FACTORS AFFECTING LOGISTICS PERFORMANCE

EMPHASIS ON TRANSPORT FUNCTION: A STUDY ON EAST

AFRICA BOTTLING S.C. JIMMA BRANCH

A THESIS SUBMITTED TO THE SCHOOL OF GRADUATE STUDIES

OF JIMMA UNIVERSITY IN PARTIAL FULFILLMENT OF THE
REQUIREMENTS FOR THE AWARD OF THE DEGREE IN MASTERS
OF LOGISTICS AND TRANSPORT MANAGEMENT

BY

ZEYNU MOHAMMED

MASTERS OF LOGISTICS AND TRANSPORTATION MANAGEMENT,

DEPARTMENT OF MANAGEMENT, COLLEGE OF BUSINESS AND
ECONOMICS, JIMMA UNIVERSITY, JIMMA, ETHIOPIA

AUGEST, 2020
Factors Affecting Logistics Performance Emphasis on Transport
Function: A Study on East Africa Bottling S.C. Jimma Branch

A Thesis Submitted To The School Of Graduate Studies Of Jimma

University In Partial Fulfillment Of The Requirements For The Award Of
The Degree in Masters of Logistics and Transport Management

BY:

ZEYNU MOHAMMED

Under the supervision of:

MESFIN MEKONNIN (PhD SCHOLAR)

And

Mr. ABERA JALETA

MASTERS OF LOGISTICS AND TRANSPORTATION MANAGEMENT,

DEPARTMENT OF MANAGEMENT, COLLEGE OF BUSINESS AND
ECONOMICS, JIMMA UNIVERSITY, JIMMA, ETHIOPIA
AUGEST, 2020
 APPROVAL SHEET
SCHOOL OF GRADUATE STUDIES
COLLEGE OF BUSINESS AND ECONOMICS
DEPARTMENT OF MANAGEMENT
JIMMA UNIVERSITY
We, the undersigned, members of the Board of Examiners of the final open defense by Zeynu
Mohammed have read and evaluated his/her thesis entitled “A Study on Factors Affecting
Logistics Performance Emphasis on Transport Function a study on East Africa bottling
S.C. Jimma branch” examined. Therefore, this is to certify that the thesis has been accepted
in partial fulfillment of the requirements for the degree of Masters of Business administration
in logistics and transport management.
Approved by:

Name of Main Advisor Signature Date

____________________________ _____________ _______________

Name of Co-Advisor Signature Date

____________________________ _____________ _______________

Name of Internal Examiner Signature Date

____________________________ _____________ _______________

Name of External Examiner Signature Date

____________________________ _____________ _______________

I
 DECLARATION

I hereby declare that this thesis entitled ‘’Factors Affecting Logistics Performance
Emphasis on Transport Function: A Study on East Africa Bottling S.C. Jimma
Branch’’ has been Carried out by me under the guidance and supervision of Mr. Mesfin
Mekonnin (PhD Scholar) and Co-Adviser Mr. Abera Jaleta. The thesis is original and has
not been submitted for the award of degree of diploma any University or Institution.

Researcher’s Name Signature Date

ZEYNU MOHAMMED __________________ _________________

II
 CERTIFICATE

This is to certify that the thesis entitled ‘’Factors Affecting Logistics Performance
Emphasis on Transport Function: A Study on East Africa Bottling S.C. Jimma Branch’’
Submitted to Jimma University for the award of the Degree of Master of Logistics And
Transport Management (MA) and is a record of Valuable research work carried out by Mr.
Zeynu Mohammed, under our guidance and supervision.

Therefore we hereby declare that no part of this thesis has been submitted to any other
university or institutions for the award of any degree of diploma.

Main Adviser’s Name Signature Date

___________________________ ________________ _________________

Co - Adviser’s Name Signature Date

____________________________ ________________ _________________

III
 ACKNOWLEDGEMENTS

First of all, thanks to the Almighty ALLAH for his giving me the patience to start and
finalize this research paper.

Secondly, I am deeply extending my sincere appreciation to my main advisor Mr. Mesfin

Mekonnin (PhD Scholar) and my Co–Adviser Mr. Abera Jaleta for their valuable advice,
constant support, commitment, dedication, encouragement and precious guidance, creative
suggestions and critical comments, and for their being everlasting enthusiastic from the
beginning to the end of this thesis. Without their recommend, no doubt, this work would not
have been possible at all.

Finally, I give special thanks to my beloved families and friends for all of the
encouragements and supports they gave to finish the paper and East Africa Bottling S.C.
Jimma Branch Staffs and management for their persistent co-operation in providing the
necessary data throughout the time of accomplishing this research paper.

Zeynu Mohammed

Jimma University

Jimma

IV
 ACRONYMS OR ABRIVATIONS

ANOVA-Analysis of Variance

BTRE- Bureau of Transport and Regional Economics

DV-Dependent Variable

EABSC -East Africa Bottling Share Company

IV-Independent Variable

LTL-Less than truck load

SCM- Supply Chain Management

SPSS- Statistical Packages for Social Science

TL – Truck load

TPLs- Third Party Logistics

VIF -Variance Inflation Factor

V
 ABSTRACT

The main objective of this study was to examine the factors affecting logistics performance
emphasis on transport function in a case of East Africa Bottling Share Company Jimma
branch focusing on factors affecting the logistics performance and dimensions of transport
function (Speed/Responsiveness and connectivity). The data were collected from 51 employees
of the East Africa Bottling Share Company Jimma Branch including transportation, logistics,
warehouse and distribution including officials. The type of data were collected includes both
primary and secondary type of data, descriptive research design was used for this study and
the data were collected with the help of closed ended and open-ended questionnaire. As per
the result weakness observed in areas of flexibility, cost efficiency, improved number of orders
shipped on time and timely reply to special enquiry were identified. The relationships
proposed in the framework were tested using Pearson’s correlation, and the causal relations
were analyzed using regression analysis and Statistical Packages for Social Science (SPSS
Version 20). From the result of the analysis it is concluded that there was strong relationship
between factors affecting logistics performance emphasis on transport function
(Speed/Responsiveness and connectivity) of East Africa Bottling S.C. Jimma branch. Hence, it
is to the benefit of the company to give due emphasis on dimensions of transport function
(Speed/Responsiveness and connectivity) to improving logistics performance.

Key words: Logistics Performance, Transport Function

VI
 Table of Contents’

Contents Page No
DECLARATION……………………………………………………………………………….I
CERTIFICATE …………………….……………………………..…………………..…….…II
ACKNOWLEDGEMENTS……………………………………………………………...…....III
ACRONYMS OR ABRIVATION............……………………………………………….…...IV

ABSTRACT……………………………………………………………………………………………….……………….……………V

CHAPTER ONE………………………………………………………………….……..……...1
1.INTRODUCTION……………………………………………………………….……..….....1
1.1. Background of the Study.………………………………………………………........,…1
1.2.Background of the organization…... ................................................................................. ..3
1.3. Statement of the Problem................................................................................................ 4
1.4. Basic Research Questions.............................................................. ……….7
1.5. Objective of the Study………………………………..……………………....…….…..7

1.5.1.General Objectives ...................................................................................... ………….…7

1.5.2. Specific Objectives……………………….………………………………..…......8

1.6. Significance of the Study…. ........................................................................................... 8

1.7. Delimitation ....................................................................................................... …. …10
1.8.Limitation of the Study ……………………………….…………..……………….....…10
1.9. Organization of the Paper...............................................................................................11
CHAPTER TWO……………………………………………………………………….…..…12
2. REVIEW OF RELATED LITERATURE……………………………………………..…...12
2.1.Introduction…………………………………………………….…………………..……..12
2.2. Theoretical framework…………………………………………………………………...12

2.2.1. Over view of logistics…………………………………………………………..…..12

2.2.2. Introduction………………………………………………………………………...12
2.3. Logistics management…………………...……………………………………………….13

2.4. Logistics activities and fields………………….……………………………………..…..14

2.4.1. Inbound Logistics.………………………………………………………….….….15

2.4.2. Outbound Logistics……………………………………………………….…...…15

2.4.3. Logistics Activities………………………………………………………………..18

2.4.4. Logistics fields………………………………………………………………....…19

2.5. Achieving Logistics Efficiency and Effectiveness Requires …………………….….…...19

2.6. Logistics Service Value ……………………………………………………….…...….…19
2.7. Transportation…………………….….…………….……………………………..…...….21

2.7.1. Modes of Transportation ………………………………………………………….…22

2.8 Transportation and Logistics………………………………………………………….…..23

2.9. The Effects of Transportation on Logistics Activities……………………………………23

2.9.1. The Role of Transportation in Service Quality………………………………....24

2.10. Empirical Findings……………………………………………………..….……….…...25

2.11. Conceptual frame work……………………………………………………………....…26
CHAPTER THREE.……………………………………………………………………....…..28
3. Research design and methodology.................................................. .....................................28
3.1. Introduction…....................................................................................................................28
3.1.1. Research Design…...........................................................................................28
3.1.2. Source and type of data.....................................................................................29

3.2. Sampling design……………………………………………………………..……..….....29

3.2.1. Study area and target population.................................................................29
3.2.2. Sample size and sampling techniqueS.........................................................29
3.3. Methods of Data Collection, Design and Administration…………………………..……30

3.3.1. Methods of Data Collection…………………………………………….…30

3.3.2. Questionnaire design………………………………………………...……30

3.3.3. Methods of Administration/ Quality Criteria…………………….….……30

3.3.3.1. Content validity…........................................................................30

3.3.3.2. Construct validity26….................................................................31

3.3.3.3. Pilot test……………………………………………………..…..31

3.4. Method f Data Analysis……………………………………….…………………….…....31

3.5. Validity and Reliability………………………………….………………………….…....32

3.6. Ethical consideration…………………………………………..…………………………34

4.RESULTS AND DISCUSSIONS..........................................................................................34

4.1.Introduction…………………………………………………………….…………….…...34
4.2.General information ….. .................................................................................................. .35
4.3. Descriptive statistics.. ................................................................................................. ..…37
4.4.Inferential Statistics for Factors Affecting Logistics Performance and Transport Functi.45
4.4.1.Correlation Analysis……………………………………………………..…………...…45
4.4.1.1.Correlation analysis between Factors Affecting Logistics Performanceand
Transport Function......................................................................................................46
4.4.1.2. Correlation between transport function and factors affecting
Logistics Performance...............................................................................................48
4.4.2. Regression Analysis ……………………………………………………………….....50
4.4.2.1.Regression analysis between Factors Affecting Logistics Performance Emphasis on Transport Function..………51
 4.4.2.2. Independent of observation test…………………………………………………......51

4.4.2.3. Test of linearity…………………………………………...…………………….......51

4.4.2.4. Normality of Residuals (Normality Test) ………………………...…………….…..52

4.4.2.5. Multi co linearity Test……………………………….………………………..….…54

4.4.2.6. Regression analysis between Factors Affecting Logistics Performance and

Transport Function….................................................................................................56
4.4.2.7. Regression analysis between Transport Function and Dimensions of Transport......57

4.4.2.8. Regression analysis between Human factors and logistics performance…………...59

CHAPTER FIVE………………………………………………………………………..…...61
5. SUMMARY, FINDINGS, CONCLUSIONS AND RECOMMENDATIONS……….…....61
5.1. INTRODUCTION..............................................................................................................61
5.2. Summary……………………………………………………………………………….....61
5.3. FINDINGS………………………………………….…………………………………….62

5.4.CONCLUSIONS……………………………………………………………………….....63

5.5. RECOMMENDATIONS…………………………………………………………….…...64
5.6. IMLICATION FOR FURTHER STUDY…………………..……………...64

REFERENCES……………………………………………………………………………......65
APPENDIX I………………………………………………………………………………….67
 CHAPTER ONE

1. INTRODUCTION

This chapter addresses the introductory part of the paper. It basically includes a background
of the study, Company profile, statement of the problem, objectives of the study,
significance of the study, Delimitation of the study, Limitation of the Study and
Organization of the Paper.

