Addis Ababa University

College of Business and Economics

Department of Logistics and Supply Chain Management

The Effect of Supply Chain Management Challenges on the Performances

of Humanitarian Aid Organization: The case study of Addis Ababa City
Administration.

BY
Mebrahtom Tesfay

Addis Ababa, Ethiopia

June, 2016
 Addis Ababa University
College of Business and Economics
Department of Logistics and Supply Chain Management

The Effect of Supply Chain Management Challenges on the Performances

of Humanitarian Aid Organization: The case study of Addis Ababa City
Administration.

By: Mebrahtom Tesfay

Advisor: Dr. Abebe Ejigu

A Master thesis submitted to the department of Logistics and Supply Chain Management in
Partial Fulfillment of the Requirements for the Degree of Masters in Logistics and Supply Chain
Management

Addis Ababa, Ethiopia

June, 2016
 Declaration
I, the undersigned, declare that this thesis is my original work and has not been presented
for a degree in any other university, and that all the sources of materials used for the thesis
have been duly acknowledged.

Declared by:

Name: Mebrahtom Tesfay

Date: June, 2016

Signature: ___________________

Place: Addis Ababa University Department of Logistics and Supply Chain

Management

Date of Submission: June, 2016

III
 Addis Ababa University
College of Business and Economics
Department of Logistics and Supply Chain Management

This is to certify that the thesis prepared by Mr. Mebrahtom Tesfay, entitled “The effect of
supply chain management on the performances of humanitarian aid organization”: the case
study of Addis Ababa City Administration, which is submitted in partial fulfillment of the
requirements for the Degree of Masters in Logistics and Supply Chain Management,
complies with the regulation of the university and meets the accepted standards with respect
to originality and quality.

Signed by the Examining Committee:

Abebe Ejigu (PhD) _____________ _____________

Advisor Signature Date

Matiwos Ensermu (PhD) _____________ _____________

Internal Examiner Signature Date

Goitom (PhD) _____________ _____________

External Examiner Signature Date

___________________ _____________ ____________

Chair of Department or Graduate Signature Date
Program Coordinator

IV
 Acknowledgment
I am using this opportunity to express my gratitude to everyone who supported me
throughout the research project. First and foremost my gratitude directly goes to the God
Almighty, the creator and sustainer of all, for in Him I live and move and have my being.

I would like to give my grateful appreciation to my Advisor, Dr. Abebe Ejigu for his
constructive suggestions especially, his invaluable and prompt advices, comments,
suggestions and encouragements me throughout this study. I appreciate also all my
instructors, in one way or the other you brought a lasting impact in my life and future
career.

I am also thankful to those staff of the humanitarian aid organization who welcomed me
into their organizations and working environments to undertake the data gathering necessary
for this thesis. These participants were not only exceptionally helpful and receptive to this
research, but gave of their valuable time willingly; I would like to say thank you so much.

I am very thankful to my father Tesfay Beyene and my mom Hadas Berehe for their
continuous encouragement and always stood beside me for the success of this study.

I would like to thank my colleagues from Grand Ethiopian Renaissances Dam Project
(GERDP), Humanitarian Aid Organization, and Ethiopia Charity and Societies Agency who
provided insight and expertise that greatly assisted the data input for the research project
and I am immensely grateful to these personnel;

Mr. Desalegn Geremew, Procurement and Property Administration Directors’

Director of Addis Ababa University
Mr. Fikade Kebede, Chief Finances Officer of Grand Ethiopian Renaissances Dam
Project
Mr. Girma Teshome, Human Resources and Services Chief Officer of Grand
Ethiopian Renaissances Dam Project

