATURE RIVIEW

2.1. Overview of Supply Chain Management

Supply chain is essentially a planning orientation and frame work that seeks to create a single
`plan for flow of product, information, and funds through business, so that supply chain
management builds up on this framework and seek to achieve linkage and co-ordination between
the processes of other entities in the pipelines. i.e. the suppliers, customers and organization
itself.

The focus of supply chain managements on co-operation, trust and the recognition that, properly
managed the whole can be greater than the sum of its part Martine (2007:3). In addition, as
stated that supply chain management is upon the management of relationship in order to achieve
a more profitable outcomes for all parties in the chain, this brings with it some significant
challenges since, there may be occasions when the narrow self-interest of one party has to be
subsumed for the benefit of the chain as a whole. Anon (2007).

Whilst the phrase “supply chain management” is now widely used, professionals in the field
argued that it should really be termed “demand chain management” to reflect the fact that the
chain should be driven by the market, not by suppliers. Equally the word “chain” should be
replaced by “network” since there will normally be multiple suppliers and, indeed, suppliers to
suppliers as well as multiple customers’ and customers to be included in the total system.

Extending this idea it has been suggested by (J. Aitken 2006:3) that a supply chain could
accurate be defined as: A network of connected and interdependent organizations mutually and
co-operative working together to control, manage and improve the flow of material and
information from suppliers to end users.

The phrase supply chain management now a day widely used, particularly in manufacturing
industry. However, there is also of confusion surrounding term logistics, supply chain
management, and values chain; Thomas Craig an author and expert on the field defines logistics

7
on his article dated: 20-01-2006 says all definition of logistics has to comprise the management
of inventory.

In addition to that (Award 2001:8) on his book of supply chain strategy tried to described the
confusion surrounding the term logistics and supply chain management by saying logistics is
what happens in supply chain, logistics activities (customers response, Inventory management,
supply transportation and warehousing) connect and activate the objects in supply chain, but
supply chain in the network of facilities (warehouse, factories, terminals, port, stores, and
homes), Vehicles (trucks, train, planes, and ocean vessels), and logistics information system
(LIS) connected by an enterprise’s suppliers and its customer’s customers. To borrow as port
analogy, logistics is the game played in the supply chain arena. extending this idea the supply
chain could be accurately defined as: supply chain management is an integrating function with
primary responsibility for linking major business functions and business process within and
across companies into a cohesive and high performing business model, It includes all of the
logistics management activities noted above, as well as manufacturing operation and its drives
coordination of process and activities with and across marketing, sales, product design, finance
and information technology.

Again, there is still controversial in the meaning of supply main and values chain. However,
William Capalino an author and expert in the supply chain management define supply chain and
values chain on his article dated: 7-3-2007 says supply chain done right is value chain, it is an
integrated supply and chain or an integrated supply and demand chain or an integrated value
chain. When you think about it that way, you use it to drive revenues and innovation and value
not just to reduce costs, and that’s where you start to get strategic advantage.

Thus, one goal of supply chain management might be to reduce or eliminate the buffers of
inventors that exist between organization in chain through the sharing of information on demand
and current stock level, this is the concept of “co-managed inventory” Christopher (2005:4).

2.2. SCM Approaches

There are two approaches of managing supply chain. These are traditional approaches and
modern approaches RahulV.Alteker (2005:6)

8
2.2.1 Tradition SCM Approaches
The traditional approach of SCM was the fragmented sub-optimization within departments, or
within the company. The typicality in this approach is the local dominance and absence of
global sense. Customers and suppliers were treated as external entities and most of the time
ignored from or for any strategic decisions. In fact, the organization was locking at the various
departments including sales, production, and others like, finance, human resource, maintenance,
research and development, administration etc. As separate functions and no cohesiveness was
observed among them. On the contrary, purchase and production planning department was seen
as one functionality and primary application of integration philosophy was seen through MRP
(Materials requirement planning) applied there. Even though, later the traditional SCM
approaches integrate all of its internal supply chain operations but failed to extend the
integrations across external supply chain.

2.2.2 Modern SCM Approach

The modern SCM approach embraces the challenges across organizations, across different lines
of businesses, across consumers and across geographies. The strategies now formed are such
that they govern over all supply chain rather than the individual plays or organizations. Hence
we can say that to day supply chains rather than organizations compete with each other.

Under this approach, all the organized players are seen as are entity or which is also referred as
CPFR (Collaborative planning forecasting replenishment). It means the manufacturing
organization closely operates with all the trading partners including customers at one side and
suppliers at other side. In fact, the well define customer demands are known and the main focus
of the organization becomes fulfilling this demand with the supply management thus integrating
suppliers side. Typically, it integrates all of its internal supply chain operations as well as the
external supply chain operations to deliver value to the final consumers. In the Global E-
Business age, consumers can directly talk with the manufacturing company that is also a patent
holder of the commodities required by consumers. It organizes the complete solution for the
overall global system dynamics and closely operates with all the trading partners including
customers (redefined as points of demand) at one side and suppliers (redefined as points of
supply) at other side. (, 2005:9).

9
2.3. Supply Chain Stage.
The supply chain stage according to from up to down include:

1/ Component /raw materials suppliers

2/ Manufacturers

3/ Wholesalers /distributors

4/ Retailers

5/ Customers

The appropriate design of the supply chain will depend on both the customer’s need and the roles
of the stages involved (Chopra and meindl.2004; 5)

2.4. Scope of Supply Chain

Supply chain encompasses every effort involved in producing and delivering a final product
from the supplier’s suppler to customer’s customer, Efforts include managing supply and
demand, sourcing raw materials and parts, manufacturing and assembly, warehousing,
information management, distribution and delivery to customers. Supply chain activities began
with a customer order and end when a satisfied customer has paid for his or her purchase. The
term supply chain conjurers up images of product or supply moving from suppliers to
manufacturers to distributors to retailers to customer along a chain.

