Tsion Gebretatios

LUNAR INTERNATIONAL COLLEGE
SCHOOL OF BUSINESS AND ECONOMICS
DEPARTMENT OF BUSINESS ADMINISTRATION
The Effect of Supply Chain Management on Organizational Performance.

A Case Study in BGI Ethiopia
THESIS SUBMITTED TO THE DEPARTMENT OF BUSINESS ADMINISTRATION

IN PARITIAL FULFILMENT OF THE REQUIREMENT FOR THE AWARD OF
MASTER OF ART (MBA) DEGREE IN BUSINESS ADMINISTRATION
BY:
TSION GEBRETATIOS
ADVISOR:
Rijalu N. (PhD)
June 2022
ADDIS, ABABA, ETHIOPIA
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DEPARTMENT OF BUSINESS ADMINISTRATION
The Effect of Supply Chain Management on Organizational Performance.

A Case Study in BGI Ethiopia
BY:
TSION GEBRETATIOS
APPROVED BY BOARD OF EXAMINERS
Rijalu N. (PhD ______________ ______________
(Advisor) (Signature) (Date)

____________________________________ ______________ _____________
(Internal Examiner) (Signature) (Date)

_____________________________________ _______________ _______________
(External Examiner) (Signature) (Date)
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Statement of Declaration
I, the undersigned, declare that thesis entitled ―the effect of supply chain management in
organization performance: Case of BGI Ethiopia in partial fulfilment of the requirement for the
degree of Master of Business administration (MBA) with the guidance and support of the research
advisor Rijalu N. (PhD). This study is my own work that has not been submitted for any degree,
diploma or fellowship program in this or any other university. Finally, I confirm that a source
material used for the thesis have been duly acknowledged.
Tsion Gebretatios
Signature _____________
Date _____________
Addis Ababa, Ethiopia
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Statement of Certification
This is to certify that this thesis research entitled ― the effect of supply chain management in
organization performance: Case of BGI Ethiopia has been carried out by Tsion Gebretatios, under
my supervision. Therefore, I recommend that the thesis has fulfilled the requirements and hence
can be submitted to the department for defense.
Rijalu N. (PhD).
Signature ____________________
Date _____________________
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Acknowledgements
First of all, I would like to express my great thanks to my advisor Rijalu N. (PhD) for his valuable
efforts in advising, checking, consulting, and providing useful comments by virtue of his
professional experience, his detailed criticisms which helped me to make more substantial
improvements through continual consultation. In addition to this I want to thank the staffs of BGI
Ethiopia for their cooperation in providing all necessary information without whom this research
wouldn’t been completed
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Table of Contents
Statement of Declaration...........................................................................................III
Statement of Certification.........................................................................................IV
Acknowledgements.....................................................................................................V
List of tables and figures.........................................................................................VIII
Acronyms and abbreviations.....................................................................................IX
Abstract:......................................................................................................................X
Chapter one: introduction............................................................................................1
1.1 Background of the study.....................................................................................1
1.2 Background of the company...............................................................................3
1.3 Statement of the problem....................................................................................4
1.4 Basic research questions.....................................................................................6
1.5 Objective of the study.........................................................................................6
1.5.1 General objective...........................................................................................................................6
1.5.2 Specific objective..........................................................................................................................6
1.6 Research hypotheses...........................................................................................7
1.7 Significance of the study....................................................................................7
1.8 Scope of the study..............................................................................................7
1.9 Organization of the study...................................................................................8
Chapter two: literature review.....................................................................................9
2. Theoretical review...................................................................................................9
2.1 The Concept of Supply Chain............................................................................9
2.1.1 Objective of supply chain............................................................................................................10
2.2 Supply chain management................................................................................11
2.2.2 Key decisions in Supply Chain Management..............................................................................12
2.2.3 Benefits of Supply Chain Management.......................................................................................15
2.3 Practices in Supply Chain Management...........................................................16
2.3.1 Strategic supplier partnership......................................................................................................17
2.3.2 Customer Relationship................................................................................................................18
2.3.3 Level of Information....................................................................................................................19
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2.3.4 Quality of Information Sharing...................................................................................................20
2.3.5 Internal Lean Practices................................................................................................................21
2.4 BGI Ethiopia supply chain...............................................................................22
2.5 Conceptual framework.....................................................................................22
Chapter three: research methods................................................................................24
3.1 Research design................................................................................................24
3.2 Population size and sampling technique...........................................................24
3.2.1 Sample size..................................................................................................................................24
3.3 Data Source and Instruments............................................................................24
3.4 Method of data analysis....................................................................................25
3.4.1 Quantitative Data Analysis..........................................................................................................25
3.5 Ethical Considerations......................................................................................27
Chapter four: presentation of findings and analysis..................................................28
Introduction...............................................................................................................28
4.1 Response Rate..................................................................................................28
4.2 Demographic Characteristics of the Respondents............................................28
4.2.1 Validity and Reliability Test........................................................................................................30
4.2.2 Descriptive statistics on Aggregated Variables............................................................................31
4.2.3. Analysis of selected Customer relationship...............................................................................32
4.3 Inferential Analysis..........................................................................................37
4.3.1 Correlation between SCM practices and Organizational Performance (OP)................................37
4.4. Regression analysis.........................................................................................39
4.4.1 Findings based on Research Questions........................................................................................40
Chapter five...............................................................................................................45
5.1 Summery, conclusion and recommendation.....................................................45
5.1.1. Summary of the Findings...........................................................................................................45
5.1.2 Conclusion...................................................................................................................................47
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5.1.3 Recommendation.........................................................................................................................48
5.2 Implication for Future Research and Limitations.............................................49
References.................................................................................................................50
QUESTIONNAIRE.................................................................................................56
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List of tables and figures
List of figures
figure 2 1 supply chain stages______________________________________________________10

figure 2.2.2 key decisions in SCM (adapted from Lambert and Cooper, 2000)________________12
figure 2.3 Areas for collaboration in the supply chain (after Barratt and Oliveira, 200)________17
figure 2.5 Research framework_____________________________________________________22
figure 4. 1 Educational level_______________________________________________________29
figure 4.2 Work Experience of the Respondents________________________________________30
Table: 4.2.1 Summary Result of Hypotheses Testing____________________________________43
List of Tables
Table 4.2a Sex and Age of the Respondents___________________________________________________________28

