ADDIS ABABA UNIVERSITY SCHOOL OF COMMERCE DEPARTMENT OF LOGISTICS AND SUPPLY CHAIN MANAGEMENT THE EFFECT OF ENTERPRISE RESOURCE PLANNING IMPLEMENTATION ON INTERNAL SUPPLY CHAIN PERFORMANCE: THE CASE OF ETHIO TELECOM BY ADANE AYALEW ADVISOR: MATIWOS ENSERMU (Ph.D.) A THESIS SUBMITTED TO ADDIS ABABA UNIVERSITY SCHOOL OF COMMERCE IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS IN LOGISTICS AND SUPPLY CHAIN MANAGEMENT May, 2017 ADDIS ABABA, ETHIOPIA THE EFFECT OF ENTERPRISE RESOURCE PLANNING IMPLEMENTATION ON INTERNAL SUPPLY CHAIN PERFORMANCE; THE CASE OF ETHIO TELECOM BY ADANE AYALEW (GSE/1265/05) A THESIS SUBMITTED TO ADDIS ABABA UNIVERSITY SCHOOL OF COMMERCE IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS IN LOGISTICS AND SUPPLY CHAIN MANAGEMENT ADVISOR MATIWOS ENSERMU (Ph.D.) May, 2017 ADDIS ABABA, ETHIOPIA ADDIS ABABA UNIVERSITY SCHOOL OF COMMERCE DEPARTMENT OF LOGISTICS AND SUPPLY CHAIN MANAGEMENT THE EFFECT OF ERP IMPLEMENTATION ON INTERNAL SUPPLY CHAIN PERFORMANCE; THE CASE OF ETHIO TELECOM BY ADANE AYALEW (GSE/1265/05) APPROVED BY BOARD OF EXAMINERS ___________________________ ___________________ Advisor Signature & Date ___________________________ ___________________ Internal Examiner Signature & Date ___________________________ ___________________ External Examiner Signature & Date Declaration I declare that this thesis is the result of my independent research work on the topic entitled “The Effect of ERP Implementation on Internal Supply Chain Performance the case of Ethio telecom” in partial fulfillment of the requirements for the Degree of Master of Art in Logistics and Supply Chain Management at Addis Ababa University School of commerce. It is my original work and all the references used in the study are acknowledged. Adane Ayalew ______________________ Name Signature & Date Dedication This thesis is dedicated to the memory of my mother Belaynesh Simeneh, who would have been happy to see her seedlings grown well. Table of Contents Acknowledgements .................................................................................................................................... i List of Abbreviations and Acronyms ........................................................................................................ ii List of Tables ........................................................................................................................................... iii Abstract .................................................................................................................................................... iv CHAPTER ONE: INTRODUCTION 1.1. Background of the Study............................................................................................................... 1 1.2. Statement of the Problem .............................................................................................................. 2 1.3. Basic Research Questions ............................................................................................................. 4 1.4. Objective of the study ................................................................................................................... 4 1.5. Significance of the study ............................................................................................................... 5 1.6. Scope of the study ......................................................................................................................... 5 1.7. Limitation of the Study ................................................................................................................. 5 1.8. Organization of the Study ............................................................................................................. 5 CHAPTER TWO: LITERATURE REVIEW 2.1. Theoretical Review ....................................................................................................................... 6 2.1.1. Factors affecting ERP implementation ................................................................................. 9 2.1.2. Supply chain performance Measurements .......................................................................... 11 2.2. Empirical Review ........................................................................................................................ 13 CHAPTER THREE: RESEARCH METHODOLOGY 3.1. Research Design .......................................................................................................................... 17 3.2. Research Study Area ................................................................................................................... 17 3.3. Sample size and Sampling techniques ........................................................................................ 17 3.4. Method of data collection: Data Source and Instrument ............................................................. 18 3.5. Method of Data Analysis ............................................................................................................ 18 3.5.1. Descriptive statistical Analysis ........................................................................................... 18 3.5.2. Inferential statistical Analysis ............................................................................................. 18 3.6. Measurement Instruments ........................................................................................................... 20 3.7. Ethical consideration ................................................................................................................... 20 3.8. Validity and Reliability Test ....................................................................................................... 20 3.8.1. Validity Test ........................................................................................................................ 20 3.8.2. Reliability Test .................................................................................................................... 21 CHAPTER FOUR: DATA ANALYSIS AND DISCUSSION 4.1. Data Analysis .............................................................................................................................. 23 4.2. Discussion of the Study............................................................................................................... 39 CHAPTER FIVE: SUMMARY, CONCLUSIONS AND RECOMMENDATIONS 5.1. Summary of the Findings ............................................................................................................ 44 5.2. Conclusions ................................................................................................................................. 45 5.3. Recommendations ....................................................................................................................... 47 5.4. Limitation and implication for further Research ......................................................................... 49 Bibliography ........................................................................................................................................... 50 APPENDICES ........................................................................................................................................ 54 Acknowledgements First of all, I would like to praise and thank the Almighty God and the mother St. Marry for being with me in all endeavors of my life. I am really lucky to be advised by Matiwos Ensermu (Ph.D.) who is one of the few precious intellectuals of Ethiopia. I would also like to thank my friend Tesfa Tiruneh who thoroughly read my work and provided me valuable comments. Hayalu Solomon, my best friend, also deserves special thanks for his morale and edition support in finalizing the study. Next, it is my pleasure to extend my heart felt gratitude to ERP super users in ethio telecom who devoted their time and provided me all the required information needed for the study. Last but not least, I would like to present my thanks to my families for their contribution for me to be who I am. i List of Abbreviations and Acronyms ERP Enterprise resource planning IT Information Technology ISCP Internal Supply chain performance MR Material Requisition POR Purchase Order requisition RFQ Request for quotation SCM Supply chain Management SCOR Supply chain operation reference SCP Supply chain Performance SPSS Statistical package for social science TOT Training of trainers ii List of Tables Table 3. 1 Model Specification of Variables. ............................................................................... 19 Table 3.2 Reliability Test of Variable’s Using Cronbach’s Alpha ............................................... 22 Table 4.1 Gender of the Respondents ........................................................................................... 24 Table 4.2 Educational level of the Respondents ........................................................................... 24 Table 4.3 Job Position of the Respondents ................................................................................... 25 Table 4.4 Company Experience of the Respondents .................................................................... 25 Table 4.5 ERP Usage Experience of the Respondents ................................................................. 26 Table 4.6 Summery of Survey result for the independent variables ............................................. 27 Table 4.7 Mean value of independent variables .......................................................................... 29 Table 4.8 Summery of Survey result for dependent variable ....................................................... 29 Table 4.9 Measures of Associations and Descriptive Adjectives ................................................. 31 Table 4.10 Correlation Matrix between the dependent and the Independent Variables ............... 32 Table – 4.11 Model Summary ...................................................................................................... 35 Table 4.12 ANOVA Model Fit .................................................................................................... 36 Table 4.13 Beta Coefficient ........................................................................................................ 37 iii
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