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AUG, 2021
EFFECT OF LOGISTICS MANAGEMENT PRACTICES
ON
OPERATIONAL PERFORMANCE:
THE CASE OF ANBESSA BREWERY, MODJO
MBA THESIS PRESENTATION
By:
KASIM MERGA
UNITY UNIVERSITY
MBA PROGRAM

ADVISOR: BEKELE RETA (ASST.P)

 PRESENTATION OUTLINES
1.BACKGROUND OF THE STUDY
2.PROBLEM STATEMENT
3.RESEARCH QUESTIONS & HYPOTHESES
4.OBJECTIVES OF THE STUDY
5.SCOPE OF THE STUDY
6.SIGNIFICANCE OF THE STUDY
7.CONCEPTUAL FRAMEWORK OF THE
STUDY
8. RESEARCH DESIGN & METHODOLOGY
9.RESULTS AND DISCUSSIONS
10.CONCLUSION AND RECOMMENDATIONS
11.LIMITATIONS
11/09/2021 AND SUGGESTION FOR3
BACKGROUND OF THE STUDY
Logistics management refers to a set of activities undertaken in an organization to
promote effective management of its logistics. According to Wescley and Ricardo
(2011), typical fundamentals of logistic activities include customer services,
inventory control, transportation and ordering. These can give companies
competitive advantages.
logistic management practices provide an avenue for integrating activities in the
supply chain aiming at realizing a sustained competitive advantage. The process
entails formulation of ways and means through which products and service reach
the firm as well as the consumer. In today’s operational environment,
manufacturing firms are faced with challenges of responding to the dynamic
demands from customers and the heightened competition amongst firms .
Previous researches evidenced that Logistics Management (LM) practices had
significant effect on Firms Operational performance.
Therefore, it can be concluded that Logistics Management (LM) is one of the most
important tools that companies use to formulating and implementing strategies
that if adopted will lead to achievement of a sustained competitive advantages.
Given this, the purpose of this study to empirically test effect of logistics management
practices on operational performance with reference to Anbessa brewery
operating in Modjo town by assessing how the company logistics management is
effective in improving operations performance to satisfy the need or demand in
4
the market for this industry
11/09/2021
 BACKGROUND OF THE STUDY
According to (Adebayo, 2012) “Logistics management refers to a set of activities
undertaken in an organization to promote effective management of its logistics.”

Transportation Transportation Customers

Warehousing

Information
flows
Factory

Transportation

Vendors/plants/ports
Warehousing Transportation
Dickson Chiu 2006
 PROBLEM STATEMENT
Despite its importance of Logistics Management, to achieve
the research purpose the researcher was reviewed global
and local researches and found that:
 There is little or limited local publications in the study area (LM and
Operational performance) more specifically Anbessa brewery operating
in Modjo town.
 Most of local literatures were indicated that Ethiopian logistics system
is poor practices and lack of coordination of goods transport,
inadequate fleet freight vehicles in numbers and damage and quality
deterioration of goods while handling, transporting and storage
 Therefore, this gives the reason for the study was conducted to help
bridge the existing literature gap.
 In addition from the reviewed literatures the researcher identified six
LM practices which were not used collectively by previous researchers
and set research objectives and hypothesis.