Table 4.2b respondent____________________________________________________________30
Table 4.2.1 Reliability Test table___________________________________________________31
Table 4.2.2: Descriptive Analysis on Strategic supplier partnership_______________________32
Table 4.2.3: Descriptive Analysis on Customer relationship______________________________32
Table 4.2.4: Descriptive Analysis on Level of information sharing_________________________34
Table 4.2.5: Descriptive Analysis on Level of information quality:________________________35
Table 4.2.6: Descriptive Analysis on Internal lean practices:_____________________________36
Table 4.2.7: Descriptive Analysis on Organizational performance:________________________36
Table 4.14: Correlation matrix between constructs of SCM practices and OP________________38
Table 4.4.1 Model summary_______________________________________________________39
Table 4.4.2 ANOVA______________________________________________________________39
Table 4.2.3 coefficient of regression_________________________________________________40
Table: 4.2.1 Summary Result of Hypotheses Testing____________________________________43
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Acronyms and abbreviations
BGI - Brasseries Glaciers Internationals
SCM – Supply chain management
SCMP – Supply chain management practices
SCEM – Supply chain event management
TQM -Total quality management
FGP – Factory gate pricing
B2B- Business to Business
SME- Small and Medium sized Enterprise
SCC- Supply-Chain Council
SCOR- Supply Chain Operations Reference-model
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Abstract:
Businesses presently operate in a market- driven, client- orientated period and to survive in
similar competitive environment, they've to be flexible, adaptable and over all give superior
service. Supply chain management, client driven commercial policy, and other rudiments of force
chain operation are constantly cited as strategic options to achieve competitive success. The main
purpose of the study is to examine the effects supply chain management practices on
organizational performance of BGI ETHIOPIA. Since competition is not any longer between
businesses, but among supply chains, effective supply chain management (SCM) has become a
potentially significant technique of protecting competitive advantage and boosting organizational
performance. Even though SME growth and survival are emphasized, SCMP are still overlooked
in practice. So, this research paper will try to assess the gap in between the SCMP and
organizational performance, will evaluate the role of supply chain management practice on
organizational performance and determine the relationship between supply chain management
practices with organizational performance of the company. Data for the study will be collected
from employee of the company, from different distributor agents and suppliers. Data will be
collected by using questioner and from primary and secondary source
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Chapter one: introduction
1.1 Background of the study
The broad set of actions required to plan, control, and execute a product's flow is known as supply
chain management (SCM). The administration of the flow of products and services is known as
supply chain management, and it encompasses all processes that transform raw materials into
finished goods. It entails actively simplifying a company's supply-side processes to increase
customer value and achieve a competitive advantage in the market. Demand planning, sourcing,
production, inventory management and storage, transportation, or logistics, and return for excess
or defective items are all areas where SCM is used to optimize the flow of commodities,
information, and financial resources. To gain a competitive advantage, these ventures employ both
corporate strategy and specialist software. (SCRC SME, April 2, 2017)
The concept of Supply Chain Management (SCM) is predicted on two core ideas. The first is that
practically every product that reaches an end-user represents the cumulative effort of multiple
organizations. The supply chain refers to all these organizations as a whole. The second point is
that, even though supply chains have existed for a long time, most businesses have solely focused
on what happens within their “four walls.” Few firms comprehended, much less managed, the
entire chain of events that culminated in the delivery of items to the final client. As a result, supply
chains became fractured and sometimes unproductive.
Companies are tasked with finding ways to meet ever-increasing customer expectations at a
manageable cost, and the current competitive landscape of supply chain management assumes
substantial relevance and calls for serious study attention. To do so, businesses must obtain which
parts of their supply-chain process aren’t competitive, understand which customer needs aren’t
being met, establish improvement goals, and rapidly implement necessary improvements.
Manufacturers used to be the supply chain's driving force, controlling the rate at which products
were manufactured and distributed. Today, customers are calling the shots, and manufacturers are
scrambling to satisfy customer demands for options/styles/ features, quick order fulfillment, and
fast delivery. (Aziz Muysinaliyev, Sherzod Aktamo)
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In past, managers were trying to improve the performance of an organization based on what had
been defined within the framework of their duties merely. However, supply chain managers should
evaluate how on-chain participants may be affected by organizational methods utilized by the
organization's managers. Because it is feasible that efforts to improve an organization's
performance will reduce the negative impact on the supply chain's performance and increase its
competitive advantage. Supply chain performance are going to be maximized only we select an
intra-organizational strategy, supported which, all members are cooperating with one another for
maximizing chain value. As a result, the additional cost and time of one part is offset by the other
part's and chain's performance, and the organization's overall performance improves. However, if
each chain member carried out their responsibilities to maximize the value of a unit of their
activity, the end effect would be a rise in unneeded expenditures. 2004 (Chopra, Meindl)
Organizational Performance Management and Measurement is one among the foremost popular
terms in today’s public sector management terminology. The idea of managing organizational
performance is being widely accepted and adopted everywhere in the world. It spread rapidly from
the private sector to the public sector within the developed world and has recently found its way in
many developing countries. Governments continue to release new initiatives and legislation as a
show of their commitment to the new performance-oriented approach. It is claimed that
performance is about executing the work as well as the results obtained. It can be characterized as
work outcomes since they have the strongest connection to an organization's strategic goals,
customer happiness, and economic contributions. Any comprehensive, systematic strategy to
improving organizational performance to meet strategic targets and promote an organization's
mission and values is referred to as Performance Management and Measurement.
Previous studies suggest that effective SCM practices have a direct impact an organization's
overall financial and marketing performance (Shin et al. 2000; Prasad and Tata 2000). In fact,
SCM techniques are intended to boost a company's market share, return on investment, and overall
competitiveness.
The brewery industry sector in Ethiopia was at a growing stage but due to COVID and instability
due to war it has shown a decrease. Even though there is still competition within the existing
industry. The competition to become the leading product has led to an aggressive promotional and
marketing. The brewery industry supplying for local and worldwide due to the growing demand
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for beer. Some of them have already began to export and a few still getting to export beers. The
state-of-the-art supply chain management plays an unreplaceable role as a competitive weapon in
such a highly competitive brewery industry. Thus, managing the supply chain in this business
environment has a major impact on the performance of all parties involved in the chain. Despite
the role of supply chain management as a competitive tool, the supply chain operational excellence
in the brewery in Ethiopia is under-researched and there is a knowledge gap on how well the
performance of supply chain management practice in Ethiopia is. Consequently, this thesis will
focus on investigating the performance of supply chain management practice in the case of
brewery companies located in Addis Ababa in terms of their collaboration and integration with
their suppliers and B2B customers, supply chain reliability, responsiveness, flexibility, and supply
chain operational cost also as ICT utilization in supply chain management in this industry with
limited scope. The beer industry has been through much change in recent years with numerous
entrants
In the better beer segment and consolidation among larger brewers. BGI Ethiopia, Habesha,
Heineken, Dashen and United beverage are the five beer companies operating in Ethiopia which
collectively run 13 factories. Four giant liquor and two wineries also make a part of Ethiopia's
growing beverage industry. Because the market is so competitive, focusing on effective supply
chain management is the greatest way to cut costs, improve customer satisfaction, maximize asset
utilization, and generate new revenue.
1.2 Background of the company
It all started in 1922. Mussie Hal, a Belgian national of Ethiopian descent established St. George
Brewery after agreeing with the monarchy. After the installment of new machinery and the
expansion of production facilities and workforce, the brewery was able to expand production and
started to meet the increasing demand for “modern” beer.
St. George Brewery’s ownership was assigned to the private domain of Emperor Haile Sellassie I
and four other individuals after the expulsion of the Italian occupying forces in 1941. During the
40’s and 50’s, beer-drinking became popular among locals and St. George Beer became the
undisputed champion in Ethiopia. This led to a serious overhaul and expansion of the brewery to
satisfy the growing demand. Throughout the 60’s and 70’s St. George Beer’s popularity grew
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steadily alongside the brewery’s product portfolio with the additions of latest brands like St.
George Stout Beer, which was the first dark or Stout beer produced in Ethiopia, and Pilsner Beer,
a blond Lager variety.
St. George Brewery was nationalized and handed over to The Ministry of Finance in 1974 when
the junta “Dergue” came to power. In 1975, St. George Brewery’s old maltery was revived to
process locally sourced malt. In the late 70’s, the iconic brand name St. George Beer and the St.
George logo was replaced with “Addis Beer”, until it was revived again in the late 90’s when BGI
Ethiopia took over ownership.
Towards the end of 1997, BGI – the brewery and beverage production wing of Castel Group – was
established as BGI Ethiopia P.L.C. to facilitate private investments in the brewery sector, which
was the first of its kind in Ethiopia. In the town of Kombolcha (Wollo), BGI Ethiopia established
the primary privately owned brewery by acquiring 47 Hectares of land, and the Kombolcha
The brewery was officially inaugurated, producing two brands: Bati Beer, which was a
mainstream local brand, and Castel Beer, an international premium brand. In conjunction with
operating its brewery and producing its beer brands, BGI Ethiopia purchased the historic St.
George Brewery and the iconic St. George Beer brand in December 1998.
Throughout the 2000’s, several expansion and modernization projects continued on the two
breweries (Addis and Kombolcha) increasing their combined production capacity from 500,000
Hl. to 1,400,000 Hl. In June 2011, BGI Ethiopia bought its third and largest brewery in the town
of Hawassa. BGI Ethiopia also continued to expand its product portfolio by introducing the Amber
beer brand in 2012, which was and still is the first of its kind in the country. By mid-2012, BGI
Ethiopia has also ventured into the winemaking business, building, and operating the first privately
owned winery and vineyard in Ziway town with an initial investment of 22 million. In 2017
acquired 58% of Raya brewery and full of Zebidar. January 2022, Diageo agreed to see Meta Abo
brewery to Castel group. BGI has a production capacity of more than 4.3 million hectoliters a year.
1.3 Statement of the problem
Academics, consultants, and company managers are all paying more attention to the concept of
SCM. Many companies have realized that SCM is the key to gaining a long-term competitive
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advantage. Despite this increased attention, the literature has not been able to offer many ways of
guidance to help the practice of SCM (Perona, 2004).
The brewery industry is extremely competitive and faces new opportunities and challenges.
Changing consumer demands and preferences require new ways of maintaining current customers
and attracting new ones. In most beer markets, there has been a steady shift towards premium
brands that offers health benefits. As a result, there's a focused switch by brewers from
mainstream brands to premium brands to reinforce their growth prospects. This successively has
resulted in an increasing need to have an efficient supply chain network and to reduce operating
expenses.
However, the link between SCM and performance cannot be considered conclusive (Cousins et al.,
2006). Despite an increase in empirical research in recent years (Priscila Laczynski, 2011),
significant differences in research design undermine comparability: a lack of agreement on the
definition and dimensionality of SCM practice (s), the use of different units of analysis, and
different approaches to performance measurement. Furthermore, most studies used non-
probabilistic samples, primarily of American and European corporations, restricting extrapolation
to emerging economies. However, there is substantial evidence that cultural, social, and economic
factors influence the link between SCM and performance in each region (Harland, 1997; Mentzer
et al., 2001; Kaufmann & Carter 2006).
Supply Chain Management practice in Ethiopia remains within the infancy stages, there are small
numbers of producing companies integrating it into their organizational system. Besides, there are
some challenges in the brewery industry that resulted in reducing the quality and demand of
products manufactured domestically. One of the problems is the poor SCM practice of
organizations in the brewery industry (Ayalew, B., 2018). T
As a business, BGI Ethiopia’s primary objective is to get optimal profit. When we are talking
about profit, it’s obvious that the company should maintain its cost low and raise its quality as per
the expectation of its customers. If the company fails to minimize its costs and keeps its customers
satisfied, there will be a simple shift of customers to other similar products that leads to low profit.
And for the company to fulfill its objective, the SCM plays a vital role in minimizing costs and
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producing a quality product that exceeds customers’ expectations. Complex supplier relationships
and dynamic markets make the supply chain management activity complicated.
The problems to be covered in this paper is to determine the effect of supply chain management
practices and their relationship with the organizational performance in BGI Ethiopia which
directly affects its competitiveness in the market
1.4 Basic research questions
This research paper will be done to answer the following question “the effect of supply chain management
on the organization performance”
 What is the effect of strategic supplier partnership on organizational performance at BGI
Ethiopia?
 How does customer relationship affect organizational performance at BGI Ethiopia?
 What is the effect of information sharing on organizational performance at BGI Ethiopia?
 How does Quality of Information Sharing affect organizational performance at BGI
Ethiopia?
 What is the effect of Internal Lean Practices on organizational performance at BGI
Ethiopia?
1.5 Objective of the study
1.5.1 General objective
 The general objective of this research is to investigate the effect of supply chain management
practice on organizational performance at BGI Ethiopia
1.5.2 Specific objective

 To examine the effects of strategic supplier partnership on organizational performance of
BGI Ethiopia
 To examine the effects of customer relationship on organizational performance of BGI
Ethiopia
 To investigate the effects of information sharing on organizational performance of BGI
Ethiopia
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 To assess the effects of Quality of Information Sharing on organizational performance of
BGI Ethiopia
 To assess the effects of internal lean practice on organizational performance at BGI
Ethiopia
1.6 Research hypotheses

 H1: Strategic supplier partnership has significant positive effect on organizational
performance
 H2: Customer relationship has significant positive effect on organizational performance
 H3: Level of information sharing has significant positive effect on organizational
performance
 H4: Level of information quality has significant positive effect on organizational
performance
 H5: Level of Lean practice has significant positive effect on organizational performance
1.7 Significance of the study
The goal of any business establishment was to remain in business profitably through the
production and sale of products or services. Without optimal profit a business/firm cannot survive
so this research paper will help BGI ETHIOPIA to establish the effect of supply chain
management on organizational performance. And will show the effect of the supply chain on
country-wise performance.
This study could help management of BGI Ethiopia. The managers may consider the result of this
study, which may help them gain better understanding about the processes of SCM practices.
From the results, the managers may either draw strategies or improve the current policies that
govern supply chain management in their organization
The findings of this study will also be used as a reference point by other researchers for further
research on the same field. They can also use the findings as a secondary source of information.
1.8 Scope of the study
Supply chain management (SCM) is that the broad range of activities required to plan, control
and execute a product's flow, from acquiring raw materials and production through
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distribution to the ultimate customer, within the most streamlined and cost-effective way
possible. But it is difficult and unmanageable to conduct the study in all areas that
summarizes SCM in terms of time, finance, and research manageability. Therefore, the scope
of this study is delimited to SCM practices and organizational performance.
And, the study will be delimited to organizational performance which incorporates market
share, returns on investment, the growth of market share, the growth of sales, growth in return
on investment, the profit margin on sales, and overall competitive position). The area of the
study is also delimited to the case company BGI Ethiopia Addis Ababa branch.
1.9 Organization of the study

This study has been categorized into five chapters. The first chapter concentrated on introductory
parts of the paper that mainly pinpointed background of the study, the statement of the problems,
objective of the study, research hypothesis, significance of the study; scope and limitation and
organization of the study. The second chapter provide related literature review with specific
emphasis to theoretical, empirical and Conceptual aspects concerning about organizational culture
and employees‟ commitment. The third chapter deals with research methodology, research design,
research approach data type and sources, sampling design and procedures, methods of data
collection and instruments, data processing and methods of data analysis are incorporated. The
fourth chapter presents the analysis of the descriptive and interpretation of the results. The last
chapter is about the conclusion and recommendations
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Chapter two: literature review
2. Theoretical review
2.1 The Concept of Supply Chain
In business and finance, supply chain is a system of organizations, people, activities, information,
and resources involved in moving a product or service from supplier to customer. Supply chain
activities involve the transformation of natural resources, raw materials, and components into a
finished product that is delivered to the end customer (Kozelenkva, 2015). In other definition
supply chain is a group of interconnected participating companies that add a value to a stream of
transformed inputs from their source of origin to the end products or services that are demanded
by the designated consumer. (Dr, Dawei Lu, 2011). This definition squared out the nagging
confusion between organizational business management and supply chain management. Rarely
any aspect of organizational business management is not related to or inﬂuenced by the external
firms in the supply chain. Thus, the best way to manage the business is to take into consideration
and engage with the external organizations in the decision making to achieve the ultimate business
objectives that means supply chain management.
In other words, trying to identify a set of supply chain management activities that is not or nothing
to do with any known business management activities would futile. The inception of the supply
chain management concept did not create a newest of functional activities that has never been
carried out before. What it created is a new way of understanding on how the business activities
might be better carried out.
And some books state supply chain as that consists of all parties involved, directly or indirectly, in
fulfilling a customer request. The supply chain includes not only the manufacturer and suppliers,
but also transporters, warehouses, retailers, and even customers themselves. Within each
organization, such as a manufacturer, the supply chain includes all functions involved in receiving
and filling a customer request. These functions include, but are not limited to, new product
development, marketing, operations, distribution, finance, and customer service (Dr, Dawei Lu,
2011).
A typical supply chain may involve a variety of stages, including the following:
 Customers
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 Retailers
 Wholesalers/distributors
 Manufacturers
 Component/raw material suppliers
Each stage in a supply chain is connected through the flow of products, information, and funds.
These
flows often occur in both directions and may be managed by one of the stages or an intermediary.
figure 2 1 supply chain stages

