THE EFFECT OF SUPPLY CHAIN MANAGEMENT PRACTICES ON

COMPETITIVE ADVANTAGE: THE CASE OF DANGOTE CEMENT

COMPANY/ETHIOPIA PLC.

By
Lemma Tadesse Boson

A Thesis submitted to College of Business and Economics the

School of Post Graduate studies of the Debre Birhan University for
the Partial Fulfilment of the Requirements of the Degree of Master
of Arts in Logistic and Supply Chain Management

Advisor: Yohannes Tefera (Ass. professor)

July, 2021
Debre Birhan, Ethiopia
 Dabre Birhan University
College of Business and Economics
School of Post Graduate Studies.

Department Of Logistics and Supply Chain Management

Assessment on the Effect of Supply Chain Management Practice

on Competitive Advantage: The Case Dangote Cement
Campany/Ethiopia

By. Lemma Tadesse

APPROVED BY BOARD OF EXAMINERS

____________________________ _______________________
Dean, Graduate Studies Signature& Date

______________________________ _______________________
Advisor Signature & Date

______________________________ _______________________
External Examiner Signature & Date

______________________________ _______________________
Internal Examiner Signature & Date

i
 Certification

This is to certify that Lemma Tadesse has carried out this research work on the topic entitled
―The effect of Supply chain management practice on competitive advantage: the case of
Dangote cement Company Ethiopia plc.‖ under my supervision. This work is original in
nature and it can be submitted for the partial fulfilment of the requirements for the award of
the degree of Masters of Art in Logistics and Supply Chain Management.

______________________________

Yohannes Tefera (Ass. Professor)

Date _____________________

ii
 DECLARATION

I, LemmaTadesse, declare that this paper is a result of my independent research work on the
topic entitled ―The effect of Supply chain management practice on Competitive advantage in
Case of Dangote Cement Company/ Ethiopia plc.‖ for the partial fulfilment of the
requirements for the Degree of Masters of Art in Logistics and Supply Chain Management at
Debre Birhan University, College of Business and Economics. This work has not been
submitted for a degree to any other university. All the references are also duly acknowledged.

Declared by:

Name____________________________

Sign_____________________________

Date_____________________________

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 ACKNOWLEDGEMENTS

Above all, I wish to thank the Almighty GOD, without his grace and mercy nothing is possible
for me to succeed thought my life. Next I want to thank my advisor Yohannes Tefera
(Ass.Professor) for his uninterrupted supporting, valuable comments and He consistently
helped me on the right direction whenever I needed his thought through entire my thesis .My
special thanks also goes to my brother Melkamu Tadesse and all my family for their support,
patience, the motivation and commitment in entire my educational life.
I would like to express my heartfelt gratitude to all the employees of Dangote cement
Ethiopia plc staff including security who involved in providing necessary information to
support me by shared their views, ideas and questionnaire filled process. Finally, I would like
thank all people and colleagues whom I not listed their name, for your supporting in different
ways.

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ACRONYMS

SCM Supply Chain Management

SCMP Supply chain management practice
LSCM Logistics and Supply chain management
SPSS Statistical Package for Social Science
ANOVA Analysis of Variance
IMF International Monitory Fund
SSP Strategic supply chain practice
CR Customer Relationship
IS Information Sharing
IQ Information Quality
LP Lean practice
CA Competitive Advantage
VIF Variance Inflation Factors
PLC Private Limited Company.

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 ABSTRACT
The understanding and practicing of supply chain management (supply chain management)
has become an essential prerequisite for staying competitive in the global race and for
enhancing profitably. A successful SCM implementation is expected to enhance the
relationship between upstream suppliers and downstream customers, and thereby increase
customer satisfaction and firm performance. Therefore, the general objective of the study was
“to assess the effect of supply chain management practices on competitive advantage in
cement manufacturing industry: the case of Dangote Cement Limited Company in Ethiopia”.
The study specifically sought to examine the effect of strategic supplier partnership, customer
relationship, information sharing and quality and also lean practices on competitive
advantage of Dangote Cement Company in Ethiopia. In order to meet the objectives of this
research, the study adopted quantitative method and the relationships proposed in the
framework were tested using descriptive and explanatory research method. The primary data
was collected from 112employees of Dangote Cement Company by using Likert scale type
questioner as measuring instrument for collection of the employees’ perception towards the
variables in three departments, namely, Logistics and supply chain management department,
sales &marketing department and production department in Dangote Cement Company.
Then the collected data were analyzed using descriptive statistics, correlational and multiple
regression analysis by Statistical Package for Social Sciences (SPSS) 23 version data
analysis. The major finding of the study indicated that supply chain management practices
i.e. strategic supplier partnership, customer relationship, information sharing, information
quality and lean practices have significantly affected the competitive advantage of Dangote
cement Ethiopia plc. However, the organization has to improve its supply chain practices in
order to improve the competitive advantage even further. Specifically, Dangote cement has to
improve involvement of suppliers in the continuous improvement programs, emphasis on
quality as criteria to select best suppliers, frequently interact with their customer to set
reliability, responsiveness, and also the company should provide on time and complete
information to its suppliers and to work more on solving the problem in equipment set up
time for delivering service to the customer. In addition, the company should improve its
determination to meet the customer needs and demands.

Key Words: Supply chain management; SCM Practice; Competitive advantage.

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Contents Page
CHAPTER ONE: ....................................................................................................................... 1
INTRODUCTION ..................................................................................................................... 1
1.1 Background of the Study .................................................................................................. 1
1.2. Background of the Organization ..................................................................................... 3
1.3. Statement of the Study problem. ..................................................................................... 3
1.4. Research Questions of the Study..................................................................................... 5
1.5. Objectives of the Study ................................................................................................... 5
1.5.1. General Objectives ................................................................................................... 5
1.5.2. The specific objectives were:- .................................................................................. 5
1.6. Significance of the Study ................................................................................................ 5
1.7. Scope of the Study........................................................................................................... 6
1.8. Definition of Terms and concept of the Study ................................................................ 6
1.9. Organization of the Study/ Paper .................................................................................... 7
CHAPTER TWO ....................................................................................................................... 8
2. LITERATURE REVIEW ..................................................................................................... 8
2.1 Concepts and Definitions of Supply Chain Management .............................................. 8
2.2. Supply Chain Management Practices ............................................................................ 10
2.2.1 Strategic supplier partnership .................................................................................. 11
2.2.2. Customer relationship ............................................................................................. 11
2.2.3. Level of Information Sharing ................................................................................. 12
2.2.4. Quality of Information Sharing .............................................................................. 14
2.2.5. Internal Lean Practices (LP) ................................................................................... 14
2.3. Competitive advantage .................................................................................................. 15
2.4. Empirical Review .......................................................................................................... 16
2.5. Conceptual Framework ................................................................................................. 17
CHAPTER THREE ................................................................................................................. 19
RESEARCH METHOD........................................................................................................... 19
3.1 Research Approach ........................................................................................................ 19
3.2 Research Design ............................................................................................................. 19
3.3 Source of Data ................................................................................................................ 20
3.4. Population and Sampling .............................................................................................. 20
3.4.1. Target Population ................................................................................................... 20
3.4.2. Sampling Techniques ............................................................................................. 20
3.4.3. Sample Size ............................................................................................................ 21
3.5. Data Collection tools/instrument................................................................................... 22
3.6. Data Collection Procedure ............................................................................................ 22

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 3.7. Method of Data Analysis............................................................................................... 22
3.8. Validity and Reliability of the study ............................................................................. 23
3.9. Ethical Consideration .................................................................................................... 24
CHAPTER FOUR .................................................................................................................... 25
DATA ANALYSIS AND PRESENTATION ......................................................................... 25
4.1. Introduction ................................................................................................................... 25
4.2. Response Rate of sample respondents .......................................................................... 25
4.3. Demographic characteristics of the respondents ........................................................... 25
4.3.1.Gender of the sample respondents ........................................................................... 25
4.3.2. Respondent‘s work experience ............................................................................... 26
4.3.3.Educational qualification of respondents ................................................................ 27
4.3.4. Department of the respondents ............................................................................... 28
4.4 Descriptive statistical Analysis on Variables‘ Used of the study .................................. 28
4.4.1. Descriptive analysis on Independent Variables (SCMP) ....................................... 29
4.4.2. Descriptive Analysis on Dependent Variable ......................................................... 34
4.5. Regression Analysis for SCM Practices and Competitive advantage ........................... 36
4.5.1. Multiple Regression Assumptions .......................................................................... 37
4.5.2.. Reliability Test for Survey Data ............................................................................ 37
4.5.3. Multi-collinearity .................................................................................................... 38
4.5.4. Normally Distributed Error vs Normally Distributed Outcome Variables............. 39
4.5.5. Correlational Analysis between Dependent and Independent Variables................ 41
4.5.6..Results of the Regression Analysis of supply chain management practices and
Competitive advantage ..................................................................................................... 43
4.6. Findings based on Research Questions ......................................................................... 46
CHAPTER FIVE ..................................................................................................................... 48
5. SUMMERY, CONCLUSION AND RECOMMENDATION ............................................ 48
5.1. Summary of the Findings .............................................................................................. 48
5.2. Conclusions ................................................................................................................... 48
5.3. Recommendation ........................................................................................................... 50
5.4. Limitation and Implications for Further Research ........................................................ 50
Reference ................................................................................................................................. 52

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List of Tables

Table 3.1: Proportional sample size of departments ............................................................... 21

Table 4.1: Gender frequency of the sample respondents ......................................................... 25
Table 4.2. Descriptive Characteristics on the grouping Variables .......................................... 29
Table 4.3: Descriptive statistics on strategic supplier Partnership (SSP) ................................ 30
Table 4.4: Descriptive statistics on Customer Relationship .................................................... 31
Table 4.5: Descriptive statistics on Level of information sharing (IS) .................................... 32
Table 4.6: Descriptive Statistics on Level of information Quality .......................................... 33
Table 4.7: Descriptive Statistics on Internal Lean Practices (LP): .......................................... 34
Table 4.8: Descriptive Statistics on Competitive advantage (CA): ......................................... 35
Table 4.10: Multi-Collinearity Test ......................................................................................... 38
Table 4.11: Correlations between grouping Variables and Competitive advantage ................ 42
Table 4.12: Model Summary table........................................................................................... 43
Table 4.13. ANOVA Table ...................................................................................................... 44
Table 4.14. Coefficient Table for regression analysis ............................................................ 45

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 List of Figure
Fig.2. 2: Conceptual Framework of the study.......................................................................... 18
Fig 4. 1: Respondent‘s work experience frequency distribution ............................................. 26
Fig 4. 2: Educational qualification of sample respondents ...................................................... 27
Fig 4. 3: Department of sample respondents ........................................................................... 28
Fig 4.4 shows 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.
.................................................................................................................................................. 40
Fig 4.5: Scatterplot based on Residual ..................................................................................... 41

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 CHAPTER ONE:

INTRODUCTION
1.1 Background of the Study
Every company will make every effort to increase productivity, efficiency, fast, easy service,
and continue to create a variety of new innovations to stay ahead and survive in the market.
In addition to productivity and efficiency that need to be improved, companies must also
understand and know what is needed by consumers.
As global competition increases, manufacturing companies should be more involved in how
their suppliers and customers conduct their businesses. To compete successfully in today‘s
challenging business environment manufacturing companies should be able to effectively
integrate the internal functions within a company and effectively link them with the external
operations of suppliers and supply chain members. They need to focus on supply chain
management practices that have impact on enhancing SCM activities and ultimately
performances (Arawati, 2011) Organizations began to realize that it is not enough to improve
efficiencies within an organization, but their whole supply chain has to be made competitive.
The understanding and practicing of supply chain management (supply chain management)
has become an essential prerequisite for staying competitive in the global race and for
enhancing profitably (Tan, et al.,2002). In addition, the organizations are facing different
kinds of challenges in their effort of competing in today‘s dynamic global markets. To remain
competitive, organizations must recognize the importance of supply chain practices that
improve not only their own organizational performance. A successful SCM implementation is
expected to enhance the relationship between upstream suppliers and downstream customers,
and thereby increase customer satisfaction and firm performance. The aim of supply chain
management practices is to combine both flow of materials and information across the chain
as a valuable competitive weapon (Mbuthia, M.G & Rotich, 2014)Yet, despite the significant
advances in research and practices, many organizations continue to struggle to understand the
complex issues associated with the coordinated planning and supply chain activities amongst
the members of their supply networks(Cook et al., 2011).
Supply chain is described in the literature as a flow of goods, information or financial. We
can refer to a supply chain as a flow, where an actor decides which strategy is to be used, and
we may therefore talk about the management of flows in terms of the flow of goods,
information and finances. It means supply chain refers to the complex network of
relationships that organizations maintain with trading partners in order to procure