1.1. Background of the Study

Global competition is increasing tremendously and the business entities cannot be survived,
if they have no the ability to adapt the environmental constant changes. More options were
being provided to the consumers in buyers’ market; any of organizations must have the
strategies to manage well the cost, quality, quantity and timeliness to fulfil customers'
requirement through excellent logistics management. (Lamber, Stock, & Ellram, 1998).

Logistics initially applied to military operations; its most significant impact is being felt
through the functions of production, distribution and consumption (Slack, 2002)
According to Hesse (2016), the origin of the modern logistics goes back to the emergence
of the capitalist economy, the development of specific modes of industrial production and
the unfolding of a particular division of labour. To a certain extent, circulation allowed for
the transition from use value to exchange value, and thus made possible the large-scale
capitalization of commodities. Mass distribution and marketing became incorporated in the
practice of modern management (Chandler, 1977) and have been significant factors of
wealth generation. The organization and technology of modern distribution are embedded
in a changing macro and microeconomic framework. This mass distribution and marketing
activity of commodities is logistics function.
Logistics management is an integrating function which coordinates and optimizes all
logistics activities, as well as integrates logistics activities with other functions, including
marketing, sales, manufacturing, finance, and information technology (Morris and Imrie,
2012). According to the Council of Logistics Management (1991), logistics is part of the
supply chain process that plans, implements, and controls the efficient, effective forward
and reverses flow and storage of goods, services, and relevant information between the
point of origin and the point of consumption in order to meet customers’ requirements.

Logistics encompasses entire process of materials and products moving into, within and out
of firm. Inbound logistics covers the movement of material to the firm. Materials
management describes the movement of materials and components within a firm. Physical
distribution refers to the movement of goods from point of production to end customers.
The movement of goods from the supplier to the manufacturing plant, within the compound
of the plant, from the warehouse to the factory, from the factory to the warehouse, from the
warehouse to the distributers and final customers all requires the service of the
transportation unit at each and every of the activities involved. The role of transportation is
unquestionable especially in companies like coca cola, where there exists a great deal of
reverse logistics and day to day supply of finished goods to customers. Transportation
plays a vital role in moving raw materials, finished goods, utilities and the manpower
involved in all those activities. (Srinavas, 2005)

Logistics system can be affected by many factors. From those factors that can be affect the
well-being of logistics performance; the transportation system is a lion share contribution.
The deficiency of professional manpower, raw materials, high transportation cost also
affects the company’s benefits (Coyl et al., 2010)

The purpose or function of transportation is to serve as a connecting link between the

spatially separated units within a firm's own organization (such as between plants and
warehouses) and between units of the firm and units of other firms and individuals (such as
suppliers and customers). Good transportation has the effect of holding to a minimum the
time and cost involved in the spatial relationships of the firm. In general, transportation is
the base of efficiency and economy in business logistics and expands other functions of
logistics system. (Coyl et al., 2010)
The effectiveness of the transportation service has an impact in the movement of raw
materials, finished goods, utilities, ware house management, on distribution outlets also on
production performance. Without well-developed transportation systems, logistics could
not bring its advantages into full play. A good transport system in logistics activities could
provide better logistics efficiency, reduce operation cost, and promote service quality. The
improvement of transportation systems needs the effort from both public and private
sectors. A well-operated logistics system could increase both the competitiveness of the
government and enterprises (Tracy, 2004).

Transportation plays different role in logistics as the physical link connecting the firm to its
suppliers and customers, as a nodes and links scenario, transportation is the link between
fixed facilities (nodes). It also adds value to the product by providing time, place &
quantity utility for the firm goods. When firms engage in global competition transportation
costs are becoming even more significant. Out of which, outbound transportation was
clearly the largest component of total physical distribution costs. In general, transportation
is the base of efficiency and economy in business logistics and expands other functions of
logistics system. (Coylet al.,2010). In line with facts, this study focused to investigate on
factors affecting logistics performance emphasis on transport function in a case of East
Africa Bottling Share Company Jimma branch.

1.2. Background of the Organization

The Coca-Cola Company was born On May 8, 1886 in Atlanta, Georgia and at present the
beverages consumed in more than 200 countries with over 1.6 billion servings each day.
Coca-Cola was first bottled in Ethiopian‘s capital Addis Ababa in 1959 by the Ethiopian
Bottling Share Company and later opened a second branch in Dire Dawa in 1965.
The two plants were nationalized in 1975 and ran as public companies until 1996 when
they were bought by the Ethiopian Entrepreneurs. Just prior to this, in 1995, Coca-Cola
Sabco bought shares in the business and in 1999 signed a joint venture agreement with the
plants and in 2001 increased its share to 61% and the company changed its name to the
East Africa Bottling Share Company (Nelson, Ishikawa &Geaneotes,2009). The company
has the mission to continually increase profitability, sustainable unit case sales of its
products by satisfying new and existing consumers through excellent market execution and
utilizing a wide range of distribution methods.

The company was opened its main distribution branch in Jimma town since 2001 E.C. This
main distributor is responsible for managing, storing and handling of products and
distributing the company’s product to the ultimate retailers and customers. Jimma main
distribution branch covers vast area of the country, Bedele, Elu Ababor and South Nations
and Nationalities, (Bonga, Mizan, Tepi) and so on. The Coca-Cola companies produces
different kinds of soft drink like Coca-Cola, Sprite, Fanta, Fanta Ananas, Fanta Tonic and
Crystal Water. Concerning transportation this companies were using its own transport
facilities to transport and distribute the final product to local customers.

1.3. Statement of the Problem

The ultimate objective of logistics is to enhance total value offered to customers, be they
are other companies in the chain or the final consumer. Among the components of business
logistics, transportation is the most important economic activity. It also accounts for one
third to two third of the expenses of logistics costs. A transportation system that provides a
reliable service level reduces supply chain uncertainty and the amount of inventory
required throughout the chain. Rapid and effective response in moving materials and
information within a short time period are crucial and transportation is a key element in
making this happen. (Hummels, 2001)

Effective logistics operations can lead to more efficient operations that increase the firm
competitiveness and increase customer loyalty where distances are frequently greater and
many environmental barriers increase the complexity and uncertainty of worldwide
operations (Nagel et al., 1994; Goh et al.,1998)

Transportation is not an economic function that stands apart from others. Instead, it is a
connective role among the several steps that result in the conversion of resources into
useful goods in the name of the ultimate consumer. It is the planning of all these functions
and sub-functions into a system of goods movement in order to minimize cost maximize
service to the customers that constitutes the concept of business logistics. The system, once
put in place, must be effectively managed. (Fair, 1981)

Liu & Yen, (2010); Luo, (2011); and Yeung& Tung (2012) studied a Hong Kong logistics
service provider and found that a successful implementation of a quality management
system is the key to survival and long-term prosperity for a logistics company.
The study conducted by Goh and Pinaikul (2002) on logistics practices and development in
Thailand found that most of the logistics costs incurred are on transportation and
warehousing. They also observed that manufacturing firms that have instituted logistics
departments are making an effort in upgrading their logistics systems and are more
pervasive in using technology to manage logistics as compared to firms without formalized
logistics departments.

Vasco, S. and Andrew, P (2012) in their study on manufacturing sector logistics practices
of South Africa found that there is a high transportation cost, unexpected road congestions,
and loading and unloading delays. Related to this there is much stronger focus on
responsiveness at customer side and road freight transport network made transport cost less
important in the whole supply chain. The study also indicated that most of these
manufacturing firms used 3PLs, and these 3PLs have 100 percent vehicle ownership and
practice flexible transportation plan. For the case of customer service sometimes there are
urgent customer orders and demand forecast inaccuracies. Concerning delivery tight and
rigid delivery windows are observed. Lack of communication between customer and carrier,
and lack of understanding between sales and logistics with in carriers are also sometimes
observed.

The study by Bemnet (2004) on Ethiopian transport system explored that transport costs
are very high in Ethiopia. For instance, in garment processing trade, overall transport cost
cover 28 percent of the total value added. This is a high proportion compared to the world
average and Africa’s average which are 6.1 and between 15 and 20 percent respectively.
According to the World Bank Report (1991) efficiently organized flows of goods and
information are only possible if there is a well-developed transport and communication
infrastructure.

The report also described that in sub-Saharan African countries, this infrastructure is poorly
managed and maintained. Until recently about half of the region's paved roads and 70
percent of its unpaved roads were only in a fair to poor condition and required substantial
repair.

In Ethiopia, a study conducted by Fekadu (2013) on logistics practices of Ethiopia

indicated that Ethiopian logistics system is characterized by poor logistics practices and
lack of coordination of goods transport, low level of development of logistics infrastructure
and inadequate fleets of freight vehicles in number and age, damage and quality
deterioration of goods while handling, transporting and storage. However, his study mainly
focused on the transportation and customer service practices using general attributes of
infrastructure, performance, information system, human resources, business and political
environments.

As per the preliminary interview conducted with the logistics and transport personnel of the
East Africa Bottling Share Company Jimma branch, there exist transportation factors
related problems in the day to day operation of the company from providing excellent
service by disturbing in the logistics function. The problems were related with dimensions
of transport function (Speed/Responsiveness and connectivity) as well. The
Speed/Responsiveness factor is related with poor performance of some of the employees in
logistics area as a result of customer orders on time, fast and Speed in delivery of services.
The connectivity factors were lack of flexibility, efficiency of cost, overall quality of our
transportation, providing dependable delivery and better tracing and tracking practice were
the problems extracted from the interview. This preliminary interview gives a clue that a
need for depth investigation regarding this issue. Therefore, this study intended to conduct
an investigation on factors affecting logistics performance focusing on transportation
function in East Africa Bottling Share Company Jimma branch.
1.4. Basic Research Questions

In line with the statement of the problem, the study was addressed the following:
1. What logistics functions is practicing in East Africa Bottling Share Company

Jimma Branch?

