AKSUM UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF LOGISTICS AND SUPPLY CHAIN MANAGEMENT

ASSESMENT OF FACTORS AFFECTING THE PERFORMANCE OF

LOGISTICS MANAGEMENT (IN CASE OF DEJEN FLOUR FACTORY)

A SENIOR ESSAY SUBMITTED FOR THE PARTIAL FULFILLMENT OF BA

(BACHLOR ART) DEGREE IN LOGISTICS AND SUPPLY CHAIN
MANAGEMENT

PREPARED BY: MEKASHAW TESFU ID No; - 0420/08

ADVISOR NAME: BAIRAY.W (MBA)

JUNE, 2018

AKSUM, ETHIOPIA

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DECLARATION
I am Mekashaw Tesfu declare that this work entitled "Assessment of factors affecting the
performance of logistics management” Is my own effort and study and that all sources of
materials used for the study have duly acknowledged. I have produced it independently except
the guidance and suggestion of the research advisor.

Advisor__________________________ Signature_________________________

Examiner(s)

1. Name____________________________ Signature________________________
2. Name____________________________ Signature________________________
3. Name____________________________ Signature________________________

Place of Submission Aksum University Date of submission_________________

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 ACKNOWLEDGMENT
First, I would like to thanks my almighty God for giving me healthy and strength to reach this
stage and become successful in my work. And my special gratitude goes to my family and
friends for all assistance they rendered to me in terms of money and suggestion to me for my
success. And next I would like to express my sincere gratitude to my advisors Bairay .W(MBA)
for giving his valuable and constructive suggestion while I am working this paper without saying
tired and have no time in accomplishments of my senior essay.

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ABSTRACT
The study was design to Assessment on investigation factory that affect logistics management
performance in case of Dejen floury factory. The main objective of this study is to assess the
Assessment on investigation factory that affect logistics management performance in case of
Dejen flour factory in Aksum town. In order to achieve the proposed objective, the researcher
used both primary and secondary data. Primary data collected through questionnaire,
unstructured interview and observation and secondary data obtained from different source of
document of the organization and related source. The researcher was uses non-probability
sampling techniques, mainly purposive sampling. Because Purposive sampling select the sample
of the respondent on the purpose of research and to identify the respondent more related with the
research title. The researcher is taken from 32 target populations by selecting 16 samples to
represent the whole population. After data gathered from perspective source then, the analysis
was made using descriptive method and interpreted in meaningful way and present by using
tables with application percentages. Finally, summary, conclusion is made and the
recommendation was forwarded.

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 Table of Contents Page
DECLARATION ............................................................................................................................................................. i
Acknowledgment ........................................................................................................................................................... ii
Abstract......................................................................................................................................................................... iii
List of table ............................................................................................................................................................... vi
CHAPTER ONE ................................................................................................................................................................1
1. INTRODUCTION..........................................................................................................................................................1
1.1. Background of Study ...........................................................................................................................................1
1.2. Background of the organization .........................................................................................................................2
1.3. Statement of Problem ........................................................................................................................................2
1.4. Objectives of study .............................................................................................................................................4
1.4.1. General Objective ........................................................................................................................................4
1.4.2. Specific Objectives .......................................................................................................................................4
1.5. SCOPE (Delimitation) study .................................................................................................................................4
1.6. Significance of the Study.....................................................................................................................................5
1.7. Limitation of the Study .......................................................................................................................................5
CHAPTER TWO ...............................................................................................................................................................6
2. LITERATURE REVIEW ..................................................................................................................................................6
2.1Definition of logistics management ......................................................................................................................6
2.2 Business Definition .......................................................................................................................................7
2.3Military Definition .................................................................................................................................................7
2.3 Logistical mission .........................................................................................................................................7
2.4 Significance of Logistic .................................................................................................................................7
2.5. Key activities of logistics .....................................................................................................................................8
2.6. Components of Logistics System ......................................................................................................................12
CHAPTER THREE ...........................................................................................................................................................14
3. RESEARCH DESIGN AND METHODOLOGY ................................................................................................................14
Introduction .............................................................................................................................................................14
3.1. Research Design ..............................................................................................................................................14
3.2. Research technique........................................................................................................................................14
3.3. Sampling design ................................................................................................................................................14
3.3.1. Population..................................................................................................................................................14
3.4. Sample technique and sample size ...................................................................................................................14
3.5. Source of Data ..................................................................................................................................................15

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 3.6. Data Collection method ....................................................................................................................................15
3.7. Methods of Data analysis and Interpretation ...................................................................................................15
CHAPTER FOUR ............................................................................................................................................................16
4. DATA ANALYSIS AND INTERPRETATION ...................................................................................................................16
4.1. Demographic Distribution of Respondent ....................................................................................................16
4.2. Analysis of Main Questionnaires ......................................................................................................................18
CHAPTER FIVE .........................................................................................................................................................29
5.SUMMARY, CONCLUSION AND RECOMMENDATION .................................................................................29
5.1 Summary ..........................................................................................................................................................29
5.2. Conclusion ........................................................................................................................................................30
5.2. Recommendation .............................................................................................................................................31
Bibliography .............................................................................................................................................................33
Appendix ..................................................................................................................................................................34

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 List of table

Page
Table 3. 1 Sample determination ..............................................................................................................................15
Table 4. 1 Sex and Age distribution of the respondents .........................................................................................16
Table 4. 2 Educational Level and Experience distribution of the respondents .....................................................17
Table 4. 3 Company strategy .....................................................................................................................................18
Table 4. 4 Significance and Contribute of logistics ..................................................................................................19
Table 4. 5 logistics Professional .................................................................................................................................21
Table 4. 6 Logistics Performance ..............................................................................................................................21
Table 4. 7 Logistics management performance and Measurement Dimensions ...................................................23
Table 4. 8 Information Sharing and Infrastructure ................................................................................................25
Table 4. 9 Transportation and Inventory Control ...................................................................................................26
Table 4. 10 Problem of logistics activities .................................................................................................................27

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 CHAPTER ONE

1. INTRODUCTION
1.1. Background of Study
Logistics management was introduced during the 1940s among researchers and the firms with
focus on separate activities and mathematical optimization for transportation solutions and it was
not a defined function because the task of purchase, materials receipt, transportation,
warehousing, dispatch and documentation was handled by different people, working under
different department heads. These people learn their skills on the job in the hierarchy according
to the level of their competence. The modern industry, logistics management functions are
central to the success in the market place (Paul, 2000).