1
manufacture and deliver products to services. As defined by the Council of Supply Chain
Management Professionals (CSCMP), SCM encompasses the planning and management of
all activities involved in sourcing and procurement, conversion and all logistics management
activities as well as coordination and collaboration with channel partners. Zuckerman (2014)
also asserts that supply chain encompasses all activities associated with the flow and
exchange of goods and services from raw material stage to the final product usable by the
client and supply chain management emphasis on integration of supply chain activities and
information flows associated with them through improved supply chain relationships. Ever
since the CSCMP adopted the definition of Supply Chain Management, the integration of
activities of procurement, manufacture, transport and distribution management, inventory
control and customer service has become a major thrust in many companies.
Stadtler, (2007) have also defined SCM as ‗ the task of integrating organizational unites
along a supply chain and coordinating material, information and financial flows in order to
fulfil (ultimate) customer demands and the aim of improving competitiveness of a
supply chain as a whole‘‘. Horizontal integration is the process of merging similar industries
entering new market and establishing new plants and service. Vertical integration, on other
hand, is the process of buying suppliers of that particular industries or creating a joint venture
with them. For example, Cement Company would have an advantage over competitors by
vertical integration if that company bought out suppliers like aggregates quarries, establishing
concrete batching plants. One advantage of this would be maintain higher control on raw
materials and optimize transport systems. Although Supply chain management in the area of
cement industry has been a major topic in the last decades, especially in north of America,
there is still a big lack of research in many countries and nations such as Latin America and
India; now days. Based on (Agudelo, 2008), the most discussed topics about cement
manufacturing and material managements. Sustainability has also become a hot topic in
cement industry. Furthermore she presented an insight into the role and structure of SCM in
cement industry. SCM has its own role for improving its processes, especially the practice of
activities which would also enhance competitiveness of supply chain. Like many other
countries, the Ethiopian Cement industry is expected to play significant role in terms of
supplying variety of cement products for the booming construction and infrastructure
development. And also stabilize the current demand of cements.

2
1.2. Background of the Organization
By following the reports of international organizations like IMF and World Bank on the
development and the fast economic growth of the country, direct foreign investment is
increasing and the government of Ethiopia also opens up the Cement industry to foreign
investors. By following this, Dangote Cement PLC is a Sub Saharan Africans leading Cement
companies operation in ten countries entered through acquisition of the state – owned cement
and building new ones with huge investment in the country. Dangote cement Ethiopia Plc.
has built the state of –the-art cement plant in west shoa zone, Adaberga woreda in March
2012-2015. The 2.5Mta plant less than 90 km from Addis Ababa, was commissioned in
2015.with rich limestone reserves of about 223 million tonnes, it is largest cement plant in
Ethiopia capable of producing high- quality 32.5 and 42.5-grade cement to meet market
needs, and at competitive cost. Embracing the challenge and opportunity to make
contribution to Ethiopia‘s sustained growth and development, the company earmarked $650
million for the construction of a flagship cement manufacturing facility at 135 hectare site in
mugher plant and transformed Ethiopian`s construction capacity in the past half-decade,
delivering 2.5 million tonnes of high quality building materials to the local market every year.

1.3. Statement of the Study problem.

In today‘s business environment with globalization, specialization, innovation and
outsourcing, it is crucial for entities to corporate and work in networks. However, such
networking may come with its own problems. For instance, one small problem in any part of
Supply chain might cause severe problem for the whole network. Thus Supply chain
management is needed. Although supply chain management is a hot topic science Nineties;
still there is a lack of studies on supply chain management in cement industry. As part of the
process industry, cement is a key portion in the world economy. Meanwhile, so far supply
chain management (SCM) has traditionally played an operational role within companies
missing opportunities for enhancing its concept and application as a mechanism to deal with
the competitiveness challenges (Isabel, 2011).

Nowadays, the focus of supply chain management has shifted from production efficiency to
customer driven and partnership synchronization approaches. To implement this strategic
shift requires high-level collaboration among supply chain partners. Especially, this makes
cement industries to move farther to efficiency and/or customer response objectives in a way
of gaining competitive advantage in the market. And literatures revealed demand/supply
fluctuation at the market level that pose a serious problem to the asset configuration of supply

3
chain, capacity synchronization, and lead-time management as of strategic challenge from
market dimension aspect.
Ethiopia‘s cement manufacturing firms are currently not able to meet the current demand
which has cement consumption has risen by an average growth rate of 30 %,( MoFD,
2010).This demand has attracted competition from within and without. For instance, new
companies have come to invest in Ethiopia, while there are increased imports. For example
the Ethiopian Ministry of Trade and Industry has announced that 320 million quintals of
cement will be imported in the 2013 Ethiopian fiscal year in addition to domestic production
to alleviate the shortage of cement. Local cement manufacturing firms have had tougher
times. Dangote cement manufacturing industry in Ethiopia has a lion share in local cement
produce is the example. The company is also under pressure to meet the demands of all its
stakeholders: For instance, customers expect good quality products at a fair price. This calls
for the firms in the cement industry to devise ways to enable them stay competitive (Anthony
OKoth, 2011). One of the ways is to reduce on the supply chain costs by effectively
managing their supply chains. Some of the SCM practices in this industry include the use of
distributors or authorized agents to distribute their products.
Cement industry in Ethiopia is under researched and there is lack of empirical research on
how practitioners and incorporate supply chain management practices in to overall corporate
strategy. A Little known about the specific practices or concerns of successful supply chain
management implementations (Tan, 2002) While the lack of successful SCM efforts has
been attributed to the complexity of SCM itself, research in the area of SCM has not been
able to offer much by way of guidance to help the practice of SCM. This has been attributed
primarily to conceptual confusion and the lack of a theoretical framework in researching
SCM. A review of the studies conducted locally on supply chain management practice shows
that, Belay Mengistu(November, 2011) did study on challenges of supply chain management
and their relationship with the competitive position of cement industry in Ethiopia. The study
focus on challenges in exploring correlation between the dependent variable – competitive
position of cement factories and independent variables; Extent of Strategic Suppliers
Partnership, Effective Customer Relationship, Managing Environmental Issues and Effective
Information Communications in Ethiopian Cement Industry. He found out that challenges of
supply chain management and their relationship with the competitive position identified the
level of perception of organization on the general issues of supply chain management analyze
their level of impacts and relationships on the competitive position of cement factories in
Ethiopia. The gap of the study, there was no addressing how to improve supply chain

4
management on the competitive position. (Manayewegayehu, 2019.), also conducted the
study on assessment on the challenges of supply chain management performance of cement
factories in Ethiopia. However, the study did not investigate how Supply chain management
performance influence competitive advantage of the manufacturing firms and more so, those
in the cement industry where currently there is stiff competition. Thus, there is knowledge
gap how well is the perform supply chain management practice in Ethiopia. Therefore, this
study sought to assess the effect of supply chain management practices on competitive
advantage of Dangote cement manufacturing industry in Ethiopia PLC.
1.4. Research Questions of the Study
In the research, the researcher answered the following research questions in this study.

How does supply chain management is being practiced in Dangote Cement Ethiopia
PLC?
To what extent the Competitive advantage of Dangote Cement Ethiopia PLC is being
accomplished?
How does supply chain management practice influence the Competitive advantage of
Dangote Cement Ethiopia PLC?
1.5. Objectives of the Study
1.5.1. General Objectives
The general objective of the study was to assess the effect of supply chain management
practices on competitive advantage in cement manufacturing industry: the case of Dangote
Cement Company in Ethiopia.

1.5.2. The specific objectives were:-

 To assess the supply chain Management practices of Dangote Cement Ethiopia PLC.
 To assess the Competitive advantage of Dangote Cement Ethiopia PLC.
 To assess and examine the relationship of SCM practices and Competitive advantage
of Dangote Cement Ethiopia PLC.
1.6. Significance of the Study
The investigation results are important to the academicians, researchers, policy makers, for
business practitioners, and management units in the case company. Specifically, the research
helps to assess the supply chain management practice and its effect on competitive advantage
of Dangote Cement PLC. Ethiopia and supported the company how can enhance its
competitive advantage by providing basic new insight about the effect of supply chain
management practices on competitive advantage. This research will also contribute to the

5
researcher in doing the cross match of the theoretical aspect with the real practices and it
served as steppingstone to conduct further study. It enabled them to see the gap of what is
unknown, what needs further research, elaboration and improvement. For academicians it
will be added value to the body of knowledge in providing a practical evidence for the effect
of SCM practices on competitive advantage in cement companies. And the research findings
can help policy makers to be alarmed about the necessity of SCMP and Competitive
advantage to business sectors. Finally, the findings of this thesis can initiate other
researcher‟s to make further study on effects of SCM Practice on competitive advantage
especially manufacturing industry in Ethiopia.

1.7. Scope of the Study

Supply chain management encompasses vast areas of managerial practices. However, it is

difficult and unmanageable to conduct the study in all areas of SCM in terms of time, finance,
and research manageability and research quality. The study was conducted on Dangote
cement factory in Ethiopia. It does not include other cement factories which found in
Ethiopia. The area of the study in this research was delimited to topic of ―the effect of supply
chain management practice on competitive advantage the case of Dangote cement factory‖
which is located around Mugher city. The research was employ descriptive and explanatory
types of research design. The SCM practice five element were considered as research
independent variables. This are strategic supplier partnership, customer relationship, quality
of information sharing, level of information sharing and lean practice. The competitive
advantage is considered as dependent variable by using five parameters. This are price/cost,
quality, delivery dependability, product innovation and time to market. Therefore, study was
delimited on only those the above variables.
1.8. Definition of Terms and concept of the Study
 Supply chain management (SCM)
Supply chain management is a network of relationships within a firm and between
interdependent organizations and business units consisting of material suppliers,
purchasing, production facilities, logistics, marketing, and related systems that
facilitate the forward and reverse flow of materials, services, finances and information
from the original producer to final customer with the benefits of adding value,
maximizing profitability through efficiencies, and achieving customer
satisfaction(Stock & Boyer, 2009).

6
  Competitive advantage
Competitive advantage is the extent to which companies are able to create a
defensible position over its competitors (McGinnis and Vallopra, 1999).
 Strategic supplier partnership
Is defined as the long-term relationship between the organization and its suppliers. It
is designed to leverage the strategic and operational capabilities of individual
participating organizations to help them achieve significant ongoing benefits. A
strategic partnership emphasizes direct, long-term association and encourages mutual
planning and problem solving efforts (Gunasekaran, Patel, Tirtiroglu, 2001).
 Customer relationship
Comprises the entire array of practices that are employed for the purpose of managing
customer complaints, building long-term relationships with customers, and improving
customer satisfaction Tan et al (1998) consider customer relationship management as
an important component of SCM practices.
 Level of information sharing
The extent to which critical and proprietary information is communicated to one‘s
supply chain partner (Monczka et al., 1998), (S. Li, Ragu-nathan, et al., 2006)
 Level of information Quality
The accuracy, timeliness, adequacy, and credibility of information exchanged
(Moberg et al., 2002)
 Lean practice
The core thrust of lean practices are that these practices can work synergistically to
create a streamlined, high quality system that produces finished products at the pace
of customer demand with little or no waste.
1.9. Organization of the Study/ Paper

The paper was organized to compromise of the following five chapters: Chapter one contain
the introduction part dealing with back ground of the study, Background of the Organization,
the research problem, objectives of the study, scope and significance of the study. The second
chapter, focuses on the literature review about the subject matter. The 3rdchapter presented
the research methodologies of the study. The fourth chapter presents results and discussion of
the study and finally, the fifth chapter present the summary of major findings, conclusion,
recommendation and indicating further research areas.

