Agro Industries

AN ASSESSMENT OF THE EFFECTIVNESS OF OUTBOUND LOGISTICS
IN THE CASE OF ELFORA AGRO INDUSTRY PLC
A SENIOR PROPOSAL SUBMITTED FOR THE PARTIAL FULFILMENT FOR

THE AWARD OF BACHELOR OF ART DEGREE IN MARKETING
MANAGEMENT
BY Group Members ID
1. Eyuel Solomon. 0553/19

2. Abel Hailemariam. 0737/19
3. Kirubel Shimelis 0682/19
4. Haregeweyin Worku 0687/19
5. Amanuel Elias. 0591/19
Advisor; Nigatu Benti(MBA)
Addis Ababa, Ethiopia
MAY, 2023
AN ASSESSMENT Of THE EFFECTIVNESS OF OUTBOND LOGISTICS IN THE CASE OF
ELFORA AGRO INDUSTRY PLC
Acknowledgment
First of all, We would like to express Our gratitude to God who has given us
strength to complete this paper. Next, We would like to thank Our adviser Nigatu
Benti who has helped us in providing his constructive advice and correction up to
the end. Last but not least us would like to thank all Our families and friends who
had grown us with the help of God by being an example for our live.
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CONTENTS
Acknowledgment..................................................................................................................1
Table of CONTENTS..........................................................................................................2
ABSTRACT............................................................................................................................5
CHAPTER ONE...................................................................................................................6
1. INTRODUCTION...................................................................................................................6
1.1. Background of the study....................................................................................................6
1.1.1. Background of ELFORA Agro-Industries Plc............................................................7
1.2. Statement of the problem...................................................................................................7
1.3. Objective of the study........................................................................................................8
1.3.1 General objective.........................................................................................................8
1.3.2. Specifics objective......................................................................................................8
1.4. Scope of the study..............................................................................................................8
1.5. Significance of the study....................................................................................................9
1.6. Limitations of the study.....................................................................................................9
1.7. Organization of the paper...................................................................................................9
CHAPTER TWO..............................................................................................................................9
2. REVIEW OF RELATED LITERATURE............................................................................9
2.1. DEFINITION AND CONCEPTS OF LOGISTICS..........................................................9
2.3. Logistics activities...........................................................................................................11
2.3.1. Inbound logistics.......................................................................................................12
2.3.2 Outbound logistics.....................................................................................................12
2.3.2.1. The Outbound logistics Process......................................................................14
2.3.2.2. Factors in outbound logistics..........................................................................15
2.4. An Overview of AGRO-Industry in Ethiopia..................................................................16

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2.4.1. A Brief Historical Perspective of Agro-Industry in Ethiopia...................................16
2.5. Logistics Service Value...................................................................................................19
2.6. Achieving Logistics Efficiency and Effectiveness Requires...........................................21
2.7. Transportation..................................................................................................................21
2.7.1 Modes of Transportation............................................................................................22
2.7.2. Fundamental Factors of Transportation................................................................22
2.7.3. Advantages of Transportation...............................................................................23
2.7.4. Function of Transportation.......................................................................................23
2.8. The Effects of Transportation on Outbound Logistics Activities....................................25
CHAPTER THREE........................................................................................................................25
3. RESEARCH DESIGN AND METHODOLOGY..............................................................25
3.1. Research Design...............................................................................................................25
3.2. Population, Sample Size and Sampling Technique.........................................................26
3.3. Types of Data to be Collected..........................................................................................26
3.4. Methods of Data Collection.............................................................................................26
3.5. Data Analysis Methods....................................................................................................27
CHAPTER FOUR...........................................................................................................................27
4. DATA PRESENTATION, ANALYSIS AND INTERPRETATION...............................27
4.1. General Characteristics of Respondents..........................................................................27
4.2. Analysis of the Findings of the study..............................................................................29
Table 2. Employees Response on logistics efficiency of the company..........................................29
Table 3. Employee’s response on logistics effectiveness of the company.....................................32
Table 4. Employee’s response on logistics Differentiation of the company..................................35
Table 6. Employee’s response on Transportation role of the company..........................................41
4.3. Analysis of the Findings of Interview..............................................................................43
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CHAPTER 5...................................................................................................................................45
5. SUMMARY, CONCLUSIONS AND RECOMMENDATION.........................................45
5.1. Summary..........................................................................................................................45
5.2. Conclusion.......................................................................................................................47
5.3. Recommendation.............................................................................................................48
REFERENCES/ BIBLIOGRAPHY................................................................................................50
APPENDIX.....................................................................................................................................53
LIST OF TABELS
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ABSTRACT
This paper is entitled with ‘an assessment of the effectiveness of outbound logistics
in the case of Elfora Agro industry’. The purpose of this study is to assess the
outbound logistics practices of the company and the challenges it faces in its
distribution practices. It also assess the effectiveness and efficiencies of the
company. The study has employed both qualitative and quantitative data analysis
technique. The student researcher uses non probability, purposive or judgmental
sampling technique. The target respondents were employees/managers and
retailers who get products from the company. The student research uses
Questionnaire and interview to conduct the data’s from target respondents.
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CHAPTER ONE
1. INTRODUCTION
1.1. Background of the study

According to Douglas M et.al 1998, the overall aim of logistics is to achieve high
customer satisfaction. It must provide a high quality service with low – or
acceptable – costs. Logistics adds value by making products available in the right
place and at the right time. Logistics is widely known as the process of coordinating
and moving resources such as equipment, food, liquids, inventory, materials and
people from one location to the storage of the desired destination. It was originally
a military-based term that was used to describe how the military force obtained,
stored and moved equipment and supplies.
Waters (2003) refers ―without logistics, no materials move, no operations can be
done, no products are delivered, and no customers are served. To position the right
products close to the right consumer, several activities have to be performed,
including transport, customer service, information technology and communications,
finance, warehousing and outsourcing (Frazelle, 2002).
According to Brown (2006:88) Outbound logistics the board range of activates
concerned with effective movement of finished products from the end of production
line to the customer. Outbound logistics then deals with the flow of products form
producer to consumers. Its major focus is the physical aspects of that flow rather
than the institution activities within channels of distribution dealing with changing
title, facilitation exchange, and negotiating with intermediaries. Outbound logistics
refer to the tasks and activities involved with moving the product to the end user.
Such types of logistic duties usually apply to players that operate relatively
downstream, which are usually the last party in the supply chain. The duties include
the storage of manufactured inventory, the transportation of manufactured goods to
the point of sale, and sometimes, the shipping and handling involved to get certain
products to the end user.
The topic of logistics for agriculture and food produce is indeed, somewhat
intricate. Handling the logistics of such products, operators are faced with taking
accountability for all actions conducted throughout the entire chain. These being; to
safeguard the quality and well-being of all products (including livestock) as well as
to create a sustainable solution for their clients (allowing them to maintain control
of their market by being an attractive source financially), whilst, of course, not
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compromising their standards of service. Over the years the importance of logistics
for the Agri-food industry, has become more recognized by organizations globally.
However, despite the importance of the role of outbound logistics in supply chain
management, minimal rigorous performance data based research has been done on
the direct, stand-alone impact of outbound logistics.
1.1.1. Background of ELFORA Agro-Industries Plc
ELFORA Agro-Industries Plc is a company engaged in the production and sales of
livestock and livestock products, poultry products, and crop products. It is a
subsidiary of MIDROC Ethiopia Investment Group. The Company was established
in 1997 by acquiring eight separate livestock enterprises and farms through the
privatization process. The company was licensed in February 1998 with a
registered capital of Birr 100 million (ELFORA Brochure, 2007).
ELFORA is perhaps the largest agro-processing firm in the country so far. It owns
six slaughter houses, five meat processing and canning plants, a natural quarantine
for livestock (the largest in the country), a number of ranches, feedlots and holding
grounds, one poultry farm, and crops farms at various locations in the country. The
Company also owns several delivery vans, cold trucks, livestock transporting trucks
and other vehicles used for transporting products to customers. (ELFORA
Brochure, 2007).
1.2. Statement of the problem
Agriculture accounts for over 50 per cent of Ethiopia’s GDP and more than 80 per
cent of its export revenue as well as 85 per cent of employment generation,
agribusiness is considered as a major economic activity in the country. In addition,
an estimated 65 per cent of employed women work in the agricultural sector. The
country is endowed with vast and fertile land, abundant and diversified natural and
climate suitable for agricultural business. The availability of competitive, cheap and
trainable labor also makes Ethiopia viable for agribusiness. The country’s rich
livestock recourse is also another factor that shows it has a real potential for agro-
processing activities like dairy, meat and meat products processing, poultry and
leather and leather products industries.(Agriculture and food security, Ethiopia.)
Logistics plays its role as early as in the beginning of 1900s, in distributing the
farm products (Lambert, Stock, & Ellram, 1998) and it continues to evolve until
today, in which it is regarded as a strategic industry. Logistics could also improve
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business performance through its flexibility and advanced technology application,

thus leading to organizational success (Tracey, 1998).
Among the components of business logistics, transportation is the most important
economic activity. It also accounts for one third to two third of the expenses of
logistics costs. A transportation system that provides a reliable service level reduces
supply chain uncertainty and the amount of inventory required throughout the
chain. Rapid and effective response in moving materials and To what extent dose
the logistics effectiveness and differentiation satisfies the performance of the
company?
1.3. Objective of the study
1.3.1 General objective