Logistics management is concerned with the organization movement and storage of material.
The term logistic was first used by the military to describe the activities associated with
maintains a fighting force in the field and in its narrowest sense describes the housing of trooping
over the years the meaning of the term has gradually generalized to over buss and service
activities. The domain of logistics management activities is providing the customers of the
system with the right product in the right place at the right time. The fundamental chart of
logistics management is its holistic, integrated view of all the activities that it encompasses. So,
while procurement, inventory management, transportation management, warehouse management
and distribution are important components. Logistic is concerned with the integration of these
and other activities to provide the time and space valve to the system or corporation (Marc
Goetschalck, 2003). Logistic is key to the modern economy almost every organization force the
problem of getting the right place at the right time. Increasingly competitive markets are making
it imperative to manage logistic system more and more efficiently (Dianwei, 2006).

Logistics management is the process of planning, implementing and controlling the efficient,
cost effective flow and storage of raw material, inventory, finished goods and related information
from point of origin to point of conforming to customer requirement (D. Waters, 2003).

Now the scope of logistics management has expanded beyond its traditional coverage of
transportation and warehousing activities to include purchasing, distribution, inventory

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management, packaging, manufacturing and customer service (Bowersox, 1986). Due to this,
every organization in the country has recently been trying to increase the integration both in
government and private origination to complete their overall logistics management process.

In this regard, examine the factor that affecting performance of logistics management in case of
Dejen flour factory. This is because, poor infrastructure, poor service delivery, lack of accessing
the latest technology in the market, poor product package, poor inventory control system, lack of
good coordination with department, just a few problems many organizations have been
experiences for long time. Poor infrastructure is a serious problem since it can affect the logistics
management of delivering the product to the market, this is a major contributor to poor condition
and high logistics management cost. These have had an adverse impact on the economies of the
country

1.2. Background of the organization

Materials, which are likely to be exposure to sun, humidity or rain should be stored in a cover
area materials of attractive nature, which are prone to be pilfered or stole should keep in a more
safety area, not with in the east reach of any outside staff. The materials should be arranged in
the storage area in such a way that minimum movement of the material is involved in the storage
area manufacturing industry is possible to define the mechanical transportation of organic
substance in to new products power driven machine the hand Dejen flour factory is located in
Aksum town 1024 KM far from Addis Ababa the company established 2004 E.C it registering its
paid up capital 30 million at the end of 2006 E.C it was reported to have a permanent labour
force 32 workers are permanent. This flour factory produces 42 tons per days the total space
Dejen flour factory is 4000 care meter the company produce different products thus are first and
seconds level flour and differ kind animal foods (for hen and cattle “furushica”).

1.3. Statement of Problem

Logistics management is increasingly playing an important role in everyday business, and
becoming a major factor of differentiation in the market (Bowersox et al. 1968). In the current
competitive climate there is strong pressure, on one hand, to operate in product and service
differentiation, and on other hand, operate on the price factor allowing its reduction. As Melnyk
et al. (2009) mention, logistics management can manage these aspects, constituting a strategic or
value-creation tool.

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Sang and Taehun (2006); conducted research on evaluate factors affecting logistics management
customer service performance in the context of car manufacturing sector. They are more
emphasis on efficiency, effectiveness and performance in terms of the physical distribution
channel, followed by a review of logistics management customer service measurement. Results
indicated that responsiveness is the most significant variable contributing to logistics
management customer service performance, followed by flexibility and inventory.

George and Iravo (2014); conducted research on factors that affect the performance of
distribution logistics management. Result indicated that for those products with small volume,
low weight and high value, distribution cost simply occupies a very small part of sale and is less
regarded; for those big, heavy and low- valued products, distribution occupies a very big part of
sale and affects profits more, and therefore it is more regarded. The demand for products can
only be satisfied through the proper and cost-effective delivery of goods and services.

Another research has been conducted by Shang and Marlow (2002) on the examined the
relationships among logistics management capabilities, logistics management performance, and
financial performance. Results show that the information-based capability is the most critical
since it can impact upon benchmarking capability, flexibility capability, and logistics
management performance. Moreover, information-based capability also indirectly impacts on
financial performance through logistics management performance.

All the above researchers more focus on evaluate factors affecting logistics management
customer service performance, factors that affect the performance of distribution logistics
management, evaluation of logistics management performance for small and medium enterprises,
and examine the relationships among logistics management capabilities, logistics management
performance, and financial performance. This study is focused on the assessing factors that
affecting the logistics management performance in the case of Dejen flour factory. And below
this are the research questions that are inter linkage with the problem. These are

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 Basic Research Question
Therefore, the research would have been obtaining answer the following questions

1. What are the significance of logistics management in the organization?

2. What are the factors that affect the performance of logistics management in the
organization?

3. How logistics management performances affect customer service in the organization?

1.4. Objectives of study

1.4.1. General Objective
The general objective is assessment of factors affecting the performance of logistics management
in case of Dejen flour factory

1.4.2. Specific Objectives

The specific objectives of the study are the following issues:

 To assess the significance of logistics management in the organization.

 To determine the factors that affect logistics management performance in the
organization.
 To determine logistics management performance affect customer service in the
organization.