7
 CHAPTER TWO

LITERATURE REVIEW
2.1 Concepts and Definitions of Supply Chain Management
Supply chain management has been emerging as one of the main areas in businesses that can
offer sources of competitive advantage (Lockamy & McCormack, 2004). Furthermore, the
importance of this topic to organizations is reinforced by factors such as increasing
competition, globalization, greater product variety, outsourcing, shorter product life cycles,
continuous advances in technology and everdemanding clients (Giunipero et al., 2008); (S. Li
et al., 2005); (Mentzer et al., 2001); (Lockamy & McCormack, 2004). In addition, the amount
of scientific research, congresses and studies has been increasing yearly (Burgess et al.,
2006); Giunipero et al., 2008).

Deferent scholars have defined supply chain management for instance Chopra defined it as
follows ―A supply chain consists of all parties involved, directly or indirectly, in fulfilling a
customer request. The supply chain includes not only the manufacturer and suppliers, but also
transporters, warehouses, retailers, and even customers themselves. Within each organization,
such as a manufacturer, the supply chain includes all functions involved in receiving and
filling a customer request. These functions include, but are not limited to, new product
development, marketing, operations, distribution, finance, and customer service‖(Chopra &
Meindl, 2007).
It also has been argued by (Suhong, Li, Ragu-Nathan, et al., 2004). The concept of SCM has
received increasing attention from academicians, consultants, and business managers alike.
Many organizations have begun to recognize that SCM is the key to building sustainable
competitive edge for their products and/or services in an increasingly crowded marketplace.
The concept of SCM has been considered from different points of view in different bodies of
literature , such as purchasing and supply management, logistics and
transportation,operations management, marketing, organizational theory, and management
information systems. Various theories have offered insights on specific aspects or
perspectives of SCM, such as industrial organization and associated transaction cost analysis,
resource-based and resource dependency theory, competitive strategy, and social–political
perspective.
According to Martin 1998, as it is cited by (Addis (2015), Supply chain management is a
philosophy of an integrated approach to manage the total flow of a distribution channel from
the supplier to the ultimate customer. It is the management of upstream and downstream

8
companies connecting inside and outside the company's operations with suppliers and
customers to deliver value to key customers with a low cost supply chain as a whole.
Stock & Boyer, (2009) defined SCM as ―The management of a network of relationships
within a firm and between interdependent organizations and business units consisting of
material suppliers, purchasing, production facilities, logistics, marketing, and related systems
that facilitate the forward and reverse flow of materials, services, finances and information
from the original producer to final customer with the benefits of adding value, maximizing
profitability through efficiencies, and achieving customer satisfaction. SCM coordinates and
integrates the activities of supply chain members into a seamless process at a minimum cost.
Any inefficiency incurred by any of the supply chain members can impact the performance of
the whole chain. This is because the inefficiencies get translated into increased costs.
Transferring the costs either upstream or downstream ultimately make their way to the
consumers (of course, limited to the extent a market can absorb). Therefore, the
competitiveness of the firm and the supply chain gets eroded (Cigolini et al., 2004). Day,
(1994) has explained the link between SCM and competitive position of a firm based on core
competencies.
The goal of SCM is to integrate both information and materials flows seamlessly across the
supply chain as an effective competitive weapon Li et al., 2006). Also, SCM is concerned
with smoothness, economically driven operations and maximizing value for the end customer
through quality delivery (Al-Mudimigh et al., 2004). Although there is no general accepted
concept of SCM among researches, all the definitions have one common objective, namely,
bringing the benefit for all the members (supplier, intermediaries, third party service
providers, and customers) of the supply chain. The evolutionary nature and complexity of
SCM are also reflected in the SCM research (S. Li et al., 2005).
Generally, the SCM concept used in the research in its essence assumes that firms set up
alliances with members of the same chain (i.e., upward stream, supplier, and downward
stream, customer) to improve its competitive advantage revealed by superior operational
performance of all chain members.
Despite the importance and theoretical development of supply chain management, there is
little empirical research on how practitioners define and incorporate supply chain
management practices in to overall corporate strategy. While supply chain management
efforts as some companies have resulted in improved competitiveness, similar results in other
organization have remained elusive.

9
2.2. Supply Chain Management Practices
SCM Practices are defined as a set of activities undertaken in an organization to promote
effective management of its supply chain. SCM practices are multidimensional which affect
the performance of partners in the supply chain. These SCM practices were seen and
discussed by different researchers from different perspectives.

The SCM practices refer to complete set of actions which are done in organizations towards
to improve the efficiency in the internal supply chain. The modern evaluation of the SCM
practices that comprises of partnership with the supplier, process of outsourcing, compression
of cycle time, continuousness of process flow and sharing or technology and information by
using purchasing the quality and relations with the customer(Tan, Kannan,& Handfield,
1998) SCM practices are defined as a set of activities undertaken in an organization to
promote effective management of its supply chain (SuhongLia et al., 2006). (Tan, K., Lyman,
S. B., Wisner, 2002)(S. Li, Ragu-nathan, et al., 2006) identify six aspects of SCM practice
through factor analysis: supply chain integration, information sharing, supply chain
characteristics, customer service management, geographical proximity, and just in time
capability.
Although literature of SCM practices vary in different view and perspectives, its stand as a
mutual understanding purpose of improving organizational performance. Over the literature
of reviewing and consolidating that has been pointed out by different researchers,
academicians and consultant, there are seven distinctive dimensions of SCM practices which
are widely agreed by researchers and received the most consensuses in the researches. These
seven dimensions are outsourcing, strategic supplier partnerships, customer relationships,
information sharing, postponement, quality of information sharing and lean practices.
Findings from these researchers argued that supply chain management practices can
encourage the customer relationship and smooth the information sharing and quality of
information sharing flow across the supply chain processes including outsourcing, strategic
supplier partnership, lean practices and postponement (Cheng, 2011).
According to different scholars, SCM practices are a fundamental to firm performance; in
today‘s globalized business all firms get their competitive advantage by managing various
challenges within the country and internationally and this devote substantial attention. As
effective SCM provides benefits that go beyond the entities or the organization itself on both
of its upstream and downstream sides and those firms may comprehend their potential of
integrating their external relationship that is the firms external suppliers, the firm itself and

10
the firms customer and also the firms internal operational practices with a view to enhancing
their level of competitiveness and performance as well as customer satisfaction.
Mbuthia, M.G & Rotich, (2014) identified four supply chain practices this are strategic
supplier partnership, customer relationship, information sharing and postponement. All the
above researchers develop their own supply chain practice for their own study. But this study
opts the supply chain practice that are compatible to objective of this study.
In reviewing and consolidating the literature, the following dimensions: strategic supplier
partnership, customer relationship, Information sharing and Postponement are selected for
measuring SCM practice. The four constructs cover upstream (strategic supplier partnership)
and downstream (customer relationship) sides of a supply chain, information flow across a
supply chain (Information sharing), and internal supply chain process (postponement) are
selected for measuring supply chain management practice in this study.
2.2.1 Strategic supplier partnership
Strategic partnerships with suppliers are organized efforts to create and maintain of a network
of qualified suppliers. Is defined as the long-term relationship between the organization and
its suppliers. It is designed to leverage the strategic and operational capabilities of individual
participating organizations to help them achieve significant ongoing benefits. A strategic
partnership emphasizes direct, long-term association and encourages mutual planning and
problem solving efforts ( Gunasekaran, Patel, Tirtiroglu, 2001) Such strategic partnerships
are entered into to promote shared benefits among the parties and ongoing participation in
one or more key strategic areas such as technology, products, and markets. Strategic
partnerships with suppliers enable organizations to work more effectively with a few
important suppliers who are willing to share responsibility for the success of the products.
Suppliers participating early in the product-design process can offer more cost effective
design choices, help select the best components and technologies, and help in design
assessment(K. C. Tan & Kannan, Handfield, 1998). Strategically aligned organizations can
work closely together and eliminate waste fulltime and effort ( Balsmeier, Voisin, 1996).

2.2.2. Customer relationship

Comprises the entire array of practices that are employed for the purpose of managing
customer complaints, building long-term relationships with customers, and improving
customer satisfaction (K. C. Tan & Kannan, 1998) consider customer relationship
management as an important component of SCM practices. As pointed out by (Carvalho et
al., 2014);(Day, 2001), committed relationships are the most sustainable advantage because

11
of their inherent barriers to competition. The growth of mass customization and personalized
service is leading to an era in which relationship management with customers is becoming
crucial for corporate survival. Good relationships with supply chain members, including
customers, are needed for successful implementation of SCM programs (Moberg et al.,
2002).

In this global competition and mass customization era, personalized attention and better
relationship management with individual customers is of utmost importance for
organizational success (Wines, 1996) Good relationships with trading partners, including
customers are a key to successful SCM efforts by organizations (Moberg et al., 2002).
Customer relationship has long been recognized as an internal component of an
organization‘s marketing strategy to increase sales and profits. Close customer relationship
allows product differentiation from competitors, helps sustain customer loyalty, and elevates
the value provided to customers. Immediate customer relationship activities have played a
crucial role in developing effective SCM strategies (Wisner, 2003).
2.2.3. Level of Information Sharing
Level of information sharing refers to the extent to which critical and proprietary information
is communicated to one‘s supply chain partner (Monczka et al., 1998, Li et.,2006). Shared
information can vary from strategic to tactical in nature and from information about logistic
activities to general market and customer information(Mentzer et al., 2000). Moreover,
(Keivan Zokaei & Simons, 2006;(Lotfi et al., 2013) consider the effective use of relevant and
timely information by all functional elements within the supply chain as a key competitive
and distinguishing factor. The empirical findings of ( Childhouse, P. & Towill, D. R. (2003)
reveal that simplified material flow, including streamlining and making highly visible all
information flow throughout the chain, is the key to an integrated and effective supply chain.

Information sharing is an important aspect in achieving perfect integration in a supply chain.

Cross functional integration and inter organizational integration requires the visibility of
information across the supply chain. Poor information sharing between partners in a supply
chain will result in poor coordination that will lead to many serious problems such as high
inventory levels, inaccurate forecasts, low resource utilization, and high production costs.
Indeed, information sharing is highly considered as the way to reduce demand uncertainty
(Lee and Whang, 2000; Lee, 2002). Many studies have reported that information sharing can
bring many benefits to both suppliers and buyers, such as inventory reduction, and reduced

12
manufacturing costs (Gu & Dong, 2016). The way companies share information whatever the
confidential level or not; determines the success of the collaboration. The nature of
information to be across the supply chain differs based on the degree of integration,
institutional trust and availability of infrastructure that facilitate the practice. Therefore, an
informatics perspective is vital in the supply chain since information flow is an integral part
of SCM and material flow is closely dependent on information flow.

2.2.3.1. Types of Shared Information

Sales Data: Indeed, orders from downstream serve as a critical source of information about
future businesses. When the information is transferred in the form of orders tends to be
distorted, can misguide upstream partners in their inventory and production decisions. It
ultimately harms the efficiency of the supply chain in the form of excess raw material
inventory, unplanned purchases of supplies, additional manufacturing expenses created by
excess capacity, inefficient utilization and overtimes, excess warehousing expenses, premium
shipping costs, and poor customer service level (Lee et al., 1997).

Sales Forecast: To exploit the vendors‘ superior forecasting capabilities, retailers including
Wal-Mart formed an initiative called Collaborative Planning, Forecasting and Replenishment
(CPFAR), which calls for the retailers and the manufacturers to exchange knowledge and
jointly develop forecasts and replenishment plans. The common form of forecast sharing
involves a downstream site sharing the information to the supplier, as it is closer to the
market and is thus better positioned to forecast future market demand (Tsay (1997).
Inventory Level: One of the most common data shared between supply chain partners is
inventory level. Access to supply chain inventory status can contribute to lowering the total
inventory level in the supply chain. If the retailer and the manufacturer independently manage
their respective inventories without sharing inventory status information, they may end up
having duplicate safety inventories or stock-outs at both locations (Milgrom and Roberts,
1998).
Other Information Sharing: Other information often shared in a supply chain include may
be performance metrics and capacity. Performance metrics include product quality data, lead
times, queuing delays at workstations and service performance. By sharing this type of
information, the supply chain can identify the bottlenecks of the chain and improve the
overall performance (Tsay (1997).

