Gap Analysis and Resolution Matrix

Gap Analysis Report: Materials Procurement/Sourcing and Contract Administration in Mojo dry

port project.

Samrawit Adane,Bsc.

GSD/3238/15

Addis Ababa College of Commerce, Post graduate student

Table of content

Introduction

Background of the project……………………………………………………………...…4

Objective/purpose of the assessment……………………………………...……………...5

As is analysis……………………………………………………………..……………...5

Methodology of the assessment…………………………………………..……………..6

Scope of assessment………………………………………………………..……………7

Recommendation……………………………………………………………..…………10

References……………………………………………………………………………….12
Abstract

The Modjo Dry Port project, a $150 million (4.7 billion Birr) investment, aims to establish a

modern dry port facility in Ethiopia, thereby enhancing the country's logistics and trade

capabilities. The project is financed by the World Bank and constructed by the China Civil

Engineering Construction Corporation (CCECC). This gap analysis report identifies the gaps

between the current state and the desired future state of materials procurement and sourcing in

the Modjo dry port project, with the ultimate goal of identifying areas for improvement and

formulating actionable recommendations to enhance efficiency, cost-effectiveness, and

compliance in these key areas. The findings of this gap analysis suggest that there are gaps in the

current processes and processes related to materials procurement, sourcing, contract

administration, and supply chain management. We recommend the following actions to improve

the materials procurement process, procurement processes, and supplier relationship

management to ensure that all costs, including maintenance, operation, and disposal costs, are

considered in the procurement process. We also recommend establishing a contract performance

monitoring and reporting system to ensure contracts are performing as expected, and that any

issues or deviations are identified and addressed promptly. Finally, we recommend that the

project team establishes a monitoring and evaluation framework to track the implementation of

these recommendations and to assess their impact on the Project's outcomes.

Keywords: Modjo Dry Port project, Logistics, Contract administration, Procurement

process
Gap Analysis Report: Materials Procurement/Sourcing and Contract Administration in Mojo dry

port project.

1.Introduction:

1.1 Background of the Project

The concept of “dry port” has paved its way, rising as a key element for the integration of sea
“system” and dry land networks. It is not only a mere physical extension of the storage capacity
of quays, but most importantly a tool by which it amplifies the dimension of the port, namely its
“catchment area”. (Varese et al., 2020). Functions of dry ports vary depending on the type of
facility, ranging from basic logistics services (e.g., transshipment, storage) to a variety of
customer-oriented services including cargo consolidation and deconsolidation, maintenance and
repair, track and trace, custom clearance, information processing and forwarding (Ng and Gujar
2009a, b; Beresford et al. 2012; Jeevan et al. 2015b).

The Modjo Dry Port project, a $150 million (4.7 billion Birr) investment, aims to establish a
modern dry port facility in Ethiopia, thereby enhancing the country's logistics and trade
capabilities. Effective materials procurement/sourcing and contract administration are crucial to
the project's success. The project, financed by the World Bank and constructed by the China
Civil Engineering Construction Corporation (CCECC), will focus on improving the Modjo Dry
Port, a key transportation hub that handles 95% of Ethiopia's trade, but which is a major
bottleneck on the vital Ethio-Djibouti trade corridor. The expansion project is part of a trade
logistics programme launched in 2017. It aims to cut back waiting time from two months to three
weeks, increasing the facility's efficiency, located 80Km southeast of Addis Ababa.

The project will support investments in physical infrastructure, ICT systems, and regulatory
improvements, which will increase exports, generate jobs, and raise the incomes of producers
and traders. Furthermore, it will facilitate the rapid movement of goods from the Port of Djibouti.
In line with the World Bank Group's twin goals of reducing extreme poverty and enhancing
shared prosperity, this project will improve transport and logistics for fertilizers and grains,
thereby increasing smallholder farmers' agricultural productivity and reducing food insecurity.
Since a dry port should act as the seaport’s inland interface, shifting port services to an inland
region provides a stimulus for development and generates new employment (Ng and Tongzon
2010).Ultimately, the project will not only facilitate Ethiopia's exports and imports but also
create jobs for many young people.
2. Objective/Purpose of the assessment

This gap analysis report identifies the gaps between the current state and the desired future state
of materials procurement/sourcing and contract administration in the Modjo Dry Port project.
The purpose of this study is to conduct a comprehensive analysis of the Modjo Dry Port project's
materials procurement/sourcing and contract administration processes, with the ultimate goal of
identifying areas for improvement and formulating actionable recommendations to enhance
efficiency, cost-effectiveness, and compliance in these key areas. Specifically, this study aims to:

-Identify inefficiencies and bottlenecks in the current materials procurement/sourcing and

contract administration processes, and propose strategies to streamline and optimize these
processes;

-Evaluate the compliance of the current processes with relevant laws, regulations, and industry
standards, and recommend measures to ensure full compliance and mitigate potential risks;

-Develop practical and implementable recommendations for improving the overall performance
of the materials procurement/sourcing and contract administration functions.