2.1.1 Objective of supply chain
The objective of every supply chain should be to maximize the overall value generated. The
value (also known as supply chain surplus) a supply chain generates is the difference between
what the value of the final product is to the customer and the costs the supply chain incurs in
filling the customer’s request.
Supply Chain Surplus = Customer Value – Supply Chain Cost

The value of the final product may vary for each customer and can be estimated by
the maximum amount the customer is willing to pay for it. The difference between the value of the
product and its price remains with the customer as consumer surplus. The rest of the supply chain
surplus becomes supply chain profitability, the difference between the revenue generated from the
customer and the overall cost across the supply chain (Sunil chopra, 2011)
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2.2 Supply chain management
Supply chain management (SCM) is the active management of supply chain activities to maximize
customer value and achieve a sustainable competitive advantage. It represents a conscious effort
by the supply chain firms to develop and run supply chains in the most effective & efficient ways
possible. Supply chain activities cover everything from product development, sourcing,
production, and logistics, as well as the information systems needed to coordinate these activities.
(SCRC SME April 2, 2017)
The concept of Supply Chain Management (SCM) is based on two core ideas:
1. The first is that practically every product that reaches an end user represents the cumulative
effort of multiple organizations. These organizations are referred to collectively as the
supply chain.
2. The second idea is that while supply chains have existed for a long time, most
organizations have only paid attention to what was happening within their “four walls.”
Few businesses understood, much less managed, the entire chain of activities that
ultimately delivered products to the final customer. The result was disjointed and often
ineffective supply chains.
The organizations that make up the supply chain are “linked” together through physical flows and
information flows.
Physical Flows: Physical flows involve the transformation, movement, and storage of goods and
materials. They are the most visible piece of the supply chain. But just as important are
information flows
Information Flows: Information flows allow the various supply chain partners to coordinate their
long-term plans, and to control the day-to-day flow of goods and materials up and down the
supply chain. (SCRC SME April 2, 2017)
Supply chain management (SCM) is the management of a network of interconnected businesses

involved in the provision of product and service packages required by the end customers in a
supply chain. (Harland, C.M., 1996). Supply chain management spans all movement and storage
of raw materials, work-in-process inventory, and finished goods from point of origin to point of
consumption. Another definition is provided by the APICS Dictionary when it defines SCM as the
"design, planning, execution, control, and monitoring of supply chain activities with the objective
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of creating net value, building a competitive infrastructure, leveraging worldwide logistics,
synchronizing supply with demand and measuring performance globally.
2.2.2 Key decisions in Supply Chain Management

(Lambert and Cooper, 2000) distinguish three key decisions in SCM, summarized in Figure 4. The
conceptual framework emphasizes the interrelated nature of SCM and the need to proceed through
several steps to design and successfully manage a supply chain. Each step is directly related to the
supply chain objectives, i.e. the degree to which a supply chain fulfils end-user requirements
concerning the key performance indicators at any point in time, and at what total cost. Key
Performance Indicators (KPIs) refer to a relatively small number of critical dimensions which
contribute more than proportionally to the success or failure in the marketplace. (Christopher,
M.G., 1998). KPIs compare the efficiency and/or effectiveness of a system with a norm or target
value. A well-defined set of supply chain performance indicators will help establish benchmarks
and assess changes over time. A good example is the Supply Chain Operations Reference-model
(SCOR) developed by the Supply-Chain Council (SCC) as the cross-industry standard for SCM.
SCOR provides an integrated, heuristic approach for supply chain improvement via
(i) the modelling of business processes,

(ii) the definition of SCM metrics for evaluating the supply chain and rapidly identifying high
value opportunities and
(iii) the identification of best practices to provide a candidate list of improvement options
figure 2.2.2 key decisions in SCM (adapted from Lambert and Cooper, 2000)
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Supply chains can be managed as a single entity through the dominant member or, alternatively,
through a system of partnerships requiring well-developed co-operation and co-ordination.
Formulating supply chain objectives is therefore not an easy task since all partners must agree on
the selection of indicators, the definition of the indicators and the target values. The present
performance measures used in most companies have several problems that prevent them from
effectively measuring total supply chain performance. Supply chain participants should start with
jointly identifying order winners and satisfiers for the supply chain, because these provide the
intended direction of control actions to improve supply chain performance. By analyzing the goals
of each individual organization and by identifying market requirements, integrated KPIs can be
defined, and norms established.
Three key decisions in more detail
1. Who are the key supply chain members with whom to link processes?
The first step in analyzing and redesigning a supply chain is to determine the organizations that are
part of the supply chain under investigation. For most manufacturers, the supply chain looks less
like a pipeline or chain than an uprooted tree, where the branches and roots are the extensive
network of customers and suppliers. The question is how many of and how intensive these
branches and roots need to be managed. Management will need to choose the level of partnership
appropriate for each supply chain member knowing that firm capabilities in time and effort are
limited (Lambert & Cooper, 2000). With some suppliers’ partnerships are required since the raw
materials they deliver are crucial; others are less important and only have to be monitored. The key
is to sort out which members are critical to the success of the company and the supply chain – in
line with the supply chain objectives - and, thus, should be allocated managerial attention and
resources.
2. What processes should be linked with each key member?

Successful SCM requires a change from managing individual business processes within one
organization to integrating activities over organizations into key supply chain processes.(Chopra,
S. and P. Meindl, 2001) have identified eight key business processes that could be integrated with
the key members in the supply chain. It is usually not necessary to integrate all processes; e.g. if
the order winner is responsiveness focus should be on order fulfilment, whereas if the order
winner is innovation focus should be on joint product development.
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SCM literature suggests several redesign strategies to improve the effectiveness and efficiency of
these business processes in the supply chain. (Vorst, van der, J.G.A.J.,Beulens, A.J.M., 2002) have
identified a generic list of SCM redesign strategies to facilitate the redesign process and
accomplish joint supply chain objectives. These are the following:
 Redesign the roles and processes performed in the supply chain (e.g. change or reduce the
number of parties involved, re-allocate roles and eliminate non-value-adding activities);
 Reduce customer order lead times (e.g. change the position of the decoupling point (see the
next section), implement ICT systems for information exchange and decision support, reduce
waiting times, increase manufacturing flexibility);
 Create information transparency (e.g. establish an information exchange infrastructure in the
supply chain and exchange demand/supply/inventory or WIP information, standardize product
coding). (Dr. Ir. Jack G.A.J., 2004)
 Synchronize logistical processes to consumer demand (e.g. increase execution frequencies of
production and delivery processes, decrease the lot sizes); and
 Co-ordinate and simplify logistical decisions in the supply chain (e.g. co-ordinate lot sizes,
eliminate human interventions, differentiate and simplify products, systems and processes).
(Vorst, van der, J.G.A.J., Beulens, A.J.M, 2002) propose that to identify the most effective
strategies in a specific supply chain one should focus on the identification and management of
the sources of uncertainties in the supply chain’s decision-making processes. We refer to their
article for an elaborated discussion
3. What level of integration and management should be applied to each process linkage?
The literature on business process reengineering and SCM suggests numerous possible
components that must receive managerial attention when managing supply relationships.
(Lambert, D and Martha C. Cooper, 2000) distinguish two groups of management components;
see table 4. The first is the physical and technical group, which includes the most visible, tangible,
measurable and easy-to change components. The second group, the managerial and behavioural
components, defines the organizational behaviour and influences how the physical and technical
management components can be implemented. If the managerial and behavioural components are
not aligned to drive and reinforce an organizational behaviour supportive to the supply chain
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objectives and operations, then the supply chain will likely be less competitive and profitable. If
one or more components in the physical and technical group are changed, then management
components in the managerial and behavioural group likewise may have to be re-adjusted.
Especially the managerial and behavioural components are well-known obstacles to SCM as they
might hinder the development of trust, commitment and openness between supply chain members.
2.2.3 Benefits of Supply Chain Management