13
2.2.4. Quality of Information Sharing
Information sharing has two aspects: quantity and quality. Both aspects are important for the
practices of SCM and have been treated as independent constructs in the past SCM studies.
While information sharing is important, the significance of its impact on SCM depends on
what information is shared, when and how it is shared and with whom (Holmberg, 2000).
Literature is replete with example of the dysfunctional effects of inaccurate/delayed
information, as information moves along the supply chain (Stock et al., 2010). Divergent
interests and opportunistic behaviour of supply chain partners, and informational
asymmetries across supply chain affect the quality of information (Kroes et al., 2010). It has
been suggested that organizations will deliberately distort information that can potentially
reach not only their competitors, but also their own suppliers and customers (Karimi &
Rafiee, 2014). This is because information is generally viewed as providing an advantage
over competitors (loss of power), and organizations resist sharing with their partners due to
the fear of giving away competitive and sensitive information such as inventory levels,
production schedules (Somuyiwa et al., 2012). Given these predispositions,
ensuring the quality of the shared information becomes a critical aspect of effective SCM (
Feldman, 2003).

Information sharing also includes such aspects as the accuracy, timeliness, adequacy, and
credibility of information exchanged(Moberg et al., 2002). While information sharing is
important, the significance of its impact on SCM depends on what information is shared,
when and how it is shared, and with whom. Literature is replete with example of the
dysfunctional effects of inaccurate/delayed information, as information moves along the
supply chain. Divergent interests and opportunistic behavior of supply chain partners, and
informational asymmetries across supply chain affect the quality of information ( Feldman,
2003).
2.2.5. Internal Lean Practices (LP)
The term ‗‗lean‘‘ is used to refer to a system that uses less input to produce at a mass
production speed, while offering more variety to the end customers. Elimination of waste is a
fundamental idea within the lean system. The core thrust of lean practices are that these
practices can work synergistically to create a streamlined, high quality system that produces
finished products at the pace of customer demand with little or no waste. Today, lean is
evolving into a management approach that improves all the processes at each level of an
organization (Mwale, 2014).

14
Internal lean practices refer to consume less system resources uses with the same speed mass
production and offers greater variety to customers. In other way internal lean practices as
Lean production associated with continuous pursuit of improving the processes, a philosophy
of eliminating all non-value adding activities and reducing waste within an organization. One
of the fundamental ideas in internal lean practices is removed surplus (Devika et al., 2016).
The most famous of internal lean practices can be mentioned timely and lean produce.
Production of lean and timely is production system that its aims are to optimize processes
and production process by reducing waste and other inefficient factors. Internal lean practices
understanding for the study is waste elimination regarding to setup time, continuous
improvement and just in time.(Mustefa, 2014).
Lean has gained popularity in a wide range of industrial sectors, beyond manufacturing, all
around the world (Garza-Reyes et al., 2012). It is nowadays considered the most influential
new paradigm in manufacturing enhancing the competitiveness of organizations. Lean is
focused on identifying and eliminating waste throughout a product‗s entire value stream,
extending not only within the organization but also along its entire supply chain network.
Thus, the concept of lean supply chains has been widely studied in the academic literature
(e.g. (Keitany & Riwo-Abudho, 2014). In most of the cases, these studies suggest that lean
principles and practices enable the effective management of supply chains. This evidence
contributed in considering this dimension as part of the SCM practices construct developed
for this study
2.3. Competitive advantage
Competitive advantage is the extent to which companies are able to create a defensible
position over its competitors (McGinnis & Vallopra, 1999). In today‘s global competition
environment, facing the rapid technology progress and high customer expectations,
companies find it hard to win the competition only depending one‘s own capacity ( Su et al.,,
2008). In this situation, the establishment of the supply chain partnership among companies
and the coordination of the partners are highly valued. Also, many companies struggle in
justifying the cost of quality within their supply chain, but many companies fail to see the
cost associated with varying quality levels from their suppliers. In order to create a quality
product, which is one of the competitive advantages, company must address all aspects of the
supply chain, including individual processes and supplier selection (Franca et al., 2010). This
is the main role of the supply chain management.

15
Competitive advantage is based on the competitive capabilities and the past literature
suggests price/cost, quality, delivery, and flexibility as important. The recent literature
identifies time is also an important source of Competitive advantage (Kessler & Chakrabarti,
1996). According to Koufteros et al., (1997) cited in (S. Li, Ragu-nathan, et al., 2006)
competitive advantage is based on the following capabilities; competitive pricing, premium
pricing, value-to-customer quality, dependable delivery, and production innovation. It
appears that CA should be achieved through both internal and external sources. Therefore, for
this study price/cost, quality, delivery dependability, product innovation, and time to market
has been selected.
A lot of companies emphasize quality as a means to stay competitive in the marketplace over
the long run. They have a reputation of high quality as representing future market share for
new customers and maintaining market share for existing customers over their lifetime.
Further, improving quality can provide term financial savings (Franca et al., 2010). For
purpose of this paper, next dimensions of the competitive advantage are chosen: price/cost,
quality, delivery dependability, product innovation and time to market.

2.4. Empirical Review

There are certain previous researchers have devoted deal of attention to the relationship of
supply chain management practice(s) and certain aspects of overall organizational
performance and competitiveness from different perspective/dimensions or overall supply
chain. Some of these researches finding are discussed as follow:

The study conducted by (Addis, 2015, 2015) has investigated the impact of supply chain
practices on the performance of pharmacies in governmental health facilities in Addis Ababa
on performances of the pharmaceutical industries, the study only focus on upper tire of
supply chain and information sharing with suppliers. Her findings showed that JIT, Holding
safety stock, few suppliers, close partnership and level of information quality improve,
product or service innovation, time to market and reduce price, operational costs and most of
which is related to the operational performance of the organization. The gaps from this
research is only focus on upper tier supply chain i.e. suppliers and some only focus on the
lower level supply chain i.e. customers.
Belay Mengistu(November, 2011) has investigated challenges of supply chain management
and their relationship with the competitive position of cement industry in Ethiopia. The study
focus on challenges in exploring correlation between the dependent variable – competitive

16
position of cement factories and independent variables Extent of Strategic Suppliers
Partnership, Effective Customer Relationship, Managing Environmental Issues and Effective
Information Communications in Ethiopian Cement Industry. The gap differ from this study
the scope, variable and methodology and the researcher only investigating competitive
position not the way of Supply chain management influence competitive advantage of the
company .
The study conducted by (S. Li, Ragu-nathan, et al., 2006), (Mutuerandu & Iravo, 2014),
(Karimi & Rafiee, 2014) and (Mustefa, 2014) investigated the impact of supply chain
management practices on performance. The studies mainly focus on the impact of supply
chain practices on competitive advantage and on organizational performance. The finding
showed that the higher level of supply chain practices i.e. strategic supplier partnership,
customer relationship, level and quality of information sharing can lead to enhanced
competitive advantage and improved organizational performance and competitive advantage.
All are focus on both supplier and customer but the variables used as supply chain practices
are varied depending on the organization selected on their study. However, it is absence of
complete agreements using the supply chain practice variable and its effect on the
performance of the organization.
Mohit Tiwari, conduct an exploration of supply chain management practice in the Aerospace
industry & Roll-Royce (case Western Reserve University 2005). The major finding of the
study was Gain from investment in supplier capabilities can outweigh the cost of building in
house capabilities. The study gap, there was no study addressing how to improve supply
chain management practice on competitiveness in Aerospace industry. Suhong, (2004)
conduct on impact of supply chain management on competitive advantage and organization
performance. The finding of the study to determine if higher levels of supply chain
management can lead to enhance competitive advantage and improved organization
performance. However, the gap of the study was the study did not look at the relationship
between competitive advantage and organization performance.
2.5. Conceptual Framework
According to Miles and Huberman (1994,p18) ―Conceptual framework explains, either
graphically or in a narrative form, the main things to be studied, the key factors, concepts or
variables and the presumed relationship among them‖. Considering the various dimensions of
supply chain management practices and measurement of competitive advantage proposed by
some researchers, the researcher adapted a research framework that encompassed the

17
following five dimensions of supply chain management practices: strategic supplier
partnership, customer relationship, quality and level of information sharing and Lean
practices. For competitive advantage measurement five elements. This are price/cost, quality,
delivery dependability, product innovation and time to market measurement were adopted.

SCM Practice

Strategic supplier
Partnership.

Customer Competitive
Relationship Advantage
- Price/cost
Level of - Quality
-Delivery
Information
dependability
sharing - Product innovation
Information -Time to market
sharing Quality

Lean practice
(LP)

Fig.2. 1: Conceptual Framework of the study

Source: The Conceptual Framework of the study, adopted from Mustefa,( 2014) modified by
the researcher.

18
 CHAPTER THREE

RESEARCH METHOD
3.1 Research Approach
The study uses a deductive research approach which is closely related to quantitative
research. Therefore, in terms of methods, this research employed quantitative method while
conducting the study i.e. to collect, to organize and to analyses the data. Quantitative research
method involves studies that make use of statistical analysis to obtain finding.
Creswell,(2005) asserted that quantitative research is a type of educational research in which
the researcher decides what to study, asks specific, narrow questions, collects numeric
(numbered) data from participants, analyses these numbers using statistics, and conducts the
inquiry in an unbiased and objective manner.

For data collection, a research question was developed to explore the effect of supply chain
Management practice on Competitive advantage and then theoretical model based on former
theories and concepts was developed based on it. Close ended Likert type questioners was
distributed to and collected from the selected employees of Dangote Cement Ethiopia PLC.
and then it is summarized and analyzed in order to describe it and to make inference on the
population.
3.2. Research Design
Research design is the framework that has been created to find answers to research questions.
One type of non-experimental form of research is the correlational design in which
investigators use the correlational statistic to describe and measure the degree or association
(or relationship) between two or more variables or sets of scores. These designs have been
elaborated into more complex relationships among variables found in techniques of structural
equation modeling, hierarchical linear modeling, and logistic regression. Creswell, (2005).

The other type of quantitative research design is the survey research. It provides a
quantitative or numeric description of trends, attitudes, or opinions of a population by
studying a sample of that population. It includes cross-sectional and longitudinal studies
using questionnaires or structured interviews for data collection—with the intent of
generalizing from a sample to a population.
Therefore, the research designs employed in this study are descriptive and explanatory.
Descriptive research design is preferred for better describe the group of individuals over the
set of variables. Correlation are applied to investigate the association of variables and the
regression is used to show the cause and effect relationship between the dependent variables

19
and the independent of supply chain management practices. The rationale behind selection of
this method is to get an accurate representation of characteristics of a particular situation and
group.
3.3 Source of Data
Primary and secondary are used for the analysis of the study. The primary data were gathered
using survey questionnaire from the selected sample respondents/employees of Dangote
cement Ethiopia Plc. And the study also utilized secondary data from the company oracle
data base, Report and other publications where it was considered necessary.

3.4. Population and Sampling

3.4.1. Target Population

According to Hair et al. (2010), target population is said to be specified group of people or
object for which questions can be asked or observed made to develop required data structure
and information. Therefore for this research the target populations were the staff of Logistics
and Supply Chain Management department, production department and sales & marketing in
Dangote Cement Ethiopia PLC. There were approximately 214 staffs in these three
departments. The sampling frame in this study included 145 employees in the Logistics and
supply chain management department, 20 in the sales and marketing department, and 49 in
the production system.
3.4.2. Sampling Techniques

In this study the researcher was used both probability and non-probability sampling
technique. Among probability sampling techniques Stratified random sampling is one of
useful method for data collection if the population is heterogeneous. In this method, the entire
heterogeneous population is divided in to a number of homogeneous groups, usually known
as Strata, each of these groups is homogeneous within itself, and then units are sampled at
random from each of these stratums. The target population for this study was classifying into
three strata based on the departments in the company, the researcher is assuming those
departments are directly related with SC of the organization. Then the sample was selected
from each stratum according to their proportion to the total population. Stratified sampling
technique was used to have the right proportion of people from every concerned departments.
The departments considered as strata, from which data was collected are: Logistics and
Supply chain management department, production department, and marketing and sales
department.