2. What is factors affecting the logistics performance of the company?

3. How the transport function is performing in the company?

4. Which dimensions of transport function is contributing more to logistics performance

of the company?

5. What are the functions played by dimensions transportation towards logistics

performance?

1.5. Objectives of the Study

1.5.1. General Objective

The General objective of the study was to examine factors affecting logistics
performance emphasis on transport function in the case of East Africa Bottling Share
Company, Jimma branch.

1.5.2. Specific Objectives

1. To assess logistics functions that is practicing in East Africa Bottling Share Company
Jimma Branch.

2. To identify factors that affecting the logistics performance of the company.

3. To show transport function that are performing in the company.

4. To indicate dimensions of transport function that are contributing more to logistics

performance of the company
5. To identify functions played by transportation towards logistics performance

1.6. Significance of the Study

This research will be enabling the East Africa Bottling share company Jimma Branch to
know its problem on logistics performance by the transport function and take correction
measures. In this competitive world and growing market demand, up grading every
aspect of operation is must to win the market. In companies like East Africa Bottling
share company, where transportation effectiveness have a great deal of impact on
distribution as well as customer satisfaction, it is essential to identify areas of operation
like transportation as many activity are related with transport function in order to identify
the effect of transport function have on logistics performance of the company in order to
give some solution to problems faced by the company. The study will also benefit the
customers of the company as the findings will indicate solutions for problems in the
transportation section which in turn results in reduced cost and customer satisfaction by
minimizing factors affecting logistics performance on transport functions especially in
the area of speed/responsiveness and connecting factors. Distributers of product of the
company will be also benefit from the improved transport service also affected by the
transportation service. The study will also help as an indication for further area of
research by incorporating other factors to the study in order to see transport function not
only in logistics performance but also other operation.

The company will be benefited since the outcome of the study helps them to easily
understand the gap on their factors affecting logistics performance and take corrective
actions that will be enhance their capacity to compete with best companies. It will also
help this company to identify, evaluate and monitor the key areas which will help them to
maintain their pace and speed of their transportation.

Supply Chain Management side will be also benefit from this study. Through the
activities will be undertaken to promote effective and efficient management of supply
chains. Effective supply chain management has become a potentially valuable way of
securing competitive advantage through enhancing Supply chain and improving
organizational performances since competition is no longer between organizations, but
among supply chains. These include supplier partnership, physical movement of goods,
meeting customer demands and information sharing throughout the supply chain.

The government policy makers will benefit also from the outcome since it will be assist
them in examining the current policies towards the factors affecting logistics
performance emphasis on transportation. The findings of this study will be also provide
prospective investors with a realistic idea and informational base of what will be expect
when operating in the company like East Africa Bottling S.C Jimma branch.

More specifically, these studies will be endeavours to limited within East Africa Bottling
Share Company Jimma branch. This study, which will be undertaken in the area of the
factors affecting logistics performance emphasis on transport function of East Africa
Bottling share company Jimma branch, will be contribute by identifying factors affecting
logistics performance and effective implementation of transport function management by
East Africa Bottling share company Jimma branch,also underline the importance of
sufficient and relevant information for planning and making successful decisions about
factors affecting logistics performance emphasis on transport function. Additionally, this
study will be serving as a point of starting for further research by academicians.

1.7. Delimitation

Logistics and transport encompass vast areas of managerial practices. However, it is

difficult and unmanageable to conduct the study in all areas in terms of time, finance, and
research manageability. Therefore, the scope of this study was delimited to the factors
affecting logistics performance emphasis on transport function in East Africa Bottling
Share Company Jimma branch (Jimma town).
The subject scope of this study was delimited to the company’s point of reference
towards logistics functions, speed/responsiveness and connectivity of logistics
performance emphasis on transport function.

The area of the study was also delimited to the case company i.e., East Africa Bottling
Share Company Jimma branch. And with the help of closed ended questionnaire and
open ended questionnaire were conducted from all employees who are working at East
Africa Bottling Share Company Jimma Branch.

1.8. Limitation of the Study

The limitation of the study was the accessibility to the required data as employees were
too busy to provide the necessary information in filling the questionnaire and conducting
interview within a planned schedule.
The study was carried out limited to one geographic location (Jimma town) the
researcher couldn’t get the overall information regarding the company at the country
level. The method applied in gathering data was also cost and time consuming.

1.9. Organization of the Paper

The research report was organized into five chapters. The first chapter focused on the
general introduction, highlighting the issues of factors affecting logistics performance
emphasis on transport function. Problem formulation and research questions also form
part of this chapter followed by the scope of the research work. The second chapter
presents the recently emerged knowledge products presented through extensive review of
relevant literatures from different sources. The third chapter presented the research
methodology used to gather and analyze the data. The fourth chapter is making an in-
depth presentation and discuss of results of generated from this research. The last section
of the report presents a summary, findings, conclusion and recommendations.
 CHAPTER TWO

2.REVIEW OF RELATED LITERATURE

2.1. Introduction

This chapter will emphasize on the theoretical aspect of the study. It takes into
consideration what various professionals have written on the topic in respect to the
factors affecting logistics performance emphasis on transport function in East Africa
Bottling Share Company Jimma Branch. The discussions will be based on what goes on
in the transportation function and how those activities can affect the logistics
performance.

2.2. Theoretical framework

In this study, logistics activities, the critical factors like transport function, factors affects
logistics activities, were identified in order to support the upgrading of logistics activities
of firms.

2.2.1. Overview of logistics

2.2.2. Definitions

Logistics can be defined in different ways. Even if the definition varies, the definitions
all are almost the same. To see some of the definitions;

According to the Council of Logistics Management (1991) logistics is part of the supply
chain process that plans, implements, and controls the efficient, effective forward and
reverses flow and storage of goods, services, and related information between the point
of origin and the point of consumption in order to meet customers requirements’.
On the other hand Johnson and Wood‘s definition (cited in Tilanus, 1997) uses five
important key terms‘, which are logistics ,inbound logistics, materials management,
physical distribution, and supply-chain management, to interpret. Logistics describes the
entire process of materials and products moving into, through, and out of firm. Inbound
logistics covers the movement of material received from suppliers. Materials
management describes the movement of materials and components within a firm.
Physical distribution refers to the movement of goods out ward from the end of the
assembly line to the customer. Finally, supply-chain management is somewhat larger
than logistics, and it links logistics more directly with the user‘s total communications
network and with the firm‘s engineering staff.

Logistics is generally the detailed organization and implementation of a complex

operation. In a general business sense, logistics is the management of the flow of things
between the point of origin and the point of consumption in order to meet requirements
of customers or corporations. The resources managed in logistics can include physical
items, such as food, materials, animals, equipment and liquids, as well as abstract items,
such as time and information. The logistics of physical items usually involves the
integration of information flow, material handling, production, packaging, inventory,
transportation, warehousing, and often security.

2.3. Logistics management

Logistics management is widely accepted in every business organization, private or

public, profit or non-profit organization. It is defined as part of the supply chain process
that plan, implement and control the efficient, effective flow and storage of goods,
services and related information from the point of origin to the point of consumption to
meet customer requirements. To satisfy customer requirements, logistics aims to ensure
the availability of the right product with the right quantity and the right condition, to the
right place, at the right time for the right customer and at the right cost (Ballou, 1999).
Particularly, logistics management is concerned with the efficient flow and storage of
goods (raw materials, in process inventory and finished goods) from the point of origin to
the point of consumption. It starts with the initial shipment of raw materials and
accessories from a supplier, products are then manufactured or processed and finally
delivered to the end customer (Bowersox et al.,2002).

Logistics can be viewed as inbound and outbound logistics. Inbound logistics in the
movement of materials from suppliers or vendors into production process or storage
facilities while outbound logistics is the process related to the movement and storage of
products from the end of the production line to the end user. Coyle and coauthors suggest
that the manufacturing industry should focus on the activities both inbound logistics and
outbound logistics. Inbound logistics systems can vary depending on the plant location in
the supply chain, the nature of the product and the market situation in which the product
is sold. Inbound logistics includes the activities of procurement or purchasing, inbound
transportation, receiving, warehousing, material handling, inventory management and
control, packaging and communication and information management. Outbound logistics
consists of the finished goods inventory, order processing activities under the areas of
order management, outbound transportation, customer services, demand management and
the distribution of finished goods.

2.4. Logistics Activities and Fields

A basic distinction in the nature of logistics activities is between inbound and outbound
logistics.

2.4.1. Inbound Logistics

Inbound Logistics is one of the primary processes of logistics, concentrating on

purchasing and arranging the inbound movement of materials, parts, and/or finished
inventory from suppliers to manufacturing or assembly plants, warehouses, or retail
stores (Tracy, 2004).

Inbound logistics is to transport, storage and delivery of goods/products coming into a

company/organization.
Inbound logistics is an integral element of business operations for manufacturing
companies/organization, involving the processes of receiving, storing and distributing
raw materials for use in the production.

2.4.2. Outbound Logistics

Outbound Logistics is the process related to the storage and movement of the final
product and the related information flows from the end of the production line to the end
user (Tracy, 2004). Generally, the following are some of the activities of logistics:

A) Order processing - the Logistics activities start from the order processing which
might be the work of the commercial department in an organization. The commercial
department is the one who ensures that the payment terms and the delivery terms have
been met and then processes the order from within the company. This is an important
step in logistics activities because any mistake in this step (wrong entries of quantity,
delivery address etc) can affect the whole logistics process. Basically, the commercial
team accepts the order from the customer and places the order to the warehouse and the
warehouse accepts the order and does it according to the order.

Order processing are sequential process involving: processing withdrawal list, picking
(selective removal of items from loading units), sorting (assembling items based on
destination), package formation (weighting, labeling and packing), and also includes
order consolidation (gathering packages into loading units for transportation, control and
bill of lading).

B) Materials handling - is the movement of goods within the warehouse. It involves

handling the material in such a way that the warehouse is able to process orders
efficiently. Although it may sound a mundane task, it is an important one and an ongoing
activity in any warehouse.
Materials handling is the movement, protection, storage and control of materials and
products throughout manufacturing, warehousing, distribution, consumption and
disposals.

Materials handling can be used to create time and place utility through the handling,
storage, and control of materials, as distinct from manufacturing, which creates form
utilities by changing the form, shape and makeup of the products.

C) Warehousing - warehousing plays a huge role and is one of the important Logistics
activities. The important point in warehousing is that the warehouse should be nearby to
the dealer or the distributors’ place and it should facilitate the easy delivery of goods.
The location of warehouses also reduces the pressure on mother warehouse (large
warehouses which stock most of the products). When there is a peak in demand or if
there is a drop in production, these warehouses can take the pressure of deliveries and
they can become interdependent to ensure delivery of goods/products to consumers.