The profitability of the supply chain could be improved drastically via better delivery
performance (improved responsiveness and reliability of deliveries, fewer stock outs, higher
product quality, more receiver-friendly loads) and increased information availability (better
demand insight, more predictable order cycles, accurate, real-time) at the operational level and a
reduction of time-to market at the tactical and strategic level. The potential for improvement when
applying SCM-concepts is based on the reduction of inventory-carrying (reduced overstocks,
faster inventory turns) and transportation costs (pooling of transport), the reduction of indirect and
direct labour costs and the increase of sales and sales margins. Many companies are re-engineering
and rationalizing their supply chain network to obtain these benefits and other book lists the
benefit of supply chain management as follow
Higher Efficiency Rate: When your business can incorporate supply chains, integrated logistics,
and product innovation strategies, you'll be in a great position to not only predict demand as well
as to act accordingly. And this is, without any doubt, one of the main supply chain management
benefits. Why? When your business implements supply chain management systems, it will be able
to adjust more dynamically to the fluctuating economies, emergency markets, and shorter product
life cycles.
Decrease Cost Effects: One of the advantages of supply chain management is the costs decrease
in different areas. The most important ones are: Improves your inventory system; adjusts the
storage space for finished goods which eliminates damage resources; improves your system's
responsiveness to the actual customer's requirements; improves your relationship with both
distributors and vendors.
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Increases Output: One of the main benefits of supply chain management is the communication
improvement. This adds up to the coordination and collaboration with shipping and transport
companies, vendors, and suppliers.
Increases Your Business Profit Level: When you place your business open to the new
technologies and an improved collaboration within the different areas, you can be sure that this
will ultimately increase your business profit level.
Boost Cooperation Level: When we're talking about the most successful businesses right now,
one of the things they all have in common is the communication. In fact, when there is a lack of
communication, your vendors and distributors have no idea about what's going on. So, this is one
of the main advantages of supply chain management. Plus, when you also open your doors and
embrace technology, you can also take advantage of the fact that people don't even need to share
the same space to be a true communication. The communication among the different areas of your
business will allow you to have faster access to forecasts, reporting, quotation, statuses, among
many other plans in real time.
No More Delays in Processes: One of the main benefits of supply chain management is the fact
that through communication, you can lower any delays in processes. Since everyone is aware of
what they're doing as well as what others are doing, this will mitigate any late shipments from
vendors, logistical errors in distribution channels, and hold-ups on production lines.
Enhanced Supply Chain Network: It's not easy to maintain a sustainable supply chain management
system. According to some of its advocators, one of the best ways to do it is by using a
combination of lean practices (like waste removal, for example) with agile. By combining all the
information gathered on the different sectors of your business will allow you to have an enhanced
supply chain network.
2.3 Practices in Supply Chain Management
In the last ten years, numerous projects on supply chain collaboration were done to analyze how
firms could use their suppliers’ and customers’ processes, information, technology, and capability
to enhance competitive advantage. Most projects were wiped out the front-end of supply chains,
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which is within the interface between retailer and manufacturer. But also, within the interface
between manufacturers and suppliers and/or third parties’ numerous enhancements were made.
The last year’s manufacturers have been instigated to focus on core business resulting in the
outsourcing of non-core activities such as transportation and the centralization of manufacturing
activities. The practical experiences are often categorized into the subsequent areas. (Dr. Ir. Jack
G.A.J, 2004)
Collaborative demand planning and replenishment: retailers and makers work together to assess
consumer demand and to work out the foremost appropriate supply management and
replenishment approach to satisfy this consumer demand.
Collaborative production: manufacturers and suppliers work together to harmonies the supply of
raw materials and the production of end products in such a way as to minimize the stocks within
the supply chain and maximize the responsiveness.
Collaborative logistics planning: coordinating transport and warehousing between the various
parties involved, including transshipped, logistic service providers, carriers, and recipients. A
precondition for supply chain coordination is that the establishment of connectivity and
transparency, i.e. interconnecting the information systems of the successive partners in the supply
chain and exchanging information via this infrastructure. (Dr. Ir. Jack G.A.J, 2004)
figure 2.3 Areas for collaboration in the supply chain (after Barratt and Oliveira, 200)
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2.3.1 Strategic supplier partnership
It is the long-term relationship between the organization and its suppliers. It is designed to
leverage the strategic and operational capabilities of individual participating organizations to help
them achieve significant ongoing benefits (Li et al, 2006). Strategic partnerships with suppliers
enable organizations to work more effectively with a few important suppliers who are willing to
share responsibility for the success of the products. Suppliers participating early in the product-
design process can offer more cost-effective design choices, help select the best components and
technologies, and help in design assessment (Tan et al., 2002).
Supplier partnerships and strategic alliances refer to the co-operative and more exclusive
relationships between organizations and their up-stream suppliers and downstream customers (A.
Gunasekaran et al, 2004). Today many firms have taken bold steps to breakdown both inter and
intra firm barriers to form alliances, with the objective of reducing uncertainty and enhancing
control of supply and distribution channels. Such alliances are usually created to increase the
financial and operational performance of each channel member through reductions in total cost
and inventories and increased sharing of information (Maloni andBenton, 1997). Rather than
concerning themselves only with price, manufacturers are looking to suppliers to work co-
operatively in providing improved service, technological innovation and product design. This
development has produced a significant impact by expanding the scope of SCM through greater
integration of suppliers with organizations (A. Gunasekaran et al, 2004)
The relationship is designed to control the strategic, tactical and operational capabilities of
individual participating organizations to help them achieve major ongoing mutual benefits (Jie et
al., 2007). A strategic partnership emphasizes direct, long-term association and encourages mutual
planning and problem-solving efforts (Gunasekaran, 2001). Strategically aligned organizations can
work closely together and eliminate wasteful time and effort. According to Noble (1997) an
effective supplier partnership can be a critical component of a leading edge supply chain (Bratić,
2011,Adebayo, 2012)
2.3.2 Customer Relationship
Comprises the entire array of practices that are employed for the purpose of managing customer
complaints, building long-term relationships with customers, and improving customer satisfaction
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(Noble,1997 ) and (Tan, 1998) Consider customer relationship management as an important
component of SCM practices. The growth of mass customization and personalized service is
leading to an era in which relationship management with customers is becoming crucial for
corporate survival (Wines, 1996). Good relationships with supply chain members, including
customers, are needed for successful implementation of SCM programs. Close customer
relationship allows an organization to differentiate its product from competitors, sustain customer
loyalty, and dramatically extend the value it provides to its customers (Mwale, 2014). Customer
relationship is the key element in today SCM practices implementation in any organization
(Mbuthia and Rotich, 2014). This is because the world today is in the era of massive growth of
mass customization and personalized service which had forced organizations to maintain good
relationship with customers for the sake of their survival (Jie et al., 2007). Close customer
relationship allows an organization to differentiate its products from the competitors, and sustain
customer loyalty (Bratić, 2011). Good relationships with supply chain members, including
customers, are needed for successful implementation of SCM program (Mbuthia and Rotich,
2014)
2.3.3 Level of Information
Sharing It is defined as the extent to which critical and proprietary information is communicated to
one‘s supply chain partner (Li et al, 2006). Level of information sharing; information sharing has
two aspects: quantity and quality and both of aspects are important for SCM practice (Li et al.,
2006). Level of information sharing refers to the extent to which critical and proprietary
information is communicated to one‘s supply chain partner (Li et al., 2006). Shared information
can vary from strategic to tactical in nature and from information about logistic activities to
general market and customer information (Mentzer et al., 2000). The objective of information
sharing is to spread appropriate information for planning and controlling entire supply chain
operation (In Tae Lee, 2017) Many researchers have suggested that the key to the seamless supply
chain is making available undistorted and up-to-date marketing data at every node within the
supply chain (Child House and Towill, 2003). Effective use of relevant and timely information by
all the functional elements in the supply chain is considered as a competitive factor and distinctive
(Ahmadi, 2005). Failures can occur in case of information delays, shortage or distortion across the
supply chain (Power, 2005). The empirical findings of( Child house and Towill,2003) reveal that
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simplified material flow, including streamlining and making highly visible all information flow
throughout the chain, is the key to an integrated and effective supply chain.
2.3.4 Quality of Information Sharing
Based on Li et al. (2005), organization needs to review their information as a strategic asset and
ensure that the information flows with minimum delay and distortion. In addition, Li et al. (2005)
also notes that information shared must be accurate so that the best SCM solution will be obtain.
Effective use of relevant and timely information by all the functional elements in the supply chain
is considered as a competitive factor and distinctive (Ahmadi, 2005). 19 Quality of information
sharing includes such aspects as the accuracy, timeliness, adequacy, and credibility of information
exchanged (Moberg, 2002). While information sharing is important, the significance of its impact
on SCM depends on what information is shared, when and how it is shared, and with whom
(Holmberg, 2000). Divergent interests and opportunistic behavior of supply chain partners, and
informational asymmetries across supply chain affect the quality of information (Feldmann and
Muller, 2003). It appears that there is a built-in reluctance within organizations to give away more
than minimal information since information disclosure is perceived as a loss of power. Given these
predispositions, ensuring the quality of the shared information becomes a critical aspect of
effective SCM (Feldmann and Muller, 2003). Organizations need to view their information as a
strategic asset and ensure that it flows with minimum delay and distortion (Mollel, 2015).
According to Mollel (2015), the most essential characteristic features for information quality
includes the following:  Reliability - It should be verifiable and dependable.
 Timely - It must be current, and it must reach the users well in time, so that important decisions
can be made in time.
 Relevant - It should be current and valid information and it should reduce uncertainties.
 Accurate - It should be free of errors and mistakes, true, and not deceptive.
 Sufficient - It should be adequate in quantity, so that decisions can be made on its basis.
 Unambiguous - It should be expressed in clear terms. In other words, in should be

comprehensive.
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 Complete - It should meet all the needs in the current context.
 Unbiased - It should be impartial, free from any bias. In other words, it should have integrity.
 Explicit - It should not need any further explanation.
 Comparable - It should be of uniform collection, analysis, content, and format.
 Reproducible - It could be used by documented methods on the same data set to achieve a
consistent result
2.3.5 Internal Lean Practices
The term “lean‘‘ is used to refer to a system that uses less input to produce at a mass production
speed, while offering more variety to the end customers. Elimination of waste is a fundamental
idea within the lean system. The core thrust of lean practices are that these practices can work
synergistically to create a streamlined, high quality system that produces finished products at the
pace of customer demand with little or no waste (Woldemichael, 2012). Today, lean is evolving
into a management approach that improves all the processes at each level of an organization
(Mwale, 2014). It is the process of removing all of the wasted time and resources in the production
process. Lean can be considered a philosophy, a work culture, a technique, a management concept,
a value, a methodology or an ethos. Today, lean is evolving into a management approach that
improves all the processes at each level of an organization. Lean practices help to eliminate waste
in all procurement cycles, prevent shortages, reduce inventory investment, reduce procurement
lead time and cost, increase inventory turnover and ensure customers satisfaction
(wijetunge,2016). Lean has gained popularity in a wide range of industrial sectors, beyond
manufacturing, all around the world (Garza-Reyes et al., 2012). It is nowadays considered the
most influential new paradigm in manufacturing (Forrester et al., 2010) enhancing the
competitiveness of organizations (Hines et al., 2004). Lean is focused on identifying and
eliminating waste throughout a product‘s entire value stream, extending not only within the
organization but also along its entire supply chain network (Boyle and Scherrer, 2009). Thus, the
concept of lean supply chains has been widely studied in the academic literature (e.g. Chen et al.,
2013; Qrunflehand Tarafdar, 2013). In most of the cases, these studies suggest that lean principles
and practices enable the effective management of supply chains. This evidence contributed in
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considering this dimension as part of the SCM practices construct developed for this study, Jones,
E. C., Richards, C. N. & Carlson, J. P.2010)
2.4 BGI Ethiopia supply chain

BGI plc is a member of Castel Group which its head office is based in France, established in 1997
in Kombolcha. BGI Ethiopia was the first private Owen brewery in Ethiopia by acquiring 47
Hectare of land. Initially BGI started manufacturing and distributed to Ethiopian Market two
brands (Bait and Castel beer). During that period the main competitor in the market was St.
George Beer. In 1998 BGI Ethiopia plc Owned St. George beer factory and then expand its
capacity by installing the third factory at Hawassa city mainly for south and east part of Ethiopian
market and now BGI ETHIOPIA is also owning tow more factory Raya brewery which was
established in 2012 by Raya Share Company and BGI Ethiopia (60%- 40% share structure) and
started operations in 2016. In 2017 BGI Ethiopia managed to acquire all individual shares and
assumed full ownership of Raya Brewery and the other Zebeder Brewery which was established in
2012 by Jemar Hulegeb Industry Share Company (a share company established by prominent local
businessmen & women) and the Belgian brewing giant UNIBRA (owners of the SKOL brand) and
started operations in 2017. In 2018 Zebidar Brewery & Zebidar Beer joined the BGI brands family
when the company acquired the shares of UNIBRA.
2.5 Conceptual framework

Conceptual framework is a hypothesized model identifying the concepts under the study and their
relationships. The Conceptual framework of the study adopted from modified by the researcher is
illustrated on the following diagram.
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figure 2.5 Research framework
According to the above framework, SCM practices represents the independent variable (IV), and
the organizational performance represents the dependent variable (DV). In the conceptual
framework, the independent variables which are believed to have impact on the performance of the
selected company are strategic supplier partnership, customer relationship, level of information
sharing, quality of information sharing and internal lean practices. The previous empirical studies
conducted by (Ibrahim & Hamid, 2012), (Karimi &Rafiee , 2014), (Li, et al., 2006), (Mustefa,
2014), (Mutuerandu, 2014), (Suhong, Li, et al., 2004), (Yohannes, 2014) , (Wagnera, S.M., et al.,
2012) and (Fantazy KA, Kumar V & Kumar U, 2010) has showed that the higher level of supply
chain practices implementation can lead to enhanced operational performance of the organization.
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Chapter three: research methods
The major purpose of the study is to identify the effect of supply chain management in
organizational performances. This part of the study presents research methodology. It contains
data source, sample and sampling techniques, data gathering tools, validity and reliability and
method of data analysis
3.1 Research design
Research design is the set of methods and procedures used in collecting and analyzing measures of
the variables specified in the problem of research. And the study design of this paper will be
descriptive type. And in order to show the cause-and-effect relationship between supply chain and
organizational performance the paper will use explanatory research design. It is used to explain the
causal relationship between independent and dependent variables. In other words, the main task is
to separate such causes and to say to what extent they lead to such effects (Ghauri and Grønhaug,
2005, p. 59).
3.2 Population size and sampling technique
This research papers target population will be separated into two groups. This is a firm employee
and BGI Ethiopias distribution agent and suppliers. And for this study, probability sampling will
be employed, specifically stratified sampling, with the target population being divided into several
strata based on their department and section.
3.2.1 Sample size
It is the process of deciding how many observations or replicates should be included in a statistical
sample. Any empirical study in which the purpose is to make inferences about a
population from a sample must consider the sample size. The sample size employed in a study is
usually decided by the cost, time, or convenience of collecting the data, as well as the
requirement that it have sufficient statistical power. And for this study paper, a sample was taken
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utilizing Yamanes simplified formula.
=800/(1+800*0.05^2)
=266
3.3 Data Source and Instruments
Data collection is a means by which information is obtained from the subject of investigation
(Creswell, 2012). Self-administered questionnaires were used to collect primary data for this
study. The questionnaire ensured that details and relevant information about study was collected.
The study was used a questionnaire because it is flexible and facilitates the capture of large
amount of data. As a method of data collection, questionnaires are appropriate because they are
easy to analyses and is cost effective. (Kothari, 2011).
3.4 Method of data analysis