1.5. SCOPE (Delimitation) study

It is necessary to define the delimitation of the study. Thus the study was delimited
methodologically, geographically and conceptually. Based on the basic purpose the major focus
of the study was to assess factors affecting the performance of logistics management in Dejen
flour factory.
.
The study was also methodologically limited by single research design and data analysing tools.
Example, descriptive research and purposive sample design.
The study was limited by geographically in the study area of Dejen flour factory in Aksum
town. In addition to that the study was limited by conceptually to the logistics management
performance of the flour.

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1.6. Significance of the Study
The main significant of the research is list below which shows why this research would conduct.
This study would contribute importance for logistics management performance and importance
role on customer satisfaction the research work would help managers of logistics management
activities control and other presences to be an aware of the potential case of poor performance
and affects the overall organizational effectiveness and customer’s satisfaction. Helps to the
organization and others to see their weakness and strength in producing quality products and
meeting customer expectation. For other researchers related to this topic it serves as the
reference, show the procedure for solving the problem and how the data would be gathered,
treated and interpreted. It would serve at the steeping point for other research.
1.7. Limitation of the Study
To accomplish these particular studies, the researcher faced the following limitations.
 Shortage of employees. experience
 Shortage of time
 Financial problem means money constraints.
 Some of the respondents were not give response sincerely

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 CHAPTER TWO

2. LITERATURE REVIEW
2.1Definition of logistics management
There is, realistically, no ‘true’ name or ‘true’ definition that should be pedantically applied,
because products differ, companies differ and systems differ. Logistics is a diverse and dynamic
function that has to be flexible and has to change according to the various constraints and
demands imposed upon it and with respect to the environment in which it works.

These many terms are used, often interchangeably, in literature and in the business world. One
quite widely accepted definition that uses some of these terms also helps to describe one of the
key relationships.

Logistics and the supply chain are concerned with physical and information flows and storage
from raw material through to the final distribution of the finished product. Thus, supply and
materials management represents the storage and flows into and through the production process,
while distribution represents the storage and flows from the final production point through to the
customer or end user.

The question of the most appropriate definition of logistics and its associated namesakes is
always an interesting one. There are a multitude of definitions to be found in textbooks and on
the Internet. A selected few are:

Logistics is the management of all activities which facilitate movement and the coordination of
supply and demand in the creation of time and place utility (Bowersox, 1968).

Logistics is the art and science of managing and controlling the flow of goods, energy,
information and other resources (Wikipedia, 2006).

Logistics management is. the planning, implementation and control of the efficient, effective
forward and reverse flow and storage of goods, services and related information between the
point of origin and the point of consumption in order to meet customer requirements (Bowersox,
1986).

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Logistics is . . . the positioning of resource at the right time, in the right place, at the right cost, at
the right quality (Paul, 2000).

Logistics is defined as the process of anticipating customer need and want acquiring the capital,
materials, people, technologies and information necessary to meet those needs and want
optimizing the goods and services producing network for fulfil customer requirements and
utilizing the network to fulfil customer request in a timely manner (k. ShridboraBhat, 2005).

Logistics is the process of planning implementing and controlling the efficient, effective flow
and storage of good services and related information from point of origin to point of
consumption for the purpose of conforming to customer requirements (George and Iravo, 2014).

2.2 Business Definition

Logistics defined as business planning framework for management of materials, service,
information and capital flows that include the increasingly complex information communication
and control system that required in today’s business environment (Helsinki FI, 1996).

2.3Military Definition
Logistics is the science of planning and carrying out the movement and maintenance of force
those aspects of military operation that deals with the design and development, acquisition,
storage movement, distribution of material movement evacuation and hospitalization of
personnel of furnishing service (Sang and Taehun, 2006).

2.3 Logistical mission

Thus far has been established that logistics of an enterprise, it an integrated effort aimed at
helping creating customer value at the lowest total cost logistics exist to satisfy customer
requirements by facility relevant manufacturing and marketing operations at strategic level,
logistic manager seek to achieve a previously agreed upon quality potency the challenge is to
balance achieved a business objective (Dianwei, 2006).

2.4 Significance of Logistic

Logistic is one of the most important activities in modern societies. It has been estimated that the
total logistics cost in occurred by USA organization in 1997 was 862 billion dollars,
corresponding to approximately 11% of the USA Gross Domestic Product. This cost is higher

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than the combined annual USA government expenditure in social security, health service and
defence (D. Waters, 2003).

2.5. Key activities of logistics

Outlined below are the key activities required to facilitate the flow of a product from point of
origin to point of consumption. All of these activities, listed below, may be considered part of the
overall logistics process (Lambert et al. 1998).

Logistic activities can be including two main activities and supporting activities:

Main logistic activities: Transportation, management of inventory, customer service, processing

orders and demand forecasting.

Supportive logistic activities: Packing, locating, warehousing, buying, planning of production

and other activities

1. Traffic and transportation:

A key logistics activity is to actually provide for the movement of materials and goods from
point of origin to point of consumption, and perhaps to its ultimate point of disposal as well.
Transportation involves selection of the mode (e.g., air, rail, water, truck, or pipeline), the
routing of the shipment, ensuring of compliance with regulations in the region of the country
where shipment is occurring, and selection of the carrier. It is frequently the largest single cost
among logistics activities.

Delivery/Transportation: Physical distribution refers to that portion of a logistics system

concerned with the outward movement of products from the seller to customer. The prime
objective of physical distribution is to ensure that right materials and products are available at the
right place, at the right time, and in the right quantities to satisfy demand or customers and also
at a right cost to give a competitive advantage to the company. It is closely related to the time
and place utility (Lambert et al. 1998).

Transportation accounts for between one-third and two-thirds of total logistics costs; for most
firms, it is the most important single element of logistics costs. Firms and their products’ markets
are often separated geographically. Transportation increases the time and place utility.

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Of products by delivering them at the right time and to the right place where they are needed. By
doing so, the customers’ level of satisfaction increases, which is a key factor for successful
marketing (Lambert et al. 1998).