11/09/2021 6
RESEARCH QUESTIONS &
OBJECTIVES
RESEARCH QUESTIONS
The following research questions are answered in the study:
1) What are the existing Logistics Management practices in Anbessa
Brewery?
2) What is the relationship between Logistics Management practices and
Operational performance of Anbessa Brewery?
3) What is the effect of Logistics Management practices on Operational
performance Anbessa Brewery?
RESEARCH OBJECTIVES
GENERAL OBJECTIVE
The general objective the study was to examine effect of logistics
management practices on operations performance of Anbessa brewery,
Modjo.
SPECIFIC OBJECTIVES
 To determine existing Logistics Management practices of Anbessa
Brewery.
 To examine the relationship between Logistics Management practices and
7
Operational performance.
11/09/2021
 SCOPE & SIGNIFICANCE OF THE STUDY
SCOPE OF THE STUDY
LM encompasses vast areas of managerial practices. However, it is difficult and unmanageable to
conduct the study in all areas that summarizes LM in terms of time, finance, and research
manageability. Therefore, the scope of the study WERE delimited to
Conceptual scope
effect of Logistics management practices on operational performance.
Geographical scope
To manage the research flow only Anbessa Brewery, located in Modjo town its distributers
around Modjo and Adama city were subjects of the study, through assessing how the
company interacts with its customers (distributors and retailers).
Subject scope
Employees and customers (Distributers) of Anbessa brewery were subject of the study
SIGNIFICANCE OF THE STUDY
 The study had significant importance in strengthening the existing knowledge and
understanding of LM practices and Operational performance by examining and empirically
testing the relationship between LM and Operational performance for the case of Anbessa
brewery.
 The study will also provide some insight or recommendations to Anbessa brewery to
evaluate and improve their LM practice based on the study findings.
 Finally, the study can serve as an additional reference to others researchers who are 8
 CONCEPTUAL FRAMEWORK OF THE STUDY &
9
RESEARCH HYPOTHESES
RESEARCH CONCEPTUAL FRAMEWORK
The HYPOTHESES
following hypotheses were formulated Independent Variables
based on the literature reviewed with the aim
of achieving objective of the study and tested
to confirm the theory. For this study six Logistics Management Practices
logistics management practices were used as Dependent Variable
independent variables and Operational
Performance
H1: There is as dependent
positive variables. relationship
and significant Information Flow Management
between Information Flow Management Practices
and Operational Performance of Anbessa brewery Transportation Management
sc
H2: There is positive and significant relationship
between Transportation Management Practices and Distribution Management Operational
Operational Performance of Anbessa brewery sc.. Performance
Inventory Management
H3: There is positive and significant relationship
between Distribution Management Practices and Warehouse Management
Operation Performance of Anbessa brewery.
H4: There is positive and significant relationship IT Integration
between Inventory Management Practices and
Operational Performance of Anbessa brewery
H5: There is positive and significant relationship Accordingly as you see on the slides and the
between Warehouse Management Practices and
Operational Performance of Anbessa brewery sc research paper, the research title, objectives
H6: There is positive and significant relationship
between Information Technology Integration
and conceptual frame work of the study
Practices and Operational Performance of Anbessa
brewery
are consistent as the theory says they must
be consistent.
RESEARCH DESIGN & METHODOLOGY
Quantitative Research Approach: through structured
Research Approach questionnaires with closed Likert type statement because it help
to measure instruments with numbered data using statistical
procedures
Research Design The study used descriptive and explanatory research
designs Data : The study used primary source of data through
Primary
Source and Type Data questionnaire which was sourced from primary means i.e. from
employees and customers of Anbessa brewery
Target Population Sample Design
294 employees and customers of
Anbessa brewery The researcher used Yemane (1967) formula to determine the
sample size when populations are infinite for the study based on
Sampling Techniques
a 95% desired confidence level and a 5% desired level of precision .
Accordingly, 169 were considered as sample size of the study
Probability Sampling techniques Data Collection Tools
particularly Stratified random
sampling techniques Questionnaires with closed Likert type
Method of Data Analysis statement were used as data gathering
tools
The Collected data was analyzed using descriptive statistics, correlation and regression Analysis .
And also diagnostics tests of Regression assumptions including Multicollinearity,
Heteroscedasticity and normality tests were conducted to ensure safe application of multiple
regression models.
 TEST OF RELIABILITY & VALIDITY
Test of Validity