In this study, both qualitative and quantitative data analysis will be applied.
3.4.1 Quantitative Data Analysis
The quantitative data analysis will be done using descriptive statistics to compute the central
tendency. Accordingly, Descriptive analytical technique will be used with the aid of Statistical
Package for Social Sciences (SPSS) to analyses the data collected with the use of questionnaires.
The questionnaires will be answered on a five –point likert-type response scale (1 = strongly
disagree, 2 = disagree, 3 = neutral, 4 = agree, 5 = strongly agree). Inferential data analysis will be
employed by correlational and regression of variables because in this research is intended to
investigate the relationship between the independent variable i.e. Supply chain Management with
its effect on the dependent variable Organizational performance.
Model Specification
The Independent Variables/ predictors to be considered in the study are: SCM practices; whereas
the Dependent Variable is organizational performance. The study will apply multiple (or
“multivariate”) regression model. Multiple Regression Analysis refers to a set of techniques for
studying the straight-line relationships among two or more variables. Accordingly the following
regression model is formulated.
Y=α+b1x1+b2x2+b3x3+b4x4+b5x5 +ε
Where:
y = dependent variable (organizational performance)
α=constant/the interception point of the regression line and the y-axis
b1, b2…. b5= the coefficients of the independent variables that were determined.
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X1= strategic supplier partnership
X2= customer relationship
X3= level of information sharing
X4= quality of information sharing
X5= internal lean practice
ε= error term
Definitions of Variables
I. Dependent Variable
Organizational Performance: - Refers to how well an organization achieves its market-oriented
goals as well as its financial goals. The short-term objectives of SCM are primarily to increase
productivity and reduce inventory and cycle time, while long-term objectives are to increase
market share and profits for all members of the supply chain.
II. Independent Variables
SCM practices
SCM practices have been defined as a set of activities undertaken in an organization to promote
effective management of its supply chain (Adebayo, 2012). This study has used six dimensions of
SCM practices include strategic supplier partnership, outsourcing, customer relationship, quality
and degree of information sharing and lean practice.
Strategic supplier partnership: - is defined as “the long-term relationship between the
organization and its suppliers. It is designed to leverage the strategic and operational capabilities
of individual participating organizations to help them achieve significant on-going benefits” (Li et
al., 2006)
Customer relationship: - is the practice of serving the customers for the purpose of managing
customer complaints, building long-term relationships with customers, and improving customer
satisfaction (Li et al., 2006).
Level of information sharing: - is defined as the extent to which critical and proprietary
information is communicated to one’s supply chain partner (Li et al., 2005).
Quality of information sharing: - includes such aspects as the accuracy, timeliness, adequacy and
credibility of information exchanged in order to make the entire supply chain more competitive
and resourceful (Li, 2005).
Lean practice: - Shah et al., (2003) defined lean practices as a multi-dimensional approach that
encompasses a wide variety of management practices, including just-intime, quality systems, work
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teams, cellular manufacturing, supplier management, and so on, in an integrated system.
3.8 Reliability and Validity of the Study
Mugenda and Mugenda (2003) asserts that, the accuracy of data to be collected largely depend on
the data collection instruments in terms of validity and reliability. Validity will be achieved by
having objective questions included in the questionnaire. This will be achieved by pre-testing the
instrument to be used to identify and change any ambiguous, awkward, or offensive questions and
technique. Reliability, on the other hand, refers to a measure of the degree to which research
instruments yield consistent results (Mugenda and Mugenda, 2003). In this study, reliability
analysis will be tasted using Cronbach Alpha to show how best the variables are best suited for the
questionnaire.
3.5 Ethical Considerations
According to Leedy and Ormrod (2010), most ethical issues fall into one of the following four
categories; informed consent, confidentiality, security and honesty. Therefore, the researcher will
consider all these issues in the questionnaire guidelines in the following manner:
Informed consent: all participants shall be briefly informed about the reason of conducting such
study therefore enabled them to join with full consent.
Right to privacy (confidentiality): the researcher will keep the nature and quality of participants’
performance strictly confidential. No information shall be recorded to link respondents with their
responses.
Security: the researcher doesn’t expose the participants to unusual stress, embarrassment, or loss
of self-esteem.
Honesty: the researcher reported the findings in complete honesty
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Chapter four: presentation of findings and analysis
Introduction
In this chapter the researcher presented the main findings from which the analysis was made. The
researcher analyzed the results with respect to research objectives and research questions from
chapter one. The chapter was divided into two major parts: descriptive statistics analysis and
inferential statistics analysis. Data analysis for both descriptive statistics and inferential statistics
was made possible with the help of Statistical Package for Social Science (SPSS version 20)
software.
4.1 Response Rate

A total of 266 questionnaires were distributed and 160 were collected from employees and
distribution agents which means 60% of the questionnaires were returned and used for the
analysis.
4.2 Demographic Characteristics of the Respondents
Table 4.2a Sex and Age of the Respondents
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Variables Frequency of responses
Frequency Percent
Male 100 62.5%
Sex
Female 60 37.5%
Total 160 100%
Age Range 20-25 years 18 11.25%

26-30 years 40 25%
31-35 years 53 33.125%
36 -40 34 21.25%
Above 40 years 15 9.375%
Total 160 100%
Job Title Managerial 10 6.25%

Section head 40 25%
Non- managerial 90 56.25%
Other 20 12.5%
Total 160 100%
Sources; Survey data (2022)
From the table 4.1, above, we can see that the composition of the respondents by sex, 63 percent
were male while 37 percent were female. This indicates that most of the respondents are males.
The age distribution of the respondents also shows that 18(11.25%) were between the ages of 20-
25 years, 40(25%) were between 26-30 years, 53(33.1%) were between 31-35 years, 34(21.25%)
were between 36-40 years and 15(9.4%) were above 40 years. This study found that most team
members comprising 33.1 % were between the ages of 31-35 years.
The education level of the respondents shows that 10(6.25%) were managerial, 40(25%) were
section heads, 90(56.25%) were non managerial, 20(12.5%) were others. This study found that
most team members comprising 56.25 % were non managerial.
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16% 16%
6%
62%
College diploma first degree

Second degree Above second degree
Source: Survey (2022)

figure 4. 1 Educational level
As seen on the above figure 4.1 the highest education level attained by most of the respondents
was first degree holders which represents, greater than 62% out of the valid respondents and
followed by second degree and college degree which accounts 16%, and 6% above second degree.
figure 4.2 Work Experience of the Respondents
Sources; Survey data (2022)
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As seen on the above figure 4.2, when looking at the respondent experience, 49% of the
respondents have 6-10 years of experience and these takes the majority. 25% of the respondents
have 5 Years. 17 % have under 2 years and 9 % of the respondents have above 10 years.
Table 4.2b respondent
NO Respondent Sample Size

1 Cor. Gen. Manager 5
2 Quality Control 11
3 Finance 23
4 Supply Chain 36
5 Production 19
6 Cor. Sales & Marketing 25
7 Procurement Store technic 6
8 Sales & Marketing Draft technic 15
9 Supplier 10
10 Distributors 10
Total 160
4.2.1 Validity and Reliability Test

A pre-test was conducted with 14 respondents before the actual collection of data to avoid
inapplicable questions, ambiguous wording, and the questionnaires appropriateness. Accordingly,
the questionnaires were revised and corrected per the feedback obtained. Moreover, clear
instructions were provided at the beginning of the sections. After pre-testing and further revisions,
the survey questionnaire was produced in final form and used to collect data.
As stated by “Hair et al., (2007) reliability indicates the extents to which a variable or set of
variables are consistent in what it is intended to measure” (Cited by Siddiqi; 2011:20). There are
different methods of reliability test, for this study Cronbach’s alpha is suitable. Cronbach’s alpha is
the most common measure of reliability.
The following table 4.2.1 shows the reliability test for each item.
Table 4.2.1 Reliability Test table
S/N Indicators Number of Cronbach Alpha

Items
1 Strategic supplier partnership (SSP) 6 .791
2 Customer relationship (CRP) 5 .791
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3 Level of information sharing (LIS) 7 .868
4 Level of information quality (LIQ) 5 .757
5 Internal lean practices (ILP) 3 .740
6 Organizational Performance (OP) 7 .872
7 Overall 33 0.91
Source: Own Survey (2019)
As it is portrayed on Table 4.2.1 above, the Alpha coefficient for the overall scale calculated as a
reliability indicator is 0.913. As described by Andy (2006) the values of Cronbach’s alpha more
than 0.7 is good. The alpha values in this study are far from 0.7 and which are 0.913. Therefore, it
had very good reliability for the questioners.
4.2.2 Descriptive statistics on Aggregated Variables

The Supply chain management practices used in the analysis are supplier relationship, customer
relationship, level of information sharing, Quality of information sharing and lean supple chain
practices. To address different points under each main category of supply chain practices and
operational performance, different questions were asked and then it is aggregated in to one
variable under each dimension. In addition, all questions as supply chain practice are also grouped
to get one SCMP variable. The following table shows the grouped responses result for each
variable.
Table 4.2.2: Descriptive Analysis on Strategic supplier partnership
Variables Mean Std.

Deviation
We consider quality as our number one criterion in selecting 3.9500 0.55852

suppliers.
We regularly solve problems jointly with our suppliers. 3.2375 0.99992
We have been helping our suppliers to improve their product 3.1313 0.91886
quality.
We have continuous improvement programs that include our key 3.4313 0.79005
suppliers.
We include our key suppliers in our planning and goal-setting 3.4938 0.88308
activities.
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We actively involve our key suppliers in new product 3.5938 0.87089
development processes.
3.47 0.84
Average
As it is indicated on the table 4.2.2, based on the mean value, the variables for strategic partnership
of the company with suppliers vary from the highest 3.95, for the criteria for the selection of the
supplier to the lowest (Mean= 3.13 with SD = 0.91) for involving helping suppliers to improve
their service quality. The highest respondents agree on BGI Ethiopia suppliers’ selection based on
quality criteria (Mean=3.95 with SD=0.558) and it involves key suppliers in new product
development processes (Mean=3.59 with SD=0.87). Moreover, the employees of BGI Ethiopia
had Agree and common understanding that the company had considered its key suppliers on
continuous improvement program with (mean = 3.43 and SD =0.79).
4.2.3. Analysis of selected Customer relationship
Table 4.2.3: Descriptive Analysis on Customer relationship
Variables Mean Std.