2. Inventory management:

Inventory management involves trading off the level of inventory held to achieve high customer
service levels with the cost of holding inventory, including capital tied up in inventory, variable
storage costs, and obsolescence. These costs can range from 14 to over 50 % of the value of
inventory on an annual basis! With high costs for items such as high-tech merchandise,
automobiles, and seasonal items that rapidly become/obsolete, many organizations are giving
inventory management much more attention.

Inventory management: inventory management involves trading off the level of inventory held to
achieve high customer service levels with the cost of holding inventory, including capital tied up
in inventory, variable storage costs and obsolescence. It is held as protection from uncertainties,
that is, to prevent a stock out in the case of variability in the replenishment cycle. Inventory team
will also make it possible for the firm’s plants to specialize in the products that it manufactures.
The finish products will then be shipped to field warehouses where they are mixed to fill
customer orders (Lambert et al. 1998).

3. Customer service:

Customer service has been defined as "a customer-oriented philosophy which integrates and
manages all elements of the customer interlace within a predetermined optimum cost service
mix. Customer service is the output of the logistics system. It involves getting the right product
to the right customer at the right place, in the right condition and at the right time, at the lowest
total cost possible, Good customer service supports customer satisfaction, which is the output of
the entire marketing process.

Customer service: the firm’s face to the customer. It provides the single source of customer
information, such as product availability, shipping details and order status. The team needs to

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have a thorough understanding of the firm’s operation, and try to foresee the effects of a given
event on the customer and on the internal operations of the firm. They are responsible for
responding to both internal and external events (Lambert et al. 1998).

4. Order processing:

Order processing entails the systems that an organization has for getting orders from customers,
checking on the status of orders and communicating to customers about them, and actually filling
the order and making it available to the customer. Part of the order processing includes checking
inventory status, customer credit, invoicing, and accounts receivable. Thus, order processing is a
broad, highly automated area. Because the order processing cycle is a key area of customer
interface with the organization, it can have a big impact on a customer's perception of service
and. therefore, satisfaction (Lambert et al. 1998).

5. Demand forecasting/planning:

There are many types of demand forecasts. Marketing forecasts customer demand based on
promotions, pricing, competition, and so on. Manufacturing forecasts production requirements
based on marketing's sales demand forecasts and current inventory levels. Logistics usually
becomes involved in forecasting in terms of how much should be ordered from its suppliers
(through purchasing), and how much of finished product should be transported or held in each
market that the organization serves. In some organizations, logistics may even plan production.
Thus, logistics needs to be linked to both marketing and manufacturing forecasting and planning
(Lambert et al. 1998).

Demand forecasting/planning: the demand management process needs to balance the customers’
requirements with the firm’s supply capabilities. This includes forecasting demand and
synchronizing it with production, procurement and distribution. Another important component of
the demand management process is developing contingency plans in the event of either internal
or external events that disrupt the balance of supply and demand (Lambert et al. 1998).

6. Warehousing management

Warehousing refers to the storing and assorting products in order to create time utility. The basic
purpose of the warehousing activity is to arrange placement of goods, provide storage facility to

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store them, consolidate them with other similar products, divide them into smaller quantities and
build up assortment of products.

Generally, larger the number of warehouses a firm has the lesser would be the time taken in
serving customers at different locations, but greater would be the cost of warehousing. Thus, the
firm has to strike a balance between the cost of warehousing and the level of customer service
(Lambert et al. 1998).

Another important logistics functional area, which is strongly related to physical flow, is
warehousing. In contrast to transportation, which primarily takes place on network arcs,
warehousing and product storage mainly take place at nodal points. Warehousing, storage, and
material-handling activities, which are often referred to as “transportation at zero miles per
hour,” take around 20% of total logistics distribution costs; therefore, they compel logistics
executives to give them serious consideration (Lambert et al. 1998).

Almost all the products flowing through logistics networks are packaged, mainly to promote or
protect the product. The former goal is achieved by one type of packaging referred to as interior
or consumer packaging. This packaging is brightly colour and contains marketing and
promotional materials. Although the exterior or industrial packaging is the plain box or pallet
that includes basic information about the item for organizations, it is designed to protect the
product and make its handling easier. In general, the main reasons for packaging goods can be
summarized as follows; -

 To protect or preserve items

 To identify the product and provide basic information
 To facilitate the handling and storage of products
 To improve the product appearance, and assist in promoting, marketing, and advertising
it (Lambert et al. 1998).
7. Logistics communications:

Communications are becoming increasingly automated, complex, and rapid. Logistics interfaces
with a wide array of functions and organizations in its communication processes (Lambert et al.
1998).

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Communication must occur between:

• The organization and its suppliers and customers.

• The major functions within the organization, such as logistics, engineering, accounting,
marketing, and production.
• The various logistics activities listed previously.
• The various aspects of each logistics activity, such as coordinating warehousing of material,
work in process, and finished goods.
• Various members of the supply chain, such as intermediaries and secondary customers or
suppliers who may not be directly linked to the firm. Communication is key to the efficient
functioning of any system, whether it is the distribution system of an organization or the
wider supply chain.
8. Facility of location & Network design:

Facility of location & network design refers to the design of the geographical structure of
logistics facilities from where logistics operations are carried out. The number, size, location of
logistics facilities like manufacturing plants, warehouse, cross dock operation, wholesaler &
retail outlets affects to the aspects of other logistical function. This activity is necessary location
& network structure (Lambert et al. 1998).

2.6. Components of Logistics System

The closely linked components of the logistics system are:

1. Logistics services
2. Information systems
3. Infrastructure/resources Shang and Marlow (2002)
Logistics services support the movement of materials and products from inputs through
production to consumers, as well as associated waste disposal and reverse flows. They include
activities undertaken in-house by the users of the services (e.g. storage or inventory control at a
manufacturer’s plant) and the operations of external service providers. They comprise physical
and non-physical activities (e.g. transport, storage and supply chain design, selection of
contractors, freight age negotiations respectively). Most activities of logistics services are
bidirectional.