Warehousing is key components of logistics management and how a

company/organization manages the transportation and storage of their inventories.
Warehousing is the act of storing goods/products that will be sold or distributed later.

D) Inventory control - Inventory management is one of the most important functions of

logistics especially after the adoption of various production techniques such as Just in
time manufacturing, lean manufacturing or other manufacturing processes where the cost
of inventory management is brought down.
Inventory control, also known as stock control, involves regulating and maximizing the
company’s/organization’s inventory. The objective of inventory control is to maximize
profits with minimum inventory investment, without impacting customer satisfaction
levels. Inventory control is also about knowing where all your stock is and ensuring
everything is accounted for at any given time.

E) Transportation - now we come to one of the major logistics activities which are one
of the most resources heavy and revenue heavy segment of logistics. Transportation
involves the physical delivery of goods from the company to the distributor or dealer and
from the dealer to the end customer. Generally, companies/organizations are involved
only till the point delivery happens to the distributor or the dealer. The distributor is then
responsible for the delivery to the end customer. The better the warehousing and the
inventory management of a company, the lower is the transportation cost for the
company. Economies of scale play a major role in the cost-effectiveness of
transportation.

Transport or transportation is the movement of humans, goods/products and animals

from one place to another.

Transportation is defined as a particular movement of an organism or things from one

point to another point by using different types of modes of transportation.

F) Packaging – the packaging refers to all those activities related to designing,

evaluating and producing the container for the product. Packaging the product is a
responsibility of the logistics team because otherwise the product will reach damaged to
the end customer and this is a huge cost to the company.

Packaging also refers to the process of designing, evaluating, and producing packages.
Packaging can be described as coordinated systems of preparing goods/products for
warehousing, transport, sales, logistics and end use.

2.4.3. Logistics Activities

The factors that affect the logistics activities in each of the six areas, namely order
processing, procurement, inventory management, production, packaging and
transportation activities

Generally, logistics activities are activities relating to procurement, inventory

management, material handling, packaging, transportation and order processing that
supports their manufacturing system through supply chain. It includes a series of related
activities from procurement at the beginning of operations to physical distribution at the
end. These logistics activities vary from firm to firm depending on a firm’s particular
organizational constitutes logistics and the importance of individual activities to its
operations (Ballou, 1999).

2.4.4. Logistics fields

Given the services performed by logisticians, the main fields of logistics can be broken
down into: Procurement logistics, Distribution logistics, disposal logistics, reverse
logistics, green logistics, asset control logistics, emergency logistics (Humanitarian
logistics), production logistics and business logistics.

2.5. Achieving Logistics Efficiency and Effectiveness Requires

- Improved efficiency of each mode of transport;

- Coordination and seamless interchange of different transport modes;
- Effective integration of all supply chain management functions (including demand
management, supply management, manufacturing, storage, transport, distribution, and
value-added services); and
- Enhanced collaboration among supply chain partners (e.g., suppliers, manufacturers,
distributors, and end users).

2.6. Logistics Service Value

As (Swartz, 2010) stated in his article, there are different conceptualizations of the
process by which logistics service creates value. The traditional conceptualizations are
based on the creation of time and place utilities. (Mentzer et al., 1989) The often quoted
Seven Rs‖ definition of logistics describe the attributes of a company‘s product offering
that leads to value creation through logistics service. In other words, part of the value that
a company creates for its customer is its ability to deliver the right product in the right
amount at the right place at the right time for the right customer in the right condition at
the right price (Shapiro and Heskett, 1985).
Factors that determine savings in material can be reduced to the following major groups:
physical, technological, engineering and design, organizational and economic. The first
group of factors - the material determines the choice of best materials, which would
reduce their consumption, particularly to reduce the consumption of scarce materials and
to reduce the amount of material costs in the cost of production. Using technology factors
is the choice of materials saving options such processes, which reduce the waste,
produced during the production. Completion of the analysis is to develop practical
measures to improve the use of material resources, based on them to establish new,
progressive norms, reflecting the advanced production experience and scientific and
technological achievements, to be implemented in the upcoming planning period.
(Makarenko, 2003)

More recent definitions of logistics service value focus on the relationship of logistics
service to customer service, capabilities, and competitive advantage of a firm. Logistics
service is an important component of customer service and helps a company maintain its
current competitive position in the marketplace (Langley and Holcomb, 1992). When
traditional attributes of logistics service are modified to create value-added services or
are configured in unique bundles, they take the shape of logistics capabilities that can be
a source of competitive advantage (Morash et al., 1996; Lynch et al., 2000). Thus, in
their quest for new ways to establish a competitive edge, managers are recognizing that
unique types of customer value can be created through logistics service (Langley and
Holcomb, 1992).

Creating customer value and sustaining competitive advantage through the delivery of
unique or value-added logistics services can be a challenging process because they
involve changing the way logistics managers and organizations work. To do so, it is
necessary to understand how logistics creates value. Fundamentally, logistics creates
customer value through three generic ways: efficiency, effectiveness, and differentiation
or relevancy (Langley and Holcomb, 1992). How logistics creates value. Fundamentally,
logistics creates customer value through three generic ways: efficiency, effectiveness,
and differentiation or relevancy (Langley and Holcomb, 1992).
2.7. Transportation

Transportation is one of the most visible element of logistics operation it provides two
services product movement and storage. It is the movement of people, animals and goods
from one location to another. Modes of transport include air, rail, road, water, cable, pipe
line and space. The field can be divided into infrastructure, vehicles and operations.
Transport is important because it enables trade between persons, which is essential for
the development of civilizations (Coyl et al., 2011).

As per (Coyl et al., 2011) transportation service is very frequently important for the
selection of a particular mode operating between two points. The dimensions of
transportation service would include reliability, accessibility, and security. These factors
are looked at in terms of their cost impact as well as the actual transportation cost itself in
selecting a particular model.

Transport is part of the economic activity, which is associated with an increase in the
degree of satisfaction of people and businesses by changing the geographical location of
goods and people. Transport - means of satisfying needs through transportation of goods
and passengers. Transportation - one of the key logistics functions associated with
moving goods vehicle on a particular technology in the supply chain, consisting of
logistics operations and functions, including forwarding, cargo handling, packaging, and
transfer of ownership of the goods, risk insurance, customs procedures, and so on. From
an economic point of view, transport is one of the defining elements of the production
process. The production and use of goods, there are two limiting factors - the time factor
and the spatial factor. (Sarkisov, 2001)

The development of an exchange or market economy, one in which goods are transferred
from points of production to points of sale and consumption, depends upon the ability to
move goods, that is, on the availability of transportation service. (Fair & Williams 1981,
p. 22)
2.7.1. Modes of Transportation

There are different modes of transportation. The common modes of transportation

include Truck, Rail, Air, water, pipeline, multimodal, and package carriers.
Air- can transport both passengers and cargo. Have a fixed cost in infrastructure and
equipment. Labor and fuel costs are largely trip related and independent of the number of
passengers or amount of cargo carried on a flight.
Truck- have the advantage of door to door shipment and a short delivery time and it
consists of two major shipments in the industry TL( Truck load) whereby charges for full
truck independent of the quantity shipped and LTL(Less than truck load) in which charge
is based on the quantity loaded and distance travelled
Rail-incurs a higher fixed cost in terms of rails, locomotives cars, and yards. It is
convenient for large shipments over large distance.
Water- Is ideally suited for carrying very large loads at a lower cost.
Pipeline-used for transportation of crude petroleum, refined petroleum and natural gas
products and requires significant initial fixed costs.
Multimodal- uses more than one mode of transport to move a shipment to its destination.
Package Carriers- carry small packages ranging from letters to shipments weighing
about 150 pounds by using air, truck or rail to transport time critical smaller packages.

2.8. Transportation and Logistics

Transport is a central ingredient in the time and spatial economic utility of products and
services.
Multimodal transport, which combines the advantages of each mode, can be a
particularly efficient and effective approach.
Logistics is a process of planning, implementing, and controlling the efficient flow of
products, information, and funds to conform to the client‘s requirements. Transport is a
core component of logistics, moving goods between different points in the supply chain.
Logistics encompasses the storage of raw materials, work-in-process parts, and finished
products, as well as a variety of value-added services.
2.9. The Effects of Transportation on Logistics Activities

According to (Sreenivas and Sirinivas, 2001) transportation plays a connective role

among the several steps that result in the conversion of resources into useful goods in the
name of the ultimate consumer. It is the planning of all these functions and sub-functions
into a system of goods movement in order to minimize cost maximize service to the
customers that constitutes the concept of business logistics. The system, once put in
place, must be effectively managed.

Traditionally these steps involved separate companies for production, storage,

transportation, wholesaling, and retail sale, however basically, production/manufacturing
plants, warehousing services, merchandising establishments are all about doing
transportation. Production or manufacturing plants required the assembly of materials,
components, and supplies, with or without storage, processing and material handling
within the plant and plant inventory. Warehousing services between plants and marketing
outlets involved separate transport. Merchandising establishments completed the chain
with delivery to the consumers. The manufacturers limited themselves to the production
of goods, leaving marketing and distribution to other firms. Warehousing and storage can
be considered in terms of services for the production process and for product distribution.
There have been major changes in the number and location of facilities with the closure
of many single user warehouses and an expansion of consolidation facilities and
distribution centers. These developments reflect factors such as better transport services
and pressures to improve logistics performance.

2.9.1 The Role of Transportation in Service Quality

Sreenivas and Sirinivas (2001) the role that transportation plays in logistics system is not
simple as carrying goods for the proprietors but complex. Its complexity could take effect
only through highly quality management. By means of well-handled transport system,
goods could be sent to the right place at right time in order to satisfy customers' demands.
It brings timely, regional and even formal efficacy, and also it builds a bridge between
producers and consumers. Therefore, transportation is the base of efficiency and
economy in business logistics and expands other functions of logistics system. In
addition, a well transport system performing in logistics activities brings benefits not
only to service quality but also the company competitiveness.

Fair & Williams (1981, pp. 22-23) Government plays an important role in development
of national transport systems. Create a beneficial environment for enterprises through
advanced infrastructures and good controls, and hence promote a countries'
competitiveness.

2.10. Empirical Findings

Michael Tracy (2004) his work entitled transportation effectiveness and manufacturing
firm performance stated that rapid and effective response in moving materials and
information within short period are crucial, and transportation is a key element in making
this happens. Transportation system that provides a reliable service level reduces supply
chain uncertainty and the amount of inventory required throughout the chain which in
turn reduces holding cost which finally reduces the overall cost of ownership of a product
and the certainty of supply chain will build customer loyalty.

On the other hand, poor transportation performance causes excessive freight cost and
increased inventory holding cost and is a major obstacle in implementing and realizing
gains from competitive manufacturing strategies such as lean production.
Empirical findings supports the notion that superior delivery service has a positive
impact on a manufacturers performance in terms of sales growth, return on assets, market
share gain and overall competitive position.

