A Study of Supply Chain Management (SCM) Practices & Performance at Ambassador Garment & Trade PLC

Abstract

Supply chain management (SCM) is a key strategic factor for increasing organizational effectiveness and for better realization of organizational goals such as enhanced competitiveness, better customer care and increased profitability. Supply chain management practices (SCMP) are defined as the set of activities undertaken by an organization to promote effective management of its supply chain. This paper develops a framework showing the effect of the four constructs of SCMP (strategic supplier partnership, customer relationship, level of information sharing and quality of information sharing) , and tests the relationships between SCM practices, competitive advantage and organizational performance. Data for the study were collected from the firm under study from its head office 51 and 39 respondents from branches within Addis Ababa. Sample sizes were determined by Krejcie, R & Morgan rule using purposive sampling technique. Questionnaires administered and were coded and entered the SPSS. The relationships proposed in the framework were tested using Pearson correlation coefficient and casual relationships were analyzed using regression analysis. Research findings indicate that SCM practices have positive effects on competitive advantage and organizational performance. Further, SCM practices have very strong, positive relationship with competitive advantage, and weak, positive relationship with organizational performance. With respect to the relationship of competitive advantage with organizational performance, the study concluded that there is positive, but weak relationship is resulted. However, in various studies competitive advantage can have a direct, positive effect on organizational performance. Hence, to strengthen and move ahead in marketing and financial performance within a period of time through organizational performance, it is advisable for the firm to give more importance to develop strategic capabilities to link SCM practices to the dimensions of competitive advantage. Furthermore, It is highly recommended that a comprehensive research effort be undertaken having gone through the limitations of this study.