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Information systems include modelling and management of decision making, and more
important issues are tracking and tracing. It provides essential data and consultation in each step
of the interaction among logistics services and the target stations.

Infrastructure comprises human resources, financial resources, packaging materials,

warehouses, transport and communications. Most fixed capital is for building those
infrastructures. They are concrete foundations and basements within logistics systems.

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 CHAPTER THREE

3. RESEARCH DESIGN AND METHODOLOGY

Introduction
This chapter shows a description of research design, research technique & method, sampling
design consisting sampling technique, study population and sample size, data source and types,
Administration of questionnaire and interview, of data collection, data analysis, and
Interpretation,

3.1. Research Design

The study would use the descriptive type of study. Because the descriptive study uses to describe
the state of affairs as it exists at present and the aim of the research’s is to describe state of facts
in logistics management performance in Dejen flour factory as it exists.
3.2. Research technique
The main technique of this research would be through close ended questionnaires and interview
schedules. The rationality for using questionnaires is that it is a convenient way for the study to
create an opportunity and for the respondents to oversee the questions and that it was easy to
handle and interpret the results. The research would use personal interview weather semi-
structure or not, this is because personal interview is flexible in nature and manageable in
controlling the respondents’ conditions.

3.3. Sampling design

3.3.1. Population
The population of the study who are working on the company are 32 employees.
3.4. Sample technique and sample size
Sampling is the process of using the small number of items from the whole population.
Therefore, the researcher used non-probability purposive sampling techniques. Because the
purposive sampling, select the sample of the respondent on the purpose of research and to
identify the respondent more related with the research title. Because this type of sampling
technique is essential for research is select any respondents that he/she think well fit to the
question. The research is taken from 32 target populations by selecting 16 samples to represent
the whole population.

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Table 3. 1 Sample determination

No. Category of Target Sample Sampling techniques used

department Population size
1 Purchasing 8 4 Purposively

2 Production 9 5 Purposively

3 Warehouse 7 3 Purposively

4 Sale and marketing 8 4 Purposively

Total 32 16

3.5. Source of Data

The source of data that the research would use both primary and secondary sources:
Primary sources: It is clear that the data to be obtain from primary sources are by its natures is
very important for the reliability of research output, because it helps a research to generate a
clear and more detailed understanding of the problem at hand. So that the primary data was
collected by both close ended question and interview
Secondary sources: it is the main source of information and easily available, inexpensive and
can be obtained quickly this secondary source was be collected from difference types of books,
internet, magazine and brochures about the organization.

3.6. Data Collection method

In order to conduct an effective research, accurate and reliable data is crucial. The necessary
information was collected through different methods of data collection. The primary data would
be conducted through questionnaires. Making interview with all of the sample population is
difficult because it is Cost and consumes time thus; in order to overcome these difficulties, the
research would be used questionnaire to collect primary data. The secondary data also would
collect from different source of documents of the organization and related sources.

3.7. Methods of Data analysis and Interpretation

The research would use both tabulation and percentage method to analyse and interpret the
collected data table and percentages are used to make appropriate interpretation and analysis of
data.

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 CHAPTER FOUR

4. DATA ANALYSIS AND INTERPRETATION

Introduction

This chapter deals about data analysis, present and interpretation which collected through
questionnaires. The questionnaire was distributed to 16 workers of Dejen flour factory. From this
questionnaire out of 16 respondents 13(81%) of them were properly filed and returned but
remaining 3(19%) was not returned back because of the employees are unwillingness to fill the
questionnaire and being careless keep the paper in unsafe place.

4.1. Demographic Distribution of Respondent

In this section the responses of respondents were analysed by classifying them to sex, age,
educational level and work experiences.

Table 4. 1 Sex and Age distribution of the respondents

No Description of Item Option Respondent

No %

1. Sex Male 8 62%

Female 5 38%

Total 13 100%

2. Age 18-25 4 31%

26-35 5 38%

36-45 3 23%

46-55 1 8%

< 56

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 Total 13 100%

Source; own questionnaire 2018

As it shown from the above table, show that from the total number of respondent 8(62%) of
respondent are male and the remaining 5(38%) are female. This implies that the number of
female in the organization is very low. Therefore, from this the researcher can understand that
the number of male exceeds the number of female in the organization.

According to this table, show that 31% of the employees are found at the age of with 18-25, 38%
of age between 26-35, 23% of age with 36-45 and 8% of age between 46-55 and no age above
50. As the research her get the organization is more employees by age with 26-35. Hence, most
of the employees of the company are young. From this, the researcher concludes that the
company has strong labour force in order to achieve its objective.

Table 4. 2Educational Level and Experience distribution of the respondents

No Description of item Option Respondent

No %

3. Educational level Incomplete10-12 - -

Complete10-12 2 15%

Diploma 4 31%

Degree 6 46%

Master degree 1 8%

Total 13 100%

4. Experience <2 4 31%

3-5 6 46%

6-10 2 15%

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 11-15 1 8%

>16 - -

Total 13 100%

Source; own questionnaire 2018

As it shown in the above table 4.2, from the total number of respondent 46% is degree graduated
and 31% of diploma and 8% of master degree and 15% of complete 10-12. The researchers can
understand that the majority of the employees in the organization has degree holders.

As it shown in the above table, show that 31% of the respondents are less than 2 years, 46% of
respondents range between 3-5 years, 15% of respondents range between 6-10years and 8% of
respondent range between 11-15 years. The researchers can understand that majority of the
employees in the organization work experience are under the range between 3-5 years. This
indicates that the company can be simply profitable within a short period of time.

4.2. Analysis of Main Questionnaires

Table 4. 3Company strategy

No Description of Item Response Respondent

Frequency %

1. How often logistics is reviewed critical company Daily 5 38%

strategy?