Validity is the most critical criterion and indicates the degree to which an instrument
measures what it is supposed to measure. Malhotra (2010) mentioned about three
types of validity in his study: content validity, predictive validity, and construct
validity. This study addressed content validity through the review of literature
and adapting instruments used in previous research.
Test of Reliability
As multiple items in all constructs were used, the internal consistency/reliabilities of LM
Practices and Operational Performance were assessed using pilot test data of 14 respondents with
Cronbachs Alpha and the reliability values for all constructs are confirmed as greater than 0.7,
which are considered ideal (Pallant 2005). the results of reliability is presented on the following
table Construct Variables Cronbach’s Alpha Result Number of items
Logistics Information Flow Management 0.744 8
Management Transportation Management 0.787 8
Practices Distribution Management 0.780 8
Inventory Management 0.688 6
Warehouse Management 0.757 8
Information Technology 0.851 5
Operational Performance 0.951 16
As it can be seen from the table, all values Totalof the Cronbach’s alpha for LM practices and59Operational
Performance show greater than 0.7. Therefore, it can be concluded that the data collection instruments
were acceptable as reliable.
 DATA PRESENTATION, ANALYSIS AND
DISCUSSION
D e s c r i p t i v e A n a l y s i s o n I n d e p e n d e n t Va r i a b l e s a n d
Dependant variables
The research questionnaire designed using 5 point Likert scale to collect appropriate responses, in relation to
this the respondents indicated the extent they agree with the statements by choosing: 5-Strongly Agree, 4-
Agree, 3-Neutral, 2-Disagree and 1-Strongly Disagree. To indicate the performance level the researcher
developed and used itemized rating scale to construct a range. This range will be used to measure the
perception level of the respondents towards each variable. The researcher uses the following formula to
construct the range.

Accordingly, the mean each individual rating from 1-5 fall within the following interval
TableInterval of the Mean
4.1: Intervals Perception/Performance
of Means Computed
1.00-1.80 Strongly Disagree\Poor Performance
1.81-2.60 Disagree\ Low Performance
2.61-3.40 Neutral\ Average Performance
3.41-4.20 Agree\ Good Performance
4.21-5.00 Strongly Agree\ High Performance
Logistics Management Practices Std.
From The company:- N Mean Deviation
IFM Information flow between functional units and trading partners is Timely 132 3.14 .497
IM uses the right inventory management technique (JIT, Kaizan, ABC analysis
etc) to manage it inventory 132 3.38 .736

Therefore, in order to improve overall performance Anbessa has to improve

those practices which have lower than the middle value of the mean 3.4.
 Inferential Statistics for LM Practices and OP
The collected data from the employees of Anbessa Brewery and its Distributers or customers were used
to make the inferential analysis of the study. Accordingly, the correlation results, regression Assumptions
and regression Analysis results are presented and discussed in the following sections els.
Table 4.9 Correlation matrix between constructs of LM practices and OP
IFMP TMP DMP IMP WMP ITIP OP
IFMP Pearson Correlation
Sig. (2-tailed)
TMP Pearson Correlation .370**
Sig. (2-tailed) .000
DMP Pearson Correlation .408** .366**
Sig. (2-tailed) .000 .000
IMP Pearson Correlation .401 **
.326** .443**
Sig. (2-tailed) .000 .000 .000
WMP Pearson Correlation .372 **
.323 **
.575** .359**
Sig. (2-tailed) .000 .000 .000 .000
ITIP Pearson Correlation .282 **
.309 **
.453 **
.394** .479**
Sig. (2-tailed) .001 .000 .000 .000 .000
OP Pearson Correlation .568 **
.532 **
.657 **
.608 **
.632** .606** 1
Sig. (2-tailed) .000 .000 .000 .000 .000 .000
**. Correlation is significant at the 0.01 level (2-tailed).
b. Listwise N=132

The correlation table revealed that there was a positive significant relationship between Logistics
Management Practices (Information Flow Management Practices, Transportation Management Practices,
Physical Distribution Management Practices, Inventory Management Practices, Warehouse Management
Practices, Information Technology Integration Practices) and Operational Performance with (0.568**,
p<0.001) (0.532**p<0.001), (0.657**,p<0.001), (0.608**,p<0.001), (0.632**,p<0.001), (0.606**,p<0.001)
respectively. This implies that the six independent variables have the potential to influence Operational
 Diagnostic Tests of the Regression Model
Before directly proceeding to regression analysis (to analyze the data collected for this study), all
necessary assumptions of Regression were checked. 3 assumptions were conducted to ensure safe
application of multiple linear regression models.

Assumption One: Multi-co linearity Test

This assumption can be assessed by examining tolerance and the variance inflation factor (VIF). VIF
values well below 10 and the tolerance statistics well above 0.2 can safely to conclude that there is no co
linearity within the data (Field, 2009). The result in table 4.10 shows that the co linearity between independent
variables had no series problem since the value of tolerance for all independent variable is greater than 0.2 and all
VIF is less than ten (VIF<10) (Pallant 2005). From the above table hence, we can conclude that there is no co
linearity between the data of the study.