Thank You,
Mebrahtom Tesfay

V
Table of Contents Page

Declaration.....................................................................................................................................III
Letter of certification.....................................................................................................................IV
Acknowledgment............................................................................................................................V
Table of contents............................................................................................................................VI
List of tables..................................................................................................................................IX
List of figures.................................................................................................................................IX
Acronyms........................................................................................................................................X
Abstract..........................................................................................................................................XI
Chapter One.....................................................................................................................................1
1. Introduction.................................................................................................................................1
1.1. Background of the study...........................................................................................................1
1.2. Statement of the problem..........................................................................................................3
1.3. Research questions....................................................................................................................5
1.4. Objective of the study...............................................................................................................5
1.4.1 General objective..................................................................................................................5
1.4.2. Specific objectives...............................................................................................................5
1.5. Research hypothesis..................................................................................................................5
1.6. Significance of the study...........................................................................................................7
1.7. Delimitation and limitation of the study...................................................................................8
1.8. Conceptual definitions..............................................................................................................8
1.9. Structure of the study................................................................................................................9
Chapter Two...................................................................................................................................11
2. Review of related literatures and conceptual framework..........................................................11
2.1. Theoretical framework............................................................................................................11
2.1.1. Supply chain management...................................................................................................11
2.1.2. Humanitarian supply chain structure, objectives and characteristics..................................12
2.1.3. Humanitarian supply chain actors........................................................................................13
2.1.4. Humanitarian Versus Business supply chain management.................................................14
2.2. Humanitarian supply chain challenges...................................................................................16
2.2.1. Governmental challenges.....................................................................................................16

VI
2.2.2. Socio-economic challenges..................................................................................................18
2.2.3. Infrastructure challenges......................................................................................................20
2.2.4. Internal challenges...............................................................................................................21
2.3. Humanitarian supply chain performance measurement..........................................................23
2.4. Synthesis of empirical study...................................................................................................24
2.5. Humanitarian aid organizations in Ethiopia...........................................................................27
2.5.1. Historical background..........................................................................................................27
2.5.2. Types of charities in Ethiopia..............................................................................................28
2.6. Literature review summary.....................................................................................................29
2.7. Conceptual framework............................................................................................................30
Chapter Three.................................................................................................................................31
3. Research Design and Methodology...........................................................................................31
3.1. Study Area..............................................................................................................................31
3.2. Research Design......................................................................................................................31
3.3. Target Population....................................................................................................................32
3.4. Method of data collection and research instruments...............................................................32
3.5. Reliability Test........................................................................................................................33
3.6. Methods of data analysis.........................................................................................................33
3.7. Ethical Considerations............................................................................................................34
Chapter Four..................................................................................................................................35
4. Results and Discussion..............................................................................................................35
4.1. Response rate..........................................................................................................................35
4.2. Reliability test.........................................................................................................................36
4.3. Descriptive analysis................................................................................................................36
4.3.1. Respondents’ general information.......................................................................................36
4.3.2. Supply chain management challenges.................................................................................39
4.4. Correlation of constructs.........................................................................................................44
4.5. Hypothesis test........................................................................................................................46
4.5.1. Hypothesis test summary.....................................................................................................57
Chapter Five...................................................................................................................................60
5. Summary, conclusion and recommendations............................................................................60

VII
5.1. Summary.................................................................................................................................60
5.2. Conclusion..............................................................................................................................62
5.3. Recommendations...................................................................................................................63
5.4. Areas of further studies...........................................................................................................64
Reference list.................................................................................................................................65
Appendix-I: A Questionnaire to be filled by the humanitarian organization................................69

VIII
 List of Tables
Page
Table 2.1 Humanitarian versus Business supply chains………………………….… 15
Table 4.1 Reliability statistics……………………………………………………… 36
Table 4.2 Respondents age bracket………………………………………………….37
Table 4.3 Respondents level of education………………………………………….. 37

Table 4.4 Respondents working experiences……………………………………….. 38

Table 4.5 SCM challenges experienced in humanitarian organizations……………. 39

Table 4.6 Level of supply chain……………………………………………………..42

Table 4.7 Correlation of variables…………………………………………………. 44

Table 4.8 Effect of government challenges on HAO performances………………... 46

Table 4.9 Effect of socio-economic challenges on HAO performances…………….49

Table 4.10 Effect of infrastructure challenges on HAO performances……………… 52

Table 4.11 Effect of internal challenges on HAO performances…………………….. 55

Table 4.12 Effect of SCM challenges on HAO performances………………………. 58

List of Figures
Figure 2.1 Relief supply chain structure………………………………………………. 12
Figure 2.2 Humanitarian supply chain Actors………………………………………….14