2.5. Importance of SCM

Many firms have discovered value –enhancing, long term benefits from their seem efforts, firms
with large system inventories, many suppliers, complex product assemblies, and highly valued
customers with large purchasing budget have the most to gain from the practice of SCM Joel
Wisner etal( 2005:9).

There are four reasons why SCM is important:

1. Dollar: supply chain management expensive (inventory holding, transportation, order

management, SC financing, related information technology)
2. Leverage: just as force is amplified by owner, small SC improvement gets amplified in
measures of interest to top management.

10
 3. Challenge: product variety is interring, product lifecycle are shrinking, and with
declining trade barriers, so Supply chain are becoming longer and more complex.
4. opportunity: Dollars, leverage, and increasing challenges do not mean much of most
supply chain are already turned with little opportunity for gain Scott Webster (2008:6)

Process integration and the other supply chain efforts can also result in better quality, better
production methods, and more reliable transportation and storage facilities. Additionally, as
working relationship throughout supply chain mature, firms will feel more comfortable investing
capital in better facilities, better products, and better service for their customers, and also
customers will share more information with suppliers. Joel Wisner etll (2005:10)

As (Chopra and Meindl ,2007:492) states this improvement can be achieved by supply chain
collaboration- within supply chain work together towards mutual goals by sharing ideas,
information, processes, knowledge, risks, and rewards among the supply chain partners.

2.6. Objectives of Supply Chain Management

The objectives supply chain is to maximize the overall supply chain profitability-the difference
between the revenues generated from customer and the overall cost across the supply chain Lan
Sadler ((2007:13)

Many professional argued that, the higher the supply chain profitability, the more successful
supply chain. Supply chain success should be measured in terms of supply chain profitability
and noddt interims of the profit at an individual stage. Having defined the objectives of supply
chain in terms of supply chain profitability the next logical steps is to look for sources of revenue
and costs. as Robert (A.Mallone 2007:197)States for any supply chain there is only one source of
revenue - customer only one providing positive cash flow for the supply chain of profit oriented
company. All others cash flows are simply fund exchanges that occur within supply chain gives
that different stage have different owners, all flows of information, products, or fund generate
cost within the supply chain. Thus, the appropriate management of these is a key to supply chain
success.

11
2.7. Process Views of Supply Chain
Customer demand is the fountain head for all supply chain activities. Fulfilling customer order
creates the need for all resources and activities, So that is a sequence of process and flow that
take place within and between different stages and combine to fill customer need for product
H.Frazelle (2002:71)

(Biruk T., 2009:46) states process choice is affect wither the product is made- to- stock or made
–to- order while a make- to- stock process will provide fast service at low lost, it offers less
flexibility in product choice than make –to- order process.

In addition to that (Chopra and meindl 2004: 8) again tries to describe cycle views of supply
chain process by saying the process in supply chain are divided in to two service of cycle each
performed at the interface between two successive stages of supply chain: customer order cycle,
replenishment cycle, manufacturing cycle, procurement cycle. Whatever, the supply chain
process, the SCM process in the firm classified in to the following three main processes:

1. Customer relationship management (CRM): All process that focus on the interface
between the firms and its customers.
2. Internal supply chain management (ISCM): All process that are internal to the firm.
3. Supplier relationship management (SRM): all process that focus on the interface between
the firms and its suppliers.

2.8. Decision Phase in Supply Chain Management

Successful supply chain management requires many decisions relative to the flow of
information, product, and funds. These decision falls in to three categories depend on the
frequency of each decision and the time frame over which a decision phase has impact.

2.8.1. Supply chain strategy or design:

It deals with the decision how to structure the supply chain over the next several years. It is
typically made for the long term (matter of years) and are very expensive to alter on short notice.

Includes:

 Location and capacity of product and warehousing capacity

 Mode of transportation d

12
  Products to be made or stored at various location
 Type of information system to be utilized

2.8.2. Supply chain planning

Decision made during this phase is a set of policies that govern short-term operations
(quarter to year). The companies start the planning phase with a forecast for the coming
year of demand in different market planning. Includes decision regarding with:

 Which market will be supplied from which location?

 The sub-contracting of manufacturing
 Inventory policies to be followed.
 Timing and size of marketing promotion.

2.8.3. Supply chain operation decision phase:

At operational level, Supply chain configuration is considered fixed and planning policies are
already defined, the time horizon here is weekly or daily, companies’ makes decisions regarding
individual customer orders, with a goal of handing incoming customer order in the best possible
manner. Decision related to: allocate orders to inventory or production, set order due dates,
generate pick list at a warehouse, allocate an order to a particular shipment, set delivery
schedules, and place replenishment order Chopora and Meindl (2004:7)

2.9. SCM strategy: Responsiveness and Efficiency

The first steps in achieving strategic fit between competitive and Supply chain strategies is to
understand customers and supply chain strategy that fit with competitive strategy Chopra and
meindl (2007:29).

Responsive business model seek to reduce or eliminate forecast reliance by joint planning and
rapid exchange of information between supply chain participants, managers are increasingly
sharing information to improve both the speed and accuracy of Supply chain management J.
Bower sox (2007:11 ),and he added supply chain responsiveness includes Supply chains ability
to do:

13
  Building high innovative products
 Handle large variety of product
 Respond to wide range of quantities demand
 Meet short lead times
 Select supplier based on: speed, flexibility, reliability, and quality
High product costs.
However, as (Chopra and Meindl 2004:40) states supply chain efficiency is the cost of making
and delivering of product to the customer at:

 Supply demand at low cost

 Minimize inventory to lower costs
 Reduce lead time but not the expense of costs
 Low production through high utilization
 Select supplier on: costs and quality.
Changing the strategies to achieve strategic fit may should easy enough to do, but in reality it can
be quite difficult,the important point to rate from the SC strategy responsiveness and efficiency
is that:

1. There is no right supply chain strategy independent of the competitive strategy.

2. There is a right supply chain strategy for given competitive strategy.

2.10. Coordination in the supply chain

Lack of coordination leads to degradation of responsiveness and on increase in cost within

supply chain, but supply chain coordination improve all stages of the supply chain take action
that together increase total supply chain profit Lan Sadler (2007:163)

Supply chain coordination requires each stages of the supply chain to take in to account the
impact its action on other stage J. Bower sox (2007:371)

However, still there are many big corporation where each of the different functions do not know
what the other are doing. a company might have promotion plan or special trade deal in place,
and the SC people are unaware of it, or the SC manager plans how much inventory to put in

14
place or how much capacity to invest in and does not share that with the sales and marketing
people and so you may find yourself in a situation where the sales and marketing peoples are
giving special deals with on a particular product when, in fact, you are running up to the capacity
limit Harvard business review (2006:80).