Assumption Two: Homoscedasticity vs Heteroscedasticity Tests (variance of the errors are constant)
According to the statistical solution (2017), to test the linear relationship assumption, Intellect’s in the statistics plot the standardized residuals verses
the predicted Y' values can show whether points are equally distributed across all values of the independent variables or not. Biased standard errors
lead to biased inference, so results of hypothesis tests are possibly wrong. For a basic analysis, we first plot *ZRESID (Y-axis) against *ZPRED (X-
axis) on SPSS because this plot is useful to determine whether the assumptions of random errors and Homoscedasticity have been met (Field, 2009).
As can be seen in the scattered plot on fig 4.4 above, the residuals at each level of explanatory variables look like they are evenly dispersed and
that the graph do not assume any type of shaped. Therefore, it is safe to say that this study has no Heteroscedasticity problem..

Assumption Three: Normality Test

According to statistics solution (2017), in multiple linear regression analysis requires that the error between observed and predicted values (i.e., the
residuals of the regression) should be that the residuals have a sound normal distribution because the plotted residuals were around the diagonal
straight normally distributed. This assumption can best be checked by plotting residual values on a histogram with a fitted normal curve or by
reviewing a Q-Q-Plot. Figure 4.5 show that the residuals have a sound normal distribution because the plotted residuals were around the
diagonal straight line instead of making any other shape or curve
 Result of Regression Analysis
Regression Analysis: Multiple regression analysis employed
to test the relationship among independent
variables and dependent variable and to
know how much the independent variable
explains the dependent variable.
Model summer:
The coefficient of determination (R square)was found to be 0.734
indicating that logistics management practices account for 73.4% of
the variability in Operational performance. This suggests that 26.6% of
the variation is not explained by Logistics management practices.
ANOVA results of the multiple regression analysis:
The significance value of 0.000 indicates that the
regression relationship is significant in predicting the effect
of the six constructs of the independent variables on
Operational performance
 Result of Regression Analysis
Coefficients of Regression Analysis:
based on the research objective which of the predictors’ (constructs) has contributed significantly to
our understanding of Operational Performance exploring beta (β) value and its level of significance.

Regression Coefficients between LMPs and OP

Standardized
Unstandardized Coefficients Coefficients
Model B Std. Error Beta t Sig.
1 (Constant) .033 .208 .157 .875
IFMP .191 .053 .194 3.570 .001
TMP .172 .049 .183 3.489 .001
DMP .153 .049 .195 3.163 .002
IMP .156 .038 .224 4.063 .000
WMP .156 .046 .203 3.387 .001
ITIP .220 .056 .221 3.970 .000
a. Dependent Variable: OP