Monthly 1 8%

Weekly 3 23%

Quarterly 4 31%

Total 13 100%

2. Does your company have a clear logistics Yes 8 62%

strategic plan?

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 No 5 38%

Total 13 100%

Source; own questionnaire 2018

As indicated in the above table 4.3.1, majority the respondent 38% of responded that company
strategy was critically reviewed by the daily and the rest 31% responded that quarterly, 8% of
monthly and 23% of respondents responded that company strategy was critically reviewed by the
weekly. Generally, the researcher concludes that the majority of respondents responded that
company strategy was critically reviewed by the day to day operation of the organization.

As it is presented in the above table, majority of respondents 62% responded that organization
has clear logistics strategic plan and the rest 38% of responded that organization haven’t clear
logistics strategic plan. Generally, the researcher understands that the organization has clear
logistics strategic plan to optimize its logistics performance.

Table 4. 4Significance and Contribute of logistics

No Description of Item Option Respondent

3. How do you rate logistics significance in your Low 4 31%

company? significance

High 9 69%
significance

Very low - -
significance

Very high - -
significance

Total 13 100%

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4. To what extent logistic activities contribute for Very high 4 31%
your company?

High 6 46%

Medium 3 23%

Low - -

Total 13 100%

Source; own questionnaire 2018

As it is seen from above table, respondents gave the response in different ways. As such out of
total respondents 31% respondents responded that logistics has low significance for the
company, and 69% responded that logistics has high significance for the organization. Generally,
from the above information, the researcher understands that logistics has high significance for
the organization for the survival.

As it shown above table majority of the respondents 31% responded that logistic activities
contribute for the organization is very high and 46% responded that logistic activities contribute
for the organization is high and the rest 23% responded that logistic activities contribute for the
organization by medium case. Therefore, the researcher understood that logistic activities high
contribution for the company.

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Table 4. 5 logistics Professional
Description of Item Option Frequency %

5. Does the logistic activities in your organization conducted Yes 5 38%

by professional workers?

No 8 62%

Total 13 100%

Source; own questionnaire 2018

As it shown in the above table 4.3. 3, majority of respondents 62% responded that logistic
activities were not conducted by professional worker and 38% responded that logistics activities
conducted by professional worker. Generally, the researcher concluded the organization
implement logistic activities by non-professional worker depending on the above data.

Table 4. 6 Logistics Performance

No Description of Item Option Respondent

Frequency %

6. What are the major Lack of 4 31%

challenges of logistics knowledge
management performance in
your organization?

Lack of skill 5 38%%

Lack of capital 3 23%

Other 1 8%

Total 30 100%

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7. Does your organization Yes 10 77%
taking steps to Improve
logistics management
performance?

No 3 23%

Total 13 100%

8. When the logistics Quarterly 6 46%

management performance
evaluated in your
organization?

Semi-annually 4 31%

Annually 3 23%

Other - -

Total 13 100%

Source; own questionnaire 2018

As shown in the table 4.3.4, majority respondents 38% responded that the major challenges of
logistics management performance are lack of skill that affect the organization, the 31% of
respondents are responded lack of knowledge, the23% of the respondent are responded lack of
capital and the 8% of respondent are responded other major challenges of logistic management
performance. This indicates that the organization should consider on lack of skill to avoid the
challenge of the organization, which means by giving training for employees and effective
information sharing for the minimization of challenges of logistics management.

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As shown in the table, majority respondents 77% responded that the organization has taken the
step in order to improve logistics management performance and 23% responded that organization
doesn't have plan to improve logistics management performance. Finally, the researcher
concludes that the organization is taking steps to improve logistics management performance.

As shown on the table, major respondent 46% responded that the logistics management
performance evaluated by quarterly and 31% responded that the logistics management
performance evaluated by semi-annually as well as the rest 23% responded that the logistics
management performance evaluated by annually. Finally, the researcher conclude that the
organization are evaluated the logistics management performance by the quarterly. So logistics
performance in Dejen factory evaluated nearly quarter per hour.

Table 4. 7 Logistics management performance and Measurement Dimensions

No Description of Item Response Respondent

Frequency %

9. How do you measure the overall of logistics Excellent 3 23%

management performance in your organization?

Very Good 4 31%

Good 6 46%

Poor - -

Total 13 100%

10. What is the key performance indicator of logistic Cost 1 8%

activities in your organization?

Quality 5 38%

Delivery 4 31%

Flexibility 1 8%

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 All 2 15%

Total 13 100%

11. What are logistics management performance On time 4 31%

measurement dimensions in your organization? delivery

Quick 9 69%
response

Just in time - -

Service - -
reliability

Other - -

Total 13 100%

Source; own questionnaire 2018

As it shows in the table 4.3.5, major respondents 46% indicate that the measure of the logistics
management performance is good and the rest 31% of respondents indicate very good and 23%
of response indicates that excellent. Therefore, the researcher can conclude that the overall
logistics management performance is good and sufficient in the organization.

As it is shown on the above table, the respondents responded 15% of responses indicate that key
performance indicator of logistic activities was both cost, quality, delivery and flexibility and the
38% of respondent said key performance indicator in logistic activity is quality as well as 8% of
respondent replied cost, the 31% is delivery and 8% on flexibility. Therefore, from the above
table, the researcher can understand that the organization mostly used quality as key performance
indicator for logistic activities.

As it is shown in the above table, 69% major respondents replied that logistics management
performance can be measured in terms of quick response as well as 31% of their respondents
replied that logistics management performance can be measured in terms of on times delivery,

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from this the researcher can generalize that quick response and on time delivery are the most
critical to increase logistics management performance of the organization.

Table 4. 8 Information Sharing and Infrastructure

No Description of Item Response Respondent

Frequency %

12. Does your organization have information Yes 8 62%

share effectively and efficiently?

No 5 38%

Total 13 100%

13. Do you have well organized logistics Yes 4 31%

infrastructure in your organization?