Good supply chain management is not zero sum game where one stage of the supply chain
increase profit at the expensive of others Anon (2007:3).

2.10.1. Views of Collaboration and Trust Built

Long-term continuity is depending on three key activities:

1. mutual strategic and operational goals

2. Two- way performance measurement
3. Formal and informal feedback mechanism Bower sox (2007:371)

Although everybody agree that cooperation and trust in supply chain are valuable. To
demonstratives ideals, Chopra and meindl (2007:512) identified two views regarding how
cooperation and trust can be built in to any supply chain relation:

1. Deterrence- based view: in this views the parties involved use variety of formal contract
to ensure cooperation. i.e. with the contract in place parties are assumed to be have in
trusting manner purely for reasons of self-interest.
2. Process- based view: within this view, trust and cooperation are built over time as a
result of a service of interaction between the parties involved, positive interaction
strengthen the belief in the cooperation of other party.
In most strong supply chain relationship, the initial period often relies more on the deterrence-
based view, over time the relation evolves toward a greater reliance on the process- based view.

2.11. Demand forecast in supply chain management

Forecast of future demand are essential to supply chain manager’s decision-making processes,
consider the push/anticipator Business model/ make –to-stock are/ process are performed in
anticipation customers demand whereas all pull (responsiveness/make to order /process are
performed in response to customer demand, so that for push make to stock process, managers

15
must plan the level of production. for pull/ make- to- order processes, a manager must plan the
level of available capacity and inventory.

There are two general approach to forecast: qualitative forecast is also known by subjective
which in corporate such as factor as the decision maker’s intuitions, emotions, and person
experiences, and value systems in reaching a forecast includes:

1. Sales for composite

2. Customer survey
3. Jury of executive opinion
4. Historical analogy
5. Leading indicators
Delphi method, Birkut T. (2009:108-109) and Quantitative forecast use a variety of
mathematical models that rely on historical data or casual variables to forecast demand
includes: Naïve, simple moving average, weighted moving average, exponential
smoothing, and simple regression analysis.

When each stage in supply chain makes its own separate forecast, these forecasts are often very
different. The result is a mismatch between supply and demand leads to bullwhip effect in
supply chain stage. Scott Webster (2008:374).

We can list some decision that utilize forecast and can be enhanced through collaborative
forecasting among supply chain partners:

Production: scheduling, inventory control, aggregate planning, purchasing etc.

Marketing: Sales force allocation, promotions new product introduction.

Finance: plant/equipment investment, budgetary planning.

Personnel: workforce planning, hiring, layoff chopra and meindl (2004:172).

Supply chain logistics forecast are necessary

(1) To support collaborative planning,

16
(2) To drive requirements planning,

(3) To improved resource management. J.Bowersox (92007: 63)

2.12. Supply Chain Drivers.

Sourcing: is the process of identifying, selecting and developing supplier- is a key purchasing
activities, sourcing can be either at tactical and operational or strategic level

Negotiate: Negotiation with suppliers involves many steps starting with request for quote
(RPQ) design, and execution of auctions.

Supply collaboration: through on forecast, production plan, and inventory levels.

Ensuring the supply of Raw materials and others supplies at reasonable price, at right quality, at
right quantity, at right time, and from the right source. (Lysons & Farrington 2006:366)

World-class sourcing practices include:

1. Make or buy analysis

2. Total acquisition cost analysis
3. Global sourcing
4. Ongoing supply base rationalization and consolidation
5. Primary -secondary sourcing
6. Electronic bid-based sourcing Frazelle (2002:155)

As (Lysons and farriongton 92006:366) stated models of the strategic process of sourcing
decision as follows:

1. Identify or reevaluate needs

2. Define or evaluate users requirements
3. Decide to make or buy
4. identify type of purchase

17
 5. Conduct marketing analysis
6. identify possible suppliers
7. prescreen possible suppliers
8. Evaluate the remaining base
9. Choose supplier
10. Deliver product/Performa service
11. Post purchase /make performance evaluation.

Sourcing decision involve a consideration of:

1. Factor influencing organization baring decision

2. Buying centers or teams
3. buying situations
4. Factors in deciding where to buy.

2.12.1 .Inventory management

“Go to the ant consider its ways and be wise it has no commander, no overseer ruler, yet it store
its provisions in summer and gather its food at harvest” proverbs 6:6-8

Inventory plays a significant role in supply chain’s ability to support a firm’s supply chain and
competitive strategy. If a firm’s competitive strategy requires a very high level of
responsiveness, a company can use the inventory to achieve this responsiveness by locating large
amount of inventory close to the customer Steven new and Roy west brook (2004:86).

As F. wood etal (2002:399) stated the goals of inventory management is to increase the financial
returns on inventory while simultaneously increasing customer service level. Inventory decision
is both risk, and high impact throughout the supply chain. Inventory committed to support future
sales drivers a number of anticipatory supply chain activities, without the proper inventory
assortment, lost sales and customer dissatisfaction may occurs, likewise, inventory planning is
critical to manufacturing material or component shortage can shut down a manufacturing line
force production schedule modifications, added cost and potential finished goods shortages, also
inventory overstock also create operating problems: increase costs and reduce profitability as a

18
result of added warehousing, working capital ,insurance ,tax and obsolescence J. bowers ox etal
(2007:130). So that management of inventory in supply chain requires understanding of
functionality, principles, cost, impact, and dynamics.