Sreevinas and srivani, (2001) stated that logistics system has a more and more important
position in the society activities and transportation and logistics systems have
interdependent relationships that logistics management needs transportation to perform
its activities and meanwhile, a successful logistics system could help to improve traffic
environment and transportation development since transportation contributes the highest
cost among the related elements in logistics systems, the improvement of transport
efficiency could change the overall performance of a logistics system. It is also stated
that transportation plays an important role in logistics system and its activities appear in
various sections of logistics processes. Without the linking of transportation, a powerful
logistics strategy cannot bring its capacity into full play. The review of transport systems
provides a clearer notion on transport applications in logistics activities.

As more frequent and flourishing world commerce, the development of logistics affects
the advancement of economy more and more. Ruijgrok (Brewer et. al., 2001) stated that
'when the economy is growing, both production and consumption will grow, hence
leading to an increase in the demand for transport, and vice versa'. Well-managed
logistics system improves efficiency and benefits of business while decreasing logistics
costs increases profits of products. In order to reduce the cost of logistics, good
management of transportation is the key issue due to that it occupies a big part in the
logistics activities.

It is also stated that transportation is fast becoming a key factor in determining the
difference between profit and loss. It is the essential link between the extraction of
natural resources; the fabrication of industrial, commercial, and consumer products; and
the final distribution of goods to wholesalers, retailers, and end users.

In all of the empirical findings problems that hinders transportation from playing its
function is not mentioned. Therefore the findings of this study might will give
explanation on the factors affecting logistics performance emphasis on transport function
in the case of East Africa Bottling Share Company Jimma Branch along with the
solutions that will be recommended.
2.11. Conceptual frame work

From the above literatures gathered, the following research framework can be drawn.
Independent Variable Dependent Variable

Speed/responsiveness
Logistics Performance

Connectivity

Figure 1 conceptual framework

Source: Self depicted based on literature review.

The responsiveness function of transportation is the speed at which a transport provides

products to the customer. The speed of the ability of transport to respond to customers’
requirements in ever-shorter time-frames has become critical.

The connecting function of transportation is that the flow of inputs to the company (the
inbound logistics), materials movement within the company and the distribution of
products to customer (the outbound logistics).
.
 CHAPTER THREE

3. Research Design and Methodology

3.1. Introduction

Research methodology provides a means to systematically solve a research problem. This

chapter explains the methodological approach adopted when conducting the research.
This includes the research design; population and sampling technique, tool of data
collection and method of data analysis were briefly explained

3.1.1 Research Design

Descriptive research design was used for this study. With such a study, information was
obtained to meet the underlying purposes and objectives of the study.

Descriptive research design was useful in investigating the existing relationships among
the variables that was captured in this study. According to Cooper& Emory (1995), a
survey is feasible when the population is small and variable hence the researcher was
able to cover all the elements of the population. Hence the survey was considered to be
more efficient and economical.

The rationale for combining both quantitative and qualitative data is to better understand
a research problem by combining both numeric values from quantitative research and
the details of qualitative research in order to neutralize limitations of applying any of a
single approach. Hence, the convenient research design considered suitable for this study
was descriptive research.

3.1.2. Source and type of data

The type of data collected includes both primary and secondary type of data. The
instrument includes for the primary data: questionnaire, open and closed ended
questionnaire are the main one while for the secondary data, review of different manuals,
reports and journal with regard to the factors affecting logistics performance emphasis on
transport function of an East Africa Bottling Share Company Jimma branch was studied
in more detail.

The primary data was collected from all employees of an East Africa Bottling Share
Company Jimma branch.

3.2. Sampling design

3.2.1. Study area and target population

The study was conducted on factors affecting logistics performance emphasis on

transport function in a case of East Africa Bottling Share Company Jimma branch. The
target populations are all employees of the East Africa Bottling Share Company Jimma
Branch including transportation, logistics, warehouse and distribution including officials.

3.2.2. Sample size and sampling techniques

The population of the study was encompasses all employees of the East Africa Bottling
Share Company Jimma branch including transportation, logistics, warehouse and
distribution including officials. The total populations are 54 (Male 48 Female 6).
Census was used. The questionnaire was distributed to all employees. Because the data
that was gathered from those people, it was helpful to get firsthand information about
factors affecting logistics performance emphasis on transport function of East Africa
Bottling Share Company Jimma branch.

Because the total population was finite and small in number, the study was cover all the
total population of the study and sampling technique is not applied.
3.3. Methods of Data Collection, Design and Administration

3.3.1. Methods of Data Collection

The data was collected with the help of questionnaire and open ended questionnaire were
conducted from all employees who are working at East Africa Bottling Share Company
Jimma branch.

3.3.2. Questionnaire design

The questionnaire that was going to ask is one which was help directly to achieve the
research objectives, provides complete and accurate information; it was easy for
respondents to complete, it was designed as to make sound analysis and interpretation
possible.

3.3.3. Methods of Administration/ Quality Criteria

Concerning methods of administration, paper-and-pencil administration were used to
gather the information. This type was served as primary methods for such kind of
assessment. Paper-and-pencil remains a widely used methods of administration, with its
primary advantage being cost-effectiveness in a situations in which face few mailing and
follow-up costs.

3.3.3.1. Content validity

As it known, Content validity refers to the extent to which the items on a test are fairly
representative of the entire domain the test seeks to measure. So, the items on a test were
fairly representative for all domains the test seeks to measure.
3.3.3.2. Construct validity

Construct validity is a process of that you work through, involving a number of

procedures to assess the validity of the measurement procedure that was in the
dissertation to measure a given construct. So, it was try to test measure the concept that
it’s intended to measure.

3.3.3.3. Pilot test

A small scale preliminary study conducted (by taking five employees) in order to
evaluate feasibility, duration, adverse events, and improve upon the study design.

As per the interview conducted with logistic sub unit head, transport heads, warehouse
keepers the role that transportation plays is very important. Almost every activity in
logistics operation is dependent up on transportation.

3.4. Method of Data Analysis

The paper employed regression analysis method since it used to capture a cause and
result relationship model. That means well-organized logistics system will positively
contribute to transport function. Those factors that affect logistics system were organized
and calculate their regression on logistics performance and transport function as well. In
order to see logistics practice of the company, descriptive statistics was employed. Also,
inferential analysis such as: correlation and regression analysis were used to measure the
degree of association and magnitude to be held in between independent and dependent
variables. In additions to the above mentioned analysis method, linear regression was
used and also Statistical Package for Social Sciences (SPSS Version, 20) software was
used to analyze the data from the questionnaires.
3.5. Validity and Reliability

According to (Broman and Bell, 2007), reliability analysis was concerned with the
internal consistency of the research instrument. As multiple items in all constructs was
used, the internal consistency/reliabilities of Logistics functions, Factors that affecting
the logistics function , Transportation function, Dimension of Transportation function
and Challenges of transportation activities 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 1: Reliability test

Measurement Number of items Cronbach’s alpha

Speed/Responsiveness 5 .702
Connectivity 7 .774
Logistics Performance 6 .795
indicators
Reliability of items 18 .757

Source: SPSS Version, 2020

Table1 indicated that the reliability of 18 items that are Factors Affecting Logistics
Performance Emphasis on Transport Function was tested by using Cronbach’s alpha.
According to Hair et al. (2005), the reliability coefficient for which more than or equal to
70 % (A>0.7) is acceptable.
Therefore, based up on Cronbach’s alpha value the reliability of the questions was
evaluated and the result was used to test the reliability of the questions related with
Factors Affecting Logistics Performance Emphasis on Transport Function. Hence, the
reliability coefficient of the above items is 0.7 or Reliability of all items used under this
study is 75.7% and alpha reliability of the variables ranges between 0.702-0.795.
Therefore, this indicates that the items used in this study were reliable and
understandable to the respondents.

3.6. Ethical consideration

The study was done by respecting the respondent’s dignity and maintaining their privacy.
It values objective and researcher establish a strong rapport with the participants on
research rapport formation under taken through clarification of the purpose of the study
telling them that provision of the information were totally depending on their willingness,
guarantying every response which came from them will be highly respected and by
telling them no need of writing their names. This strong rapport helped the researcher to
get the consent and willingness of the participants, which was very crucial to get the
necessary and reliable information data which in turn highly contributed the validity of
the research and also the purpose of these study were explained to the respondents before
data collection and provisions of the questionnaire, focus group investigation, close
ended questionnaire and open ended questionnaire were taken after insuring their
willingness to give their responses
 CHAPTER FOUR

4. RESULTS AND DISCUSSIONS

4.1. Introduction

As mentioned in the third chapter the next step after data collection were the analysis and
interpretation of data in order to come up with meaning full explanations about the
research problem and recommendations to solve the problems. The objective of this
thesis was to assess the factors affecting logistics performance emphasis on transport
function: A study on East Africa Bottling S.C. Jimma branch.

Data was the main resource which enables researchers to investigate the problems and
reach in conclusions and recommendations. In this research primary and secondary
source of data were used.

An open questionnaire and close ended questionnaire were used to obtain data from
primary sources. Different proclamations, reports, standards, regulations, researches,
journals and related literatures were the secondary sources as revised on the literature
review part.

A questionnaire was distributed to 54 (Male=48 and female=6) employees of the

company who were working in logistics, warehouse, transportation and head of
departments like logistics, transportation, warehousing and distribution including
officials to achieve the research objectives and answer the research questions.

Hence, out of 54 questionnaires, 51 respondents (Male=45 and Female=6) were filled

and returned questionnaire, which demonstrates 94.44% respondents. Furthermore, in-
depth information through primary data was gathered from top management, senior
members of staff at East Africa Bottling S.C. Jimma Branch. By using Statistical
Package for Social Science (SPSS) Soft ware frequency descriptive statistics analysis
was made to come across the findings of the research questions.
4.2. General Information

As per indicated in Table 1 below demographic results of the respondents, 45 (88.24%)

Male and 6 (11.76%) were female. The Marital Status showed that Married 34 (66.67%)
and Unmarried were 17 (33.33%).

The educational background of the respondents showed that 15 (29.41%) of the

respondents were 10 complete, 8 (15.69%) were 12 complete, a college diploma were
16(31.37%) and a degree BA/BSC were 12(23.53%). Overall in assessing the human
capital of an organization, educational background of the respondents indicated more of
the employee had a diploma. According to the response, the respondents provide relevant
and reliable information needed for the study and they are fit in line with the response of
the questionnaire.

With regard to Experience working in the company, respondents who had an experience
from 1-5 years were 15 (29.41%), from 6-10 years 18 (35.29%) , from 11-15 years were
8(15.69%) and respondents who had an experience of greater than 15 years were 10
(19.61%). This shows the company has very young and energetic employees who can
contribute in the company success and It is possible to state that majority of the
respondents were with the company for a long period of time, which means they know
the company very well from which it is possible to get the required information for the
study. This implies the fact that most of the respondents have sufficient knowledge and
experience about their firm and the subject matter of the study.

