The Effect of Supply Chain Management Practices on Operational Performance of Ethiopian Pharmaceutical Manufacturing Companies: a Mixed Method Approach

Major Advisors: - Worku Gadisa (PhD) Background: Effective supply chain management is crucial for pharmaceutical manufacturing, ensuring operational efficiency, regulatory compliance, and financial sustainability. In Ethiopia, manufacturers face major challenges such as long production lead times, poor inventory control, and quality standard issues, largely due to weak supply chain practices.
Objective: This study aimed to examine the effect of pharmaceutical supply chain management practices on the operational performance of pharmaceutical manufacturing companies in Ethiopia
Methods: An analytical cross-sectional study with a qualitative component was conducted from February to March 2025, involving 131 employees from Ethiopian pharmaceutical manufacturing companies. Plant managers and department heads were purposefully selected based on their expertise in supply chain management, strategic decision-making and operational involvement. A pretested, self-administered questionnaire based on a five-point Likert scale was used to collect quantitative data, which was then analyzed using SPSS (version 27). The data underwent both descriptive and inferential statistical analysis, including Multiple Linear Regression. Statistical significance was determined using a 95% confidence interval and a p-value below 5%. Additionally, qualitative data were obtained through face-to-face semi-structured interviews with twelve key informants and analyzed using a thematic analysis technique.
Results: The findings of the study indicate a positive correlation between supply chain management practices (strategic supplier partnerships, customer relationship management, information sharing, logistics practices) and operational performance, with a significance level of 1%. Regression analysis demonstrated that Logistics Practice (β = .216), Strategic Supplier Partnership (β = .198), Customer Relationship Management (β = .151), and Information Sharing (β = .149) all have statistically significant effects on operational performance at a p-value of less than 0.05. Furthermore, the study revealed that these four supply chain management practices collectively account for approximately 72.7% of the variation in operational performance.
Conclusion and Recommendations: The study highlights the positive impact of logistics, supplier partnerships, information sharing, and customer relationship management on operational performance, enhancing efficiency, collaboration, reliability, and satisfaction. However, challenges like inconsistent communication, poor technology integration, and logistics inefficiencies hinder effectiveness. Ethiopian pharmaceutical manufacturers can leverage these insights to optimize supply chain strategies and improve performance.
Keywords: Supply Chain Management Practice, Operational Performance, Pharmaceutical Manufacturing Companies, Ethiopia.