As (Chopra and Meindl, 2007: 51-52) identified major inventory related decision that supply
chain manager must take effectively create more responsible and more efficient supply chain.

1. Cycle inventory
2. Safety stock
3. Seasonal stock
It have found five initiative that leads to increased return on inventory and create very high level
of responsiveness in supply chain management at the same time:

1. improved forecast accuracy

2. Reduce cycle times
3. Lower purchase order/ set up costs
4. improved inventory visibility
5. lower inventor carrying cost Lan Sadler (2007:46)

2.12.2. Facilities
If we think of inventory as “what” is being passed along supply chain and transportation as
“how” it is passed along, the facilities are the “where” of the supply chain chopra and meindl
(2007:56).

Location problem is very important decision for two basic reason:

1. Location decision is somewhat irreversible due to its expensive or impossibility.

2. It affects the cost of production (such as cost of resources, i.e. direct materials, labor,
financial, overhead, energy land etc.) and on the effectiveness of marketing Biruk
Tesfaye (2009:56).

19
So that facilities is a key drivers in supply chain performance in terms of to gain economic of
scale when product is manufactured or stored in only one location: this centralization increase
efficiency. The costs reduction however comes at the expressive of responsiveness. The
opposite is also true, locating facilities close to customers increase the number of facilities
needed and consequently reduces efficiency. Chopra and meindl (2004:54).

In general, decision related to facilities: location and site selection, capacity determination,
operations methodology and warehousing and material handling methodology are crucial part of
supply chain design. So that it is a responsible on a shoulder of supply chain managers to trade-
off when making facilities decision between cost number of location, and type of facilities (level
of efficiently and responsiveness) that the company gain competitive advantages.

2.12.3. Pricing
Marketing strategy: promotion, distribution, pricing are important player lever to increase supply
chain profit by better matching demand and supply. For instance, price may influence demand if
customers are price sensitive, in any event, price will influence the total revenue generated
throughout supply cha-in strategy Frazelle (2007:97). So that as (chopra and meindl, 2007:460)
stated revenue management adjustment the pricing and available supply of asset to maximize
profit and it has a significant impact in supply chain performance (profitability) when one or
more of the following four conditions exist:

1. The value of product evolution different marketing segment

2. The product is highly perishable or product wastage occur
3. Demand has seasonal other peaks
4. The product is sold both in bulk and the spot market
Since pricing is the process by which a firms decides how much to charge customers for its
goods and services, It affect as customers segment that choose to buy the product as well as the
customers’ expectations.

The key components of pricing decision that affect SC performance are:

1. pricing and economies of scale

2. Everyday low pricing versus high- low pricing.
3. Fixed price versus menu pricing.

20
2.12.4. Distribution.
Distribution refers to the steps taken to move and store a product from the supplier stage
to the customer’s stage in the supply chain. Distribution is a key driver of the overall
profitability of a firm because it directly impacts both the Supply chain cost and the
customer experience.
Good distribution can be used to distribution networks.
To achieve a variety of supply chain objectives ranging from low cost to high responsiveness. As
a result, companies in the same industry often select very different

2.12.5. Transportation
The overall goals of transportation should be to connect sourcing location with customer at the
lowest possible transportation cost within the constraint of the customer services policy to fit
supply main strategy with company’s competitive strategy. Since transportation moves product
between different stages in supply chain. Extending this idea it has been suggested by (Robert
Amole 2007:59) transportation has a large impact on both responsiveness and efficiency. Faster
transportation whether in the form of differs modes of transportation or different amount being
transported, allows supply chain to be more responsive but reduce its efficiency. In addition to
this the type of transportation, route and network selection, In-house or out- source (3pl) uses
also affect the inventory and facility selection in the supply chain. Products (materials,
components, work- in process or finished goods) along the factory.

Supply chain network moved both by third party and own account transportation distribution
system.

2.12.6. Information
Supply chain information system initiate activities and track information regarding processes,
facilities information sharing both within the firm and between supply chain partners, and assist
in management decision making J. Bowersoxs (2007:98)

21
To execute supply chain management, we need a customer response system (CRS), an inventory
management system (IMS), supply management system (SMS)., Transportation management
system (TMS), and warehouse management system (WMS), enterprise resource and planning
(ERP) Frazelle (2007:879).An accurate information can help a firm to improve efficiency by
decreasing inventory and transportation costs, and it can be improve responsiveness by helping a
supply chain better match demand and supply. Stene new and west brook (2004:135).

In addition to this (chopra and meindl, 2007:55) states effect of information on supply chain
performances as follows:

1. Information serve as the connection between various stages of supply chain.

2. Information is also crucial to the daily operation of each in supply chain: production
scheduling systems, warehouse management system.
In general, there are two school thought on information technology in supply chain management:
one is that by getting the right software we can get rid of people, it is that simple. The other is
that information and other technologies are enablers and they can be tremendous assets when you
have the right people in place. Harvard business review (2006:80)

CHAPTER THREE
22
 3 research Methodology
3.1 Back ground of the study area
This study would be attempt to assess supply chain management (in case of Hawassa flour
factory).This factory was established in 1987EC in the southern part of Ethiopia namely,
Hawassa town .The factory fares from the capital cityon273 km and it operates it is normal
operation through 120 employees according to the data provided by the company is documents.

3.1 Research design

Descriptive research design would be employed in this study .The main purpose of
this research type were descriptive on the existing nature of the current supply
chain management practice in the company

3.3. Data type and source

3.3.1 Data type
To address the objective of the study the researcher was used both qualitative and
quantitative data type.

3.3.2. Data source

To conduct this study, the researcher used both primary and secondary data source.
Primary data collected through questionnaire and interview present by researcher
for employees and customers of the factory while secondary data collected through
reviewing company’s reports, manuals, journals, publications, and books for
assessing theories and principles related to the topics.

3.4 Target population

The target population of this study was management and employees of Hawassa
flour factory. The total population of this study is 120 due to the large size of the
employees which work in the factory, the researcher used sampling method.

