THE EFFECT OF SUPPLY CHAIN MANAGEMENT PRACTICES ON COMPETITIVE ADVANTAGE: THE CASE OF DANGOTE CEMENT COMPANY/ETHIOPIA PLC

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.