The Challenges and Prospects of Procurement Framework Agreement Practice: The Case of ethio telecom

Abstract

One way having strategic sourcing is through entering procurement framework agreement with potential suppliers in order to get, to sustainable supply of goods, service and works, to reduce costs, to improve performance and to achieve an intended goal every company must give emphasis to sourcing function. The objective of this study was to investigate the challenges and prospects of procurement framework agreement practice in ethio telecom. The research objectives were developed to address the application and practice of procurement framework agreement, cost efficiency and excellence on the procurement process, suppliers’ performance, procedure assurance and support of strategic corporate procurement process with regard to procurement framework agreement. A descriptive research design was adopted in this study and Stratified random sampling technique was used to select the questionnaire respondents. The respondents were top level management, Middle level Management, supervisors and staffs. A total of 99 questionnaires are collected from the expected 107 questionnaires and data were analyzed using mean, frequency and percentage. The major finding of the study showed that there exists a problem in the applicability of procurement framework agreement in terms of proper procurement planning, specification development, identifying the right, capable potential suppliers, low supply chain responsiveness from suppliers’ side, price fluctuation during contract period, win-win negotiation problem, improper contract management and suppliers handling management. From the findings, this study recommends to have partnership level of agreement with suppliers and create awareness of the forecasted annual procurement plan for smooth supply chain implementation. Adequate trainings for staffs to handle well equipped planning and specification development, implementation of market survey for price fluctuation during contractual period and strong assessment on suppliers’ performance and build strong suppliers relationship management with early suppliers’ involvement for sharing information, technological capabilities knowledge, technical skills and experience.