When we see the income of the respondents per month, from 1000 - 2,000 birr were 14
(27.46%), from 2001-5000 birr were 21 (41.18%), from 5001-8000 birr 12 (23.52%) and
those respondents their monthly income greater than 8,000 birr were 4 (7.84%). Hence,
more of the respondent’s income per month was 2001-5000 birr.
Table 2: Profile of Respondents
Frequencies Percent
Sex
Male 45 88.24
Female 6 11.76
Total 51 100
Marital Status
Married 34 66.67
Unmarried 17 33.33
Divorced - -
Total 51 100
Education
10complete 15 29.41
12complete 8 15.69
Diploma 16 31.37
Degree 12 23.53
Others -
Total 51 100
Experience
1-5 15 29.41
6-10 18 35.29
11-15 8 15.69
>15 10 19.61
Total 51 100.0
Income
100-2000 14 27.46
2001-5000 21 41.18
5001-8000 12 23.52
>8000 4 7.84
Total 51 100
Source: Own survey, 2020
4.3. Descriptive Statistics
Table 3: Dimensions of transport function (Speed/responsiveness)

No Question items N Mean Std Dev.

1 There is a fast service delivery 51 1.61 .255
by the company
2 The company deliver 51 2.17 .344
customer orders on time
3 The company creating time, 51 2.59 .411
place and possession utility
4 Our transportation service 51 4.11 .651
delivers products to the right
place needed
5 The company transportation 51 4.43 .693
is efficient in moving products
Source: Survey, 2020

In table 3, it is sought to see what transportation practice of the company looks like in
order to do that , the respondents were requested to respond to the statements on a 5 point
Likert scale and indicate the extent they agree with the statements that is: 5-Strongly
agree, 4-Agree, 3-Nutral, 2-Disagree, 1-Strongly disagree. A mean (M) score of 0-1.5
means that the respondents strongly disagreed, between 1.51 to 2.50 means they
disagreed, 2.51 to 3.50 means the respondents were neutral, 3.51-4.50 means they agreed,
and a mean above 4.51 means the respondents strongly agreed.

As per the response from respondents, the result shows that Dimensions of transport
function (Speed/responsiveness) of the company like transportation provides logistics
efficiency, The company transportation is efficient in moving products and transportation
service delivers products to the right place needed have a mean square value of 4.43 (Std.
Dev. .693) and 4.11 (Std. Dev. .652) respectively showing that transportation is
providing logistics efficiency by playing the roles of Speed/responsiveness of transport
function.
The company creating time, place and possession utility with a mean square value of
2.59 (Std. Dev. .411). This shows that the respondents responded neutral for the
company creating time, place and possession utility

Whereas the respondents disagreed on the company deliver customer orders on time, fast
service delivery by the company with a mean square value of 2.17(Std. Dev. .344), and
1.61 (Std. Dev. .255) respectively.

Table 4: Dimensions of transport function (Connectivity)

No Question items N Mean Std Dev.

1 The company provide 51 2.21 .951
dependable delivery
2 Transportation service of our 51 2.25 .98
company is flexible
3 Our transportation service is 51 2.37 .94
cost efficient
4 The overall quality of our 51 2.39 .818
transportation is very high
5 There a better tracing and 51 2.43 .971
tracking practice
6 The company outlets are well 51 2.63 1.11
connected
7 The company reach economies 51 4.05 .605
of scale and economies of
distance to reduce cost
Source: Survey, 2020
As per the response from respondents, the result shows that Dimensions of transport
function (Connectivity) of the company like transportation provides logistics efficiency,
The company transportation is efficient in reaching economies of scale and economies of
distance to reduce cost with a mean square value of 4.05(Std. Dev. .605). And also
become neutral in company’s outlets connected with a mean square value of 2.63(Std.
Dev 1.11).

Unlike the above five practices, Transportation service flexible, efficiency of cost, overall
quality of our transportation, providing dependable delivery and better tracing and
tracking practice in the company with mean value of 2.25(Std. Dev. .98), 2.37(Std. Dev.
.94), 2.39(Std. Dev. .818), 2.21(Std. Dev. .951) and 2.43(Std. Dev. .971) respectively,
the respondents disagreed with the Connectivity of the company. This shows that, the
company lacks in the above five dimensions of transport function (Connectivity).

Table 5: logistics performance indicators

No Question items N Mean Std Dev.
1 Improved number of orders 51 2.18 .871
shipped on time
2 Customers complains are 51 2.33 .931
decreased
3 The service delivery is 51 2.52 1.093
improved
4 Lead times improved 51 3.41 1.363
5 Branches sales improved 51 4.53 1.811
6 Damage free deliveries 51 4.57 1.823
Source: Survey, 2020

As per the response from respondents in table 4, the result shows that damage free
deliveries and branches sales improved was strongly agreed with mean value of 4.57(Std.
Dev. 1.823) and 4.53(Std. Dev. 1.811) respectively. This shows that, the company was
good in damage free deliveries and branches sales improved. By the other side, lead
times and service delivery is improved were responded neutral with mean value of
3.41(Std. Dev. 1.363) and 2.52 (Std. Dev. 1.093) respectively. Whereas, number of
orders shipped on time and customers complains are decreased were disagreed with mean
value of 2.18 (Std. Dev .871) and 2.33(Std. Dev .931) respectively. This shows that the
company’s should give especial attention on number of orders shipped on time and
customers complain.

4.4. Inferential Statistics for Factors Affecting Logistics Performance

And Transport Function

4.4.1. Correlation Analysis

This section includes the analysis of data related to the relationship between Factors
Affecting Logistics Performance and Transport Function, correlation analysis is
employed. Transport function is taken as the independent variable and logistics
Performance was considered as the dependent variable.

Correlations are the measure of the linear relationship between two variables. The
Pearson product moment correlation coefficient is a statistic that indicates the degree to
which two variables are related to one another. The sign of correlation coefficient (+ or -)
indicates the direction of the relationship between -1 and +1.

A correlation coefficient has a value ranging from -1 to 1. Values that are closer to the
absolute value of 1 indicate that there is a strong relationship between the variables being
correlated whereas values closer to 0 indicates that there is little or no linear relationship.

Variables may be positively or negatively correlated. A positive correlation indicates a

direct and positive relationship between two variables. A negative correlation, on the
other hand, indicates an inverse, negative relationship between two variables (Leary,
2004). Measuring the strength and the direction of a linear relationship that occurred
between variables is, therefore, important for further statistical significance.
In this section, correlation analysis conducted in the light of each research Objectives and
questions developed. The relationship between factors affecting logistics performance
and transport function was investigated using correlation analysis. This provides
correlation coefficients which indicate the strength and direction of relationship. The p-
value also indicates the probability of this relationship‘s significance.
 Table 6: Correlation Analysis between factors affecting logistics performance
and transport functions (dimensions)
Efficiency in Creating time, Deliver customer Delivery to the Fast service Speed/responsi Connectivity
moving place and orders on time right place delivery by the veness
products possession utility company

Efficiency in moving 1 .307 .139 .095 .004 .161 .223

products
Pearson Correlation
Sig. (2-
.000 .050 .120 .463 .125 .25
tailed)
N
51 51 51 51 51 51 51

Creating time, place .307 1 .561 .490 .379 .701 .746

and possession utility
Pearson Correlation
Sig. (2- .000 .000 .000 .000 .000 .000
tailed)
N
51 51 51 51 51 51 51

Deliver customer .139 .561 1 .676 .513 .825 .808

orders on time
Pearson Correlation
Sig. (2-
.050 .000 .000 .000 .000 .000
tailed)
N
51 51 51 51 51 51 51

Delivery to the right .095 .490 .676 1 .580 .710 .599

place
Pearson
Correlation .120 .000 .000 .000 .000 000
Sig. (2-
tailed)
N 51 51 51 51 51 51 51

Fast service delivery .004 .379 .513 .580 1 .566 .587

by the company
Pearson
Correlation
.463 .000 .000 .000 .000 .000
Sig. (2-
tailed)
N
51 51 51 51 51 51 51

Speed/responsiveness .161 .701 .825 .710 .566 1 .733

Pearson Correlation
Sig. (2-
tailed)
.125 .000 .000 .000 .000 .000
N
51 51 51 51 51 51 51
Connectivity .223 .746 .808 .599 .587 .733 1
Pearson Correlation
Sig. (2-
tailed)
.25 .000 .000 .000 .000 .000
N
51 51 51 51 51 51 51

**. Correlation is significant at the 0.01 level (2 tailed).

*. Correlation is significant at the 0.05 level (2-tailed).
The correlation between dimensions of logistics performance and transport function
(dimensions) indicators was run as seen in the above table. The result of correlation
matrix between logistics performance and transport function (dimensions) are analyzed
as follow:
As it is shown in the table 6 above, Creating time, place and possession utility is
positively related to indicators of transport function (dimensions) of
Speed/responsiveness with a Pearson correlation coefficient of .701 (r=0.701) and
significance value is less than 0.001 and Connectivity with a Pearson correlation
coefficient of .746 and significance value of less than 0.001. This significance tells that
there is strong relationship between Creating time, place and possession utility of
logistics performance and transport function (dimensions) of Speed/responsiveness and
Connectivity.

It is also shown in the table above; the other logistics performance Deliver customer
orders on time is positively related with transport function (dimensions) of
Speed/responsiveness with Pearson coefficient of .825 and with Connectivity with
Pearson coefficient of .808 with significance of less than .001 in all the two cases. This
significance tells that there is a strong and genuine relationship between logistics
performance of Deliver customer orders on time and transport function (dimensions) of
Speed/responsiveness and Connectivity.

The other utility that logistics performance is place utility by delivering products to the
right place .In this regard, logistics performance of creating place utility is positively
related with transport function (dimensions) of Speed/responsiveness and Connectivity
with Pearson coefficient of .710 and .599 respectively with significance level of less
than.001 in all the two correlations.
Lastly, the others logistics performance were fast service delivery by the company, In
this regard, logistics performance of creating fast service, is positively related with
transport function (dimensions) of Speed/responsiveness with Pearson coefficient of
.566, also connectivity with Pearson coefficient .587, respectively with significance level
of less than .001.