-Provide a roadmap for implementing the recommended improvements, including timelines,

milestones, and resource allocation plans.

By achieving these objectives, this study aims to contribute to the success of the Modjo Dry Port
project by enhancing the efficiency, cost-effectiveness, and compliance of its materials
procurement/sourcing and contract administration processes, ultimately leading to improved
project outcomes and benefits for all stakeholders involved.

3. As-is analysis

Currently six projects of the first phase are well in progress, all of which are to be constructed by
the Federal Water Works Construction Enterprise and CCECC .

The second phase of the project will include the construction of a containers’ terminal, the
digging of two deep water wells, construction of additional stores, a heavy truck terminal, an
alley, and gas stations, as well as other structures he explained.

The project is expected to be finalized within the current fiscal year at which time the Port will
accommodate 9, 500 containers up from its current capacity of just 6,300 containers.
4. Methodology of the assessment

The methodology employed in this assessment involved a combination of data collection

methods, including:

Interviews: Semi-structured interviews were conducted with key stakeholders involved in

materials procurement/sourcing and contract administration, including project managers,
procurement officers, contract administrators, and suppliers. The interviews aimed to gather
information on the current processes, challenges, and best practices in materials
procurement/sourcing and contract administration.

Historical Data: Historical data was collected from project documents, reports, and records to
gain insights into the project's past performance, trends, and challenges in materials
procurement/sourcing and contract administration.

Questionnaires: Questionnaires were administered to a sample of project stakeholders, including

procurement officers, contract administrators, and suppliers, to gather information on their
experiences, perceptions, and opinions on the current materials procurement/sourcing and
contract administration processes.

Data Analysis

The data collected through interviews, historical data, and questionnaires was analyzed using a
combination of qualitative and quantitative methods. The analysis involved:

Content Analysis: The interview transcripts, historical data, and questionnaire responses were
analyzed using content analysis to identify themes, patterns, and trends related to materials
procurement/sourcing and contract administration.

Gap Analysis: The current state of materials procurement/sourcing and contract administration
was compared to the desired future state to identify gaps and areas for improvement.

Root Cause Analysis: The root causes of the gaps and challenges identified were analyzed to
identify the underlying factors contributing to the gaps.

Data Validation

To ensure the validity and reliability of the findings, the following measures were taken:

Triangulation: The data collected through interviews, historical data, and questionnaires was
triangulated to ensure consistency and accuracy of the findings.
Member Checking: The findings were shared with the project stakeholders to ensure that the
results accurately reflected their experiences and perceptions.

Peer Review: The report was reviewed by peers to ensure that the methodology, analysis, and
findings were sound and unbiased.

Limitations

The following limitations were encountered during the assessment:

Time Constraints: The assessment was conducted within a limited timeframe, which may have
impacted the comprehensiveness of the data collection and analysis.

Data Availability: The availability of historical data and records was limited, which may have
impacted the accuracy of the findings.

Stakeholder Availability: The availability of stakeholders for interviews and questionnaires was
limited, which may have impacted the representativeness of the sample.

5. Scope of the assessment

The assessment will focus on the following components of the project:

In-Scope Components:

1.Materials Procurement/Sourcing:

Procurement processes and procedures, Supplier selection and management, Contract

management, Inventory management.

2.Contract Administration:

Contract development and management, Contract performance monitoring and reporting,

Contract compliance and risk management, Dispute resolution and claims management.

Out-of-Scope Components:

1.Project Management: Project planning and scheduling, Resource allocation and management,
Budgeting and cost control, Quality management
 Gap Analysis and Resolution Matrix 9

Ref Topic Priority Current Proposed Gap Resolution

-The project currently relies on manual -Implement an -Lack of automated -Implement an automated
procurement processes, leading to automated procurement system procurement system
delays and inefficiencies. procurement system to
streamline processes -Inadequate -Establish a centralized
-There is no centralized procurement and reduce delays. centralized procurement system
system in place, resulting in a lack of procurement system
1 Materials High transparency and accountability. -Establish a -Develop a total cost of ownership
Procurement/Sourcing centralized -Insufficient approach to procurement
-Procurement decisions are often made procurement system to consideration of total decisions
without considering total cost of ensure transparency, cost of ownership
ownership, leading to higher costs in accountability, and -Implement a supplier relationship
the long run. consistency. -Ineffective supplier management program
relationship
-Supplier relationships are not well- -Develop a total cost management
managed, leading to inconsistent of ownership approach
quality and delivery performance. to procurement
decisions, considering
factors beyond initial
cost.