The general objective of the study is to assess the effectiveness of the
outbound logistics system of ELFORA Agro-Industries Plc
1.3.2. Specifics objective
 To determine the level of efficiency of the outbound logistics practice
of the company.
 To assess the challenges that ELFORA Agro-Industries face in relation
to transportation.
 To evaluate the logistics effectiveness and differentiation on the
company’s performance.
1.4. Scope of the study
This study will focus on an assessment of the effectiveness of the outbound
logistics(specific areas) in the case of ELFORA Agro- Industries. The student
researcher also limits its area of study to the main branch of Elfora Agro Industries
which is located in the Gurdshola area in Addis Ababa, Ethiopia. Also, in these
paper data that will be used concerning the companies will span from 2018 to 2020
G.C. In addition the student researcher will focus on identifying the challenges
that Elfora Agro-Industries faces in relation to transportation and effectiveness of
the outbound logistics practice of the company.
1.5. Significance of the study
The finding of this student researcher will help the decision maker of the company
to identify the problems area and take corrective measure. Moreover this study will
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be used as reference material for the students and other interested groups who seek
to conduct in depth study on the outbound logistics. It will also help the student
researchers get more knowledge in this area and to have experience in the
conduction research.
1.6. Limitations of the study
Limitations were reveal vividly from those the most and main limits are shortages
of information , Transportation , specific location of Elfora , high losses during
transport from our location to factory.
1.7. Organization of the paper
This paper consists of Four chapters with different sections and sub sections. One
presents description of the research proposal, chapter one presents introduction,
background of the study, objective, objectives of the study, significance of the
study, delimitation/scope of the study, limitation of the study and organization of
the paper. The chapter two section contained reviews of related literature and the
third section concerned with data analysis and interpretation.
Finally, in the last section, summary, conclusions and included.
CHAPTER TWO
2. REVIEW OF RELATED LITERATURE
2.1. DEFINITION AND CONCEPTS OF LOGISTICS

Logistics is the process of planning and executing the efficient transportation and
storage of goods from the point of origin to the point of consumption. The goal of
logistics is to meet customer requirements in a timely, cost-effective manner.
Originally, logistics played the vital role of moving military personnel, equipment
and goods. While logistics is as important as ever in the military, the term today is
more commonly used in the context of moving commercial goods within the supply
chain.
Many companies specialize in logistics, providing the service to manufacturers,
retailers and other industries with a large need to transport goods. Some own the
full gamut of infrastructure, from jet planes to trucks, warehouses and software,
while others specialize in one or two parts. FedEx, UPS and DHL are well-known
logistics providers.
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Typically, large retailers or manufacturers own major parts of their logistics

network. Most companies, however, outsource the function to third-party logistics
providers (3PLs)
2.2. Functions of logistics
Transportation and warehousing are the two major functions of logistics.
Transportation management focuses on planning, optimizing and executing the use
of vehicles to move goods between warehouses, retail locations and customers. The
transportation is multimodal and can include ocean, air, rail and roads.
Not surprisingly, transportation management is a complex process that involves
planning and optimizing routes and shipment loads, order management, freight
auditing and payment. It can also extend to yard management, a process which
oversees the movement of vehicles through the yards outside manufacturing plants,
warehouses and distribution facilities. Carrier management is an important aspect
since the price, availability and capacity of transportation carriers can vary widely.
Definition
Jomini originally defined logistics as:[4]
... l'art de bien ordonner les marches d'une armée, de bien combiner l'ordre des
troupes dans les colonnes, les tems [temps] de leur départ, leur itinéraire, les
moyens de communications nécessaires pour assurer leur arrivée à point nommé ...
... the art of well-ordering the functioning’s of an army, of well combining the order
of troops in columns, the times of their departure, their itinerary, the means of
communication necessary to assure their arrival at a named point ...
The Oxford English Dictionary defines logistics as "the branch of military science
relating to procuring, maintaining and transporting material, personnel and
facilities". However, the New Oxford American Dictionary defines logistics as "the
detailed coordination of a complex operation involving many people, facilities, or
supplies", and the Oxford Dictionary on-line defines it as "the detailed organization
and implementation of a complex operation".[7] As such, logistics is commonly
seen as a branch of engineering that creates "people systems" rather than "machine
systems".
According to the Council of Supply Chain Management Professionals (previously
the Council of Logistics Management),[8] logistics is the process of planning,
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implementing and controlling procedures for the efficient and effective

transportation and storage of goods including services and related information from
the point of origin to the point of consumption for the purpose of conforming to
customer requirements and includes inbound, outbound, internal and external
movements.[9]
Academics and practitioners traditionally refer to the terms operations or
production management when referring to physical transformations taking place in
a single business location (factory, restaurant or even bank clerking) and reserve the
term logistics for activities related to distribution, that is, moving products on the
territory. Managing a distribution center is seen, therefore, as pertaining to the
realm of logistics since, while in theory, the products made by a factory are ready
for consumption they still need to be moved along the distribution network
according to some logic, and the distribution center aggregates and processes orders
coming from different areas of the territory. That being said, from a modeling
perspective, there are similarities between operations management and logistics,
and companies sometimes use hybrid professionals, with for example a "Director of
Operations" or a "Logistics Officer" working on similar problems. Furthermore, the
term "supply chain management" originally referred to, among other issues, having
an integrated vision of both production and logistics from point of origin to point of
production.[10] All these terms may suffer from semantic change as a side effect of
advertising.
2.3. Logistics activities
A basic distinction in the nature of logistics activities is between inbound and
outbound logistics.
2.3.1. Inbound logistics
It is all about moving raw materials, supplies, or finished goods into a supply chain.
Through inbound logistics, a business secures its supply — that is, it obtains the
products (or the materials to make the products) that it will eventually sell.
The logistics processes that transport raw materials, inventory, or supplies from a
supplier and into a business’s warehouse, distribution center, fulfillment center, or
retail store are all considered inbound logistics.
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2.3.2 Outbound logistics