4.4.1.2. Correlation between transport function and factors affecting

Logistics Performance

Table 7: Correlation between transport function and factors affecting

logistics performance
Correlations
Transport Function Factors Affecting
Logistics Performance
Transport Function 1 .901**
Pearson Correlation
Sig. (2-tailed) .000
N
51
51

Factors affecting logistics .901** 1

performance
Pearson Correlation .000
Sig. (2-tailed)
51 51
N

**. Correlation is significant at the 0.01 level (2-tailed).

Source: SPSS Version, 2020

Table 7 shows the result of correlation run between transport function and factors
affecting Logistics Performance. As a result of the correlation run, there is a very strong
positive relationship between transport function and factors affecting Logistics
Performance with Pearson coefficient of correlation of .901 with significance of .000
which is less than .001
4.4.2. Regression Analysis
Multiple regression analysis was conducted to find out the independent effects of each
factors affecting logistics performance emphasis on transport function. Multiple
regression technique gave a more detailed analysis as it enabled the examination of the
factors affecting logistics performance emphasis on transport function. As it is explained
earlier in this paper, transport plays a great role in the logistics performance and to have
an efficient logistics performance, and it is must to have a strong transport function in
the company. To prove this and determine the variation in logistics performance as a
result of transport function, a regression analysis is conducted.

4.4.2.1. Regression analysis between logistics performance and transport function

Table 8: Model summary
Model R R Adjusted Std. Durbin-
Square R Square Error of Watson
the
Estimate

1 .901 a .811 .802 2.62985 1.825

Source: SPSS Version, 2020

a. Predictors: (Constant), transport function
b. Dependent Variable: logistics performance

From table 8 R-Square which is the coefficient of determination is a commonly used

statistics to evaluate model fitness. The adjusted R square also called the coefficient of
multiple determination, is the percentage of the variation in the dependent variable
explained uniquely or jointly by the independent variable. As per the adjusted R square
result in the table 8 above, 80.2 percent of variation in Logistics performance of East
Africa Bottling Share Company Jimma branch can be attributed to effect of predictor
variable which is transport function. This means, 19.8 percent changes in logistics
performance can be attributed to other factors while 80.2 percent of the variation in
logistics performance was as a result of the functions that transportation plays in the
logistics performance.
4.4.2.2. Independent of observation test

Independent of observation may also be tested by the Durbin- Watson coefficient, which
uses standardized residuals. The Durbin – Watson statistics should be between1.5–2.5 for
independent observations. In this study, the value of Durbin – Watson from the above
table is 1.825. This value is within the acceptable range of the assumption and it implies
that the observations are independent.

4.4.2.3. Test of linearity

According to Darlington (1968), Linearity defines the dependent variable as a linear

function of the predictor (independent) variables. Multiple regressions can accurately
estimate the relationship between dependent and independent variables when the
relationship is linear in nature (Osborne & Waters, 2002).

This diagnostic test of linear regression assumes that the residuals should follow a
straight-line in the Normal Probability Plot indicating that the relationship between the
independent and dependent variable of the study was linear. As shown in figure below,
the points lie in a reasonably straight diagonal line from bottom left to top right; it seems
the linear regression fit the data on a straight line which confirmed existence of linearity.
 Source: SPSS Version, 2020

Figure 1: Regression Standardized Residual

4.4.2.4. Normality of Residuals (Normality Test)

To be sure that the model is a good one, it is important to examine the residuals.
According to Darlington, (1968) the differences between the values of the outcome
predicted by the model and the values of the outcome observed in the sample are known
as residuals. Normality can further be checked through histograms of the standardized
residuals (Stevens, 2009). Histograms are bar graphs of the residuals with a super
imposed normal curve that show distribution.

The residuals should follow a normal distribution about the predicted dependent variable
with a mean score of 0 and standard deviation of 1. A mean of 0 indicates the line is in
the middle of the points. Once again, some are above and some are below. The normal
distribution was shaped like a bell—it is symmetric, and most points were in the middle,
with fewer and fewer farther from the mean. And the bell shape means that most points
were close to the line, and there were fewer points farther from the line.
The histogram and p-p plot depicted in figure below shows that, the residuals seem
normally distributed and the residuals were distributed with the approximate mean value
of 0 and standard deviation of 0.985 which was approximately 1. Thus, the model
fulfilled the assumption of normally test.

Source: SPSS Version, 2020

Figure 2: Regression Standardized Residual

Table 9: ANOVA

Model Sum of Squares Df Mean Square F Sig.

1 Regression .270 8 .034 2.898 .027b

Residual .012 1 .012
Total .282 9
Source: SPSS Version, 2020

a. Predictors: (Constant), transport function, Speed/responsiveness, Connectivity

b. Dependent Variable: logistics performance

From table 9, it is obvious that the regression model was significant using between the
independent variable and dependent variable. An F statistic of 2.898 and a probability
value of 0.027 clearly indicate that the model was significant.

4.4.2.5. Multi co linearity Test

Co linearity occurs when two or more independent variables contain strongly redundant
information. If variables are collinear, there is not enough distinct information in these
variables for the multiple regressions to operate correctly. A multiple regression with two
or more independent variables that measure essentially the same thing can produce errant
results and this is called a problem of multi co linearity.

Different scholars recommend different levels of correlation coefficients of independent

variables to predict the presence of multi co linearity problem in a certain research;
among those, Malhotra (2007) suggested that the problem of multi co linearity may exist
when the coefficient of correlation among independent variables is greater than 0.75
whereas Cooper & Schindler (2009), revealed that if the correlation coefficient is above
0.8, there was a problem of multi co linearity in the research.

In this study the correlation matrix for the independent variables, as indicated in the
above correlation table, there is no correlation above 0.75 or 0.8; it can be concluded that
there was no multi co linearity problem in this research. Ideally, independent variables
are more highly correlated with the dependent variables than with other independent
variables.

Table 10: Co linearity Statistics

Model Tolerance VIF

1 (Constant)

A .66 1.9

B .21 2.3

Source: SPSS Version, 2020

Further to the reliability tests a multi co linearity test was done at the pilot stage to ensure
that the accepted independent variables did not exhibit co linearity amongst themselves.
A situation in which there is a high degree of association between independent variables
is said to be a problem of multi co linearity which results into large standard errors of the
coefficients associated with the affected variables. According to Mugenda and Mugenda
(2012), multi-co linearity can occur in multiple regression models in which some of the
independent variables are significantly correlated among themselves.

In a regression model that best fits the data, independent variables correlate highly with
dependent variables but correlate, at most, minimally with each other. This problem was
solved by ensuring that there was a large enough sample as multi co linearity is not
known to exist in large samples. Multi co linearity can also be solved by deleting one of
the highly correlated variables and re-computing the regression equation. From table 10,
the tolerances are all above 0.2. If a variable has co linearity tolerance below 0.2, it
implies that 80% of its variance is shared with some other independent variables.
Myers (1990) also postulates that a VIF (Variance Inflation Factor) value greater than 10
calls for concern. As indicated in table 13, there is no existence of multi co linearity
problem among the explanatory variables as tolerance values are greater than 0.2 and VIF
values less than 10.

4.4.2.7. Regression analysis between Logistics performance and

Factors affecting logistics performance

Table 11: Regression coefficients for Logistics performance and for predictor

Variable

Model Summary

Un standardized Standardized
Coefficients Coefficients

Model B Std. Error Beta T Sig.

1 (Constant) .577 .369 1.565 .120

Speed/respon
siveness .213 .071 .271 2.987 .003*

Connectivity .100 .050 .143 1.993 .001*

a. Dependent Variable: logistics performance

Source: SPSS Version, 2020

Table 11 shows that there exists significant association between the independent
variables Speed/responsiveness and Connectivity and the dependent variable logistics
performance of East Africa bottling Share Company Jimma branch, since the p-value of
those logistics performance dimensions are less than 0.05
The unstandardized coefficient of an independent variable (also called B or slope)
measures the strength of its relationship with the dependent variable (CSR practice); this
means, the variation in the logistics performance corresponds to the variation in the
independent variables. A coefficient of 0 means that, the dependent variable do not
consistently vary as the independent variables varies. In this research model, the
coefficient for the Speed/responsiveness is 0.213 and the coefficient for the Connectivity
is 0.100. So, for a certain variation in each independent variable as stated above, there
was a consistent variation in the logistics performance.

The standardized beta (β) coefficient column also showed that the contribution that an
individual variable makes to the model. The beta weight is the average variation the
dependent variable logistics performance increases when the independent variables
(Speed/responsiveness and Connectivity) increases by one standard deviation (all other
independent variables are held constant). Thus, the largest influence on logistics
performance is from the Speed/responsiveness (.213) and Connectivity .100). The above
table further shows that all the explanatory (independent) variables included in this study
can significantly explain to the variation on the dependent variable (logistics
performance) at 95% confidence level.

Table 12: Model Summary for dependent variable logistics performance

Model Summary

Model R R Square Adjusted Std. Error of Durbin-

R Square the Estimate Watson
1 .977a .954 .943 1.08231 1.779

a. Predictors: (Constant), transport function

b. Dependent Variable: logistics performance
Source: SPSS Version, 2020
The findings from table 12, the adjusted R Square, implies that 94.3 percent of the
variation in transport function of the East Africa bottling share company Jimma branch
can be attributed to the combined effect of predictor variable (Speed/responsiveness and
Connectivity). That means 5.7 percent of changes in the transport function is attributed to
other factors.

Table 13: Regression coefficient for transport function of East Africa bottling Share
Company Jimma branch

Coefficients

Un standardized Standardized
Coefficients Coefficients

Model B Std. Error Beta T Sig.

1 Constant 31.044 5.074 6.003 .000

Logistics performance. .807 .173 .471 4.801 .000

a. Dependent Variable: Logistics Performance.

Source: SPSS version, 2020
The result in table 13 shows that there is significant association between the independent
variable transport function and logistics performance as p-value for transportation
function is less than 0.05

Table 14: Model summary for Factors Affecting Logistics Performance

Model Summary

Model R R Square Adjusted Std. Error Durbin-

R Square of the Watson
Estimate
1 0.44 .194 .190 6.98474 1.586
a. Predictors: (Constant), Transport function
b. Dependent Variable: Logistics performance
Source: SPSS Version, 2020
The adjusted R Square table 14 shows that 19% of variation in Transport function is
related with the factors affecting logistics performance with the remaining of 81%
resulting from other factors.
 CHAPTER FIVE

5.SUMMARY, FINDINGS, CONCLUSIONS AND

RECOMMENDATIONS

5.1. INTRODUCTION
This chapter has four parts: summary, findings, conclusion and recommendation. The
conclusion is based on the data that are analyzed in chapter four while recommendation is
based on the conclusion. The main purpose of this study was to identify the Factors Affecting
Logistics Performance Emphasis on Transport Function: A Study on East Africa Bottling S.C.
Jimma Branch

5.2. Summary

This research aimed at investigating the Factors Affecting Logistics Performance Emphasis on
Transport Function: A Study on East Africa Bottling S.C. Jimma Branch. The dependent
variable is Logistics Performance whereas the independent variable includes: Transport
function (Speed/Responsiveness, Connectivity). Accordingly, there is an association between
dependent variable and independent variables, in which the magnitude of association ranges
from medium to strongest. As per the output of regression analysis made to for Transport
Function, it is Speed/responsiveness and Connectivity factors related to operation of transport
function which could determine logistics performance of East Africa Bottling S.C. Jimma
Branch.