No 9 69%

Total 13 100%

14. Does the infrastructure structured effectively Yes 7 54%

No 6 46%

Source; own questionnaire 2018

As clearly describe in the above table 4.3.7, 62% of respondents responded that there is
information sharing within the organization and 38% of the respondents answered that there is no

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information sharing. According to the above data the respondents said that there is good
information sharing among the employees of an organization.

As clearly describe in the above table, 69% of respondents responded that organization haven't
well-organized infrastructure and the rest 31% of respondents responded that organization have
well organized infrastructure. Generally, the researcher understand that organization haven't
well-organized logistics infrastructure to achieve objectives of the organization.

As clearly describe in the above table, 54% of respondents responded that there is infrastructure
structured effectively and the rest of 46% of the respondents responded that haven't infrastructure
structured effectively.

Table 4. 9 Transportation and Inventory Control

No Description of Item Response Respondent

Frequency %

15. Does your organization has good transportation Yes 10 77%

system?

No 3 23%

Total 13 100%

16. Does your company implement inventory Yes 13 100%

control system?

No - -

Total 13 100%

Source; own questionnaire 2018

As clearly describe in the above table 4.3.8, majority of respondent 77% responded that
organization have good transportation system to deliver the product to the customers and 23%
response that organization haven’t good transportation system to support logistics. Generally,

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from the above information the researcher understand that organization have good transportation
system to implementation of logistics activities.

As shown in the above table, 100% of respondent responded that organization implement
inventory control system.

Table 4. 10 Problem of logistics activities

No Description of Item Response Respondent

Frequency %

17. What are the problems that face your Infrastructure 5 38%
organization for implementation of logistics
activities?

Information 2 15%
technology

Finance 3 23%

Management 1 8%

Other 2 15%

Total 13 100%

Source; own questionnaire 2018

As shown in the above table 4.3.9, most of the respondents 38% replied that infrastructure is
faced problem to implementation of logistics activities and 23% replied that there is financial
problem; the 15% responded that Information technology and 8% are the Management problem.
Generally, the researcher concludes that the main problem for the implementation of logistics
activities is infrastructure and finance for the organization.

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Interview Questions

1, what seems to be logistic activities in your organization?

The manager said that, logistics management performance in their organization seems to be good, especially in
distributing and on time delivery for the customer and also by preparing qualitative equipment

2) What do you think of the problems that affect the well-being logistic activities?

The manager said that, the most common problems are lack of access skilled man power, shortage of raw material
and luck of experience are highly affect the organization.

3) Is there any training program for the employees in relation logistics management performance?

The manager states that some time there is a training course for the employees about logistics management
performance organization productivity but it is not satisfactory enough. Because the source is very limited in case of
content and give within short period of time.

4) What is your overall suggestion about the logistics management performance or DEJEN FLOUR FACTORY?

The manager said that the organization is good to some extent, but it is exposed to different challenges as a result
same improvement and a ware to be unexpected risks to manage. In addition to the organization is expected to ward
better so as to minimize the problem such as shortage of skilled man power, lack of access and lack of interpretation.

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 CHAPTER FIVE

5. SUMMARY, CONCLUSION AND RECOMMENDATION

This chapter contains summary, conclusion, and recommendation of the study paper concerned
with assessment of factors affecting the performance of logistics management.

5.1 Summary
Based on the previous chapter summarized in the following ways:

 Majority of the respondents are male in the company.

 Majority of the respondents are young’s and the researcher concludes that most of the
Dejen flour factory employees are relatively young.
 The researchers can understand that majority of the employees in the organization work
experience are under between 3- 5 years.

 The researchers can understand that the majority of the employees in the organization
have degree holders.
 Majority of respondents responded that the major challenges of logistics management
performance are lack of skill that affects the organization.

 Majority of respondents responded that organization haven't well-organized logistics

infrastructure to achieve the objectives of the organization.

 The researchers can understand the organizations have good transportation system to
implementation of logistics activities.

 Majority of respondents responded that a logistic activity was not conducted by

professional worker.
 Majority of respondent responded that organization implement inventory control system.
 The researchers can understand logistics have high significance for the organization
performance success as compare with the nature of the organization as major
respondents.

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  Majority of respondent responded that the organization has clear logistics strategic plan
to optimize its logistics performance strategy was critically reviewed by the day to day
operation of the organization.
 The researchers can understand the organization implied that logistics has high
significance for the organization for the survival.
 Majority of respondent responded that the organization implied that logistic activities
high contribution for the company.
 Majority of respondent responded that the organization is taking steps to improve
logistics management performance.
 The researchers can understand the organization are evaluated the logistics
management performance quarterly.
 Majority of respondent responded that the organization replied that the overall logistics
management performance is good and sufficient in the organization
 The researchers can understand the organization mostly used quality as key
performance indicator for logistic activities.
 The study states that logistics management performance can be measured in terms of on
times delivery,
 Majority of respondent responded that the organizations have good information sharing
among the employees of an organization.
 The study states that the organization haven't well-organized logistics infrastructure to
achieve objectives of the organization.
 The researchers can understand the organizations have good transportation system to
implementation of logistics activities.
 Majority of respondent responded that the main problem for the implementation of
logistics activities is infrastructure and finance for the organization.

5.2. Conclusion

In the line with finding in chapter four, the following conclusions are drawn:

This study has been made to the factor affecting the performance of logistics management. The
purpose of this study has been to describe the activities as well as the procedures followed

30 | P a g e
specific objective assess the significance of logistics management performance, determining the
factors that affect logistics management performance and logistics management performance
affect customer service in the organization.