It is the process related to the storage and movement of the final product and the
related information flows from the end of the production line to the end user.
Any logistics process involved in order confirmation, fulfillment (including picking
and packing), shipping, last-mile delivery, customer service, and troubleshooting
qualifies as an outbound logistics process.
Key Activities in Outbound Logistics
The previously mentioned components make up outbound logistics. But on closer
inspection, all four are involved in at least five logistical activities. These include:
Inventory Management
Inventory management determines how you source goods from suppliers or
manufacturers so you have enough products to sell and deliver to customers at and
from the right location. That’s why managing inventory is part of both inbound and
outbound logistics. But while it’s the last stage of inbound logistics, it’s the first
stage of outbound logistics. The main objective of effective inventory management
is to keep enough inventory to maintain a steady supply of goods to meet customer
demand.
Warehousing and Storage
Warehousing and storage is the process that determines how you store products, but
also how you prepare them for delivery, including picking and packing goods from
inventory. Because it’s almost impossible to forecast demand with 100% accuracy,
storing enables you to keep a certain amount of goods on hand.
This outbound logistics process also secures and organizes goods in proper
conditions before shipment and fulfillment.
Here as well, inbound and outbound logistics overlap.
Transportation
In outbound logistics, transportation refers to the physical movement of goods
across the first and last mile of delivery. The type of transportation varies
depending on the type of shipping you offer. But also the structures that make up
your outbound logistics. For example, if your delivery network extends beyond one
delivery zone, you’ll need to transport goods to multiple locations.
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This may vary depending on your supply chain, as well as whether you’re routing
deliveries in urban areas or across the country. Some deliveries that are perishable,
might have to be transported in refrigerated containers.
Last-Mile Delivery
Last-mile delivery is the final stage of the fulfillment process. It refers to the
movement of goods to the customer and involves multiple sub-processes beyond
transportation.
These activities include (and depend on):
• Receiving orders and order information
• Delivery scheduling and planning
• Dispatching vehicles in the delivery fleet
• Picking up goods from inventory
• Transporting and dropping off orders
• Collecting proof of delivery
• Managing returns and reverse logistics
Distribution Channels in Outbound Logistics
How you organize outbound logistics depends on your distribution channels.
Simply put: How your products reach your customers.
In distribution management, there are two broad categories you need to be aware
of:
 Direct distribution channels
 Indirect distribution channels
Which one governs outbound logistics depends on the type of business you operate.
But for the most part, your business will fall under one of three distribution
channels:
Wholesalers
Wholesale is a distribution channel that you choose based on the nature of the
products you sell (consumers have to buy in bulk); or restrictions and regulations
that prevent retail sales. For instance, most construction delivery management is
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used to fulfill large orders by wholesalers that sell construction materials in bulk.
On the other hand, laws that govern alcohol delivery may prevent manufacturers
from selling products as retailers.
Retailers
Retail uses only intermediaries. This makes it an indirect type of distribution
channel as retailers buy products from manufacturers or suppliers before selling
them to the consumer. This kind of distribution is the most widespread channel.
Most companies, from small e-commerce stores to large supermarket chains, are
considered retailers.
Direct-to-Consumer
Direct-to-consumer refers to the distribution channel where manufacturers make,
sell and deliver products straight to customers. A good direct-to-consumer
outbound logistics example is Apple. The company produces a variety of products
at their manufacturing facilities, before selling them both at physical and online
stores and delivering them to customers. Many businesses that manufacture goods
sell products online but outsource e-Commerce fulfillment. They are also direct-to-
consumer distributors.
2.3.2.1. The Outbound logistics Process
Outbound logistics focuses on the demand side of the supply-demand equation. The
process involves storing and moving goods to the customer or end user. The steps
include order fulfillment, packing, shipping, delivery and customer service related
to delivery. The processes involved in moving materials or goods into a supply
chain, and securing inventory that your business later sells. The processes involved
in moving finished inventory out of a supply chain by fulfilling and shipping orders
to end customers. What is inbound and outbound logistics?
Inbound and outbound logistics refer to two of the most common processes to move
goods throughout the retail supply chain. While they are similar in nature and both
involve the transportation of products across various distribution channels, inbound
logistics deals with supply and outbound logistics fulfills demand.
Elements of outbound logistics
When transporting your goods, it's important to understand each of these stages:
warehousing, inventory management, transportation, and last-mile delivery.
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Together, they fall under the umbrella of outbound logistics and relate directly to
how your business runs smoothly and efficiently.
2.3.2.2. Factors in outbound logistics
The efficiency and effectiveness of the outbound logistics operation has a
considerable influence not only on the business performance of the marketer but
also on the customer’s perception of the quality of the products and services
provided by the marketer. The uncertainty of the flows of finished goods to the
customer may create dissatisfaction to the firm’s customer base. Accordingly,
logistics is strategically important in achieving competitive advantage (Bowersox et
al., 2010).
Logistics services comprises of two things – physical activities and non-physical
activities. Physical activities refers to the activities like transport, storage etc. and
non-physical activities include supply chain design, selection of contractors, freight
negotiations etc. Most activities of logistics services are considered as bi-direction
movement. Tracking and tracing is also an important element of logistics. It
provides essential data in each step of the interaction among logistics services and
the target destinations. Infrastructure comprises human resources, financial
resources, packaging materials, warehouses, transport and communications.
The role of logistics system or method is more complex than carrying goods for the
proprietors. Its complexity can only be confirmed by high quality management.
With well-handled transport system, goods could be sent to the right place at right
time in order to satisfy customers’ demands. It brings efficacy, and also it builds a
bridge between producers and consumers. Therefore, transportation or logistics
method is the base of efficiency and economy in business logistics and expands
other functions of logistics system (Tseng et al., 2005). In addition, a good transport
system performing in logistics activities brings benefits not only to service quality
but also to company’s competitiveness. Typically, firms or businesses outsource a
range of activities in order to be competitive. Reducing costs (Aimi, 2007; Jiang et
al., 2006; Lau & Zhang, 2006) is an important issue to outsource activities. Other
reasons to outsource logistics related activities are to improve product quality
(Bardhan et al., 2006), gain flexibility in decision making (Lau & Zhang, 2006),
develop market coverage (Skjoett- Larsen, 2002), or to gain additional capacity
(Linder, 2004; Mason et al., 2002). Elliott (2006, p. 22) argued that in most cases
the objective of outsourcing is a targeted 20% cost reduction. Most of the research
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shows how outsourcing the outbound logistics is successful, but there is still a gap
of how the factors associated with the logistics are impacting the purchase decision.
Customer service in logistics is the process of providing goods, information and
services to customers in order to create satisfaction in cost-effective manner (Sadler
2007). Specifically, it talks about how the logistics provider handles the queries on
“creation of time” and “place utility” (Christopher 2011). Products will not have
value unless they have positioned to the right place when it is needed (Christopher
2011). But the required service elements should be developed by customers
themselves (Christopher 2011). Shobha and Subramanya (2016) argued that
strategically routing has helped us in identifying the right routes to be chosen in
order to reduce the distance traveled and hence logistics cost.
Takele (2014) suggests outbound logistics provokes the customer’s choice mainly
in 3 aspects: availability, reliability, and flexibility. Lou Cortese (2003) mentioned
all the logistics service provider’s goal is to deliver the goods in damage free
condition. Many providers offer insured service and confirm the security.
Anderson, Britt, and Favre (1997) mentioned one of the major principle in supply
chain management is strategically reducing the total cost of owning materials and
services and developing a supply chain-wide technology strategy that supports
multiple levels of decision making and gives a clear view of the flow of products,
services, and information. Manikas and Ieromonachou (2016) suggested that
logistics providers are aligned with customer’s choice and focuses on service
quality priorities.
2.4. An Overview of AGRO-Industry in Ethiopia
2.4.1. A Brief Historical Perspective of Agro-Industry in Ethiopia

Agriculture is an engine of the Ethiopian economy, employing 80% of the total
population, contributing 39% to GDP, and generating 90% of its foreign currency
from exports. Ethiopia’s agricultural exports are primarily unprocessed
commodities, including coffee, oil seeds, pulses, live plants, and cut flowers.
Conversely, agro-industries accounted for only five percent of Ethiopia’s GDP, yet
50% of the total manufacturing production was in food and beverage. Ethiopia
possesses a wide range of agro ecological zones, arable land, and access to labor,
which allow for a wide range of agricultural systems. In Africa, Ethiopia is a major
producer of coffee and barley. Additionally, among African countries, Ethiopian
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production ranks second in sorghum, third in maize, third in wheat, and fourth in
coarse grains. Finally, Ethiopia maintains the largest number of livestock in Africa.
The Government of Ethiopia (GOE) aims to boost exports and trade through $1
billion investment in agro processing industrial parks to make Ethiopia a top
manufacturing hub on the continent. Industrial parks broadly are a key focus of
Ethiopia’s economic development strategy. Through the Ministry of Trade and
Industry (MOTI) and the Industrial Parks Development Corporation (IPDC), 17
agro-industrial growth corridors (AIGC) are planned for development, with
coverage in all nine regional states. In its current first phase, four Integrated Agro-
Industrial Parks (IAIP) are under construction, out of which three are already
operational. The IAIPs when fully completed will provide support services to
companies, opportunities for skills development, and attraction for foreign
investment. The total estimated cost of the four pilot agro-industrial parks is $181.2
million. The GOE intends for the four IAIPs to result in $1.5 billion in investment,
400 business opportunities, and 400,000 jobs. The four industrial parks are situated
in strategic locations throughout Ethiopia and were selected based on the area’s
agricultural potential, infrastructure facilities (water, electricity, etc.), and regional
market potential. The IAIPs are envisioned to provide a one-stop shop to provide
various services to facilitate trade logistics, access to land, customs clearance, and
other business services. At present, three IAIPs are already operational and one is
under construction and development, located in Humera (Tigray), Bure (Amhara),
Yirgalem (SNNP) and Bulbula (Oromia). Aside from these, there are multiple
textile and apparel industrial parks, the most notable being Hawassa Industrial Park
where the U.S.-owned apparel manufacturer, Philips Van Huesen (PVH), is
producing shirts and other garments for the export market. In 20222, however, PVH
sold its plant and left the country ceasing its operation in Ethiopia. Generous
government investment incentives, preferential access to the United States large
market under the African Growth and Opportunity Act (AGOA), low cost of
electricity and labor, and abundant natural resources have resulted in increased
foreign direct investment into the parks. In 2019/20, the industrial parks generated
$610 million in export earnings and created 89,000 job opportunities. Following the
war between the government of Ethiopia and Tigrayan forces, the U.S. government
suspended Ethiopia’s AGOA privileges.
Commodities intended for processing include coffee, sorghum, maize, sesame,
horticulture, meat and dairy, and cereals, among others. The IAIPs will include
companies that export value-added agricultural products as well as those producing
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products for domestic consumption. Major agriculture processing potential includes

cattle fattening and processing, chicken production and processing, livestock feed
manufacturing, wheat-based food production (e.g. pasta, biscuits), sesame
processing (e.g. tahini), soybean crushing (e.g. soybean oil and feed), sugar
production and processing, juice and dairy manufacturing, as well as garments and
leather goods.
In 2019, the Ethiopian Ministry of Finance implemented a policy change
authorizing duty free import of agricultural and irrigation equipment. This new
directive aims to increase agricultural productivity for both smallholder farmers and
commercial farmers, as they will have improved access to new agricultural farming
capital goods.
Key agricultural commodities intended for processing and exports through the
IAIPs are the following:
Coffee – Ethiopia exported 271,111 metric tons of coffee in 2020/21 generating
$855.6 million in revenue. During the first ten months of the current 2021/22 fiscal
year, Ethiopia exported 232,000 MT of coffee and earned a record-breaking
revenue of US $1.2 billion from coffee exports. Ethiopia targets to export up to
300,000 MT of coffee by the end of the fiscal year.
Maize – Ethiopia produced 9.4 million MT of maize in 2021/22, both for food and
feed source for processing.
Poultry – Poultry production (chicken meat) by the end of 2020 was estimated at
68,000 MT, and the retail price of imported chicken meat ranges between $9-10 per
kilogram.
Dairy – In the last 15 years, the volume of milk production has tripled. Ethiopia
faces shortages of feed, land, and pasture for its cattle herds. In May 2019, the
Ministry of Finance released a new proclamation that allows duty free import of
feed production machinery. This new directive will boost both production of feed
as well as dairy and poultry production. In June 2022, the GOE removed import
duties and value added tax levied on animal feed products. The exemption would
help lower the cost of animal feed by a third and the prices of dairy products by an
average of 17%.
Potato – Potato production has increased substantially in recent years, with
estimates at nearly 1.14 million MT produced last year. Demand for processed
potatoes should continue in the foreseeable future.
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Avocado – Avocados are becoming increasingly popular in Ethiopia, both among