20
3.4.3. Sample Size

To determine representative sample size from the target population different strategies can be
used according to the necessity of the research work. In this study the researcher adopt the
mathematical formula developed by ( Krejcie and Morgan, 1970), thus the study was assume
that many researchers (and research texts) suggest the minimum Confidence Level = 95%
and the Margin of Error = 5%. Therefore, sample size was determined using statistical
formula below.
n= Z2.P.Q.N
e2 (N-1) +Z2.P.Q
n= 1.962𝑋0.5𝑋0.5𝑋214
0.052(214−1) +1.962𝑋0.5𝑋0.5 =137
 Z = Z score level of confidence of the estimate (in the case of 95% = 1.96).
 e = Marginal error, 5%
 P = proportion of the sample successfully collected =P=0.5
 Q = failure of sample (1-0.5) = 0.5
 N = population of the staff sample=214
 n= sample size
Therefore, once the total sample size is determined by sample size determination formula, the
representatives‘ sample taken from each target department determined by using proportional
sampling formula. Based on the above given information and sample size formula, 137
employees are selected for the survey and questioners are distributed to them, as indicated in
the following table.
Table 3.1: Proportional sample size of departments
Strata (departments) Target Population Sample size from each
of each Stratum Stratum
Logistics & Supply Chain 145 145*137/214 = 93
Management department
Production departments 49 49*137/214 =31
Marketing and sales 20 20*137/214 =13
department
Total 214 137

Source: researcher’s survey data, (2021)

21
3.5. Data Collection tools/instrument
As the measuring instrument, close-ended Likert type questionnaires will be used.
Questionnaires are distribute to sample respondents. For the purpose of this study a
quantitative methodology involving a close-ended questionnaire will be used as the
measuring instrument. The close-ended questionnaires can be administered to groups of
people simultaneously, since they are less costly and less time consuming than other
measuring instruments. The Likert-type scale method uses a range of responses: ‗strongly
disagree‘, ‗disagree‘, ‗Neutral‘, ‗Agree‘, and ‗Strongly Agree‘, with a numeric value of 1-5,
respectively. The questionnaire were also includes some questions about educational back
ground of respondents, employee level of the respondents, experience of the respondents at
their current position.

3.6. Data Collection Procedure

In the data collection the following procedures were used:

 1st briefing on the questioners was given to the selected respondents before the
distribution of the questioner and then questioner are distributed to the respondents.
 2nd depending on the distribution time, the questions were collected from the
respondents after a week.
 3rd a reminder was made for the non- responding employees and lagged questioners
were collected.
 4th the questioners were coded to analyze for usability of the questioners are made
and the next analysis of the data.

3.7. Method of Data Analysis

Before analyzing the data, the quantitative data collected using questionnaire were cross
checked for its completeness and consistency. Then, descriptive statistics, correlational and
regression model are used in order to analyze the data. The analysis of the data was done
using SPSS Version 23. Frequencies and percentages are used to analyze respondents‘
demographic data. Mean, Standard deviation, skewness and kurtosis have been used for the
assessment of the responses of the employees of the organization. Correlation and regression
are used to test the relationship of the independent and dependent variables. Finally,
conclusions would be made based on the findings /results of the study and recommendations
will be forwarded on the basis of the data analyzed.

22
3.8. Validity and Reliability of the study
According to (Bryman, 2007), reliability analysis is concerned with the internal consistency
of the research instrument. As multiple items in all constructs were used, the internal
consistency/reliabilities of SCM practices, and competitive advantage were assessed with
Cronbach‗s Alpha and the reliability values for all constructs are confirmed as greater than
0.7, which are considered acceptable (Nunnally, 1978).The following table shows the
summary of reliabilities of all Constructs.

Table 3.2. Reliability Table

Number of Cronbach’s
Constructs Variables
items Alpha

Strategic Supplier Partnership 6 0.731

SCM
Customer relationship 5 0.777
Practices
Level of information sharing 5 0.716
Level of information quality 5 0.763
Lean practice 3 0.800
Competitive
Competitive 16 0.840
advantage

Source: researcher’s survey data, (2021)

Analysis of Validity

The empirical findings of this study conducted by using Pearson correlation have proven that
there is a relationship among determinant factors of SCMP on competitive advantage
dimensions p< 0.05 coefficient level for all the five dimensions. Therefore the validity of
instrument is supported at a high level of significance. Moreover in order to assure the
validity of measurement instrument, the study is conducted based on the literally accepted
conceptual framework clearly indicates that the theoretical construct was associated with the
measurement that are valid to evaluate the factors of SCMP on Competitive advantage.
Where possible this should be supported and consideration given to practical things. So, the
questions prepared for primary data collection for the research objective were found valid by
the researcher

23
3.9. Ethical Consideration
Ethics are generally considered to deal with beliefs about what are right or wrong, proper or
improper, good or bad. (Kimmel, 1998), clearly stated that it is the responsibility of any
researcher to ensure that ethical standards are adhere to or kept. The following measures were
taken while planning and conducting of the study to ensure that the right and welfare of each
subject would be protected, and that nobody was not being harmed in any way during the
research procedures. The researcher had to be open and honest with the respondents and
respondents were never misleading during the study. Information obtained from respondents
remained and would remain confidential. Collecting of data was anonymous (no name) and
confidential (secretly). The researcher would also make sure that no posted physical or
mental discomfort would occur to respondents in the study. Finally, the researcher had to take
care during the dissemination of findings. The study also adhered to keeping the ethical
consideration of the Dangote cement Ethiopia plc.

24
 CHAPTER FOUR

DATA ANALYSIS AND PRESENTATION

4.1. Introduction

This chapter presents the data analysis and result interpretation part of the research. In order
to presents the findings of this research on the Effect of supply chain management practices
on Competitive advantage of Dangote Cement Ethiopia plc., the collected data using
quantitative method was tabulated and analyzed using descriptive and regression analysis
statistical tools.
4.2. Response Rate of sample respondents

A total of 137 questionnaires were distributed to employees of Dangote Cement Ethiopia plc.
Only 112 questioners are collected out of 137 distributed questioners, to the selected
respondents that make (81.75%) response rate and 18.2% non-response rate.
4.3. Demographic characteristics of the respondents

The demographic profile of sample respondents in the selected department of Dangote

Cement plc. The demographic profile of sample respondents is presented and analyzed
below. The purpose of assessing and analyzing sex, and departments is to determine whether
the researcher considered heterogeneity of sample respondents. On the other hand presented
and analyzed work experience, and educational level of the respondents is to determine when
the respondents more experienced, educated and SCM practices applied in daily process they
have better opportunity to understand about SCM practices and give better response than
other else.
4.3.1. Gender of the sample respondents
Table 4.1: Gender frequency of the sample respondents

Valid Cumulative
sex statistics Frequency Percent
Percent Percent
Male 88 67.2 78.6 78.6
Valid Female 24 18.3 21.4 100
Total 112 85.5 100

Source: researcher’s survey data, (2021)

The above table 4.1 indicates that 88 (78.6%) of the respondents were male while 24 (21.4%)
were female respondents. This implies that male employees are dominantly participate in

25
SCM activities of Dangote cement plc. Or male employees highly involved in SCM activities
of Dangote cement plc. While female employees less involved.

4.3.2. Respondent’s work experience

Fig 4. 1: Respondent’s work experience frequency distribution

Source: researcher’s survey data (2021)

As Fig. 4.1 Above shows, the frequency distribution of the respondents work experience
clearly show that majority or the largest 45 (40.2%) of the respondents had experience of 2
up to 5 years. 37 (33%) of the respondents had 6 up to 10 years‘ experience. In the same case
16 (14.3%) of the respondents had also less than 2 years. the remaining 14(12.5%) of the
respondents had work experience of greater/above 10 years. This shows that, most of the
respondents have better understanding about their company supply chain management
practices or the majority employees of Dangote cement Ethiopia plc were well informed
about their company supply chain management practice. This is because when the employees
more and more experienced within the organization they have better opportunity to know
more and more about the organization.

26
4.3.3. Educational qualification of respondents
Fig 4. 2: Educational qualification of sample respondents

Source: researcher’s survey data (2021)

As shown above in Fig 4.2 the highest educational level attained by most of the respondents
was first degree holders which represent 54(48.21%) out of the respondents and followed by
2nd degree holders which account 39(34..82%). on the other hand diploma holders are
account 11(9.82%) while 8 (7.14%) out of the respondents represent 2nd degree and above
which is the smallest number of educational level holders. From these data obtained from the
respondents, it is possible to conclude that most of the respondents have the ability to
understand the objectives of the study or they were able to understand the questions designed
and asked about the SCM practices of the case company and this contributes the greatest
contribution on the quality of the study.

27
4.3.4. Department of the respondents
Fig 4. 3: Department of sample respondents

Source: researcher’s survey data (2021)

As shown above in Fig. 4.3 most of valid respondents 74 (66.1%) involved to filled
questionnaires Logistics and Supply Chain Management department followed by production
department which account for 26 (23.2%) of respondents. On the other hand marketing and
sales departments filling the designed questionnaire which account 12 (10.7.This implied that
the researcher was spent more of his contact time with Logistics and Supply Chain
Management department respondents during the study and the result of the study highly
dominated by Logistics and Supply Chain Management department respondents. This
because almost 66.1% of the total respondents which participate in filling the designed
questionnaire were under Logistics and Supply Chain Management department and the
remaining 33.9% participants were from the rest departments .
4.4 Descriptive statistical Analysis on Variables’ Used of the study

For the analysis of all these variables mean, standard deviation, skewness and kurtosis is
used. Particularly mean value of the response has been considered important indicators to
extents of company‘s SCM practices on each item and skewness and kurtosis are indicate the
normality of the data distribution. Since this value falls within the normality range i.e. for
skewness and kurtosis the data should be within +2 and -2 range. To conclude the overall

28
competitive advantage of the case company practices on each variable Mean value was
calculated and used based on the following assumptions;

If the mean value is between (0 to 1.50) this implies the respondents strongly disagree, if the
mean value is between (1.50 to 2.50) indicates the respondents disagreed, the mean value
between 2.50 t0 3.50) indicates the respondents neutral, the mean value between 3.5 0 to 4.5
implies that the respondents agreed and mean value 4.50 and above implies that the
respondents strongly agreed (Burns & Burns, 2008) as cited (TIYA, 2016) .Accordingly the
mean score was computed for all independent and dependent variables by equally weighting
the mean score of all the items under each dimension .the average mean result together with
their respective variables was separately presented, analyzed and interpreted as follows:

Table 4.2. Descriptive Characteristics on the grouping Variables

SCMP
CA SCMP
Statistics SSP CR IS IQ LP

N valid 112 112 112 112 112 112 112

Mean 3.09 3.034 3.36 2.71 3.23 2.84 3.084

Std. Deviation 1.033 1.105 0.996 0.986 1.016 0.981 1.043

Skewness -0.225 0.234 -0.511 -0.028 -0.337 -0.196 -0.173

Kurtosis -1.138 -0.647 -0.334 -0.396 -0.36 -0.343 -0.575

Source: researcher’s survey data (2021)

Base on the table 4.2, in the five independent variables information sharing has the highest
mean (3.36) which is followed by 3.23 mean score for lean practice, supplier relationship
mean (3.09) and customer relationship mean (3.034)respectively. However, information
quality with the suppliers has the lowest, which is 2.71.The mean value of the dependent
variable (competitive advantage of the company) is also above lowest 2.84.The value of
skewness and kurtosis, we can also see the normality of the data distribution. Since this value
falls within the normality range i.e. for skewness and kurtosis the data should be within +2
and -2 range.