Deviation
We frequently interact with customers to set reliability, 3.9375 0.56843

responsiveness, and other standards for us.
We frequently measure and evaluate customer satisfaction. 3.9375 0.55726
We frequently determine future customer expectations 3.9188 0.56046
We facilitate customers’ ability to seek assistance from us. 3.6813 0.81936

We periodically evaluate the importance of our 3.5500 0.79973
relationship with our customers.
Average 3.81 0.66
Sources; Own Survey data (2022)
Pertaining to BGI Ethiopia customer relationship practice, the employees of BGI Ethiopia had
Agree and common understanding that the company had frequently interact with customers to set
reliability, responsiveness, and other standards (mean = 3.93 and SD =0.568); measure and
evaluate its customer satisfaction (mean = 3.93 and SD =0.557); and periodically evaluate the
importance of its relationship with customer (mean = 3.55 and SD =0.799).
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Using the overall variables of the customer relationship, the findings has showed us BGI Ethiopia
has good customer relationship with the customer. In relation to this, Mbuthia, M. G &Rotich, G.
(2014) justifies that Customer relationship is the key element in today SCM practices
implementation in any organization. This is because the world today is in the era of massive
growth of mass customization and personalized service which had forced organizations to
maintain good relationship. with customers for the sake of their survival. Close customer
customer loyalty
Information sharing has two aspects: quantity and quality. Both aspects are fundamental for the
practices of supply chain. Shared information can vary from strategic to tactical in nature and from
information about logistics activities to general market and customer information. With this
intention, respondents were asked six questions and their response is displayed on the table 4.5
below
Table 4.2.4: Descriptive Analysis on Level of information sharing
Variables Mean Std.

Deviation
3.86253. .62934
We inform trading partners in advance of changing needs.
Our trading partners share proprietary information with us. 3.8188 .69020
Our trading partners keep us fully informed about issues that 3.1750 1.07311
affect our business.
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Our trading partners share business knowledge of core business 2.9188 1.05790
processes with us
We and our trading partners exchange information that helps .57157
3.9188
Establishment of business planning.
Exchange of information with our partners (formal or .43365
3.9750
informally) is frequent.
We and our trading partners keep each other informed about 3.9563 .45345
events or changes that may affect the other partners
3.63 0.7
Average
Pertaining to the responses of the given, items most respondents agreed to BGI’s practice of prior
exchange of information with partners with mean value 3.97 and SD 0.433 followed by the
practice trading partners keep each other informed about events or changes that may affect the
other partners having mean values and standard deviation 3.95 and 0.45 respectively. Moreover,
most of the respondents perceived that BGI Ethiopia and partner exchange information that helps
establish of business planning (mean = 3.9q and SD =0.51). However, respondents disagree to
items as: Trading partners share business knowledge of core business processes with us.
The above finding tells us that, BGI Ethiopia has been informed its trading partners on the
changing needs, share priority information with the suppliers and fully informed them when any
issue is arise which affect the company and its strategic suppliers. In line with this, Stein and
Sweat, (2008) asserts that, supply chain partners who exchange information regularly are able to
work as a single entity. Together, they can understand the needs of the end customer better and
hence can respond to market change quicker. However, BGI Ethiopia do not establish its business
planning with its strategic suppliers.
While information sharing is important, the significance of its impact on SCM depends on what
information is shared, when and how it is shared and with whom. Ensuring the quality of the
shared information becomes a critical aspect of effective SCM in any organization. To assess the
quality of information sharing in BGI Ethiopia, five items were provided to respondents and the
result are portrayed on the table 4.6Table 4.6: Descriptive Statistics on Level of information
Quality
Table 4.2.5: Descriptive Analysis on Level of information quality:
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Variables Mean Std.
Deviation
Information exchange between our trading partners and us is 3.8063 .63935

timely.
accurate.
complete.
adequate
reliable.
3.45 0.85
Average
The mean ranged from the highest 3.80 for timely information exchange with the suppliers to the
lowest 3.04 for timely information exchange of information. Highest respondents agreed that BGI
Ethiopia has complete, adequate and reliable information exchange with the suppliers. However,
most respondents do not believe BGI Ethiopia has on time Information exchange between trading
partners and us is accurate.
Therefore, in order to improve level of information quality, the company has to work more on
accurate and timely information exchange with the suppliers. However proper care must be taken
with this issue while releasing the information. Because information is also considered as an asst.
Organizations need to view their information as a strategic asset and ensure that it flows with
minimum delay and distortion.
Table 4.2.6: Descriptive Analysis on Internal lean practices:
Variables Mean Std.

Deviation
Our firm reduces process set-up time (time required to prepare or 3.7250 .88984
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refit equipment/workstation for production)
Our firm has continuous quality improvement programs 3.9188 .61401
Our firm produces only what is demanded by customers when 4.0250 .38770
needed (e.g. JIT)
3.9 0.63
Average
As it is depicted on the above table, the highest mean value is observed for the practice of
produces only what is demanded by customers when needed which is 4.025 with SD = 0.387.
However, lowest 3.72 mean is for the reduction of process setup time having mean value 3.72 and
Standard deviation 0.889.
Table 4.2.7: Descriptive Analysis on Organizational performance:
Variables Mean Std.

Deviation
4.0250 .38770
Market share.
Return on investment. 4.0125 .41946
3.9125 .51868
The growth of market share.
3.8500 .67479
The growth of sales.
3.9125 .58694
Growth in return on investment.
3.8813 .70374
Profit margin on sales.
Overall competitive position. 4.0188 .39608
3.94 0.53
Average
As it is presented in Table 4.13, On the average the respondents perceived that the organization
market-oriented goals as well as its financial goals is increasing with the growth of sales, its profit
margin on sales, the growth of market share and return on investment.
In today’s business environment, competition is constantly getting stronger and tougher. And to
stay in the battlefield alive, the company should keep its performance consistent for success.
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Achieving the competitive advantage and best SCM practice are the major factors that affect the
company’s organizational performance one way to the other.
4.3 Inferential Analysis
Pertaining to inferential analysis the study used correlation analysis, specifically Pearson
correlation to measure the degree of association between different variables under consideration.
Regression Analysis was also used to test and predict the effect of independent variable on
dependent variable.
Correlation and Regression Analysis
In this section, the researcher tried to accomplish the goal of the study through applying Pearson’s
correlation as it is the most widely used method of measuring the degree of relationship between
two variables. Correlation coefficient varies from -1 to +1. Values that are closer to the absolute
value of 1 indicate that there is a strong relationship between the variables being correlated
whereas values closer to 0 indicates that there is little or no linear relationship.
As described by Andy (2006), the correlation is a commonly used measure of the size of an effect:
values of ± 0.1represent a small effect, ± 0.3 is a medium effect and ± 0.5 is a large effect. Hence,
the relationship between supply chain management practices and organizational performance was
investigated using correlation analysis. This provided correlation Coefficients which indicated the
strength and direction of relationship. The p-value also indicated the probability of this
relationship’s significance.
4.3.1 Correlation between SCM practices and Organizational Performance (OP)

The correlation table below measures the correlation of the independent variables (SCM) i.e.
strategic supplier partnership, Customer relationship, Level of information sharing, Level of
information quality and internal lean practice with the dependent variable (Organizational
Performance OP). The p-value tells whether the correlation is statistically significant or not.
Table 4.14: Correlation matrix between constructs of SCM practices and OP
Correlations
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Level of
Strategic Level of informa Organization
supplier Customer informatio tion al
partnership relationship n sharing quality performance
Strategic Pearson Correlation 1
supplier Sig. (2-tailed)
partnership N 160
Customer Pearson Correlation .941 1
relationship Sig. (2-tailed) .000
N 160 160
Level of Pearson Correlation .857 .890 1
information Sig. (2-tailed) .000 .000
sharing N 160 160 160
Level of Pearson Correlation .818 .832 .934 1
information Sig. (2-tailed) .000 .000 .000
quality N 160 160 160 160
Organization Pearson Correlation .744 .774 .842 .879 1
al Sig. (2-tailed) .000 .000 .000 .000
performance N 160 160 160 160 160
**. Correlation is significant at the 0.01 level (2-tailed).
The finding shows that all supply chain management practice variables coefficients are significant
at the 0.01 level. Based on the above output value of sig (2-tailed), in BGI Ethiopia.
 All independent variables used as supply chain practice and organizational performance have
a statistically significant relationship r < .001).
 The direction of the relationship independent variables and dependent variables are positively
correlated, that means these variables tend to increase together.
In general, there is a strong and positive relationship between all independent and dependent
variables are observed on the finding. Specifically, for example, the coefficient of the relationship
between Strategic supplier partnership and Customer relationship (r = 0.941).
4.4. Regression analysis
Regression is a technique that can be used to investigate the effect of one or more predictor
variables on an outcome variable. That is, it allows us to make statements about how well one or
more independent variables will predict the value of a dependent variable. The parameters model
used in this study are estimated using multiple regression analysis
Table 4.4.1 Model summary

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Model Summaryb
Std. Error Change Statistics
R Adjusted of the R Square F Sig. F Durbin-
Model R Square R Square Estimate Change Change df1 df2 Change Watson
1 .642a
.412 .409 .225 .412 110.809 4 155 .000 .357
a. Predictors: (Constant), Strategic supplier partnership, Customer relationship, Level of information
sharing, Level of information quality
b. Dependent Variable: Organizational performance
The adjusted R square is called the coefficient of determinatio n. This value tells us how organization
performance is varied with strategic supplier partnership, customer relationship, level of
information sharing, level of information quality, internal lean practices . Again, adjusted R square is
0.412. This implies that, there was a variation of 41.2 % of effects on organization performance due to
strategic supplier partnership, customer relationship, level of information sharing, level of
information quality, internal lean practices. For this study, liner multiple regression analysis was
employed. organization performance was used as the dependent variable while the underlying factors the
organization performance affecting organization performance were used as the independent variables.
Table 4.4.2 ANOVA
ANOVAa
Model Sum of Squares df Mean Square F Sig.
1 Regression 5.623 4 5.623 110.809 .000
Residual 8.018 155 .051
Total 13.641 159
a. Dependent Variable: Organizational performance
b. Predictors: (Constant), Strategic supplier partnership, Customer relationship, Level of
information sharing, Level of information quality
Furthermore, the ANOVA table shows the overall significance / acceptability of the model from a
statistical perspective. As the significance value of F statistics shows a value .000, which is less
than p< 0.05, implies the model is significant. This indicates that the variation explained by the
model is not due to chance.
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Table 4.2.3 coefficient of regression
Coefficientsa
Standardized
Unstandardized Coefficients Coefficients
Model B Std. Error Beta t Sig.
1 (Constant) 9.209 2.222 4.144 .000
SSP .096 .095 .080 1.012 .313
CRP -.290 .102 -.219 -2.838 .005
LIS .390 .077 .408 5.073 .000
LIQ .477 .117 .337 4.081 .000
ILP .166 .139 .086 1.196 .234
a. Dependent Variable: OP
Source: Own Survey (2022)
4.4.1 Findings based on Research Questions
Table 4.14 above, shows the regression between independent variables (strategic supplier
partnership, customer relationship, level of information sharing and quality of information sharing)
and organization performance (OP). The Table 4.14 above shows coefficients of each model along
with corresponding test statistics. Hereunder the formulated hypothesis are tasted based on the
values obtained from the regression model. As it is explained on chapter 3 multiple regression
analysis was assumed to be employed so as to determine the relationship between organization
performance of the BGI Ethiopia and the five supplier relationship variables. As per the SPSS
output above, the equation
Y=β0+b1x1+b2x2+b3x3+b4x4+b5x5 +ε which means
Y=β0+ SSPx1+ CRPx2+ LISx3+ LIQx4+ ILPx5 +ε) becomes
Y = 9.209+ 0. 096 X1 + (-0.290) X2 + 0.390 X3 + 0.477 X4+ 0.166 X5+ 0. .852
If all SCMP has not been performed on the company or (when X1, X2, X3, X4, X5= 0), the
organization performance of the company (BGI Ethiopia) will start form negative.
However, since, there will no operation without supply chain function. Therefore, the researcher
do not interpret it. Form the above equation, if X1 differed by one unit (and X2, X3, X4, X5 did
not differ) Y (Organization
Similarly, β1 is interpreted as the difference in the predicted value in operational performance for
41 | P a g e
each one-unit difference in X1 if X2, X3, X4, X5 remains constant. So compared to a one percent
decrease in the customer relationship of BGI Ethiopia, we would expect the organizational
performance of the company will by 0.290% having constant the other variables. In addition,
holding or keeping the other variables constant, for one percent increase in organizational
performance of the company, 0. 390% is form the level of information sharing, 0.477% is level of
form information quality and 0. 166% form lean practice of the organization
H1: Strategic supplier partnership has significant positive effect on organizational performance
From the given table 4.14 unstandardized coefficients and p-value for Strategic supplier
partnership on organizational performance were 0.096 and 0.313 respectively; these values
indicate that there were no significant influences on competitive advantage based on this study.
Since the p-value 0.313 which is greater than level of coefficient 0.05. From the result we can
conclude that the research hypothesis is not accepted.
In the existed literature different authors wrote Effective partnerships with suppliers can be critical
factor to guide supply chain management (Li et al., 2006). Sadikoglu and Zehir (2010) also stated
that in strategic supplier partnership, suppliers play more direct role in an organization’s quality
performance. Strategically aligned organizations can work closely together and eliminate wasteful
time and effort Balsmeier and Voisin (1996). An effective supplier partnership can be a critical
component of a leading edge supply chain (Noble, 1997). The main objective of strategic
partnerships with suppliers is increasing the functional capability desired supplier (Rosenzweig,
2003). Therefore, strategically managed long-term relationship with supplier has positive impact
on a firm’s supplier performance Cooper and Ellram (2003).
H2: Customer relationship has significant positive effect on organizational performance