producers and consumers. Over the last five years, the GOE has given increased
emphasis on avocado production due to the rapidly growing international market
and presence of suitable weather for growing avocados. Recently, Ethiopia has
begun exporting fresh Hass variety avocados to the European market.
Sugar: Ethiopia has 13 sugar manufacturing factories with all plants owned by the
state. As a part of PM Abiy Ahmed’s economic reform program, transfer of the
sugar factories to private ownership is underway. At present, the 13 state owned
sugar factories are undergoing technical, price, social and environmental impact
assessment studies. The initial plan is to privatize six out of the 13 sugar plants to
local or international private investors.
Some of the challenges in the current agro-processing sector include insufficient
local product, in part due to complexities in smallholder farm structures, post-
harvest storage, as well as inconsistent commodity quality. Furthermore, a critical
constraint to agro-industrial development is the lack of infrastructure to support
sufficient raw commodities flow to processors. Establishing effective supply
chains, including cold chain, can increase agro processor access to local producers.
With the establishment of the agro-industrial parks, the integration of smallholder
farmers and processors into the industries as part of the commercial value chain
could improve the local economy.
2.5. Logistics Service Value
As (Swartz, 2010) stated in his article, there are different conceptualizations of the
process by which logistics service creates value. The traditional conceptualizations
are based on the creation of time and place utilities. (Mentzer et al., 1989) The
often quoted Seven Rs‖ definition of logistics describe the attributes of a company‘s
product offering that leads to value creation through logistics service. In other
words, part of the value that a company creates for its customer is its ability to
deliver the right product in the right amount at the right place at the right time for
the right customer in the right condition at the right price (Shapiro and Heskett,
1985).As sited by Swartz. In sum, logistics service the attributes of the process by
which the item gets to the user is part of the value of the product (Mentzer et
al.,1997) sited by Swartz.
More recent definitions of logistics service value focus on the relationship of
logistics service to customer service, capabilities, and competitive advantage of a
firm. Logistics service is an important component of customer service and helps a
20
company maintain its current competitive position in the marketplace (Langley and
Holcomb, 1992). When traditional attributes of logistics service are modified to
create value-added services or are configured in unique bundles, they take the shape
of logistics capabilities that can be a source of competitive advantage (Morash et
al., 1996; Lynch et al., 2000). Thus, in their quest for new ways to establish a
competitive edge, managers are recognizing that unique types of customer value
can be created through logistics service (Langley and Holcomb, 1992).
Creating customer value and sustaining competitive advantage through the delivery
of unique or value-added logistics services can be a challenging process because
they involve changing the way logistics managers and organizations work. To do
so, it is necessary to understand how logistics creates value. Fundamentally,
logistics creates customer value through three generic ways: efficiency,
effectiveness, and differentiation or relevancy (Langley and Holcomb, 1992).
Efficiency refers to an organization‘s ability to provide the desired product/service
mix at a level of cost that is acceptable to the customer. This concept implicitly
identifies the need for managing organizational resources wisely so as to minimize
the expenses incurred in providing a service and ensuring that the service delivered
meets customer requirements. Therefore, the customer takeaway is economic value
in terms of low price (Langley and Holcomb, 1992; Bowersox et al., 2000).
Effectiveness refers to an organization‘s ability to meet customer requirements in
certain critical performance areas of logistics. For example, L.L. Bean has
identified seven customer services called ―Key result areas,‖ namely product
guarantee, in-stock availability, fulfillment time (turnaround), convenience, retail
service, innovation, and market standing (image). Therefore, the customer
takeaway is market value which in the L.L. Bean‘s case is assortment and
convenience. (Bowersox et al., 2000)
Differentiation or relevancy manifests itself in the ability of logistics to create
value for the customer through the uniqueness and distinctiveness of logistical
services (Langley and Holcomb, 1992; Bowersox et al., 2000).
2.6. Achieving Logistics Efficiency and Effectiveness Requires
 Enhanced collaboration among supply chain partners (e.g., suppliers,
manufacturers, distributors, and end users).
 Improved efficiency of each mode of transport;
21
 Effective integration of all supply chain management functions (including

demand management, supply management, manufacturing, storage, transport,
distribution, and value-added services); and
 Coordination and seamless interchange of different transport modes;
2.7. Transportation
Transportation is one of the most visible element of logistics operation it provides
two services product movement and storage. It is the movement of people, animals
and goods from one location to another. Modes of transport include air, rail, road,
water, cable, pipeline and space. The field can be divided into infrastructure,
vehicles and operations. Transport is important because it enables trade between
persons, which is essential for the development of civilizations (Coyl et.al, 2011).
As per (Coyle et.al, 2011) transportation service is very frequently important for the
selection of a particular mode operating between two points. The dimensions of
transportation service would include reliability, accessibility, and security. These
factors are looked at in terms of their cost impact as well as the actual
transportation cost itself in selecting a particular model. Transportation is a critical
link in the overall supply chain, which has become an important concept for
organizations in the 21st century. Transportation can be viewed as the glue that
helps to hold the supply chain together.
Transportation is an important and pervasive element in our economy, and it affects
almost every person directly and/or indirectly. The goods we consume, our
economic livelihoods, our mobility, and our environment are in some way impacted
by transportation. Transportation also bridges the supply and demand gap inherent
in specialization by region or area and the related mass production. The
interrelationship between transportation and large-scale production points out the
dependency of our global economy upon effective and efficient transportation.
Transportation contributes to the value of goods by providing time and place utility.
That is, effective and efficient transportation moves products to points where there
is a demand for the product and at a time when it is needed.
2.7.1 Modes of Transportation
There are different modes of transportation. The common modes of transportation
include Truck, Rail, Air, water, pipeline, multimodal, and package carriers.
 Air- can transport both passengers and cargo. Have a fixed cost in
infrastructure and equipment. Labor and fuel costs are largely trip related
22
and independent of the number of passengers or amount of cargo carried

on a flight.
 Truck- have the advantage of door to door shipment and a short delivery
time and it consists of two major shipments in the industry TL( Truck
load) whereby charges for full truck independent of the quantity shipped
and LTL(Less than truck load) in which charge is based on the quantity
loaded and distance travelled
 Rail-incurs a higher fixed cost in terms of rails, locomotives cars, and
yards. It is convenient for large shipments over large distance.
 Water- Is ideally suited for carrying very large loads at a lower cost.
 Pipeline-used for transportation of crude petroleum, refined petroleum
and natural gas products and requires significant initial fixed costs.
 Multimodal- uses more than one mode of transport to move a shipment
to its destination.
 Package Carriers- carry small packages ranging from letters to
shipments weighing about 150 pounds by using air, truck or rail to
transport time critical smaller packages.
2.7.2. Fundamental Factors of Transportation
According to Altekar, (2005) explains that, there are three factors which are
fundamentals to transportation performance, .e. Cost, Speed and Consistency, and
also he describes cost as direct cost which includes the payment for movement
between two geographical locations and expenses related to administration and
indirect cost of maintaining n transit inventory. And the second factor as Speed
which s the time required completing a specific movement of goods from one place
to another land greater speed would result n lesser time of inventory n transit being
unavailable. Hence the tradeoff s required to be made and balance has to be stock.
And the third factor s consistency, which s refers to the variation n time required to
perform a specific movement. Consistency s reflection of dependability of the
transport.
2.7.3. Advantages of Transportation
It provides time and place utility for the customer, it also supports the company
operations some of the advantages of having a good transportation system by any
company are as follows:-
23
1. It provides greater economies in the scale of production it helps better

utilization of capacity and the production units can be located in sites
more sailed for production.
2. For providing opportunities for business, it increases the competition
among transporters and this reduces costs associated with transport,
inventory, and packaging.
3. It provides better customer services, transportation creates the place and
time utility as required either a scheduled dates as even in emergencies.
2.7.4. Function of Transportation
To encouraging large scale production
Conversion of raw materials in to finished products is known and the production of
goods. For large or small scale production of goods movement of raw material is
essential. Then finished products must be transported. Transportation of good takes
place from the abundant area to the scarce area. Transport is necessary at every
stage of production of good. Transportation existing market and create new market.
It increases the demand for goods. It leads to increase in the production level, thus
large scale production is possible. Movement of products from one place to another
place created place utility. Transport moves the products in the required from to the
required place. It equalizes the supply.
To increases the mobility of factors of production
Growth of industries depends on the transport systems the four factors of
production (raw material, labor, capital, and entrepreneur) for essential for
development of industries. It’s only through transportation, the mobilization of
factors is made possible from one place to another places and from one country to
other countries. It encouraged migration of people and movement of labor and
capital. Quick a reliable means of transport are essential for the industries which
produce perishable commodities like products, fruits, meat, poultry etc. thus t
creates time utility.
It encourages of specialization and division of labor
Transport facilitates regional and geographical concentration. It helps the region or
country which may concentrate on the production of that commodity for which it’s
most suited. It will rely on other countries for those goods which it can’t produce.
Thus it helps in territorial division of labor. Exploitation of local resources is also
24
possible. Location of industries also s decided by the transport. Thus transportation