The following expressions how the samples are calculated scientifically.

n=N/1+N (e) ^2
23
Where, n-The number of sample size taken
N-The number of the total population
e-Confidence interval (2.72).
Source :( Yamani, 1996).
The following illustrations how the samplings are taken
for thestudy. n=N/1+N (e) ^2
=120/1+120(2.72) ^2
=120/1+120(7.3984)

=120/1+887.81

=120/888.81

=0.14*100

=14

3.5 method of data collection instrument

All the necessary data that need for research was collects and document from the
sample that would considered to be relevant for the study .Thus the researcher used
primary and secondary data which involve close ended question and unstructured
interview with the selected respondent and the secondary data was obtained though
document analysis

3.6 Method of data analysis and interpretation

The data analysis that would employ in this research through descriptive analysis
to analyze and interpret the obtained the obtained qualitative data using
questionnaire and interview though tabulation , percentage and figure presentation
in order to arrive certain calculation

24
 3.7 Ethical consideration

The research would keep all the data gathered in selected from and the study
should contain full reliable data as well as full information should be pressed
and should Mach with the objectives of the study information gathered and the
data was connected and kept confidential and exclusive used for academic
purpose only beside consent of the respondents would take before data
collection process under goes.

25
 CHAPTER FOUR

4. Data Analysis, Presentation and Interpretation.

4.1 INTRODUCTION

This Chapter Comprises the analysis and Interpretation of the data collected from
Hawassa flour Factory. In the previous chapter the researcher have made clear
literature review with the concept of supply chain management system. In this
chapter the research will analyses the assessment of supply chain management in
manufacturing industry and its product by analyzing the response of the employees
and managers of the company.

The researcher took the population of the factory as target population of the study
14 respondents were requested to fill the questionnaire and the respondents agreed
and filled it frankly. Even though, all the questionnaires were collected in the
required time.

4.2 Analysis of Demographic background of the respondents.

This section gives detailed information about respond and in the light of their age,
sex, educational level, year of experience and the work position as related to the
study.

Table.4.1. Sex Distribution of respondents.

S e x Number of respondents P e r c e n t a g e
M a l e 9 6 4 %
F e m a l e 5 3 6 %
T o t a l 1 4 1 0 0 %
Source; Own Survey, 2020

26
The above table4.1, Indicates that from the total number of respondents9 (64%) of
them were Male and the remaining5 (36%) of respondents were Female. From this
it can be concluded that majority of the respondents were Male.

Table.4.2. Age Distribution of the respondents.

A g e Number of respondents P e r c e n t a g e
1 8 - 2 5 2 1 4 . 3 %
2 6 - 3 3 5 3 5 . 7 1 %
3 4 - 4 5 4 2 8 . 6 %
4 2 - 5 0 3 2 1 . 3 9 %
T o t a l 1 4 1 0 0 %
Source; Own survey, 2020

According to the above table 2 (35.71%) of the respondents were found between
the age of 18-25, 5(35.71%) of the respondents were found between the age of26-
33. About4 (28.6%) of the respondents were also found between the age of 34-41,
3 (21.39%) of the respondents were found between the age of 42-50 and there were
no above 50.

From this it can be concluded that majority of the respondent were between the age
of 26-33.

Table 4.3 Educational level of respondents

Level of Educatio n
S e x Certificate D i p l o m a B a c h e l o r Above B.A T o t a l
M a l e 4(28.64%) 3(21.43%) 2(14.28%) - 6 4 %
F e m a l e 3(21.44%) 1 ( 7 . 1 4 % ) 1 ( 7 . 1 4 % ) - 3 6 %
T o t a l 7 ( 5 0 % ) 4(28.57%) 3(21.43%) - 14(100% )
Source; Own Survey, 2020

27
The above table indicates that 4 (28.64%) of Male and 3 (21.44%) of Female were
certificate and 3 (21.43%) of Male and1 (7.14%) of Females also Diploma
graduate. About2 (14.28%) of Males and 1 (7.14%) of females were also BA
holders and none of them are above BA. From this it can be concluded that the
majority of the respondents were certificate graduate.

4.3 Analysis of the Major Findings of the study

Table 4.4 Presence of efficient supply of raw Materials

R e s p o n s e Number of respondents P e r c e n t a g e
Y e s 1 2 8 5 . 7 1 %
N o 2 1 4 . 2 9 %
T o t a l 1 4 1 0 0 %
Source; Own survey, 2020

According to the above asked question, about2 (14.29%) of respondents only

replied that there are no efficient supply of raw materials. But the majority, of
respondents about12 (85.71%) of respondents answered that the firm has efficient
supply of raw material to produce its products.

Consequently, it can be concluded that there are efficient supply of raw material
that enables the company to produce its products.

Table 4.5 suppliers’ speed to process and deliver the order

R e s p o n s e Number of respondents P e r c e n t a g e

28
P r o m p t l y 8 5 7 . 1 4 %
L a t e l y 2 1 4 . 2 9 %
V e r y L a t e l y 0 0 %
S o m e t i m e s 4 2 8 . 5 7 %
T o t a l 1 4 1 0 0 %
Source; Own survey, 2020

Table 4.5 exhibit that about8 (57.14%) of respondents said that the organization
process orders promptly; about

2(14.29%) of respondents replied lately and about 4 (28.57%) 0f respondents were

also replied that sometimes the company deliveries its products sometimes. This
indicates that suppliers of the company processes and deliver the order on time.
And here it can be concluded that the suppliers can process and deliver the order.

Table 4.6 Believe in reliability and sustainability of suppliers

R e s p o n s e Number of respondents P e r c e n t a g e
Y e s 7 5 0 %
N o 3 2 1 . 4 3 %
S o m e h o w 4 2 8 . 5 7 %
T o t a l 1 4 1 0 0 %
Source; Own survey, 2020

Table 4.6, Indicates the majority of respondents about 7(50%) of respondents were
replied that there is reliability and sustainability of suppliers in the factory. And
about 4(28.57%) of respondents also said that somehow the factory has reliability
and sustainability, but the remaining 3 (21.43%) of respondents also said that there
is no reliability and sustainability in the factory.