As it is depicted on the above table 4.14 unstandardized coefficients and p-value for Customer
relationship on competitive advantage were -0.290 and 0.003 respectively; these values indicate
that Customer relationship had significant influences on organizational performance of the
company based on this study. Since the p-value 0.003 which is less than level of coefficient 0.05.
This indicates that from the unstandardized coefficient as one unit of strategic supplier partnership
decreases with 29 percent increase on organizations organizational performance. From the result
we can conclude that the research hypothesis is accepted.
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Customer relationship management as an important component of SCM practices. As pointed out
by Day (2000), devoted relationships are the most sustainable advantage because of their essential
barriers to competition. Focusing and maintaining the customer relationship will enable the
organizations to be more responsive towards customers’ needs and will result creating greater
customer loyalty, repeat purchase and willing to pay premium prices for high quality product
H3: Level of information sharing has significant positive effect on organizational performance
From the given table 4.14 above, unstandardized coefficients and p-value for Level of information
sharing on organizational performance were 0.390 and 0.000 respectively; these values indicate
that level of information sharing had significant influences on organizational performance based
on this study. Since the p-value 0.000 which is less than level of coefficient 0.05. This indicates
that that from the unstandardized coefficient 0.390 as one unit of level of information sharing
increases with 39.0 percent increase on organizations organizational performance. From the result
we can conclude that the research hypothesis is accepted.
Information sharing is an important aspect in achieving perfect integration in a supply chain. Poor
information sharing between partners in a supply chain will result in poor coordination that will
lead to many serious problems such as high inventory levels, inaccurate forecasts, low resource
utilization, and high production costs. Effective use of relevant and timely information by all the
functional elements in the supply chain is considered as a competitive factor and distinctive
(Ahmadi, 2005). Failures can occur in case of information delays, shortage, or distortion across the
supply chain (Power, 2005). In this study supply chain information sharing is associated with the
amount of information shared among supply chain partners in downstream and upstream side of
the supply chain and the information intensity.
H4: Level of information quality has significant positive effect on organizational performance
From the given table 4.14 unstandardized coefficients and p-value for Level of information quality
on organizational performance were 0.477 and 0.000 respectively; these values indicate that level
of information quality had significant influences on organizational performance based on this
study. Since the p-value 0.000 which is less than level of coefficient 0.05. From the result we can
conclude that the research hypothesis is accepted.
Information quality includes an aspect such as accuracy, timeliness, adequacy and information
43 | P a g e
exchanged credibility (Tan et al., 1998). Based on (Li et al., 2005), organization needs to review
their information as a strategic asset and ensure that the information flows with minimum delay
and distortion. In addition, (Li et al., 2005) also notes that information shared must be accurate so
that the best SCM solution will be obtain. Effective use of relevant and timely information by all
the functional elements in the supply chain is considered as a competitive factor and distinctive
(Ahmadi, 2005).
H5: Level of Lean practice has significant positive effect on organizational performance
The effect of lean practice on the competitive advantage of the organization also regressed and
portrayed on the above table 4.14. Accordingly, the unstandardized coefficients and p-value for
level of lean practice on organizational performance were 0.166 and 0.234 respectively; these
values indicate that level of lean practice had no significant influences on organizational
performance based on this study. Since the p-value 0.234 which is greater than the level of
coefficient 0.05. This indicates that that from the unstandardized coefficient 0.166 as one unit of
level of lean practice decrease with 23.4 percent increase on organizations organizational
performance. From the result we can conclude that the research hypothesis is not accepted.
Table: 4.2.1 Summary Result of Hypotheses Testing
Hypotheses Description Result Source:

H1 Strategic supplier partnership has significant positive effect Not
own
on organizational performance Accepted
H2 Customer relationship has significant positive effect on Accepted survey
organizational performance 2022
H3 Level of information sharing has significant positive effect Accepted
on organizational performance
H4 Level of information quality has significant positive effect Accepted
on organizational performance
H5 Level of Lean practice has significant positive effect on Not
organizational performance Accepted
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Chapter five
5.1 Summery, conclusion and recommendation
In this section, the summery and conclusion of the research finding that have been analyzed and
discussed in the previous chapter are briefly presented. Furthermore, based on the findings of this
study possible recommendations are made.
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5.1.1. Summary of the Findings
This study is intended to investigate if there is a relationship between SCM practices and
organizational performance of BGI Ethiopia Brewery. The study was conducted by using both
primary and secondary data. The primary data for this study were collected through questionnaire.
A total of 266 questionnaires were distributed and 160 were collected and used for the analysis.
Accordingly, this paper provides empirical justification for a framework that identifies five key
dimensions of SCM practices and describes the relationship among SCM practices, and
organizational performance of BGI Ethiopia. To investigating these issues a comprehensive, valid,
and reliable instrument was developed. The instrument was tested using rigorous descriptive and
inferential statistical tests. This study provides empirical evidence to support conceptual and
prescriptive statements in the literature. Based on the results of the study and the following
summary is given.
Descriptive statistics on the effect of strategic supplier Partnership on the organizational

performance of the company shows, BGI Ethiopia suppliers’ selection practice was based on
quality criteria and the company also involves key suppliers in new product development
processes. The company had include key suppliers in planning and goal-setting activities.
However, it was suggested that the company must improve the involvement of its suppliers in
solving the problems jointly and helping suppliers to improve their product quality.
Pertaining to Customer relationship the company had frequently interact with customers to set
reliability, responsiveness, and other standards. Literatures also suggest that Close customer
customer loyalty. However, the company’s has fallen to evaluate the importance of relationship
with customers periodically. Customers were not being encouraged to seek assistance from the
BGI.
Pertaining to the practice of information sharing, the finding tells us that BGI Ethiopia has been
informed its trading partners on the changing needs, and also shared priority information with the
suppliers and fully informed them when any issue is arise which affect the company and its
strategic suppliers. However, BGI Ethiopia didn’t disclose its business planning with its strategic
suppliers.
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Ensuring the quality of the shared information becomes a critical aspect of effective SCM in any
organization. Regarding, the level of information quality of the company the finding of the study
attested that, BGI Ethiopia has established complete, adequate, reliable, and timely information
exchange with the suppliers. However, most respondents do not believe BGI Ethiopia has accurate
information exchange with its suppliers.
Elimination of waste is a fundamental idea within the lean system. Concerning to internal lean
practice of the company, the highest mean value was observed for firm produces only what is
demanded by customers when needed and the practice of continuous quality improvement
programs in the company. However, the finding of the study also witnessed that although, BGI
Ethiopia provide its product and services whenever needed, the equipment setup time for delivery
of services is lower.
Finally the overall organizational performance of the company, respondents were asked to provide
their perception on how well BGI Ethiopia achieves its market-oriented goals as well as its
financial goals in the past five years taking in to account. Accordingly the finding tells us that,
most of the respondents perceived that the organization market-oriented goals as well as its
financial goals is increasing with the growth of market share, overall competitive position and
return on investment. However, on average the respondents understood items that the company
achievement is the same as usual in terms of its market-oriented goals as well as its financial goals
is with its growth of sales and profit margin on sales.
In general taking the above mentioned findings in mind it is possible to say that BGI Ethiopia is
aligning its supply chain activities to get a competitive advantage in the market.
5.1.2 Conclusion
Base on the finding using descriptive statistics and inferential analysis of correlation and multiple
regression analysis, the results showed that, most of the stated supply chain management practices
are significant and positively related with the organizational performance of the company.
Specifically based on the findings of the study the following conclusions are drown:
From the findings, we can conclude that the application of Supply Chain Management in BGI
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Ethiopia has a positive implication on organizational performance of the company, because, the
results have confirmed that supply chain practices and organizational performance of the company
shows above average performance .In addition, from the questionnaire analysis, we can conclude
that even though BGI Ethiopia is applying Supply Chain Management, it’s hard to say that the
company is effective in implementing successful SCM.
This is confirmed that, from the correlation analysis of correlation between SCM practices with
the dependent variable (Organizational Performance OP) attested that there is positive and
significant correlation with independent variables. Meaning if the companies’ strategic supplier
relationship, customer relationship, level of information sharing, quality of information sharing
and lean practices increase the organizational performance of the BGI Ethiopia will increase
proportionately.
From Regression Analysis between SCM practices with organization performance of the company
three variables i.e. customer relationship, level of information sharing and level of information
quality had strong significant influence on organizational performance of BGI Ethiopia. Strategic
supplier partnership, and lean practice had no significant influences on organizational performance
of the case company. Accordingly, the findings of the survey shows that corresponding change in
determining organizational performance of BGI Ethiopia is the results of the change in supply
chain practices of all the five predictor variables jointly.
In addition, the study shows that out of nine hypotheses, six are supported. Customer relationship,
level of information sharing, level of information quality from hypothesis has significant positive
effect on organizational.
5.1.3 Recommendation
BGI Ethiopia is one of the most competent companies in the brewery industry of the country.
Managing supply chain in such a tough business environment is most challenging for any
company. As of the findings of the study, BGI Ethiopia is doing well in implementing SCM
practices and sustaining its competitiveness in the brewery business. However, in each separate
variables of the study, the company has drawbacks which are suggested to be corrected.
Accordingly the following recommendation are made as follows:
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 Concerning to the company’s strategic partnership with its suppliers, BGI Ethiopia has to
improve the involvement of its suppliers in solving the problems and continuous
improvement programs that include our key suppliers. The company is also suggested to
assist its suppliers to improve their service quality regularly. Furthermore, by using an
improved customers relationship management techniques the SCM should control the fair
distribution of assets for the outlets otherwise, there may be a shift of outlets to other
company’s products.
 Hence, Strategic supply chain partnership of BGI Ethiopia will be improved if the company
involves suppliers in the continuous improvement programs, on planning and goal setting as
well as in new product and service development
 The company is expected to evaluate and determine its customer expectation and encourage
its customers to seek pertinent assistance through different mechanisms including conducting
need assessment, and market research to maintain good relationship with its potential
customers. Because, maintaining close customer relationship allows an organization to
differentiate its products from the competitors, and sustain customer loyalty.
 Ensuring the quality of the shared information becomes a critical aspect of effective SCM in
any organization. To improve level of information quality, BGI Ethiopia has to work more on
accurate and complete information exchange with its suppliers. Level of information sharing
and Level of information quality are also vital in the supply chain since information flow is an
integral part of SCM and material flow is closely dependent on information flow. Poor
information sharing between partners in a supply chain will result in poor coordination that
will lead to many serious problems.
 While offering more variety to the end customer’s elimination of waste is a fundamental issue
within such system. Therefore, to improve its lean practice, BGI Ethiopia is suggested to
reduce the time required to prepare or refit it products. Moreover, the company must work
more on solving the problem in equipment set up time for delivering service to the customer.
 Moreover, by properly conducting market research and customer need assessment, the
company is expected to provide its product and services whenever needed by its customers.
 Since SCM is recently established as an independent department. BGI Ethiopia has evaluate
the current skill labor deficit within the department, staffing with an experienced and adequate
number of experts together with necessary equipment is mandatory to sustain and maintain the
established good practice of SCM.
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 People are the most important asset in any organization. No matter how educated and
experienced employees are they need a continuous training for their improvement in some
specific issues they are working around. Because Supply Chain Management is a relatively
new and complex concept, the company should consider a continuous management and
employees training to utilize their knowledge and performance around the area of SCM.
 In addition, by applying the tools and techniques that SCM requires and by properly applying
an appropriate management of supply chain processes, it is possible to achieve organizational
in the company. In doing so BGI Ethiopia is suggested improve its relationship with suppliers
from simply buy-sale relationship to a modern supply chain relationship through establishing
strategic or long term relationship.
 Furthermore, So as to be competitive enough and to sustain in a changing market and remain
profitable, BGI Ethiopia would need to re-evaluate their supply chain practices such that they
keep pace on the market. IT systems and information sharing will play a major role in creating
sustainable processes. Digital Marketing solutions, customer relationship, Supply Chain and
strategic supplier Management are a few of the levers to attain their business goals.
5.2 Implication for Future Research and Limitations