helps everyone n the world to reap the benefit of specialization.
It helps n stabilizing prices
Transportation brings about regional price equalization. It helps in the movement of
goods from surplus area to deficit areas. This leads to equalization demand and
supply conditions prices and elastic or static according to the demand and supply
conditions this reduces the price of goods to the consumer. Thus transportation is
good for both the consumer and producers. It intensifies competition among dealer
and thus reduces prices.
It provides employment opportunities
It provides employment opportunities to skilled or unskilled labors. Millions of
peoples are needed to perform the function transport throughout the world. There
are three modes of transport; land, water, air. Thus transport lends a helping hand to
employment.
It strengthens the deface of a nation
Transport s the most important element for strengthening the defiance of a nation.
Men and materials to fight wars are moved by the transport system. The national
defiance force consists of air force, navy and army and these three categories of
transport are essential.
It reduce the dangers of shortages
In this world everything is in short supply relating to its demand. The danger of
shortage can be eradicated with the help of transport. Transport creates place utility.
American wheat, Russian kerosene, Burmese rice etc. are brought by us. We are in
shortage of these commodities. Due to shortage of one commodity n one place the
price will be high. But that commodity may be in abundant supply in other places at
low prices. Transport helps the shortage area by bringing the goods from the
abundant area.
It helps n the transformation of the economy
Transformation of agriculture from subsistence farming to commercial farming is
possible through the development of transport. Development of industries is
possible only by the movement of raw material, labor capital, etc. this movement is
25
possible only through transport. Thus, transport leads to transformation in

agriculture and industrial economy of a country.
Transform of social and cultural structures
Social and cultural contacts between one country and another country are indicated
through transport. Social homogeneity and utility are created. Religious deals are
known, standard for living education and day to day life are known a society
stagnant; it can never enjoy the benefit of a modern and progressive society.
National unity and integrity are prompted by transport. It increases the knowledge
of the people. It spreads the culture and civilization all over the world.
It increase of the demand for goods
Today markets have become national or international only because of transport. It
wider the market, both consumers and producers are benefited by the extension of
the market. New comers in newer places can easily be contacted and thus demand
is created. It helps the product to be distributed in the minimum possible time.
2.8. The Effects of Transportation on Outbound Logistics Activities
On outbound logistics translates to increased efficiencies, lower costs, higher
production rates, better inventory control, smarter use of warehouse space,
increased customer and supplier satisfaction, and an improved customer experience.
How Outbound Logistics Impacts Distribution of Finished Goods and Products.
Outbound logistics activities influence how products are distributed from the place
of manufacture to the customer's destination. Delays in delivery are among
prominent potential insufficiencies in the outbound logistics system.
CHAPTER THREE
3. RESEARCH DESIGN AND METHODOLOGY
3.1. Research Design

The three widely recognized research designs are exploratory, descriptive and
casual research design. To assess the outbound logistics management of ELFORA
Agro-Industries Plc descriptive research design was chosen by the student
researcher. This method helps the student researcher describe the existing problem
on outbound logistics management of ELFORA Agro-Industries Plc.
26
3.2. Population, Sample Size and Sampling Technique

Population is a theoretically specified aggregation of the survey element in which
sample is selected. Kumar (2000:222) explains that for probability sampling, each
member of the population has a known probability of being selected; however, the
researcher needs to have a definite sampling frame of the sampling units.
Non-probability sampling does not depend upon chance as a selection procedure,
and thus the researcher cannot properly control the probability of a sampling unit
being included in the sample. The representativeness of the sample and the quality
of the parameters estimates must be determined subjectively (Hill et al., 1999:26).
The target populations of this study were the company employees and retailers of
the company. For the purpose of this study the student researcher used non
probability, purposive/judgmental sampling technique
Based on the recommendation provided by Malhotra (2007) when the exact number
of the population is unknown the student researcher must use a minimum of 200
sample size. But because of this pandemic disease, the number of the
questionnaires is limited to 20. Therefore the student researcher used a sample size
of 20 in order to conduct this study.
3.3. Types of Data to be Collected
The research will use both primary and secondary data. In order to collect primary
data interview question and questionnaire was employed to collect data from
respondents. An interview question was prepared for retailers of the company and
questionnaire was prepared for ELFORA Agro-Industries employees. The
secondary data was collected from literature review of the PLC records, reports,
publications and magazines to substantiate the information obtained from the first
hand source.
3.4. Methods of Data Collection
Both Primary and secondary data was used for this research. The primary data was
collected through interview and questionnaires. Questionnaires was distributed to
employees of the company and interview was conducted with retailers of the firm.
Company profile, different books, internet and other relevant documents was used
as a secondary data.
27
3.5. Data Analysis Methods

Both qualitative and quantitative data analysis technique was applied in this study.
Qualitative data analysis technique was applied to analyze the data which is
collected through interview and open-ended questions. Quantitative analysis
technique was applied to analyze the data which is gathered through close-ended
questions.
CHAPTER FOUR
4. DATA PRESENTATION, ANALYSIS AND INTERPRETATION
This part of the research is dedicated to general characteristics of Respondents, data

presentation, analysis and interpretation. The primary source of data for this
research is collected via questionnaire and interview. Accordingly, 30
questionnaires were distributed. Out of which all 30 were validly completed and
returned. There for the rate of return of questioner was 100%.
4.1. General Characteristics of Respondents
Table1. Below describes the demographic characteristics of the respondents
including Age, Gender, Educational Level and year of service.
28
Table 1: Demographic Characteristics of Respondents
No Item Description No of respondents Percentage (%)
1 Gender Male 21 70%
Female 9 30%
Total 30 100%
2 Age 18-28 3 10%
29-37 4.5 15%
38-48 19.5 65%
49 and above 3 10%
Total 30 100%
3 Educational Below certificate 0 0%

status
Certificate 0 0%
Diploma 1.5 5%
Degree 9 30%
Masters 18 60%
Above masters 1.5 5%
Total 30 100%
4 Year of service < 2 years 0 0%
2-3 years 3 10%
>5 years 27 90%
Total 30 100%
Owners source (2023)
29
Table 1: Indicates the general characteristics of the sample respondents from

Elfora Agro industries. As described on Table 70% were male, while the remaining
30% are female respondents. This shows the majority of the respondents were
male.
As it can be seen from the above table majority of the respondents are in the age of
38-48 that describe 65 %. The second majority age categories of the respondents
are from 29-37 that describe 15 %, the third majority age categories were both the
age of 18-28 and 49 and above that describes 1% . These shows the majority of
respondents are from the age 38 up to 48.
Regarding educational level of the respondents, the education level of respondents

explained in detail, 60% of respondents have masters, 30% of respondents have
degree, 5% of respondents have diplomas, and another 5% of respondents have
above masters. As a result, this shows the majority of respondents have masters.
As it can be seen from the above table the service year of the respondents explained
in detail,
10% of the respondents worked between 2-3 years and respondents who have
worked more than
5 years are 90%. These shows the majority respondents have worked there for
more than 5 years.
4.2. Analysis of the Findings of the study

Table 2. Employees Response on logistics efficiency of the company
No Items Description No of Percentage
respondents (%)
1 Reduce transportation cost Very good 4.5 15%
30
Good 7.5 25%
Neutral 9 30%
Poor 6 20%
Very poor 3 10%
Total 30 100%
2 Reduce warehouse cost Very good 6 20%
Good 3 10%
Neutral 7.5 25%
Poor 9 30%
Very poor 1.5 5%
Total 30 100%
3 How would you rate Very good 1.5 5%

company’s
Good 4.5 15%
Inventory turn per year
Neutral 3 10%
Poor 15 50%
Very Poor 6 20%
Total 30 100%
4 How do you see the Very good 3 10%

company’s Average order
cycle time (time in between Good 4.5 15%
order and delivery) Neutral 7.5 25%
Poor 15 30%
31
Very poor 6 20%
Total 30 100%
How would you rate the Very good 4.5 15%

number of orders shipped on
time Good 3 10%
Neutral 7.5 25%
Poor 15 30%
Very poor 6 20%
Total 30 100%
According to item 1 of table (2), shows that out of 30 respondents 4.5(15%) of the
respondents replayed very good, 7.5(25%) of the respondents good, 15(30%) of the
respondents neutral whereas 6(20%) of the respondents replayed poor and the rest
3(10%) of the respondents very poor. This above finding shows that the reduced
transportation cost of the company is neutral.
As mentioned in item 2 of table (3), shows that out of 30 respondents 6(20%) of the
respondents replayed very good, 3(10%) of the respondents good, 7.5(25%) of the
respondents neutral whereas 15(30%) of the respondents replayed poor and the rest
1.5(5%) of the respondents very poor. This above finding shows that the reduced
warehouse cost of the company is poor.
As reveled in item 3of table (2) the respondents were asked how they would rate
the company’s inventory turn per year. Thus 1.5(5%) and 4.5(15%) of respondents
replied “Very good” and “Good” respectively. However 3(10%) and 15(50%) of
respondents replied “neutral” and “Poor” respectively. and 6(20%) of respondents
32
replied very poor. From the result we can see that, the majority of respondents
replied “poor”. This implies that, the company has low inventory turn per year.
As reveled in item 4of table (2) the respondents were asked how they see the
company’s average order cycle time. Thus 3(10%) and 4.5(15%) of respondents
replied “Very good” and “Good” respectively. However 7.5(25%) and 15(30%) of
respondents replied “neutral” and “Poor” respectively, And 6(20%) of respondents
replied “poor”. This implies that, the company’s average order cycle time is low.
As explained in item 5 of table (2) the respondents were asked how they would rate
the number of orders shipped on time. Thus 4.5(15%) and 3(10%) of respondents
replied “Very good” and “Good” respectively. However 7.5(25%) and 15(30%) of
replied “poor”. This implies that, the company’s order shipment on time is low.
Table 3. Employee’s response on logistics effectiveness of the company