29
4.4.1. Descriptive analysis on Independent Variables (SCMP)

4.4.1.1. Strategic Suppliers’ Partnership (SSP):

Table 4.3: Descriptive statistics on strategic supplier Partnership (SSP)

Std.
Items of questions about N Mean Deviation Skewness Kurtosis
SSP Variables Statistic Statistic Statistic Statistic Statistic
We consider quality as your
number one criterion in selecting 112 2.70 .957 .296 -.267
suppliers.
We regularly solve problems
112 3.07 1.096 -.269 -.655
jointly with our suppliers.
We helped our suppliers to
112 3.88 1.023 -.618 -.491
improve our product quality
We continuous improvement
programs that include our key 112 2.65 1.002 -.017 -.670
suppliers.
We include our key suppliers in
our planning and goal-setting 112 3.01 1.061 -.202 -.519
activities.
We actively involve our key
suppliers in new product 112 3.65 1.063 -.544 -.440
development processes.
Strategic Supplier relationship 112 3.09 1.033 -0.225 -1.138

Source: researcher’s survey data (2021)

As it is indicated on the table 4.6, based on the mean value, the respondents agreed on helped
their suppliers to improve their product quality (m=3.88, s.d=1.023), and on actively involve
their key suppliers in new product development processes (m=3.65, s.d=1.063). On other, the
respondents neutral on regularly solve problems jointly with their suppliers (m=3.07,
s.d=1.096), on key suppliers in their planning and goal-setting activities (m=3.01, s.d=1.061),
on continuous improvement programs that include our key suppliers (m=2.65, s.d=1.002),
and unfortunately the respondents were disagreed on quality as one measurement criterion in
selecting best suppliers (m=2.30, s.d=0.957). From this it is possible to conclude that, the
company was not used quality as one measurement criterion in selecting best suppliers..The
skewness and kurtosis has showed the collected data based on the variables of strategic
supplier partnership is normally distributed i.e. it falls between +2 and -2.

30
Accordingly it is possible to conclude that strategic supplier partnership SCM practices were
not properly implemented in Dangote Cement Ethiopia plc mean they has to need some
improve the specially on the respondent disagree and neutral with their suppliers in order to
improve they strategic supplier relationship.

4.4.1.2. Customer Relationship (CR)

Table 4.4: Descriptive statistics on Customer Relationship
Std.
Items of questions about N Mean Deviation Skewness Kurtosis
CR Variables Statistic Statistic Statistic Statistic Statistic
We frequently interact with
customers to set reliability,
112 2.26 1.272 .837 -.406
responsiveness, and other standards
compared with our competitor.
We frequently measure and
112 3.52 1.115 -.463 -.579
evaluate customer satisfaction.
We frequently determine future
112 2.74 .984 -.439 -.770
customer expectations
We facilitate customers‘ ability to
112 3.77 1.131 -.594 -.625
seek assistance from its competitor
We periodically evaluate the
importance of our relationship with 112 2.88 1.023 -.515 -.855
our customers
Customer relationship 112 3.034 1.105 0.234 -.647

Source: researcher’s survey data (2021)

Table 4.7 illustrates that the mean value of respondents were agreed on facilitate customers‘
ability to seek assistance from the competitors with (m=3.77, S.D=1.131) and frequently
measure and evaluate the customer satisfaction (m=3.52, s.d=1.115). Some respondents
neutral on periodically evaluate the importance of our relationship with our customers
(m=2.88, s.d=1.023) and frequently determine future customer expectations (m=2.74,
s.d=0.984). However, on frequently interact with customers to set reliability, responsiveness,
and other standards compared with the competitors respondents respond dis-agree.The
skewness and kurtosis value failed between +2 and -2, therefore, the data collected form the
respondents are normally distributed.

31
Using the overall variables of the customer relationship, the findings has showed us Dangote
Cement has good customer relationship with the customer. However, the company has to
work to improve they relationship with their customer, especially by frequently determining
the future customer expectations, and to set reliability, responsiveness, and other standards.
4.4.1.3. Level of Information Sharing (IS)
Table 4.5: Descriptive statistics on Level of information sharing (IS)
Std.
Items of questions about IS N Mean Deviation Skewness Kurtosis
Variables Statistic Statistic Statistic Statistic Statistic
We inform trading partners in
112 3.89 1.017 -.725 -.087
advance of changing needs.
Our trading partners share
112 3.18 .997 -.534 -.296
proprietary information with us
Our trading partners keep us fully
informed about issues that affect 112 4.01 .963 -.757 -.061
our business
We and our trading partners share
business knowledge of core 112 2.21 .853 .014 -.884
business processes with us
We and our trading partners
exchange information that helps 112 3.54 1.154 -.554 -.343
establishment of business planning
Level of Information Sharing 112 3.36 0.996 -0.511 -0.334

Source: researcher’s survey data (2021)

As it is presented on the Table 4.8, indicate that the respondents were agreed on the trading
partners in advance of changing needs (mean=3.89, S.D. =1.017), trading partners keep us
fully informed about issues that affect their business (mean= 4.01, S.D. =0.963) and on
trading partners exchange information that helps establishment of business planning (mean=
3.54, S.D. = 1.154). In addition, on the trading partners share proprietary information with
each other (mean= 3.18, S.D. =0.997) neutral. However, on the trading partners share
business knowledge of core business processes with each other (mean= 2.21, S.D. =1.018)
failed in dis-agree. The skewness and kurtosis value failed between +2 and -2, therefore, the
data collected form the respondents are normally distributed.
Therefore, the finding shows that, Dangote cement exercised in good way information
sharing with trading partners on fully informed about issues that affect their business and its

32
strategic suppliers, changing needs, But Dangote cement Company do not believe either
agree or disagree to share proprietary information with each other and low establish/practice
of share business knowledge of core business processes with trade partners. This implies it
has need to improvement in order to achieve information sharing /exchange between the
organization and its trading partners.
4.4.1.4. Level of Information Quality (IQ)
Table 4.6: Descriptive Statistics on Level of information Quality
Std.
Items of questions about IQ N Mean Deviation Skewness Kurtosis
Variables Statistic Statistic Statistic Statistic Statistic
Information exchange between our
112 2.54 .929 .100 -.239
trading partners and us is accurate

Information exchange between our

trading partners and us is timely 112 3.22 1.054 -.320 -.527

Information exchange between our

112 2.27 .859 .144 -.232
trading partners and us is complete
Information exchange between our
112 2.41 1.027 .270 -.436
trading partners and us is adequate

Information exchange between our

112 3.14 1.064 -.336 -.549
trading partners and us is reliable
Level of Information Quality 112 2.71 0.986 -0.028 -0.396

Source: researcher’s survey data (2021)

Table 4.9 shows that, unfortunately the respondents were neutral on information exchange
between the trading partners and us it timely (m=3.22, s.d=1.054), for exchange reliable
information (m=3.14, s.d=1.064) and on accurate information exchange with the supplier to
the lowest (m=2.54, s.d=0.929).however, on exchange complete information and adequate,
the respondents are dis-agreed. This implies that there is lack of implementation/practice of
information sharing quality. The data collected using the survey questioner are normally
distributed as it is indicated by the skewness and kurtosis.
Therefore, in order to improve level of information quality, the company has to work more on
all items of the variables to information exchange with the suppliers.

33
4.4.1.5. Internal Lean Practices (LP):
Table 4.7: Descriptive Statistics on Internal Lean Practices (LP):
Std.
Items of questions about N Mean Deviation Skewness Kurtosis
ILP Variables Statistic Statistic Statistic Statistic Statistic
We reduces process set-up
time (time required to prepare
112 3.18 .979 -.309 -.309
or refit equipment/workstation
for production)
We has continuous quality
112 3.32 .979 -.453 -.203
improvement programs
We produces only what is
demanded by customers when 112 3.21 1.092 -.250 -.589
needed (e.g. JIT)
Internal lean practice 112 3.23 1.016 -0.337 -0.36

Source: researcher’s survey data (2021)

As the above table 4.9 indicates that, the average of all items found in neutral with the highest
value (m=3.32, s.d=0.979) and the lowest value with (m=3.18, s.d=0.979). This implies the
company was dominant/constant by practices lean. The Skewness and kurtosis shows that the
collected data using lean practice variables are normally distributed.

Therefore, Dangote cement is do not aware on provide their product and services whenever
needed, the continuous quality improvement programs services and reducing process time is
the company. So, the company has work to improve the observed gap to effective implement
of lean practice.
4.4.2. Descriptive Analysis on Dependent Variable

Competitive advantage is achieved through price/cost, quality, delivery dependability, and

time to market in a way that meet and even going beyond the expectation of the customers. In
order to collect its employee‘s perception towards the Competitive advantage of Dangote
Cement Ethiopia plc. The respondents have been asked sixteen questions and the result of the
findings are provided in the following table.

34
Table 4.8: Descriptive Statistics on Competitive advantage (CA):
Std.
Items of questions about N Mean Deviation Skewness Kurtosis
CA Variables Statistic Statistic Statistic Statistic Statistic
We able to offer prices as low
112 3.18 1.059 -.319 -.528
or lower than our competitors.
Our company run operation
with less Production cost 112 2.36 .889 .012 -.772
compared with our competitor
We offer competitive prices
112 4.03 .915 -.628 -.447
compared with our competitor

Our inventory turnover is high

112 3.29 .955 -.499 -.144
compared with our competitor
We are able compete based on
112 4.12 .857 -.664 -.303
quality
We offer products that are
112 2.21 .832 -.040 -.886
highly reliable
We offer products that are very
112 3.64 1.064 -.473 -.317
durable
We offer high quality products
112 2.00 1.123 1.243 .910
to our customer
We deliver the kind of products
112 3.65 1.063 -.544 -.440
needed
We deliver customer order on
112 2.79 .950 -.473 -.623
time
We provide dependable
112 3.88 1.023 -.618 -.491
delivery.
Time to solve customer
complaints is short compared 112 2.91 .991 -.552 -.723
with our competitor
We deliver product to market
quickly compared with your 112 2.45 1.073 .766 .460
competitor
We has time-to-market lower
than industry average compared 112 2.21 .832 -.040 -.886
with our competitor

35
 We are first in the market in
introducing new products 112 3.18 1.059 -.319 -.528
compared with our competitor
We have fast product
development compared with 112 2.50 1.013 .291 -.216
our competitor
Competitive advantage 112 2.843 0.981 -0.196 -0.343

Source: researcher’s survey data (2021)

Based on table 4.10, the data‘s collected for the assessment the Competitive advantage
variables of Dangote cement is normally distributed i.e. the skewness and kurtosis values are
between +2 and -2. Based on the survey result, on the average the respondents agree that the
company able compete based on quality, offer competitive prices compared with their
competitor, provide dependable delivery, and deliver the kind of products needed and on
offer products that are very durable. On others, on able to offer prices as low or lower than
their competitors, fast product development compared with their competitor, first in the
market in introducing new products compared with our competitor, Time to solve customer
complaints is short compared with their competitor, deliver customer order on time, and
inventory turnover is high compared with their competitor are on neutral. However, some of
respondents are disagreed on time-to-market lower than industry average compared with their
competitor, offer high quality products to their customer, offer products that are highly
reliable and company run operation with less Production cost compared with their
competitor. This implies, even though there is good practice of competitive advantage,
majority of the respondents are failed in disagree and neutral in Dangote cement Ethiopia plc.

From this it is possible to reveals that Dangote cement is not competitive in priority
consideration for operating costs and reduces cost of energy consumption As well as decrease
inventory level and promote product quality due to the improper implementation of supply
chain management practices such as strategic supplier partnership, customer relationship
management, information sharing and lean practice.
4.5. Regression Analysis for SCM Practices and Competitive advantage

The collected data form the employees of Dangote cement were used to make the inferential
analysis of the study. The researcher conducted a multiple regression analysis so as to test the
relationship among independent variables and dependent variable. This regression analysis is
conducted to know by how much the independent variable explains the dependent variable.