This indicates that the company’s suppliers are reliable and sustainable.

29
Table 4.7 Do you agree that your factory acquire sufficient raw material from
the supplier?

R e s p o n s e No of R e s p o n d e n t s Percentage (% )

A g r e e 5 35.71%
Some agree 7 5 0 %

D i s a g r e e 2
1 4 . 2 9 %
T o t a l 1 4 1 0 0 %
Source: Own survey, 2020

As indicated above table 4.7 5(35.71%) of respondents response were

agree,7(50%) of the respondents were some agree and the remaining 2(14.29%)
of respondents response were dis agree. based On the above information the
majority of the respondents response were some agree. This implies that the
supplies of raw material not fully satisfied.

Table 4.8 what source of supplier are the factory used?

R e s p o n s e No of R e s p o n d e n t s Percentage (% )

Single supplier 8 57.14%

Multiple supplier 6 42.86%
T o t a l 1 4 100%
Source: Own survey, 2020

As indicated above table 4.8, 8(57.14%) of respondents response were single

supplier they used and the remaining 6(42.86%) of the respondents were multi
supplier they used. Based on the above information the majority of the

30
respondent’s response were single supplier the factory used. This implies that the
supplies of raw material were acquired from single supplier.

Table 4.9 Thoughts about factory’s distribution facility to its downstream

partners in the supply chain?

D e s c r i p t i o n Number of respondent P e r c e n t a g e
G o o d 2 1 4 . 2 9 %
V e r y g o o d 1 2 8 5 . 7 1 %
P o o r 0 0
V e r y p o o r 0 0
T o t a l 1 4 1 0 0 %
Source; Own survey 2020

As depicted in the above table, the majority or12 (85.71%) of respondents indicate
that the factory’s distribution facility to downstream partners in the supply Chain is
very good and the remaining2 (14.29%) respondents also replied that the factory
has good distribution facility to its downstream partners .Here it’s distribution
understood that the factory have a very good distribution facility to downstream
partners in the supply chain.

Table.4.10 the presence of challenges that the factory face while distributing
the flour to the customers
R e s p o n s e Number of respondents P e r c e n t a g e
Y e s 7 5 0 %
N O 3 2 1 . 4 3 %
S o m e h o w 4 2 8 . 5 7 %
T o t a l 1 4 1 0 0 %
Source; Own Survey, 2020

31
Here as the above table indicates, majority of the respondents about7 (50%)
indicates that there are challenges the factory face with. And about3 (21.43%) of
respondents also replied that there are no challenges and the remaining4 (28.57%)
of respondents also answered that there are some challenges. Here it can be
concluded that there are challenges or problems that the factory face while working
along with other internal and external supply chain members. As some respondents
explained there are challenges such as problems that slow down the factory’s
performance, lack of proper flow of product and goods, Information and funds
across the supply chain of the organization and sometimes customer orders become
greater than the actual needed.

So the company faces the above challenges while working along with its supply
chain members.

Table 4.11 Capacity of the company to compete with other when your factory
distribute the product
D e s c r i p t i o n Number of respondents P e r c e n t a g e
M u c h b e t t e r 3 2 1 . 4 3 %
B e t t e r 7 5 0 %
About the same 4 2 8 . 5 7 %
M u c h w o r s e 0 0 %
W o r s e 0 0 %
T o t a l 1 4 1 0 0 %
Source; Own survey, 2020

Table 4.11 shows that about3 (21.43%) of respondents said that the company can
compete much better than its competitor. And about4 (28.57%) of respondents also
said that the company compete same with the competitors. And the majority of

32
respondents about7 (50%) of respondents answered that the company compete or
perform better than its competitors.

Consequently it can be concluded that the company has a better performance or

highly compete with other firms which are selling similar products.

Table 4.12 Does the company provide Transportation Service

R e s p o n s e Number of respondents P e r c e n t a g e
A l w a y s 4 2 8 . 5 7 %
S o m e t i m e s 1 0 7 1 . 4 3 %
N o t a t a l l 0 0 %
T o t a l 1 4 1 0 0 %
Source; Own Survey, 2020

The above table indicates that the majority of respondents about10 (71.43%) of
them answered that the company provide transportation service sometimes. And
about4 (28.57%) respondents also replied that the factory provide the
transportation service always.

Table 4.13 the overall experience of the factory’s distribution policy

D e s c r i p t i o n Number of respondents P e r c e n t a g e
G o o d 4 2 8 . 5 7 %
V e r y g o o d 7 5 0 %
N e u r a l 1 7 . 1 4 %
P o o r 2 1 4 . 2 9 %
V e r y P o o r 0 0 %
T o t a l 1 4 1 0 0 %
Source; Own Survey, 2020

As the above Table shows Majority of the respondents7 (50%) indicates that the
experience of the company’s distribution policy is very good. And about
33
4(28.57%) of respondents were replied that the product experience is good. About
1(7.14%) of respondents answered neutral and the remaining 2(14.29%) of the
respondents replied that it’s poor.

From the above analysis one can understood that the company’s product has very
good experience.

Table 4.14 Company’s smooth relationship with the chain members

R e s p o n s e Number of respondents P e r c e n t a g e
Y e s 9 6 4 . 2 9 %
N O 2 1 4 . 2 8 %
S o m e h o w 3 2 1 . 4 3 %
T o t a l 1 4 1 0 0 %
Source; Own Survey, 2020

As indicated the above table shows that, the Majority of the respondents, about9
(64.29%) of respondents, Indicates that the company have smooth relationships
with its chain members. About2 (14.28%) of respondents also indicates the
company have no smooth relationship and the remaining3 (21.43%) of the
respondents also said that somehow there is. This indicates that the company has
smooth relationship with its chain members.