No Item Description No of respondents Percentage
1 Increases market coverage Very good 7.5 25%
Good 10.5 35%
Neutral 4.5 15%
Poor 6 20%
Very poor 1.5 5%
Total 30 100%
2 How would you rate the Very good 6 20%
33
company’s Product and Good 3 10%

service quality Neutral 7.5 25%
Poor 15 30%
Very poor 4.5 15%
Total 30 100%
3 How do you see Customer Very good 1.5 5%

satisfaction of the Good 4.5 15%
company
Neutral 12 40%
Poor 7.5 25%
Very poor 3 10%
Total 30 100%
4 Dose the company deliver Very good 4.5 15%

as expected
Good 6 20%
Neutral 4.5 15%
Poor 12 40%
Very poor 3 10%
Total 30 100%
As reveled in item 1 of table (3) the respondents were asked the increased market
coverage of the company. Thus 7.5(25%) and 10.5(35%) of respondents replied
“Very good” and “Good” respectively. However 4.5(15%) and 6(20%) of
34

replied “good”.
As reveled in item 2 of table (3) the respondents were asked how they would rate
the company’s product and service quality. Thus 6(20%) and 3(10%) of
respondents replied “Very good” and
“Good” respectively. However 7.5(25%) and 9(30%) of respondents replied
“neutral” and “Poor” respectively, And 4.5(15%) of respondents replied very poor.
From the result we can see that, the majority of respondents replied “poor”. This
implies that, the product and service quality of the company is poor.
As reveled in item 3 of table (3) the respondents were asked how they viewed the
customer satisfaction of the company. Thus 3(10%) and 4.5(15%) of respondents
replied “Very good” and “Good” respectively. However 12(40%) and 7.5(25%) of
replied “neutral”. This implies that, the he customer satisfaction of the company’s
is neutral.
As reveled in item 4 of table (3) the respondents were asked if the company
delivers as expected. Thus 4.5(15%) and 6(20%) of respondents replied “Very
good” and “Good” respectively.
However 4.5(15%) and 12(40%) of respondents replied “neutral” and “Poor”
respectively, And 3(10%) of respondents replied very poor. From the result we can
see that, the majority of respondents replied “poor”. This implies that, the company
doesn’t deliver as expected.
35
Table 4. Employee’s response on logistics Differentiation of the company

No Item Description No of Percentage
respondents (%)
1 How would you rate the Very good 7.5 25%
Percentage of Damage free
deliveries of the company Good 12 40%
Neutral 6 20%
Poor 3 10%
Very poor 1.5 5%
Total 30 100%
2 How do you see the company’s Very good 6 20%

Forecasting accuracy Good 7.5 25%
Neutral 15 30%
Poor 6 20%
Very poor 1.5 5%
Total 30 100%
3 How do you evaluate the Lead Very good 3 10%

time( time between order and
delivery) of the company Good 6 20%
Neutral 4.5 15%
Poor 13.5 45%
Very poor 3 10%
Total 30 100%
36
4 How would you rate the Very good 4.5 15%

Percentage of on time delivery
Good 7.5 25%
Neutral 6 20%
Poor 10.5 35%
Very poor 1.5 5%
Total 30 100%
5 How do you view the it takes Very good 6 20%

Time on backorder
Good 3 10%
Neutral 15 30%
Poor 12 40%
Very poor 0 0
Total 30 100%
6 Uses competitive price Very good 18 60%
Good 9 30%
Neutral 3 10%
Poor - -
Very poor - -
Total 30 100%
7 Increase marke Very good 7.5 25%

distribution/ t
destination Good 12 40%
Neutral 6 20%
37
Poor 3 10%
Very poor 1.5 5%
Total 30 100%
the percentage of damaged free deliveries of the company. Thus 7.5(25%) and
12(40%) of respondents replied “Very good” and “Good” respectively. However
6(20%) and 3(10%) of respondents replied “neutral” and “Poor” respectively, And
1.5(5%) of respondents replied very poor. From the result we can see that, the
majority of respondents replied “good”. This implies that, the percentage of
damaged free deliveries of the company is good.
As reveled in item 2 of table (4) the respondents were asked how they view the
company’s forecasting accuracy. Thus 6(20%) and 7.5(25%) of respondents replied
“Very good” and “Good” respectively. However 15(30%) and 6(20%) of
respondents replied “neutral” and “Poor” respectively, And 1.5(5%) of respondents
replied “neutral”. This implies that, the company’s forecasting accuracy is neutral.
As reveled in item 3 of table (4) the respondents were asked how they evaluate the
lead time of the company. Thus 3(10%) and 6(20%) of respondents replied “Very
good” and “Good” respectively. However 4.5(15%) and 13.5(45%) of respondents
replied “neutral” and “Poor” respectively, And 3(10%) of respondents replied very
poor. From the result we can see that, the majority of respondents replied “poor”.
This implies that, the lead time (time between order and delivery) of the company
is poor.
38
the percentage of on time delivery. Thus 4.5(15%) and 7.5(25%) of respondents
replied “Very good” and “Good” respectively. However 6(20%) and 10.5(35%) of
replied “poor”. This implies that, the percentage of on time delivery of the
company is poor.
As reveled in item 5 of table (4) the respondents were asked how they viewed the
time it takes on backorder. Thus 6(20%) and 3(10%) of respondents replied “Very
good” and “Good” respectively. However 15(30%) and 12(40%) of respondents
replied “neutral” and “Poor” respectively, And 1.5(5%) of respondents replied very
poor. From the result we can see that, the majority of respondents replied “good”.
This implies that, the time it takes on backorder of the company’s products is poor.
As reveled in item 6 of table (4) the respondents were asked the competitive
pricing of the company. Thus 18(60%) and 9(30%) of respondents replied “Very
good” and “Good” respectively. However 3(10%) of respondents replied “neutral”
respectively, from the result we can see that, the majority of respondents replied
“very good”. This implies that, the competitive pricing of the company is very
good.
As reveled in item 7 of table (4) the respondents were asked the increased market
destination of the company. Thus 7.5(25%) and 12(40%) of respondents replied
“Very good” and “Good” respectively. However 6(20%) and 3(10%) of
replied “good”. This implies that, the increased market destination of the company
is good.
39
Table 5. Employee’s response on challenges affecting transportation practice

of the company
No Items description No of Percentage (%)
respondents
1 Your company Strongly agree - -
transportation has Agree 3 10%
adequate and modern
Neutral 9 30%
equipment
Disagree 12 40%
Strongly 6 20%
disagree
Total 30 100%
2 Your company has Strongly agree 6 20%

Substandard trucks for Agree 3 10%
transportation
Neutral 7.5 25%
Disagree 15 30%
Strongly 4.5 15%

disagree
Total 30 100%
3 Your company Strongly agree - -

transportation service Agree 10.5 35%
uses Excessive loading
Neutral 15 30%
and
Disagree 6 20%
unloading time
Strongly 4.5 15%
disagree
40
Total 30 100%
transportation has adequate and modern equipments. Thus 3(10%) agreed, 9(30)
were neutral, 12(40%) disagreed and 6(20%) strongly disagreed. From the result
we can see that, the majority of respondents
“disagreed”. This implies that, the company doesn’t have adequate and modern
transportation equipments.
As reveled in item 2 of table (5) the respondents were asked if the company has
substandard trucks for transportation. Thus 6(20%) strongly agreed, 3(10%)
agreed, 7.5(25%) were neutral, 9(30%) disagreed and 4.5(15%) strongly disagreed.
From the result we can see that, the majority of respondents “disagreed”. This
implies that, the company doesn’t have substandard trucks for transportation.
transportation service uses excessive loading and unloading time. Thus 10.5(35%)
agreed, 15(30) were neutral, 6(20%) disagreed and 4.5(15%) strongly disagreed.
From the result we can see that, the majority of respondents “agreed”. This implies
that, the company’s transportation uses excessive loading and unloading time.
Table 6. Employee’s response on Transportation role of the company