Figure 2.3 Conceptual Framework……………………………………………………. 30

IX
 Acronyms

AACA Addis Ababa City Administration

C Collaboration

CP Cost Performances

CSCMP Council of Supply Chain Management Professionals

DV Dependent Variable

F Flexibility

FDRECSA Federal Democratic Republic of Ethiopia Charities and Societies

Agency
GC Government Challenges

HAO Humanitarian Aid Organization

HL Humanitarian Logistics

HSCM Humanitarian Supply Chain Management

IC Infrastructure Challenges

INC Internal Challenges

IV Independent Variable

KPI Key Performances Indicators

NGO Non-Governmental Organizations

R Responsiveness

RSC Relief Supply Chain

SCM Supply Chain Management

SEC Socio-Economic Challenges

UNDP United Nation Development Program

X
 Abstract
Humanitarian supply chain is the network created through the flow of services, supplies,
information and finances between donors, beneficiaries, suppliers and different units of
humanitarian organizations, in order to provide physical aid to beneficiaries. Both the number
of natural and man-made challenges and the people affected by these challenges have
increased substantially during the recent decades. There exists a limited body of empirical
research within the field of humanitarian supply chain and this study is presented to address
this limitation by utilizing an operations research technique to examine, how the SC
performance can be improved. The research presented is builds on “The effect of supply
chain management challenges on the performances of humanitarian aid organization”. The
study took a descriptive and causal cross-sectional survey research design to describe
population characteristics and examine the effect of SCM challenges on the performances of
humanitarian aid organization. The study also equipped spearman‘s correlation to
determining the degree of correlation between the independent and dependent variables. For
the purpose of testing the developed hypothesis, simple and multiple linear regressions
analysis was used. The study was targeted to one hundred twenty three (123) humanitarian
aid organizations at Addis Ababa City Administration. Data were collected through primary
and secondary sources that were able to directly answer and fulfill the objective of the
study, and cronbach's alpha was used to measure the internal consistency of items in the
scale. The findings show that each dimension of supply chain management challenges has a
negative effect on responsiveness, collaboration, flexibility and cost performances. Finally
this study recommends that, it is advisable to closely working and collaboration with
different partners and stakeholders is extremely essential to minimize the SCM challenges,
and ensure service quality and sustainability. Therefore, this study is expected to fill the
empirical gap in literature on effects of supply chain management challenges on the
humanitarian aid organization, which need to be bridged to ensure that humanitarian supply
chains are improved and managed on the basis of informed evidence.

Keywords: Humanitarian supply chain management, Supply chain challenges,

Performances measurement

XI
 Chapter- One

1. Introduction

1.1. Background of the study

In today’s global economy, organizations are faced with a variety of changes in the business
environment (McIvor, R. 2000). Supply chain management deals with growth of
multinational corporations and strategic partnerships; global expansion and sourcing and
environmental concerns. Owing to these emerging issues in the internal and external
environment of organizations, supply chain management is the most critical discipline in the
world today (Chopra, S. 2007).

As stated by (Ganeshan and Harrison, 1995) a supply chain is a network of facilities and
distribution options that performs the functions of procurement of materials, transformation
of these materials into intermediate and finished products, and the distribution of these
finished products to customers as cited by ( Matiwos Ensermu,2013, pp.5). The ultimate
goal of any supply chain is to deliver the right supplies in the right quantities to the right
locations at the right time. Humanitarian supply chain management is applicable within
societal settings, including medical missions; disaster relief operations and other kinds of
emergencies and it helps improve quality of life.

Giulia S. et al. (1998), defined performance as the accomplishment of a given task measured
against preset known standards of accuracy, completeness, cost, and speed. According to
Heasip et al. (2004), supply chain performance is the entire chain's ability to meet end
customer needs through product availability, responsive, on-time delivery and flexible as
cited by (Jane Kiende Kinyua, 2013). The performance of a supply chain depends on how
its members coordinate their decisions. Sharing information is the most basic form of
coordination especially in the today’s globalized environment. Increased globalization and
competition has made SCM a very important and critical issue for any company if they have
to deliver quality and timely services and products to their customers. SCM ensures that
organizations get the right things to the right places at the right time thereby creating time
and place utility (Watcharavee Chandraprakaikul, 1997). The SC performance
characteristics with the greatest value in a supply chain are accuracy, responsiveness,

1
cooperation, on time complete deliveries, reduction of inventory and mutual continuous
improvement (Bonney, 2003).