Based on the research model developed in chapter two the mathematical relationship
between LM Dimensions and Operational Performance was expressed in the multiple
regression equation as:
Y = X0 +X1 (IFMP) + X2 (TMP) + X3(DMP) +X4 (IMP) +X5(WMP) + X6(ITIP) + e
In accordance with this mathematical model the constructed hypothesizes were tested
by considering significance level of each constant parameter and Regression
Coefficients in multiple regression analysis.
 Hypotheses Testing
As it is indicated on the table above, based on the finding of this study, all Logistics Management constructs
had significant and positive influence on Operational Performance of Anbessa brewery since all predictors
significance level is less than 0.05. This in turn indicated that, by improving Logistics Management practices,
Operational Performance of the Anbessa brewery could be significantly & positively improved.
Therefore, the hypothesis which were stated as
 Information Flow Management (IFM) Practices had significant & positive effect on Operational
Performance of Anbessa brewery & was possible to be accepted by the researcher in the study. This
finding is in line with the findings of Srivastava (2006) Wathe (2016) who found that Information Flow
Management Practices had significant effect on Operational Performance.
 Transportation Management (TM) Practices had significant & positive effect on Operational
Performance of Anbessa brewery & was possible to be accepted by the researcher in the study. This
finding is consistent with the findings of Musau, Namusonge, Makokha and Ngeno (2017) who found that
Transportation Management Practices had significant effect on Operational Performance
 Distribution Management (DM) Practices had significant & positive effect on Operational
Performance of Anbessa brewery & was possible to be accepted by the researcher in the study. This
finding is in line with the findings of studies conducted by Bwari et al. (2016) and Musau, Namusonge,
Makokha and Ngeno (2017).
 Inventory Management (IM) Practices had significant & positive effect on Operational Performance
of Anbessa brewery & was possible to be accepted by the researcher in the study. This finding is in line
with the findings Ontita (2016) and Fugate, Mentzer and Stank (2010)
 Ware house Management (WM) Practices had significant & positive effect on Operational
Performance of Anbessa brewery & was possible to be accepted by the researcher in the study. This
finding is in line with the findings of Bwari et al. (2016)
 Information Technology Integration (ITI) Practices had significant & positive effect on Operational
Performance of Anbessa brewery & was possible to be accepted by the researcher in the study. This
finding is in line with the findings of Njoroge and Kabare (2016) and Hyvönen (2007).
SUMMARY OF MAJOR FINDINGS, CONCLUSION
AND RECOMMENDATION
Information Flow Management Practice and Operational Performance were positively and
significantly related. IFMPSummary of Major
has β=19.4% Findingson Operational Performance at tolerance
contribution
level t= 3.70 and significance level at p=0.001.
Transportation Management Practices had strong significant and positive influences on
Operational Performance at β =18.3%, t=3.483 and significance level p=0.001 which is less than
the limit 0.05.
Distribution Management Practices had strong significant and positive influences on
Operational Performance at β =19.5%, t=3.163 and significance level p=0.002 which is less than
the limit 0.05.
Inventory Management Practices and Operational Performance positively and significantly
related. Inventory Management Practices had a positive effect and 22.4% contribution on
Operational Performance at t=4.063 and significant level p= 0.000.
Warehouse Management Practice and Operational Performance are positively and significantly
related. Warehouse management Practice had 20.3% contribution on Operational Performance at
t= 3.387 and significance level p=0.001.
Information Technology Integration Practice and Operational Performance are positively and
significantly related. Information Conclusions
Technology Integration Practice had 22.1% contribution on
Operational Performance at t= 3.970 and significance level p=0.000
From Regression Analysis between LM Practices and Operational Performance from six constructs of Logistics
From Regression Analysis between LM Practices and Operational Performance from six constructs of Logistics
Management practices All variables (IFM, TM, DM, IM, WM and ITI) had strong and significant influence on
Operational Performance of the Anbessa brewery.
The coefficient of determination (R square) was found to be 0.734 indicating that LM practices account for
73.4% of the variability in Operational Performance. And The test of overall significance of all the six
variables jointly significant at 0.000 levels which found out that the model used for this study is also to be
valid.
SUMMARY OF MAJOR FINDINGS, CONCLUSION
Recommendation
Based on the study AND RECOMMENDATION
results and conclusions drawn above, some recommendations
are proposed as a means of alleviating the problems found.
The result of the study as clearly indicate that LM practices (Information
Flow Management Practices, Transportation Management Practices, Physical
Distribution Management Practices, Inventory Management Practices,
Warehouse Management Practices and Information Technology Integration
Practices) have significant effect on the company’s operations performance.
Therefore, the company should give due attention in properly implementing
for those LM practices to improve overall operations performance.
LM practices have an influence on Operational performance with regard to
customer satisfaction, cost reduction (lowering operational costs), and
reduced cycle time reduction of lead time, high customer service levels,
product quality, fast response to changes in the market and expanding its
market share and sales. Therefore, by improving logistics management
practices, operational performance of the company could significantly and
positively improved.
Finally, improving logistic performance yields numerous benefits, including
greater customer satisfaction, increased delivery speed, more rapid response
to demands, order and delivery flexibility, and faster order completion
capability. In order to achieve these objectives and to be a competitive
 Limitation and Suggestion for Future Research
Potential limitations of this research were not
considering or conducting other performance
measures, only taking Operational performance as
the performance measures, and not considering the
other contextual factors i.e. type of industry. Based
on this, the researcher suggests researches that the
academics and the researchers can conduct in the
future
Studying the scope of the Effect of Logistics
Management on the general performance of the
manufacturing industry
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