No Items Description No of Percentage
respondents (%)
1 Your company’s Strongly agree 6 20%
transportation is efficient in Agree 4.5 15%
41
moving materials Neutral 10.5 35%

and information Disagree 15 30%
Strongly - -
disagree
Total 30 100%
2 Using transportation as a Strongly agree 3 10%

means of storage is a
common practice in your Agree - -
company Neutral 6 20%
Disagree 13.5 45%
Strongly 7.5 25%

disagree
Total 30 100%
3 Your transportation Strongly agree 4.5 15%

delivers input at the right
time Agree 3 10%
Neutral 4.5 15%
Disagree 10.5 35%
Strongly 7.5 25%

disagree
Total 30 100%
4 Your transportation service Strongly agree - -

deliver products to
customers Agree 3 10%
on time Neutral 4.5 15%
Disagree 9 30%
Strongly 13.5 45%

disagree
42
Total 30 100%
5 Your transportation Strongly agree 7.5 25%

services deliver products
to the right place needed Agree 12 40%
Neutral 6 20%
Disagree 4.5 15%
Strongly - -
disagree
Total 30 100%
As reveled in item 1 of table (6) the respondents were asked if the company’s
transportation is effective in moving materials and information. Thus 6(20%)
strongly agreed, 4.5(15) agreed, 10.5(35%) were neutral, and 15(30%) disagreed.
From the result we can see that, the majority of respondents were “neutral “ .
As reveled in item 2 of table (6) the respondents were asked if using transportation
as a means of storage was common in the company. Thus 3(10%) strongly agreed,
6(20%) were neutral, 13.5(45%) disagreed and 7.5(25%) strongly disagreed. From
the result we can see that, the majority of respondents “disagreed”. This implies
that, the company doesn’t use transportation as a means of storage.
transportation delivers input at the right time. Thus 4.5(15%) strongly agreed,
3(10%) agreed 4.5(15%) were neutral, 10.5(35%) disagreed and 7.5(25%) strongly
disagreed. From the result we can see that, the majority of respondents “disagreed”.
This implies that, the company doesn’t deliver input at the right time.
43
transportation delivers products to customers on time. Thus 3(10%) agreed, 4.5(15)
were neutral, 15(30%) disagreed and 13.5(45%) strongly disagreed. From the result
we can see that, the majority of respondents “strongly disagreed”. This implies
that, the company’s transportation doesn’t deliver products to customers on time.
As reveled in item 5 of table (6) the respondents were asked if the company’s
transportation delivers product to the right place needed. Thus 7.5(25%) strongly
agreed, 12(40) agreed, 6(20%) were neutral, and 4.5(15%) disagreed. From the
result we can see that, the majority of respondents
“agreed”. This implies that, the company’s transportation delivers product to the
right place needed.
4.3. Analysis of the Findings of Interview

To gather more information about the company’s outbound logistics, interview
questions were forwarded to retailers.
1. How long have you been working with Elfora-Agro industries and
briefly explain your relationship with the company?
- As from the words of retailers; they have been working with Elfora agro
industries for more than 8 years and they have built a long term relationship
with them. Within those years they have been consuming various of different
products from the company, like there dairy, poultry, meat products and
many others.
2. How do you view the product and service quality of Elfora-Agro
industries?
44
- As the retailers mentioned, the products they receive from the company at
the beginning of their business relationship use to be good but through
time the products were latent. And In comparison to the products they
receive from other companies in the same industry; Elfora Agro-
industries products seem to have a slightly lower quality.
3. What major problem have you faced from the company in relation to
distribution /transportation practice?
- As the retailers mentioned, the major problem faced by the company in
relation to distribution practice is the transportation problems. Products
are not delivered to them on time. The company takes awfully a lot of
time between order and delivery, and that has been a major struggle in
their business relationship so far.
4. How do you see the effectiveness of outbound logistics practice of the
company?
- As the retailers described the company is partially effective in its outbound
logistics practices. Even though they face problem in relation to the
company’s product transportation they have still managed to work
together for a long time.
5. What are your recommendations for Elfora-Agro industries, that can
further help make the company’s products better?

- The retailers recommended that the company should work on trying to
reduce the time between order and delivery and transportation practices ,
they also recommended that they have a better management team to
further grow its business and satisfy customers.
45
CHAPTER 5
5. SUMMARY, CONCLUSIONS AND RECOMMENDATION
5.1. Summary
 Majority (70% )of the respondents were male, (75%) of the respondents
were in the age groups of 38 up to 48 years, (65%) respondents have masters

and In general most( 90%) of the respondents have for more than 5 years of
experience.
 Regarding the response made by the employs with respect to the reduced
transportation cost of the company, 9(30%) which is the majority replied

“neutral”.
 Regarding the evaluation of company’s reduced warehouse cost, 9(30%)
which is the majority replied “good”.

 Regarding the response made by the employees towards company’s
inventory turn per year, 15(50%) which is the majority replied “poor”.
 The majority 9(30%) said, the company has a poor average order cycle time.
 Regarding the evaluation of the on time orders shipments of the company,
9(30%) which is the majority replied “poor”.

 Regarding increased market coverage of the company, 10.5(35%) which is
the majority replied “good”.

 The majority 9(30%) said, the company has a poor product and service
quality.
 Regarding the evaluation of the employees view of customer satisfaction,
12(40%) which is the majority replied “neutral”.

 The majority 12(40%) said, the company doesn’t deliver products as
expected.
 Regarding the evaluation of percentage of damaged free delivers of the
company, 12(40%) which is the majority replied “good”.
46
 Regarding the response made by the employees towards company’s
forecasting accuracy, 9(30%) which is the majority replied “neutral”.

 Regarding the evaluation of the employees view on lead time of the
company, 13.5(45%) which is the majority replied “poor”.

 The majority 10.5(35%) said, the company timely delivery of products is
poor.
 Regarding the evaluation of the time it the company takes on backorders,
12(40%) which is the majority replied “good”.

 The majority 18(60%) said, the company uses very good competitive pricing
poor.
 Regarding the evaluation of the company’s market destination, 12(40%)
which is the majority replied “good”.

 The majority 12(40%) said, the company doesn’t have adequate and modern
equipments of transportation.
 The majority 9(30%) said, the company doesn’t have substandard trucks for
transportation.
 Regarding the evaluation of the excessive time the company’s transportation
takes on loading and unloading, 16.5(55%) which is the majority disagreed.

 Regarding the evaluation of the company transportation efficiency in
moving materials and information, 10.5(35%) which is the majority stayed

neutral.
 The majority 13.5(45%) said, the company doesn’t use transportation as a
means of storage.
 The majority 10.5(35%) said, the company doesn’t deliver inputs at the right
time.
 The majority 9(30%) said, the company doesn’t deliver products to
customers on time.
47
 The majority 12(40%) said, the company deliver products to the right place
needed.
5.2. Conclusion
Depending on the finding discussed above the following conclusion are drawn
 Based on the finding, the inventory turns and average order cycle time of the
company is low, which implies to excess inventory, weak sales and lower
rate of product delivery. The longer products are held, the higher warehouse
cost, and for an industries like Elfora this lead to higher damaged and
perishable products. This factor affects the company’s quality of product,
cost of the business and the overall effective performance of the company.
From this we can conclude that the company is not efficient in its outbound
logistics practice.
 Based on the finding, the company lacks adequate and modern equipments,
substandard trucks and also takes excessive time in loading and unloading of
the products, which has a direct impact on the company’s capacity of
delivering products on time. Therefore we can conclude that those are the
major challenges that the company faces in relation to its transportation
practices.
 Based on the finding, the company has a poor product and services quality,
which leads to high level of customer dissatisfaction and compliant. This in

return has an impact on the overall effectiveness of the company. So from
this we can conclude that the company is not effective and doesn’t satisfy
the company’s performance. On the other hand based on the finding the
company’s market destination and market coverage is good which greatly
enhances the company’s ability of recognition and differentiation from other
48
firms in the same industry. Therefore we can conclude that logistics

differentiation of the company satisfies the company’s performance
5.3. Recommendation
 In relation to the outbound logistics efficiency, the company has low
inventory turns and low average order cycle time which implies that the
company is not efficient in its outbound logistics practices .so the student
researcher recommends that that company should increase demand for its
inventory to be able to move more products while increasing sales .And this
could be done by running a regular promotion or using social media
marketing platforms to help achieve that. And having more local stores
could also help reduce the average order cycle time of the company’s
products delivery’s.
 In relation to transportation practices, the company lacks adequate and
modern equipments, substandard trucks and also takes excessive time in

loading and unloading of the products, which implies that those are the
major challenges that the company faces in relation to its transportation
practices .so the student researcher recommends that the company replaces
and purchase its old vehicles and have adequate and up to date modern
equipments and substandard trucks. Other solution could be outsourcing its
transportation practices which could save more time so that the third party
logistics companies could add value while the firm could focus on the
product, business and customers. And training should be applied to
employees to help reduce the excessive time in loading and unloading of the
company’s products.
49
 In relation to effectiveness and differentiation of the company, elfora has a
poor product and service quality, which implies that the company is not
effective and doesn’t satisfy the company’s performance .so the student
researcher recommends that the company review its products, trucks its
mistakes and improve those to help extend its relationship with customers
and enhance its effectiveness. On the other hand, the market destination and
market coverage of the company is good which implies that the company has
a great effort to increase its distribution practices and that plays a great part
in differentiating and recognition of the company’s products.
REFERENCES/ BIBLIOGRAPHY
 Bartolacci et al., 2012; M.R. Bartolacci, L.J. Leblanc, Y. Kayikci, T.A.
Council, 2012; Council of Supply Chain Management Professionals
50
 Bowersox, J.D. (2000) Supply Chain Logistics Management. New York:
McGraw Hill Irwin
 Council of Logistics Management (1991) Definition of Logistics.