The Oxford Dictionary defines challenges as a new or difficult task that tests somebody's
ability and skill. Some of the challenges facing human beings include man-made and natural
calamities, diseases, poverty, war, crimes, insecurity and poor governance. The term
challenge in this context is used to refer to the barriers that hinder effectiveness of supply
chain management in the humanitarian sector. In humanitarian supply chain environment
humanitarian staff often has to confront with many stakeholders, including large number of
donors, the media, government, the military and the final beneficiaries (Tomasini and van
Wassenhove, 2004). Interconnected or interlinked networks and node businesses are
involved in the provision of products and services required by end customers in a supply
chain. Lack of coordination among humanitarian organizations at the scene of a disaster is
ordinary, as there can be as many as several hundred humanitarian organizations at the
scene to carry out relief operations, all with different political agenda, ideologies and
religious beliefs and all fighting for media and donor attention (Van Wassenhove, 2006).
Oloruntoba and Gray (2005), posits that the humanitarian supply chain often entails high
level of uncertainty in terms of demands, supplies and assessments. Logisticians are often
frustrated by the need to operate in volatile environment. The performance management
particularly the performance of supply chain is equally a challenge for humanitarian
organizations. As clearly stated by Kunz and Reiner (2011), the humanitarian supply chain
factors categorized as socio-economic situational factors, environmental situational factors,
funding status, government situational factors, organizational factors and supply chain
decision as cited by (Jane Kiende Kinyua, 2013). As stated by (Graham E. Heaslip, 2012),
the primary objective of humanitarian aid organizations is to save lives, alleviate suffering
and maintain human dignity during and in the aftermath of man-made crises and natural
disasters, as well as to prevent and strengthen preparedness for the occurrence of such
situations as quoted by (Peter Nyandega Agwata, 2014:6).

The Charities and Societies Agency in Addis Ababa City Administration gather its members
from international, regional and national humanitarian organizations operating in Ethiopia.
There are several humanitarian organizations that currently operate in Addis Ababa City
Administration. These humanitarian organizations are active in a cross section of sectors

2
including: Relief and Emergency, Agriculture, Peace and security, Water, Education,
Environmental and natural resources protection, Health, Human rights, Energy, Justice,
Micro finance support, Gender and development, Children’s rights, Poverty alleviation,
Population, Training, Counseling, Small scale enterprises, Biodiversity, Disability and
Tourism among others. The reasons for the existence of such organizations are diverse. In
humanitarian actions, delays in delivery or relief can cost lives. Therefore, efficiency and
reliability in supply chain is a key success factor, because it ensures the smooth flow of
goods and services. To save lives and alleviate suffering, the response must be timely,
effective, appropriate, and well organized.

1.2. Problem statement

Today, organizations worldwide have to cope with very keen competition and a dynamic
environment as market conditions are changing rapidly and customers are demanding better
and better products and services (Reza Mohammady Garfamy, 2005). The humanitarian
supply chain focuses on providing humanitarian assistance in the forms of food, water,
medicine, shelter, and supplies to areas affected by large scale emergencies. Just like the
business world, humanitarian organizations are required to adopt various supply chain
concepts, to help in making informed decisions, and more importantly, to help them
undertake their operations in more profound manner. SC Performance measurement in
humanitarian logistics is crucial and critical element of successful humanitarian relief
operations on strategic, tactical and operational levels. As stated by (Peter Nyandega
Agwata, 2014) a disaster struck region, each supply chain has to be built up from the very
beginning and usually very different to previous ones. Therefore, the necessary
competencies need to be rapidly reconfigured. In addition, aid workers knowledge and skills
are of utmost importance to guaranteeing a quick response.