Table 4.15 Does the factory have financial capacity to create sustainable
supply chain collaboration?
R e s p o n s e Number of respondents P e r c e n t a g e
Y e s 1 2 8 5 . 7 1 %
N o 2 1 4 . 2 9 %
T o t a l 1 4 1 0 0 %
Source; Own survey, 2020

34
As table 4.16, explain that the majority of respondents replied that the company
has financial capacity to create sustainable supply chain collaboration. And
respondents who said this are about12 (85.71%). And the remaining2(14.29%) of
respondents said that the factory have no financial capacity to create supply chain
collaboration.

This indicates that the company has a good financial capacity to create sustainable
supply chain collaboration

Table 4.16 Respondents attitude related with Rate of customer response about
the factory’s product
D e s c r i p t i o n Number of respondents P e r c e n t a g e
H i g h 4 2 8 . 5 7 %
M e d i u m 8 5 7 . 1 4 %
L o w 2 1 4 . 2 9 %
T o t a l 1 4 1 0 0 %
Source; Own survey, 2020

The above table shows that the majority or8 (57.14%) of the respondents replied
that the rate of customer response is medium. And about4 (28.57%) of respondents
also replied that the customer response rate is high and the remaining2 (14.29%) of
respondents replied that the customer response rate is low.

From this it can be concluded that the customer response rate is medium.

Table 4.17Does the company have Supply chain Performance Measurement?

R e s p o n s e Number of respondents P e r c e n t a g e
Y e s 8 5 7 . 1 4 %
N o 2 1 4 . 2 9 %
S o m e t i m e s 4 2 8 . 5 7 %

35
 T o t a l 1 4 1 0 0 %
Source; Own Survey, 2020

As Table 4.17 Shows that the majority of the respondents or8 (57.14%) of the
respondents said that there was supply chain management Measurement in the
factory and4 (28.57%) of respondents response were sometimes and there main
response were that there was no Supply chain management measurement in the
factory. Consequently, one can conclude that the company has its own
measurement of supply chain performance

Table 4.18dose your company’s discussion schedule about the product with the chain
member?

R e s p o n s e Number of respondents P e r c e n t a g e
Y e s 4 2 8 . 5 7 %
N o 2 1 4 . 2 9 %
S o m e h o w 8 5 7 . 1 4 %
T o t a l 1 4 1 0 0 %
Source; Own Survey, 2020

As Table 4.17 Shows that the majority of the respondents or 8 (57.14%) of the respondents
response were somehow, 4(28.57%) of the respondents were said that Yes and the remaining
2(14.29%) of the respondents response were No. This implies that the company’s discussion
schedule about the product with the chain member was not fully achieved.

36
4.4 Analysis of information gathered from interviews

First the, interview question was raised by the researcher For the inquiry made to assess the
factory’s performance measurement system the researcher interviewed the managers and
analyzed the documents that shows the organizations performance measurement system in their
supply chain activities.
The performance measurement systems used in Hawassa flour factory are: financial based
performance measurement, output standard performance measurement, and customer feedback
/satisfaction based performance measurement. The organization conducts this performance
measurement quarterly within a year to understand its level /status of performance in its supply
chain management practice. These performance measurement systems of the organization are
divided into three levels these are:

1. Individual level performance measurement (measured by given out put standard)

2. Departmental level performance measurement (measured by customer feedback)

3. Organizational level performance measurement (measured by financial)

Individual l level performance measurement.

Under this performance measurement level the organization measures the capacity and interest of
the individual to perform their job according to given standards settled by the factory to achieve
its supply chain performance and job specification.

Department level performance measurement.

This is depend on the above individual performance measurement feedback. The individual
performance of each department is collected and compared with each department according to
standard given to each department in accomplishing their objective in each stage that is to
maximize the overall supply chain profit. Then any department who fit the standard is well
performer. Departmental level performance measurement is also measured by the feedback that
comes from wholesalers and suppliers. The Factory has an annual customers and suppliers day
or ceremony once a year to measure its departmental performance and as a whole performance of

37
the organization by discussing with its customers and suppliers on that ceremony. On this
ceremony the employees of the factory and the wholesalers and suppliers sit together to discus
and share their information on the area of their relation. (Source Interview analysis).

Organization level performance measurement.

This deals with the whole performance measurement of the organization. The factory measure its
performance by financial performance measurement system to increase its supply chain
performance activities and to maximize the overall supply chain profitability.

Secondly questions rise by researcher that related with Challenges faced by the factory while
practicing SCM system.
To assess factory’s challenges faced so far to apply supply chain collaboration, questions were
posed and response were given from the managers, suppliers, and wholesalers and presented as
follows: The problems/ challenges that slow down the factory’s performance while practicing
supply chain management are: lack of proper flow of products/goods, information, and funds
across the supply chain stages of the organization. Sometimes the amount of customers’ orders
are greater than what they actually need. This creates more products/goods in the factory to be
stored as unnecessary inventory which tied the capital requirement of the factory. The distorted
information makes factory to allocate funds and others resources in inappropriate manner.
Sometimes the factory also faces capacity problem/ efficiency to produce and deliver the product
to its wholesalers due to machine break, financial and other problems. Sometimes, suppliers did
not deliver the raw materials on delivery date. Others challenges of the factory face are
fragmentation of supply chain ownership and difficulty to execute new strategies. (Interview
survey.

38
 Chapter five

5. Conclusion and Recommendation

5.1 Conclusion

This study under taken with the intention of assessing of supply chain management in Hawassa
flour factory as major source. This section summarizes and concludes the study finding as
follows:

 The study indicates that Hawassa flour Factory have started to develop structured system
that enables it to respond a proper supply chain network in its business function.
 The level of employee’s measurement and skills that is currently founded in factory is by
far better than other manufacturing industry.
 A brief discussion of each supply chain drives particular procurement, inventory
management, transportation/distribution/ and information technology provides a
foundation to understand the challenge of supply chain management.
 As the study indicated that the factory does not use modern supply chain information
system along its supply chain network.

The factory applied traditional demand forecasting methods along its supply chain networking
only internal functional units /departments/are involved/participate in producing the products.