 CSA, Agricultural Sample Survey, 2005/06, Central Statistical Agency
(CSA, 2005).
 ELFORA BROCHURE 2007
 Frazelle, (2002) The Logistics of Supply Chain Management,
McGraw-Hill New York ,pp. 45
 John J. Coyle, Robert A. Novack, Brian J.Gibson and Edward J. Bardi.
(2011),
Transportation: A Supply Chain Perspective, Seventh edition
 Kahhana, K. (2002). Physical Distribution Management: Logistical
Approach 10th Edition. New Delhi: Asakek Gash Prentice Company.

 Narewsh K, Malhotra (2006). Review of Marketing Research. New
York: M,E. Sharp Inc.
 Mentzer, J. T. and Konrad, B. P. (1997).An efficiency / effectiveness
approach to logistics performance analysis. Journal of Business Logistics

12(1): 33-62.
 Michael Tracey. (2004),"Transportation Effectiveness and Manufacturing

Firm Performance", The International Journal of Logistics Management,
Vol. 15 Iss 2 pp. 31 – 50
 Sreenivas. M and Srinivas .T. (2001), The role of transportation in
logistics chain: Alluri institute of management science

 Tracy. (2004), Transportation effectiveness and Manufacturing firm
performance: The International Journal of Logistics Management, Vol.
15
51
 WATERS D.: (2003)Logistics. An Introduction to Supply Chain
Management, Palgrave Macmillan, New York, pp.

1www.unido.org/doc/5070).
 http://www.cscmp.org/
 https://www.brwilliams.com/blod/logistics-services-key-successful-
outbound-process/
52
53
APPENDIX
ADMAS UNIVERSITY
FACULTY OF BUSINESS
DEPARTMENT OF MARKETING MANAGEMENT
Dear respondents,
The purpose of this questionnaire is to collect primary data for the research entitled
with outbound logistics, in the case of Elfora-agro plc for the partial fulfillment of
the requirements for the degree of bachelors of Arts in Marketing Management in
Admas university. Therefore, we kindly request you to provide the reliable
information. Your responses will be kept confidential. The study will use it purely
only for academic purpose and thus, it doesn’t affect you in any cases. Indeed, your
undeserved cooperation is highly appreciated.
For further comments and information, you may contact -
Ø Kirubel shimelis 0962183473
Ø Eyuel Solomon 0938037763
Ø Abel Hailemariam 0946623482
Ø Haregeweyin Worku 0967308994
Ø Amanuel Elias 0918963353
PUT “” MARK ON THE BOX GIVEN
PART ONE: GENERAL PROFILE OF THE RESPONDENTS
1. Sex:
Male Female
54
2. Age:
18-28 29- 37 38- 48 49 and above

3. Education status:
Below certificate Certificate Diploma Degree

Masters Above master
4. Year of service?
<2years 2-3 years >5 years
PART TWO: QUESTIONS RELATED TO STUDY
The under listed items are asked to measure efficiency, effectiveness,

differentiation and transportation role of logistics operation of the company.
Therefore, please answer the questions by putting the sign/ √ / on the rating
provided.
Rating
Logistics efficiency Very Poor Neutral Good Very

poor good
1 2 3 4 5
Reduce transportation cost
Reduce warehouse cost
How would you rate the

company’s Inventory turn per
year
55
How do you see the company’s

Average order cycle time (time
in between order and delivery)

Number of orders shipped on
time
Ratings
Logistics effectiveness
Very
Poor Neutral Good Very
Poor
Good
1 2 3 4 5
Increases market
coverage
company’s Product and
service quality
How would you rate
Customer satisfaction
increase
Dose the company deliver

as expected
Rating
56
Logistics differentiation Very Neutral Good Very Good

Poor
poor
1 2 3 4 5

percentage of Damage free
deliveries
How do you see the
company’s Forecasting
accuracy
How would you evaluate
the Lead time( time
between
order and delivery)
Percentage of on time
delivery
How do you view the
Time it takes on backorder
Use competitive price
Increase distribution/
market destination
Transportation Roles Strongly Disagree Neutral Agree Strongly

disagree agree
57
1.Connecting 1 2 3 4 5
Your company’s transportation is

efficient in moving materials and
information
2. Storage
Using transportation as a means of

storage is a common practice in your
company
3. Creating time and palace
possession utility
Your transportation delivers input at the

right time
Your transportation service deliver

products to
customers on time
Your transportation services deliver

products to the right place needed
OPEN ENDED QUESTIONS
1. What are the major problems in the current outbound logistics practices of
Elfora-agro industries?
_____________________________________________________________
___________
_____________________________________________________________
___________
58
__________________________________________________________________
______
__________________________________________________________________
______
2. If you have general comments about logistics performance, just put forward
in the space provided.
__________________________________________________________________
______
__________________________________________________________________
______
__________________________________________________________________
______
_____________________________________________________________
___________
Thank you for taking time to complete this questionnaire!!!!
ADMAS UNIVERSITY COLLEGE
59
Faculty of Business
Department of Marketing Management
Interview questions
This interview is prepared to ask the retailers of Elfora Agro-Industries in order to
find valuable information to the study about the company in general, & to
investigate the outbound logistic activities especially on distribution /transportation
practices.
1. How long have you been working with Elfora-Agro industries and briefly
explain your relationship with the company?

2. How do you view the product and service quality of Elfora-Agro
industries?
3. What major problems have you faced from the company in relations to
distribution/transportation practices?
4. How do you view the effectiveness of Elfora-Agro industries outbound
logistics practices?
5. What are your recommendations for Elfora-Agro industries, that can
further help make the company’s products better?
60

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AN ASSESSMENT OF THE EFFECTIVNESS OF OUTBOUND LOGISTICS

IN THE CASE OF ELFORA AGRO INDUSTRY PLC

A SENIOR PROPOSAL SUBMITTED FOR THE PARTIAL FULFILMENT FOR

1. Eyuel Solomon. 0553/19

Advisor; Nigatu Benti(MBA)

Addis Ababa, Ethiopia

1.1. Background of the study....................................................................................................6

1.1.1. Background of ELFORA Agro-Industries Plc............................................................7

1.2. Statement of the problem...................................................................................................7

1.3. Objective of the study........................................................................................................8

1.3.1 General objective.........................................................................................................8

1.3.2. Specifics objective......................................................................................................8

1.4. Scope of the study..............................................................................................................8

1.5. Significance of the study....................................................................................................9

1.6. Limitations of the study.....................................................................................................9

1.7. Organization of the paper...................................................................................................9

2. REVIEW OF RELATED LITERATURE............................................................................9

2.1. DEFINITION AND CONCEPTS OF LOGISTICS..........................................................9

2.3. Logistics activities...........................................................................................................11

2.3.1. Inbound logistics.......................................................................................................12

2.3.2 Outbound logistics.....................................................................................................12

2.3.2.1. The Outbound logistics Process......................................................................14

2.3.2.2. Factors in outbound logistics..........................................................................15

2.4. An Overview of AGRO-Industry in Ethiopia..................................................................16

2.4.1. A Brief Historical Perspective of Agro-Industry in Ethiopia...................................16

2.5. Logistics Service Value...................................................................................................19

2.6. Achieving Logistics Efficiency and Effectiveness Requires...........................................21

2.7.1 Modes of Transportation............................................................................................22

2.7.2. Fundamental Factors of Transportation................................................................22

2.7.3. Advantages of Transportation...............................................................................23

2.7.4. Function of Transportation.......................................................................................23

2.8. The Effects of Transportation on Outbound Logistics Activities....................................25

3. RESEARCH DESIGN AND METHODOLOGY..............................................................25

3.1. Research Design...............................................................................................................25

3.2. Population, Sample Size and Sampling Technique.........................................................26

3.3. Types of Data to be Collected..........................................................................................26

3.4. Methods of Data Collection.............................................................................................26

3.5. Data Analysis Methods....................................................................................................27

4. DATA PRESENTATION, ANALYSIS AND INTERPRETATION...............................27

4.1. General Characteristics of Respondents..........................................................................27

4.2. Analysis of the Findings of the study..............................................................................29

Table 2. Employees Response on logistics efficiency of the company..........................................29

Table 3. Employee’s response on logistics effectiveness of the company.....................................32

Table 4. Employee’s response on logistics Differentiation of the company..................................35

Table 6. Employee’s response on Transportation role of the company..........................................41

4.3. Analysis of the Findings of Interview..............................................................................43

5. SUMMARY, CONCLUSIONS AND RECOMMENDATION.........................................45

1.1. Background of the study

business performance through its flexibility and advanced technology application,

1.3.1 General objective

2.1. DEFINITION AND CONCEPTS OF LOGISTICS

Typically, large retailers or manufacturers own major parts of their logistics

implementing and controlling procedures for the efficient and effective

2.3.2 Outbound logistics

2.4.1. A Brief Historical Perspective of Agro-Industry in Ethiopia

products for domestic consumption. Major agriculture processing potential includes

Avocado – Avocados are becoming increasingly popular in Ethiopia, both among

 Effective integration of all supply chain management functions (including

and independent of the number of passengers or amount of cargo carried

1. It provides greater economies in the scale of production it helps better

possible. Location of industries also s decided by the transport. Thus transportation

possible only through transport. Thus, transport leads to transformation in

3.1. Research Design

3.2. Population, Sample Size and Sampling Technique