Nowadays, Supply chain is becoming a vital entity to the organizations` performance

measurement and metrics, and has received much attention from researchers and
practitioners. However studies have established the factors affecting supply chain
performance in manufacturing and commercial organizations whose focus is to deliver
value to customers in order to make profit (Mingli Liu, 2013). One of the differences
between supply chains for business and for humanitarian actions is the main focus. In

3
business, the focus is the final consumer, who is the input source of funds for the entire
chain. In humanitarian, the focus is protection of civilians and those no longer taking part in
hostilities, and the provision of food, water and sanitation, shelter, health services and other
items of assistance, undertaken for the benefit of affected people and to facilitate the return
to normal lives and livelihoods. There has been pressure on humanitarian organizations to
respond to emergencies in organized, timely, effective and appropriate manner. A number
of supply chain challenges are limited the humanitarian organizations in responding to
disasters (Van Wassenhove, 2006).

Swafford (2006), Brewer (2000) carried out studies on humanitarian supply chain and
measuring supply chain performance using balanced scorecard respectively, but the studies
did not examine the challenges of supply chains management. Andreas Wieland and Carl
Marcus Wallenburg, (2012), has conducted a study on supply chain risks and linking risk
management practices and strategies to performance, but the study were focused on the
supply chain risk management (SCRM) through the supply chain strategies (agility and
leanness). Walton (2011) carried out study on factors affecting the experience of speed in
humanitarian logistics and identified a relationship between decision making and
perceptions of speed. These studies have left an obvious research gap on effects of supply
chain management challenges on the humanitarian aid organization, which need to be
bridged to ensure that humanitarian supply chains are improved and managed on the basis
of informed evidence.

Therefore, this study is intended to examine the effect of supply chain management
challenges on the performances of humanitarian aid organization in Addis Ababa City
Administration. Finally, this study will be expected to fill the empirical gap in literature as
there is lack of empirical studies in the area, as the researcher stated before.

1.3. Research questions

The vital research questions that have been addressed in this study are:
1. What are the experiences of the humanitarian aid organization in relation to supply
chain management challenges?
2. What is the relationship between supply chain management challenges and the
performance of humanitarian aid organizations?

4
 3. What is the effect of supply chain management challenges on the performances of
humanitarian organizations?

1.4. Objective of the study

In response to the above research questions, the associated research objectives are as
follows:
1.4.1 General Objective

The main objective of this study is to examine the effects of supply chain management
challenges on performances of humanitarian aid organization in Addis Ababa City
Administration.

1.4.2 Specific Objectives

The specific objectives of this research are;

1. To determine the experiences of humanitarian aid organization in relation to supply
chain management challenges.
2. To determine the relationship between supply chain management challenges and the
performance of humanitarian aid organizations.
3. To examine the effects of supply chain management challenges on the performances
of humanitarian aid organizations.

1.5. Research hypothesis

This study is an empirical research on the supply chain management challenges in relation
to (government, infrastructure, socio-economic and internal organization) and HAO
performances (responsiveness, collaboration, flexibility and cost performances). So, the
following hypotheses are creating a clear picture of what will be investigate in this research
work.

1. The effect of government challenges on HAO Performances

As stated by (VanWassenhove, 2006) governments hold main power over political and
economic conditions and directly affect to supply chain processes as quoted in (Jane Kiende
Kinyua,2013). So, the first hypothesis of this study is:

 H1: Government challenges may have a negative effect on HAO Performances

5
 o H1a: Government challenges may have a negative effect on responsiveness.
o H1b: Government challenges may have a negative effect on collaboration.
o H1c: Government challenges may have a negative effect on flexibility.
o H1d: Government challenges may have a negative effect on cost performances.

2. The effect of socio-economic challenges on HAO Performances

Socio-economic challenges are associated with; uncompetitive market economy, absences

of local suppliers, uncertainty in demand and supply, availability stiff competition, absences
financial donors, the culture and language of the host country (Jahre, M. and Jensen, L.M.
2010). So, the second hypothesis of this study is:

 H2: Socio-economic challenges may have a negative effect on HAO Performances

o H2a: Socio-economic challenges may have a negative effect on responsiveness.
o H2b: Socio-economic challenges may have a negative effect on collaboration.
o H2c: Socio-economic challenges may have a negative effect on flexibility.
o H2d: Socio-economic challenges may have a negative effect on cost
performances.