5.3. FINDINGS

As per the discussion and data interpretation under taken in the previous chapters, the
findings derived.

The objective of the study is to examine the Factors Affecting Logistics Performance
Emphasis on Transport Function on East Africa Bottling S.C. Jimma branch.
Literature has suggested that Logistics Performance is dependent up on Transport
Function at each and every stage of operation. The study will contribute by exploring the
relationship between the Factors Affecting Logistics Performance and Transport
Function.

The company transportation is efficient in moving products and transportation service

delivers products to the right place needed have a mean square value of 4.43 (Std. Dev.
.693) and 4.11 (Std. Dev. .652) respectively showing that transportation is providing
logistics efficiency by playing the roles of Speed/responsiveness of transport function.
The company creating time, place and possession utility with a mean square value of
2.59 (Std. Dev. .411).This shows that the respondents responded neutral for the company
creating time, place and possession utility. Whereas the respondents disagreed on the
company deliver customer orders on time, fast service delivery by the company and with
a mean square value of 2.17(Std. Dev. .344), and 1.61 (Std. Dev. .255)

The company transportation is efficient in reaching economies of scale and economies of

distance to reduce cost with a mean square value of 4.05(Std. Dev. .605). And also
become neutral in company’s outlets connected with a mean square value of 2.63(Std.
Dev 1.11).
Unlike the above five practices, Transportation service flexible, efficiency of cost, overall
quality of our transportation, providing dependable delivery and better tracing and
tracking practice in the company with mean value of 2.25(Std. Dev. .98), 2.37(Std. Dev.
.94), 2.39(Std. Dev. .818), 2.21(Std. Dev. .951) and 2.43(Std. Dev. .971) respectively,
the respondents disagreed with the Connectivity of the company. This shows that, the
company lacks in the above five dimensions of transport function (Connectivity).

Damage free deliveries and branches sales improved was strongly agreed with mean
value of 4.57(Std. Dev. 1.823) and 4.53(Std. Dev. 1.811) respectively.

Lead times and service delivery is improved were responded neutral with mean value of
3.41(Std. Dev. 1.363) and 2.52 (Std. Dev. 1.093) respectively.

Whereas, number of orders shipped on time and customers complains are decreased
were disagreed with mean value of 2.18 (Std. Dev .871) and 2.33(Std. Dev .931)
respectively.
5.4. CONCLUSIONS

This research covers broadly Factors Affecting Logistics Performance Emphasis on

Transport Function Jimma branch through extensive review. Based on the result of
summary findings,

The company is using economies of scale and distance in order to reduce transportation
cost that leads to reduced logistics cost. Transportation service of East Africa Bottling
Share Company Jimma branch is providing speed/responsiveness and connectivity.
Transportation of the company is not flexible as supported by majority of respondents
which shows lack of flexibility in transportation operation of East Africa Bottling share
Company Jimma branch.
The transportation practice is also not cost efficient as per respondents’ response. The
transportation service is also not giving timely reply to special enquiry from customers.
The improved number of orders shipped on time had also a problem.There is a strong and
positive relationship between factors affecting logistics performance and transport
function on East Africa Bottling S.C. Jimma branch.

5.5. RECOMMENDATIONS

The following suggestion and recommendation are brought forward based on the
conclusion made earlier so as to allow the management of the company to take
appropriate actions to set the problem identified in the study right. This includes:
 In order to minimize factors affecting logistics performance and enhance transport
function, the company has to work on transportation flexibility in order to serve
different parts of the customers.
 Transportation cost has to be controlled in order to minimize factors affecting
logistics performance on transport functions.
 The company gives special attention to giving timely reply to special enquiry from
customers.
 To grow the benefits of transport functions, the company has to give due emphasis to
factors affecting logistics performance as transportation accounts for about one third
 to two third of logistics costs which will support the company‘s objective of
benefiting from economies of scale.
 The company should give attention in improving number of orders shipped on time.
 To enhance organizational performance, it is better for the organization to give due
attention to transport functions as more and more of their operation is dependent on
this activities.

5.6 IMLICATION FOR FURTHER STUDY

• Logistics is not only affected by transportation but logistics performance is just

ranking the rating in relation to the other factors affecting to logistics performance is
not greater than the transportation. Below are cost ratio of logistics
items(Chang,1998).
• It should be noted that transportation is not the only factor that influence logistics
performance but there are other elements of activities like Order Processing, Inventory
control, procurement, warehousing, distribution,... all have a say on the performance of
logistics operation even if the major one is transportation.
• Logistics performance is not dependent only on transportation function. Therefore, the
implication for further study is to include all other dimensions including the influence
from other departments in the company in order to have a full picture of factors having
significant role on logistics performance .
 REFERENCES

BTRE (2001), Logistics in Australia: A Preliminary Analysis, Bureau of Transport and

Regional Economics, Canberra, Available from the Internet
<http://www.btre.gov.au/docs/wp49contents.htm>.
Bower sox and Closs, (1996);Christopher,(1992)
Bower Sox, A., and Bell, E. (2000), Business research methods (2nd ed). Oxford: Oxford
University press

Council of Logistics Management (1991), 'Definition of Logistics'. Available from Internet

<http://clml.org/Default.aspnCX=1>.
Sreenivas. M and Srinivas .T. (2001), The role of transportation in logistics chain: Alluri
institute of management science.

Chang, Y H (1998), Logistical Management, 1st edition, Hwa-Tai Bookstore Ltd., Taiwan

Chopra and Meinal (2007), Transportation: A Supply Chain Perspective, Seventh edition
Fair, M L & Williams, E W (1981) a, 'Transport and economic development' in
Transportation and Logistics, Business Publication Inc., USA, pp. 21-35.

Fair, M L & Williams, E W (1981)b, 'Systems of goods movement: economics of business

logistics' in Transportation and Logistics, Business Publication Inc., USA, pp. 51-65.

Krumwiede, D W & Sheu,C (2002), 'A model for reverse logistics entry by third-party
providers', Science Direct, vol. 30, pp. 325-333.

Michael Tracey. (2004),"Transportation Effectiveness and Manufacturing Firm

Performance". The International Journal of Logistics Management, Vol. 15 Iss 2 pp.
31 – 50

Peter Drucker (2001) Marketing Management and Strategy University of Warwick New
Delhi

Rogers D S & Tibben-Lembke R S (1998), going backwards: reverse logistics trends and
practices, The University of Nevada, Reno, and Centre for Logistics Management.

Ruijgrok "Case study: managing for total quality of logistics services in the supply chain",
Logistics Information Management,

Reynolds - Feighan, A.J. (2001) Air freight logistics. In A.M, Brewer, K.J. Button and
D.A.

Sreenivas.M and Srinivas .T. (2001), the role of transportation in logistics chain: Alluri
institute of management science.
Nelson, J., Ishikawa, E & Geaneotes, A. (2009), ―Developing Inclusive Business Models:
A
Review of Coca-Cola‘s Manual Distribution Centers in Ethiopia and Tanzania.‖ (A report
by the Harvard Kennedy School and the International Finance Corporation, 2009.

Tracy. (2004), Transportation effectiveness and Manufacturing firm performance: The

International Journal of Logistics Management, Vol. 15
James H.Bookbider and Tiffany A.Motuk. (2009), logistics and transportation in global
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chain: review,Critique and Prospects.department of management science , university of
Waterloo
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transportation and distribution sector", International Journal of Physical Distribution &
Logistics Management, Vol. 28 Iss 6 pp. 434 – 45

APPENDIX I
JIMMA UNIVERSITY
COLLEGE OF BUSINESS AND ECONOMICS
DEPARTMENT OF LOGISTICS AND TRANSPORT
MANAGEMENT
JUNE, 2020 G.C
Questionnaire
Dear respondent,

This research will be conducted as a partial fulfillment of Master of Arts (MA) graduate
student of Jimma University, College of Business and Economics department, Logistics
and Transport Management. This paper will be designed to gather primary data on
Factors Affecting Logistics Performance Emphasis on Transport Function, in A Case Of
East Africa Bottling Share Company Jimma Branch.

No reference will be made to any individual and the information will be reported in an
aggregated form. I will like to forward my heartfelt thanks in advance for your
cooperation being sacrificing your time. It takes approximately 30 to 40 minutes on
average to complete it.

Finally the researcher will like to ask you to be realistic and objective in assessing your
organization. The researcher will be assured complete anonymity of the gathered data.
These will be represented on aggregate level alone. Please provide answers on all
questions even though you feel that they repeat themselves occasionally. This is the only
way that the researcher can assure statistical validity of the questionnaire.

Email: [email protected] or mobile phone 0911051963/0967007270

Thank you in advance for your cooperation

N.B. Tick √ or X mark for close ended questions and use the space for open ended
questions

Part One: Demographic Characteristics of Respondents

1. Gender: Male Female
2. Age: below 25 25-35 35-45 above 45
3. Your Experience:
A. Less than 3 years B. 4-10 years C. 11-15 years D. Above 15 years
4. Your current position in the Banking.
A Transportation Officer B. Logistics manager C. Warehouse Manager
D. Recovery/monitoring officer E. Distribution officer F. None Managerial Employee

Part Two: Questions related to the Logistics and Transport function

1. What is/are district/branch specific logistics activities? Please specify your answer
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2. What are the challenges of transportation activities that resulted in poor logistics
performance of the company? Please specify your answer
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3. Please indicate your degree of agreement or disagreement to the selected transport

functions (dimensions) that affect the logistics performance.

Strongly Agree Neutral Disagree Strongly

Factors Agree (4) (3) (2) Disagree

(5) (1)

4.1 Speed/responsiveness
4.1.1 The company
transportation is efficient
in moving products
4.1.2 The company creating
time, place and
possession utility
4.1.3 The company deliver
customer orders on time
4.1.4 Our transportation service
delivers products to the
right place needed
4.1.5 There is a fast service
delivery by the company
4.2 Connectivity
4.2.1 The company outlets are
well connected
4.2.2 Transpiration service of our
company is flexible
4.2.3 The company reach
economies of scale and
economies of distance to
reduce cost
4.2.4 Our transportation service is
cost efficient
4.2.5 The overall quality of our
transportation is very high
4.2.6 The company provide
dependable delivery
4.2.7 There a better tracing and
tracking practice

4. Please indicate your degree of agreement or disagreement to the following logistics

performance indicators particular to transport function.

Strongly Agree Neutral Disagree Strongly

Indicators Agree (4) (3) (2) Disagree

(5) (1
5.1 Lead times improved

5.2 The service delivery is

improved
5.3 Improved number of orders
shipped on time
5.4 Damage free deliveries
5.5 Customers complains are
decreased
5.6 Branches sales improved

THANK YOU !!!