36
The model applied to show this influence is presented as follows;

Y = β0 + β1X1 + β2X2 + β3X3 + β4X4 + β5X5 + ε

Where: Y = Competitive advantage of Dangote Cement.
β0 = Constant (value of Y when X1, X2, X3, X4 and X5= 0)
β1 = Regression coefficient for strategic Supplier relationships
X1= Strategic supplier partnership
Β2=Regression coefficient for strategic partnership
X2= Customer relationship
Β3=Regression coefficient for customer relationship
X3= Level of information sharing
Β4=Coefficient of regression for level of information
X4= Level of information quality
Β5=Coefficient of regression for level of information quality
X5= Internal lean practices ε = the error
4.5.1. Multiple Regression Assumptions
In order to get the reliable and dependable result of the analysis, all the assumptions of the
multiple regression should be fulfilled before making the regression analysis interpretation.
Therefore, before going to answer the research questions the researcher have tested the
following pre regression assumptions and the assumption results are presented on the
following topics of this research paper.
4.5.2.. Reliability Test for Survey Data
The researcher have tested the reliability of the collected data using the Cronbach‘s alpha
reliability test. It measures the extent to which item responses obtained at the same time
correlate highly with each other and the widely accepted social science cut off is that alpha
should be 0.70 or higher for a set of items to be considered a scale(Field, 2009).
Table 4.9 Reliability Statistics
Number of Cronbach’s
Constructs Variables
items Alpha
Strategic Supplier Partnership 6 0.731
SCM
Customer relationship 5 0.777
Practices
Level of information sharing 5 0.716

37
 Level of information quality 5 0.763
Lean practice 3 0.800
Competitive
Competitive 16 0.840
advantage
Source: researcher’s survey data (2021)

As can be observed form SPSS generated data on Table 4.11, the calculated coefficient
Cronbach‘s alpha for this study was found to be greater than 0.7 for all variables, which is
confirming the variables to be internally consistent for each variable for Internal lean
practice.
4.5.3. Multi-collinearity

The multi- collinearity test is a test to identify a strong correlation between two or more
predictors in a regression model. 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 collinearity within the data (Field,
2009). A small tolerance value indicates that the variable under consideration is almost a
perfect linear combination of the independent variables already in the equation and that it
should not be added to the regression equation. A good regression model must not have a
strong correlation among its independent variables or must not have a multi-collinearity
problem and that the value of variance inflation factor (VIF) must have a value between 1 and
10 and the tolerance level should be more than 0.2 (SPSS Inc., 2017) .
Table 4.10: Multi-Collinearity Test

Collinearity Statistics
Model Tolerance VIF
1 (Constant)
SSP .322 3.102
CR .587 1.702
IS .541 1.850
IQ .338 2.955
LP .344 2.904
a. Dependent Variable: DV
Source: researcher’s survey data (2021)

38
Based on the output data on table 4.12, the obtained VIF (the coefficient of collinearity
statistics) value is between 1 to10 and the tolerance level is more than 0.2. Therefore, it can
be concluded that there are no multi-collinearity symptoms on this regression model.
4.5.4. Normally Distributed Error vs Normally Distributed Outcome Variables

The assumption of normally distributed error states that the residuals in the model are
random, normally distributed variables with a mean of 0. This assumption simply means that
the differences between the model and the observed data are most frequently zero or very
close to zero and that differences much greater than zero happen only occasionally. In
general, the normal distribution makes a straight diagonal line, and the plotted residuals are
compared with the diagonal. If a distribution is normal, the residual line will closely follow
the diagonal (Field, 2009).
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
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. Normality can also be
checked with a goodness of fit test (e.g., the Kolmogorov-Smirnov test), though this test must
be conducted on the residuals themselves. When the data is not normally distributed, a non-
linear transformation (e.g., log-transformation) might correct this issue if one or more of the
individual predictor variables are to blame, though this does not directly respond to the
normality of the residuals.

39
Fig 4.4 Plot of regression standardized Residual
Source: researcher’s survey data (2021)

Source: researcher’s survey data (2021)

Fig 4.4 shows 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.
4.5.4.1. Homoscedasticity
In Homoscedasticity assumption, the variance of error terms are similar across the
independent variables. At each level of the predictor variable(s), the variance of the residual
terms should be constant. This just means that the residuals at each level of the predictor(s)
should have the same variance (homoscedasticity); when the variances are very unequal there
is said to be heteroscedasticity (Field, 2009). 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

40
(Field, 2009). residuals were around the diagonal straight line instead of making any other
shape or curve.

Fig 4.5: Scatterplot based on Residual

Source: researcher’s survey data (2021)

The graph of *ZRESID and *ZPRED should look like a random array of dots evenly
dispersed around zero. If this graph funnels out, then the chances are that there is
heteroscedasticity in the data. If there is any sort of curve in this graph, then, the chances are
that the data have broken the assumption of linearity (Field, 2009).
4.5.5. Correlational Analysis between Dependent and Independent Variables

Correlation is a measure of liner relationship between two variables. Correlation

coefficient is ranging from value -1 to 1. Values that are closer the absolute value 1
indicate that there is strong relationship between variables being correlated whereas values
closer to 0 indicates that there is a little or no relationship between two variables. Values of
±0.1 represent small effect, ±0.3 medium effect and ±0.5 large effect Andy (2006) as cited by
(Mustefa, 2014). Whereas according to (Burns & Burns, 2008) as cited by (TIYA, 2016)
correlation value ranging between 0 and 0.3 indicates weak positive (negative) liner

41
relationship via shaky liner rule value between 0.3 and 0.7 (0.3 and -0.7) indicate moderate
positive liner relationship, value between 0.7 and 1.0 (-0.7 and -1.0) indicate strong positive
(negative) liner relationship. In this study correlational analysis, the Competitive advantage is
taken as dependent variable and as independent variables different supply chain management
practices (strategic suppliers‘ partnership, customer relationship, level of information sharing,
level of information quality and lean practices) are used. To test the statistically significant
relationship between the participants' responses to the two Likert scales questions for the
independent and dependent variables, Pearson correlation test is used on the this survey since
the variables are measured on a scale that is at least ordinal. Therefore in this study the
researcher is intended to study the relationship between supply chain management
practices and Competitive advantage of Dangote Cement Ethiopia plc analyzed and
interpreted based on the above correlation rules.
Table 4.11: Correlations between grouping Variables and Competitive advantage

SSP CR IS IQ LP CA

Correlation .685** .525** .534** .746** .583** 1.000

Coefficient
Pearson CA
Sig. (2-tailed) .000 .000 .000 .000 .000 .

N 112 112 112 112 112 112

**. Correlation is significant at the 0.01 level (2-tailed).
Source: researcher’s survey data (2021)
Each questions in each category of supply chain management practice are transformed in to
five variables i.e. CR, IS, LP, SSP, and IQ. For Competitive advantage, the collected data
using Likert scale type questioners was transformed in to CA variable. The finding shows
that all supply chain management practice variables coefficients are significant at the 0.01
level. Based on the above output value of sig (2-tailed), in Dangote Cement,
 All independent variables (SSP, CR, IS, IQ and LP) used as supply chain management
practice and competitive advantage have a statistically significant relationship r <
.001).
 The direction of the relationship independent variables and dependent variables are
positively correlated, that means these variables tend to increase together.

42
  The magnitude, or strength, of the association is approximately strong (.5 < | r | < .9).

In general, there is a strong and positive relationship between all independent and dependent
variables are observed on the finding. Specifically, for example, the coefficient of the
relationship between strategic supplier relationship and Competitive advantage (r = 0.685). It
is concluded that there is strong positive relationship between the two variables. This implies
that strategic supplier partnership has large effect on the Competitive advantage. This means
a unit increase in strategic supplier partnership causes 0.685 increases in Competitive
advantage. The same holds for the other variables i.e. the coefficient of Competitive
advantage with Customer relationship (r = 0.525) implies moderate positive relationship, the
level of Information sharing (r = 0.534) moderate positive relationship, the level of
information quality (r = 0.746) strong positive relationship, the Lean practice (r = 0.583) it
has also moderate positive relationship. Therefore, if the companies‘ strategic supplier
relationship, customer relationship, level of information sharing, quality of information
sharing and lean practices increase the Competitive advantage of the company will increase
proportionately.
4.5.6..Results of the Regression Analysis of supply chain management practices and
Competitive advantage

Regression analysis is conducted to know about by how much independent variable

explains or predicts the dependent variable. In this study the researcher was used regression
analysis to conduct by how much supply chain management practice (independent variable)
explains or predicts Competitive advantage (dependent variable).
Table 4.12: Model Summary table

R Adjusted R Std. Error of

Model R Square Square the Estimate
1 .953a .908 .904 2.65339
a. Predictors: (Constant), LP, CR, LIS, LIQ, SSP

Source: researcher’s survey data (2021)

Based on the above table SPSS generated data, the adjusted R 2 (coefficient of determination)
explain 90.4% of the factor affecting Competitive advantage as represented by the five
independent variables that were studied. Therefore, a further research should be conducted to
investigate the other factors (9.6%) that affects Competitive advantage of Dangote cement.

43
 Table 4.13. ANOVA Table

Sum of
Model Squares df Mean Square F Sig.
1 Regression 7360.630 5 1472.126 209.095 .000b

Residual 746.290 106 7.040

Total 8106.920 111
a. Dependent Variable: DV
b. Predictors: (Constant), LP, CR, LIS, LIQ, SSP

Source: researcher’s survey data (2021)

The ANOVA reports how well the regression equation fits the data or predict the dependent
variable .In the above ANOVA table the F value measures the probability of chance deputes
from straight line and the F-ratio of this study is (F=1472.126/7.040 =209.095), which is
statistically significant at P<0.05 because the value in the column labelled (sig. less than
<0.05) or The significance value is .000 which is less than 0.05. Therefore it is conclude that
the regression model is significantly better prediction of Competitive advantage or the
regression model over all predicts Competitive advantage significantly well. Thus the model
is statistically significance in predicting, strategic supplier partnership; customer relationship
management information sharing information sharing quality and lean practice of SCM
practices affect Competitive advantage.
As the ANOVA table indicates that from the estimated total observation 8106.920 wanted to
be explained by the regression model 7360.630 with mean square 1472.126 was explained
and the remaining 746.290 with mean square 7.040 of the total estimated observation was
error or not explained by the regression model. The degree of freedom (DF=5) is the number
of predictors or the number of independent variables calculated from the number of the study
variable K (6) minus one (6-1=5) and 106 is indicates the number of complete respondents
calculated as [ (N-K-1) =(112-5-1=106)] while 111 indicates that number of respondents(N)
minus one (112-1=111).

44
Table 4.14. Coefficient Table for regression analysis

Unstandardized Standardized
Coefficients Coefficients

Model B Std. Error Beta t Sig.

1 (Constant)
8.514 1.439 5.915 .000
SSP .381 .109 .181 3.483 .001
CR .623 .087 .274 7.134 .000
IS .219 .100 .088 2.196 .030
IQ 1.099 .122 .456 9.004 .000
LP .492 .166 .148 2.956 .004
a. Dependent Variable: DV

Source: researcher’s survey data (2021)

Coefficient of determination explains the extent to which changes in the dependent variable
can be explained by change in the independent variables or the percentage of variation in the
dependent variable Competitive advantage that is explained by all the five independent
variables such as strategic supplier partnership customer relationship, information sharing
and lean practice. A multiple regression analysis so as to determine the relationship between
Competitive advantage of Dangote Cement and the five supplier relationship variables. As
per the SPSS output above, the equation (Y = β0 + SSPX1 + CRX2 + ISX3 + IQX4 + LPX5
+ ε) becomes:

Y = 8.514+ 0. 381 X1 + 0. 623 X2 + 0. 219 X3 + 0. 1.099 X4+ 0. 492 X5+ ε.