The study confined itself to BGI Ethiopia Plc, however the competition in the whole brewery
industry is becoming intense and this necessitates for further study regarding the issue of supply
chain management and competitiveness in the beer industry. As this study focus on showing
relationship between SCM practices and performance at organizational level, future research can
study SCM issues at the supply chain level.
It would also be much better if it was used to participate the respondents from pairs of
organizations at two ends of supply chains. By comparing different view of SCM practices from
organizations across the supply chain, it is possible to identify the strength and weakness of the
supply chain and also the best common SCM practice across the supply chain.
It would be significant to investigate how SCM practice differs across organization size. In
addition it would also be interesting to examine the impact of supply chain structure (supply chain
length, organization’s position in the supply chain, channel structure, and so on) on SCM practice
and operational as well as organizational performance. Hence, future studies can also examine the
proposed relationships by bringing some contextual variables into the model, such as
50 | P a g e
organizational size and supply chain structure.
Since, the concept of SCM is complex and involves a network of companies in the effort of
producing and delivering a final product, it is difficult to cover entire domain just in one study.
Future research can expand the domain of SCM practice by considering additional dimensions
such as geographical proximity, cross-functional coordination, logistics integration, and agreed
supply chain leadership, which have been ignored from this study.
However, by validating a multi-dimensional operational measure of the construct of SCM practice

together with competitiveness of the company and by demonstrating its efficacy with
organizational performance, the present study provides important insights for BGI Ethiopia
management. It can be used as the useful tool for evaluating the strength and weakness of the
current SCM practices of the organization. This study also provides empirical evidence to support
conceptual and prescriptive statements in the literature regarding the impact of SCM practices.
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ANNE
XES
Annexes I
QUESTIONNAIRE
Dear respondent this survey is conducted as my research project, on The Effect of Supply Chain
Management on Organizational Performance which shall be submitted as part of fulfillment of
the Master of Business Administration degree from the Lunar international college Graduate
School of Business and economics. Please try to answer all the questions as honestly and
accurately as possible. The survey will take less than 15 minutes. Your participation is very much
appreciated.
General Instructions
 There is no need of writing your name
57 | P a g e
 Where answer options are available, please tick ( ) in the appropriate box for part I and
circle for your response to each statement of part II.
Contact Address
Should you have any questions or comments regarding this questionnaire, do not hesitate to
contact me at (Mobile: 0913073298 or e-mail: tsiongebretatios@gmail.com )
Thank you for scarifying your precious time in advance
PART I: Demographic Information
Gender: Male Female
Age: 20-25 years 26-30 years

31-35 years 36- 40 years above 40 years
1) Educational Qualification:
Grade 10 completed Grade 12 completed Certificate
College diploma first Degree Second Degree and above
2) Job title Managerial position Section head
Non managerial position other
3) Years stayed at the organization:
Under 2 years 2- 5years
6-10 years over 10 years
4) Your department/work unit
58 | P a g e
Part II: Instruments for supply chain management practices, and organizational
performance
Section one: supply chain management practices

About SCM practices of your firm, please circle the appropriate number to indicate the
extent to which you agree or disagree with each statement.
Disagree
Strongly
Strongly
disagree
Neutral
Agree
agree
Strategic supplier partnership:
We consider quality as our number one criterion in selecting

1. 1 2 3 4 5
suppliers.
2. We regularly solve problems jointly with our suppliers. 1 2 3 4 5
We have been helping our suppliers to improve their product
3. 1 2 3 4 5
quality.
We have continuous improvement programs that include our
4. 1 2 3 4 5
key suppliers.
We include our key suppliers in our planning and goal-
5. 1 2 3 4 5
setting activities.
We actively involve our key suppliers in new product
6. 1 2 3 4 5
development processes.
Disagree
Strongly
Strongly
disagree
Neutral
Agree
agree
Customer relationship:
1 We frequently interact with customers to set reliability,

1 2 3 4 5
responsiveness, and other standards for us.
2 We frequently measure and evaluate customer satisfaction. 1 2 3 4 5
3 We frequently determine future customer expectations 1 2 3 4 5
4 We facilitate customers’ ability to seek assistance from us. 1 2 3 4 5
5 We periodically evaluate the importance of our
1 2 3 4 5
relationship with our customers.
59 | P a g e
Disagree
Strongly
Strongly
disagree
Neutral
Level of information sharing:
Agree
agree
1 We inform trading partners in advance of changing needs. 1 2 3 4 5
2 Our trading partners share proprietary information with us. 1 2 3 4 5
3 Our trading partners keep us fully informed about issues that
affect our business. 1 2 3 4 5
4 Our trading partners share business knowledge of core
business processes with us 1 2 3 4 5
5 We and our trading partners exchange information that helps
Establishment of business planning. 1 2 3 4 5
6 Exchange of information with our partners (formal or
informally) is frequent. 1 2 3 4 5
7 We and our trading partners keep each other informed about
events or changes that may affect the other partners 1 2 3 4 5
Disagree
Strongly
Strongly
disagree
Neutral
Agree
agree
Level of information quality:
Information exchange between our trading partners and us is

1 1 2 3 4 5
timely.
2 1 2 3 4 5
accurate.
3 1 2 3 4 5
complete.
4 1 2 3 4 5
adequate
5 1 2 3 4 5
reliable.
Disagree
Strongly
Strongly
disagree
Neutral
Agree
agree
Internal lean practices:
1 Our firm reduces process set-up time (time required to 1 2 3 4 5

prepare or refit equipment/workstation for production)
2 Our firm has continuous quality improvement programs 1 2 3 4 5
3 Our firm produces only what is demanded by customers 1 2 3 4 5
when needed (e.g. JIT)
60 | P a g e
Section two: organizational performance
Regarding organizational performance, please circle appropriates number which best indicate
your firm’s overall performance.
Organizational performance:
Significantly
Significant
Decrease
decrease
Increase
How well an organization achieves its market-oriented goals as
Same as
increase
before
well as its financial goals in the past five years?
1 Market share. 1 2 3 4 5
2 Return on investment. 1 2 3 4 5
3 The growth of market share. 1 2 3 4 5
4 The growth of sales. 1 2 3 4 5
5 Growth in return on investment. 1 2 3 4 5
6 Profit margin on sales. 1 2 3 4 5
7 Overall competitive position. 1 2 3 4 5
61 | P a g e

Tsion Gebretatios

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LUNAR INTERNATIONAL COLLEGE

SCHOOL OF BUSINESS AND ECONOMICS

DEPARTMENT OF BUSINESS ADMINISTRATION

The Effect of Supply Chain Management on Organizational Performance.

THESIS SUBMITTED TO THE DEPARTMENT OF BUSINESS ADMINISTRATION

ADDIS, ABABA, ETHIOPIA

SCHOOL OF BUSINESS AND ECONOMICS

DEPARTMENT OF BUSINESS ADMINISTRATION

The Effect of Supply Chain Management on Organizational Performance.

APPROVED BY BOARD OF EXAMINERS

Rijalu N. (PhD ______________ ______________

(Advisor) (Signature) (Date)

(Internal Examiner) (Signature) (Date)

(External Examiner) (Signature) (Date)

Addis Ababa, Ethiopia

figure 2 1 supply chain stages______________________________________________________10

Table 4.2a Sex and Age of the Respondents___________________________________________________________28

SCM – Supply chain management

SCMP – Supply chain management practices

SCEM – Supply chain event management

TQM -Total quality management

FGP – Factory gate pricing

B2B- Business to Business

SME- Small and Medium sized Enterprise

SCC- Supply-Chain Council

SCOR- Supply Chain Operations Reference-model

1.2 Background of the company

1.3 Statement of the problem

1.4 Basic research questions

1.5 Objective of the study

1.5.1 General objective

1.5.2 Specific objective

1.6 Research hypotheses

1.7 Significance of the study

1.8 Scope of the study

1.9 Organization of the study

figure 2 1 supply chain stages

Supply Chain Surplus = Customer Value – Supply Chain Cost

Supply chain management (SCM) is the management of a network of interconnected businesses

2.2.2 Key decisions in Supply Chain Management

(i) the modelling of business processes,

2. What processes should be linked with each key member?

2.2.3 Benefits of Supply Chain Management

2.3 Practices in Supply Chain Management

2.3.2 Customer Relationship

2.3.3 Level of Information

2.3.4 Quality of Information Sharing

 Unambiguous - It should be expressed in clear terms. In other words, in should be

 Explicit - It should not need any further explanation.

 Comparable - It should be of uniform collection, analysis, content, and format.

2.3.5 Internal Lean Practices

2.4 BGI Ethiopia supply chain

2.5 Conceptual framework

3.4 Method of data analysis

Honesty: the researcher reported the findings in complete honesty

4.1 Response Rate

4.2 Demographic Characteristics of the Respondents

Table 4.2a Sex and Age of the Respondents

Age Range 20-25 years 18 11.25%

Job Title Managerial 10 6.25%

Sources; Survey data (2022)

College diploma first degree

Rijalu N. (PhD