-Implement a supplier
relationship
management program
to ensure consistent
quality and delivery
performance
 10

-Contract management processes are -Develop and -Lack of

not well-defined, leading to confusion implement standardized contract
and miscommunication with standardized contract management -Develop and implement
contractors. management processes processes standardized contract
High and procedures. management processes and
-There is no standardized contract -Inadequate contract procedures.
template, resulting in inconsistent -Establish a template
terms and conditions. standardized contract -Establish a standardized contract
2 Contract template to ensure -Ineffective contract template
Administration -Contract performance monitoring and consistency and performance
reporting are inadequate, making it clarity. monitoring and -Implement a contract
difficult to identify and address issues reporting performance monitoring and
promptly. -Implement a contract reporting system
performance -Inadequate dispute
-Dispute resolution mechanisms are monitoring and resolution -Establish clear dispute resolution
not clearly defined, leading to potential reporting system to mechanisms mechanisms
delays and cost overruns. identify and address
issues promptly.

-Establish clear
dispute resolution
mechanisms to
minimize delays and
cost overruns.

Table 1. Gap Analysis and Resolution Matrix for Mojo dry port project.
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6. Recommendations

Based on the findings of this gap analysis, we recommend the following actions to improve the materials procurement/sourcing and
contract administration processes in the Modjo Dry Port project:

Materials Procurement/Sourcing:

1. Implement an Automated Procurement System: We recommend implementing an automated procurement system to streamline and
optimize the procurement process, reduce manual errors, and increase efficiency.

2. Establish a Centralized Procurement System: We recommend establishing a centralized procurement system to ensure transparency,
accountability, and consistency in procurement decisions.

3. Develop a Total Cost of Ownership Approach: We recommend developing a total cost of ownership approach to procurement
decisions to ensure that all costs, including maintenance, operation, and disposal costs, are considered in the procurement process.

4. Implement a Supplier Relationship Management Program: We recommend implementing a supplier relationship management
program to ensure that suppliers are managed effectively, and that relationships are built on trust, transparency, and mutual benefit.

Contract Administration:

1. Develop and Implement Standardized Contract Management Processes and Procedures : We recommend developing and
implementing standardized contract management processes and procedures to ensure consistency, transparency, and accountability in
contract administration.

2. Establish a Standardized Contract Template: We recommend establishing a standardized contract template to ensure that all
contracts are consistent, complete, and compliant with relevant laws and regulations.
 12

3. Implement a Contract Performance Monitoring and Reporting System: We recommend implementing a contract performance
monitoring and reporting system to ensure that contracts are performing as expected, and that any issues or deviations are identified
and addressed promptly.

4. Establish Clear Dispute Resolution Mechanisms: We recommend establishing clear dispute resolution mechanisms to ensure that
disputes are resolved quickly, fairly, and efficiently, and that relationships with contractors are maintained.

Implementation Plan

We recommend that the project team develop a detailed implementation plan to ensure that these recommendations are implemented
effectively and efficiently. The plan should include timelines, milestones, and resource allocation plans to ensure that the
recommendations are implemented within a reasonable timeframe.

Monitoring and Evaluation

We recommend that the project team establish a monitoring and evaluation framework to track the implementation of these
recommendations and to assess their impact on the project's outcomes. `The framework should include key performance indicators
(KPIs) to measure the effectiveness of the recommendations and to identify areas for further improvement.
 13

References

-Varese, E., Marigo, D. S., & Lombardi, M. (2020). Dry Port: A Review on Concept, Classification, Functionalities and
Technological Processes. Logistics, 4(4), 29. https://doi.org/10.3390/logistics4040029
-Ng, A.K., and J.L. Tongzon. 2010. The transportation sector of India’s economy: Dry ports as catalysts for regional
development. Eurasian Geography and Economics 51: 669–682. (n.d.).
-Ng, K. Y. A., & Gujar, G. C. (2009). Government policies, efficiency and competitiveness: The case of dry ports in India.
Transport Policy, 16: 232–239. (n.d.).