 This study also used some review of related literature that describe the performance of
logistics management and activities of logistics management.
 This study was descriptive type of study that describe the existing situation as it is and the
study use non-probability purposive sampling technique.
 Based On the data presentation and analyses the researcher had been able to general
Highlight of logistic management and its performance and organization productivity in
Dejen flour factory.
 The researcher concludes that logistics has high significance for the organization for the
survival.
 The researcher concludes that the major challenges of logistics management performance
is lack of skill for the organization.
 The researcher concludes that the main problem for the implementation of logistics
activities is infrastructure and finance for the organization.

5.2. Recommendation
 After the researcher identified the strength as well as the weakness of the organization,
the researcher also would like to suggest on the problems mentioned in the conclusion or
summary. The researcher believes that the organizations are very positively to take out
comment in to account and give a due attention and forms for out suggestion are as
follows.
 The overall goal of logistic activities is to minimize the total logistic cost. Hence the
organization should have to use the scientific or modernize logistical system in order to
balance the logistic expenditure with the desired costumer service. The organization
administered should work hard to have skilled and more experienced employees as well
as aspects to expand of logistic outside company to gain more advantageous from logistic
customer.

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  There is shortage of warehouse, in that case company must build a new other warehouse
in order to have enough inventory on hand, and to facilitate the company production
performance.
 The organization should improve the facility of infrastructure and network designing,
because it is requirement to determine the number and location of all types of facilities
need to perform the logistic work inventory and how to stock at each facility and where
to assign
 The organization should consider on internal structure and external environment to
avoiding the challenge of the organization, which means by dividing authority and
responsibility as well as division of task, and also by effective information sharing for
minimization of internal challenge of logistics management.

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Bibliography
Bowersox, D., Smykay, E., LaLonde, B., 1968. Physical distribution management in: Logistics
Problems of the Firm. MacMillan: New York/London.
Bowersox, D.J., D. J. Closs and 0.K. 1Ielferich. (1986) Logistics Management: A systems
integration of physical distribution, Macmillan Publishing Company.
Douglas M. Lambert (1998); The Fundamentals of Logistics Management,2nd edition The Ohio
State University.

Dianwei, Q, Dunlop, J., Hammond, J., Weil, D., 2006. Retailing and supply chains in the
information age Technology in Society 22, 5–31

George and Iravo (2014), A.C., Performance analysis of a batch production system with limited
flexibility. International Journal of Production Economics, 2001, 69(1), 39–48.

Helsinki (1996): Measuring supply chain performance. International Journal of Operations &
Production Management, v. 19, n. 3, p. 275-29.
K. Shridbora Bhat (2005); Introduction of EDI and its Effects to Performance. Ph.D. Thesis: The
Univ. of Hannam.

Marc Goetschalck (2003); "Flexibility in logistic systems-modelling and performance

evaluation", International Journal of Production Economics, Vol. 85, No.3

Melnyk (2009); Application Management research study: Challenges in the Automotive

Industry. Bathwick Group Ltd.

Paul (2000); “The Changing Basis of Performance Measurement”, International Journal of

Operations and Production Management, Vol 16, No.8, Pg.74, (1996).
Shang and Marlow (2002); Performance analysis of a batch production system with limited
flexibility. International Journal of Production Economics, 2001, 69(1), 39–48.

Sang and Taehun (2006), “The Changing Basis of Performance Measurement”, International
Journal of Operations and Production Management, Vol 16, No.8, Pg.74, (1996)

Wikipedia (2018); Logistics Management

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 Appendix
AKSUM UNIVERSIY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARETEMENT OF LOGISTICS AND SUPPLY CHAINS

MANAGEMENT

DEAR RESPONDENT

The purpose of this questionnaire is to gather information in order to evaluate the logistics
management performance in DEJEN FLOUR FACTORY. There your genuine support in
responding to the raised questions has paramount importance for the attainment of the study‘s
objectives. So, please free and frank to respond the questionnaires genuinely. Furthermore, the
secrecy of all the information that you will provide is confidential and will only be used for
research purpose. Your honest opinion on each and every statement of the questions is
appreciated.

Thank you in advance for your cooperation.

General instruction

 No need to write your name

 Close ended questions are answer by placing office (x)

Part-one personal information

1, Sex Male female

2, Age

18 – 25 26-35 36-45

46-55 above 56

3, educational level

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Incomplete 10-12 complete 10-12 certificates

Diploma 1st degree 2nd degree and above

4, Work experienced in the current position?

<2 years 3-5 years

6-10 years 11-15 years >16 years

Part two- basic questioner

1. What are the major challenges of logistics management performance in your organization?

Lack of knowledge Lack of skill Lack of capital other

2. Does the logistic activities in your organizational conducted by professional workers?

Yes No

3. Does the infrastructure structured effectively?

Yes No

4. When the logistics performance evaluated in your organization?

Quarterly semi-annually annually other

5. To what extend logistic activities contribute for your company?

High medium low

6. How do you rate logistics significance in your company?

Low significance High significance Very low significance Very high

significance

7. How often logistics is reviewed critical company strategy?

Daily Monthly Weekly Quarterly

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8. How do you measure the over all of logistics management performance in your organization?

Excellent very good good poor

9. Does your organization has good transportation system?

Yes No

10. Does the information share effectively in your organization?

Yes No

11. Do you have well organized logistics infrastructure in your organization?

Yes No

12. What are the key performance indicator of logistic activities in your organization?

Cost quality delivery

Flexibility all of the above listed

13. Does your organization taking steps to improve logistics management performance?

Yes No

14. What are logistics management performance measurement dimensions?

On time delivery quick response JIT

Service reliability other

15. Does your company have a clear logistics strategic plan?

Yes No

16. Does your company implement inventory control system?

Yes No

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 17. What are the problems that face your organization for implementation of logistics
activities?

Infrastructure IT Finance

Management Other

Interview Questions

1) What seems to be logistic activities in your organization?

2) What do you think of the problems that affect the well-being logistic activities?

3) Is there any training program for the employees in relation logistics management performance?

4) What is your overall suggestion about the logistics management performance or DEJEN FLOUR FACTORY?

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