From the regression equation β0 was the Y- intercept and the value is the value of β in the
coefficient table for the constant with β0 is 8.514 when there is supply chain
management practices in Dangote Cement Company was implemented, Competitive
advantage would be increase by (8.514). Therefore, the regression equation above shows that
constant at by taking all factors the value of dependent variable in to account when all
independent variable equal to zero, Competitive advantage of Dangote Cement Company had
the value of 8.514. The constant term has p- value 0.000 which is less than 0.05. This implies
that constant term is significant and the positive value 8.514 indicates that the constant term
has positive effect or impact on Competitive advantage.
From the finding the value of the regression coefficient shows that, the change in the
outcome associated a unit change in the predictor or if predictor variable strategic
supplier partnership increased by one unit would lead to 0.381 increases in Competitive
advantage. A unit increase in customer relationship management lead 0.623 increases in

45
Competitive advantage, a unit increases in information sharing activities would lead to 0.219
increase in Competitive advantage, a unit increase in information quality would lead to .109
increases in Competitive advantage, and a unit increases in lean practice would lead to 0.492
increases in Competitive advantage. This implies that SCM practices of strategic supplier
partnership, customer relationship, information sharing, information quality, and lean
practices has significant effect on Competitive advantage.
4.6. Findings based on Research Questions
Based on the finding of the study, the researcher have answered for the following research
questions
―How the strategic suppler partnership influence the Competitive advantage of Dangote
cement Ethiopia plc?”
Based on generated data, strategic supplier partnership has a positively and significantly
influence the Competitive advantage of Dangote cement, where the t- statistic value was
calculated to be 3.483 at p value < 0.05. The value of the coefficient of strategic supplier
partnership was also found to be 0.381 which means that, keeping other things constant, a
unit change in strategic partnership cause 38.1% increase in Competitive advantage.
“How the customer relationship influence the Competitive advantage of Dangote cement
Ethiopia plc?”
The coefficient of customer relationship was .623, which means a unit change in this variable
increases Competitive advantage by 62.3%, keeping other variables constant. The t-statistic
value of customer relationship was 7.134 significant at p value < 0.05, which makes the
customer relationship and Competitive advantage has positive and statistically significant
relationship.
“How the level of information sharing influence the Competitive advantage of Dangote
cement Ethiopia plc?”
The value of level of information sharing has a positively and significantly influence the
Competitive advantage of Dangote cement company, where the t- statistic value was
calculated to be 2.196 are significant at p value < 0.05. The value of the coefficient of
information sharing was also found to be 0.219 which means that, keeping other things
constant, a unit change in level of information sharing causes 21.9% increase in Competitive
advantage of the company.
“How the level of information quality influence the Competitive advantage of Dangote
cement Ethiopia plc?”

46
Level of information quality has also a positively and significantly influence the Competitive
advantage of the Dangote cement company, where the t- statistic value was calculated to be
9.004 are significant at p value < 0.05. The value of the coefficient of information quality was
also found to be .1099 which means that, keeping other things constant, a unit change in level
of information quality causes 10.99% increase in Competitive advantage of the company.
―How lean practice influence the Competitive advantage of Dangote cement Ethiopia plc?”
The Level of lean practice has also a positively and significantly influence the Competitive
advantage of the Dangote cement company, where the t- statistic value was calculated to be
2.956 are significant at p value < 0.05. The value of the coefficient of lean practice was also
found to be 0.492 which means that, keeping other things constant, a unit change in lean
practice causes 49.2% increase in Competitive advantage of company.
In general, the survey result showed that there is a significant and positive relationship
between independent variables of supply chain practices and the Competitive advantage of
the Dangote cement company.

47
 CHAPTER FIVE

SUMMERY, CONCLUSION AND RECOMMENDATION

In this section, the summery conclusion of the research finding that have been analyzed and
discussed in the previous chapter are briefly presented. Furthermore, based on the findings of
this study possible recommendations are made.
5.1. Summary of the Findings
This study was aimed at analyzing the effect of supply chain management practices on
overall competitive advantage of Dangote cement Ethiopia plc. The specific objectives of the
study include identifying the existing practices of supply chain management from the five
SCM practices perspectives, analyzing and assessing the effect of strategic supplier
partnership on overall competitiveness, analyzing and assessing the effect of customer
relationships on overall competitiveness, analyzing and assessing the effect of information
communication on overall competitiveness and analyzing and assessing lean practice on
overall competitiveness. The study was conducted by using primary data. The primary data
for this study was collected through questionnaire. The study used 112 respondents selected
using probability sampling particularly stratified sampling techniques.

The findings of the survey also shows that that 81.75% of corresponding change in
determining competitive advantage of Dangote cement Ethiopia plc is the results of the
change in supply chain practices of all the five predictor variables jointly. The test of overall
significance of all the five variables jointly i.e. strategic supplier relationship, customer
relationship, level of information sharing, level of information quality and lean practices are
significant at .05 level which found out that the model used for this survey is also to be
significant.

5.2. Conclusions
The findings show that, the implementation of modern supply chain management practices in
Dangote cement was moderate and still not doing for more competitiveness to locally and
global. Furthermore, the study noticed some important points regarding SCM practices
implementation in Dangote cement Ethiopia plc that is, the level of understanding and
implementation of SCM practices is not to a very large extent in a way it could have enabled
companies to fully take advantage of benefits SCM concept can offer for the success of their
respective organisations. Nevertheless, the general conclusion emerged in this study was that,
SCM practices understanding and implementation in Dangote cement Ethiopia plc can have a

48
direct, positive influence in their respective Competitive advantage when effectively and
efficiently implemented and vice versa is true. Based on the finding using the data collected
and by using multiple regression analysis, the results showed that the effect of supply chain
management practices on the competitive advantage of Dangote cement are significant and
positive related with the competitive advantage of the company. Specifically,

 Strategic supply chain relationship and Competitive advantage are significantly and
positively related. So strategic supply chain relationship is one of the main predictor
of the Competitive advantage of Dangote cement firm. As strategic relationship,
Dangote cement considered helped their suppliers to improve their product quality.
However, the practices of continuous improvement programs that include their key
suppliers, and the issue of quality consideration as a number one criterion in selection
are given a less emphasis by the Company.
 Customer relationship and Competitive advantage are also significantly and positively
related. Dangote cement evaluates the customer satisfaction and facilitates the
interaction for customer assistance. But, in frequently interact with customers to set
reliability, responsiveness, and other standards compared with their competitor are
under question. Means low perform on this dimensions.
 The level of information sharing and Competitive advantage are positive and
significant. Dangote cements existence of informing about issues that affect the
business and about the advance of changing need, proprietary information and any
issues. However, Dangote Cement Company do not share business knowledge of core
business processes with trading partners in properly.
 The level of information quality and Competitive advantage are also positive and
significant. Dangote Cements Company has Information exchange between the
trading partners timely and reliable with the suppliers. However, Dangote Cements
Company has low perform on adequate and complete information exchange with its
suppliers.
 Lean practice and Competitive advantage relationship are positive and significant in
Dangote Cements Company. The company provides products and services whenever
needed by the customer. However, the company has problem in equipment set up time
for delivering product and service to the customer.

49
5.3. Recommendation
The following recommendations can be drawn from the analysis and conclusions made.

The company to give attention to its relationship with its suppliers and they will
improve if the company involves suppliers in the continuous improvement programs,
and emphasis on quality as criteria to select best suppliers.
As time comes for the competition, dissatisfied customers would retaliate by
migrating to the new better supplier‘s. So, to improve the customer relationship
company should be frequently interact with their customer to set reliability,
responsiveness, and other standards services.
Dangote cement Ethiopia plc information network should start from customers
through the organizations to the suppliers and planning stage in order to meet the
customer needs and to improve the level of information sharing.
Quality information has a great power to success or to remain in today era of
competition. In order to assure the quality of its products the organization is better
attention on the strategic supplier partnership SCM practices of joint problem solving
,joint planning and goal setting , is improve their long term contract arrangement with
suppliers. In addition the researcher reveal Dangote Cement Company should provide
adequate, reliable, complete and timely information with their customers as well as
their suppliers.
In order to reduce wastage and improve service, the company has to work more on
solving the problem in equipment set up time for delivering service to the customer.

Generally, as to be competitive firm, it is better for the organization to give attention on

modern supply chain management practices for more improvement and remain
Competitiveness.

5.4. Limitation and Implications for Further Research

The study aimed at determining the effects of supply chain management practices on
competitive advantage in cement manufacturing industry. The concept of supply chain
management is very wide due to its multidisciplinary origin thus covering everything in one
study is nearly impossible. A potential limitations of this research are not considering the
responses of the other tier supply chain members and contextual factors i.e. type of industry,
firm size and supply chain length. Therefore, the results have to be interpreted taking this
limitation into account. Future studies can examine the proposed relationships by bringing

50
some contextual variables of SCM practices such as postponement, and outsourcing may
have an influence in the competitive advantage of manufacturing firms and additional
dimensions like numbers/size of organization into the model in order to fill the observed gap.
However, this study also provides empirical evidence to support conceptual and prescriptive
statements in the literature regarding the impact of SCM practices. The study therefore
suggests that a similar study be conducted to establish the effect of supply chain management
practices on competitive advantage but this time with other supply chain management
practices.

51
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 APPENDIX
DEBRE BERHAN UNIVERSITY
COLLEGE OF BUSINESS AND ECONOMICS
DEPARTMENT OF LOGISTICS AND SUPPLY CHAIN MANAGEMENT
MASTERS OF ART IN LOGISTICS AND SUPPLY CHAIN MANAGEMENT
FOR PARTIAL FULFILLMENT OF THE DEGREE OF MASTER IN LOGISTIC AND
SUPPLY CHAIN MANAGEMENT QUESTIONNAIRE.

Dear respondents, the purpose of this questionnaire is to gather data on the Effect of
supply chain management practices on Competitive advantage: In the case of Dangote
Cement Ethiopia plc. The study is purely for academic purpose and thus not affects you in
any case. So, your genuine, frank and timely response is vital for successfulness of the study.
Therefore, I kindly request you to respond to each items of the question very carefully.
In order to investigate the effect of SCM practices on Dangote Cement Ethiopia plc, the
researcher prepared the following questions, please tick (√) on the appropriate question
number to indicate the extent to which you agree or disagree with each statement.
The item have five-point Likert type scales, the scales have the following meaning
1= Strongly Disagree, 2= Disagree, 3=Neutral, 4= Agree, 5= Strongly Agree.
General Instructions
 There is no need of writing your name
 Where answer options are available please tick (√) in the appropriate box.
Contact Address If you have any query, please do not hesitate to contact me and I am
available as per your convenience at (Mobile: 0910-668809 or e-mail:
[email protected]). Thank you for spending your precious time in
advance!
PART I: DEMOGRAPHIC INFORMATION
Educational Years stayed/Experience Your department
Qualification
Certificate/diplomas Under two Years Logistics & Supply
chain management
Bachelor‘s degree 2-5 Years production
Masters & 2nd 6-10 Years Sales and Marketing
Degree
Phd Above 10 years

58
Part II: Instruments of Supply chain management practice

1 2 3 4 5
Description Frequency
SSP 1 Your company consider quality as our number
one criterion in selecting suppliers.
2 Your company regularly solve problems jointly
with its suppliers.
3 your company have helped your suppliers to
improve their product quality
4 Your company has continuous improvement
programs that include its key suppliers.
5 Your company include its key suppliers in its
planning and goal-setting activities.
6 Your company actively involve our key suppliers
in new product development processes.
CR 1 Your company frequently interact with customers
to set reliability, responsiveness, and other
standards compared with your competitor.
2 Your company frequently measure and evaluate
customer satisfaction.
3 Your company frequently determine future
customer expectations
4 Your company facilitate customers‘ ability to
seek assistance from its competitor..
5 Your company periodically evaluate the
importance of its relationship with its customers.
IS 1 Your company inform trading partners in advance
of changing needs.
2 Your trading partners share proprietary
information with us.
3 Your trading partners keep us fully informed
about issues that affect our business.
4 Your trading partners share business knowledge
of core business processes with us.
5 Your trading partners exchange information that
helps establishment of business planning.
IQ 1 Information exchange between our trading
partners and us is accurate
2 Information exchange between our trading
partners and us is timely.
3 Information exchange between our trading
partners and us is complete.
4 Information exchange between our trading
partners and us is adequate
5 Information exchange between our trading
partners and us is reliable.
LP 1 Your company reduces process set-up time (time
required to prepare or refit equipment/workstation
for production)
59
 2 Your company‘s has continuous quality
improvement programs
3 Your company‘s produces only what is
demanded by customers when needed (e.g. JIT)
Part III: Instruments of Competitive Advantage

1 Your company is able to offer prices as low or

lower than our competitors.
2 Your company run operation with less
Production cost compared with your competitor.
3 Your company offer competitive prices compared
with your competitor
4 Your company inventory turnover is high
compared with your competitor.
5 Your company is able compete based on quality.
6 We offer products that are highly reliable
7 Your company offer products that are very
durable.
8 Your company offer high quality products to our
customer.
9 Your company deliver the kind of products
needed.
10 Your company deliver customer order on time.
11 Your company provide dependable delivery.
12 Time to solve customer complaints is short
compared with your competitor
13 Your company deliver product to market quickly
compared with your competitor.
14 Your company has time-to-market lower than
industry average compared with your competitor.
15 Your company is first in the market in
introducing new products compared with your
competitor.
16 Your company have fast product development
compared with your competitor.

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