 The major challenges faced the factory while collaboratively works with internal and
external parties are lack of proper flow of products, information’s and funds, internal
capacity efficiency to produce and deliver products on due date. The others challenges
of the factory are fragment of ownership (supply chain stage ownership) and difficulty to
execute new strategies.
 Finally, the finding of this study shows Hawassa flour factory applied three types of
performance measurement system; financial, output and customer feedback
measurement system, in three levels: individual, departmental, and organizational level

39
 to measure its function or performance whether it achieve its objective or not in its
supply chain network and it conduct the measurement quarterly within a year.

5.2 Recommendation
To increase the factory’s supply chain collaboration along its supply chain networks in the
factory it’s advisable to take the following action:

 Building partnerships and trust with their suppliers and wholesalers

 Get top management and employees commitment

 Designing effective conflict resolution mechanism

 Designing marketing strategy to stabilize orders

 Improving information application

 Improving operational performances

In light to the finding of this study, the Hawassa flour factory has no appropriate Appling
information technology along its supply chain networks. So the study would like to recommend
the following supply chain information technology: supply management system (SMS),
warehouse management system (WMS), enterprise resource planning (ERP), electronic data
interchange (EDI) etc.

Since forecasting of future demand are essential to supply chain management decision making
process, the factory have to use sophisticated demand forecast methods that balance objective
and subjective factors, such as state of the economy, planned price discounts, action of
competitors, lead-time of product.

To assess factory’s overall supply chain profitability it is better to apply the following modern
supply chain performance measurement: demand flexibility, product quality, new product
development, on time delivery etc.

40
In addition to the above recommendation, the study forwards the following recommendation in
order to cope up with problem being observed in supply chain management application in
Ethiopian trading practices. Including:

 Long-term services contracting instead of contracting on the basis of consignments (piece

rate). In view of introducing relationship marketing, contracting is better handled when
the service provider and contractor deal on a long term basis.

 Moving towards demand chain management from the current concept, i.e. the basic
conceptual shift from supply chain to demand chain lies in that the volume of cargo in
transit related to the quantity needed (in demand) rather than the traditional quantity
supplied.

41
Bibliography

Bowan Kim: Supply chain management mastering: Business in Asia, John and Wiley
sons’plc. , 2005

Chopra and meindl: Supply chain management: strategy, planning and operation, 3rd
ed.Hamilton printing company, 2007

Chopra and Meindl: supply chain management: strategic, planning and operation, 2nd ed.Von
Hoffmann, 2004.

Steven New and Roy west brook: understanding supply chain management: concept,
critiques and features, Oxford University press, New York, 2006.Scott Webster: principles
and tools for supply chain management, McGraw-Hill companies USA, 2008.

Dobler and Starling: World class supply chain management, the key to supply chain
management: McGraw-Hill companies New York, 2003.

Douglas M. et al: Harvard business review on supply chain management, Harvard business
school publishing press, USA, 2006.

E. Fawcett et al: supply chain management from vision to implementation: Dorling

Kindersley India, 2007.

Ellram,L, Copper,1993”Characterstics of Supply chain management and the implication for

Purchasing and Logistics” International Journal of Logistic Mom,4,2,1-10

James W.Martin: Lean six sigma for supply chain management: McGraw-Hill USA, 2007.

Joel D. Wisner et al: principle of supply chain management a balanced approach: flexible
and packaging, India, 2005.
Monczka, R, M, Morgan, 1997” what is wrong with Supply Chain M management?” purchasing
122, 1, 69-73.

Quinn, F, J, 1997,”What is the buzz?” Logistics Management, 36, 2, 43-7.

42
 HAWASSA UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF LOGISTICSANDSUPPLYCHAINMANAGEMENT

QUESTIONNAIRE

Dear respondents:

This questionnaires is prepared for academic research purpose that together primary data
required to conduct supply chain management in Hawassa flour factory. The survey is conducted
in completion of the requirement of the study in Bachelors Arts degree in Logistics chain
management in Hawassa University. Your assistance by filling this questionnaires is very crucial
for successful completion of the paper and I would like to thank you in advance.

Instruction

Dear respondents you are kindly requested to put in the box that will fit our options for the
close-ended questions and write in the space provided for the open-ended questions.

Part I personal information

1. Sex: male . Female

2. Age: 18-28 29-39 40-50 50 and above 3.

Marital status: Single Married Divorce

4. Educational level: below 12th Diploma 1st degree

Masters and above

5. Years of experience including other organizations:- below 5 year 5-10year

11-15 year 16-20 year 21and above

PART II Investigative question

1. Are there efficient supply of raw materials to produce Flour?

43
 Yes No

2. How fast your suppliers process and deliver your order?

Promptly Lately Very late

3. Do you believe that your suppliers are reliable and sustainable?

Yes No some how

4. Do you agree that your factory acquire sufficient raw material from the supplier?

Agree No

5. Does your factory have enough material handling equipment to handle the products?

Yes No

6. What do you think the factory’s distribution facility to your downstream partners in the supply
chain?

Excellent poor

Very good very poor

7. Are there any challenges or problems that the factory face while distributing the flour to the
customers?

Yes No sometimes

8. How does your factory compete with other when your factory distributes its product?

Much better about the same Worse

Better Much Worse

9. Does your factory has appropriate product distribution strategy?

Always sometimes not at all

10. Does your factory provide transportation service to the customers?

44
 Always Sometimes Not at all

11. How do you rate the overall experience of the factory’s distribution policy?

Very good Good poor Very poor

12. Does the company have smooth relationships with the supply chain members?

Yes No Somehow

13. Does the factory have financial capacity to create sustainable supply chain collaboration?

Yes No some how

14. Does the company have supply chain performance measurement system in each department?

Yes No Some time

15. Does your company has discussion schedule about the product with the chain members?

Yes No Some time

16. How do you rate your customer response about the factory’s product?

High Medium Low

INTERVIW QUESTION

1 What Performance measurement System along supply chain?

2 What Challenges faced by the factory while practicing SCM system?

45