3. The effect of infrastructure challenges on HAO Performances

Infrastructure challenges are directly related to; inadequate availability of a road network,
railway, airports, power supply, tends to disrupt and slow down the distribution of relief
items (Andreas Wieland, Carl Marcus Wallenburg, 2012). So, the third hypothesis of this
study is:

 H3: Infrastructure challenges may have a negative effects on HAO Performances

o H3a: Infrastructure challenges may have a negative effect on responsiveness.
o H3b: Infrastructure challenges may have a negative effect on collaboration.
o H3c: Infrastructure challenges may have a negative effect on flexibility.
o H3d: Infrastructure challenges may have a negative effect on cost performances.

4. The effect of internal organizational challenges on HAO Performances

According to (Thomas, A. S. and Kopczak, L. R., 2005); internal challenges are events that
occur within an organization associated with inadequate resources, employee turnover, lack

6
of contingency plan, poor organizational structure and systems, lack of employee
accountability, internal budget constraints among others.

So, the forth hypothesis of this study is:

 H4: Internal challenges may have a negative effect on HAO Performances

o H4a: Internal challenges may have a negative effect on responsiveness.
o H4b: Internal challenges may have a negative effect on collaboration.
o H4c: Internal challenges may have a negative effect on flexibility.
o H4d: Internal challenges may have a negative effect on cost performances.

Where; hypothesis letter subscribe: H1 (H1a, H1b, H1c, H1d) H2 (H2a, H2b, H2c, H2d) H3 (H3a,
H3b, H3c, H3d) H4 (H4a, H4b, H4c, H4d) represents alternative hypothesis. Whereas, hypothesis
letter subscribe: H1o (H1ao, H1bo, H1co, H1do) H2o (H2ao, H2bo, H2co, H2do) H3o (H3ao, H3bo, H3co,
H3do) H4o (H 4ao, H4bo, H4co, H4do) represents null hypothesis.

1.6. Significance of the study

The primary advantage of this study is for the researcher i.e. one of the fulfillments to get
master’s of Art degree in Logistics and Supply Chain Management. Secondly, this study
will have a paramount importance to the humanitarian aid organization by furnishing
valuable solution on the level of supply chain challenges. So that the humanitarian aid
organization can design effective processes, policies, procedures and metrics on how to
make minimize the supply chain challenges. Hence, financial donors, recipients of services,
staff and volunteers will be benefited. Moreover, this study will help those interested in this
area to have an insight on theoretical understanding of the issue under discussion and can
serve as a base and as a reference for further and other related research works.

1.7. Delimitation and limitation of the study

The principal concern of this study is to examine the effect of supply chain management
challenges on the humanitarian aid organization’s responsiveness, collaboration, flexibility,
and cost performances. It is geographically delimited at Addis Ababa City Administration in
relief and emergency sectors, on the supply chain/procurement/ logistics managers of the
humanitarian aid organization

7
The main limitation of this study is that the research is conduct only in Addis Ababa City
Administration (AACA) in relief and emergency sector, and the findings may not indicate
the general situation in Ethiopia. Unavailability of well documented and organized
secondary data was the limitations. Moreover, the organizations are very scattered which
was difficult to distribute and collect the data on time. Despite the limitation mentioned, the
data were collected by probing respondents through clarifying the aim of the research.

1.8. Conceptual definition

The conceptual definitions of both dependent and independent variables of the study are
defined below.

Supply Chain performances: supply chain performances is the entire chain's ability to meet
end customer needs through planning and management of all activities related to material,
information, financial flows, and co-ordination and collaboration with supply chain
members, across humanitarian aid organizations (Daniel Willner and Stavros Zafeiridis,
2013).

The predictor variables of the study, which are expected (hypothesized) to have association
with supply chain performances, are selected based on previous study on the subject.

Government challenges: Governments hold the main power with the control they have over
political and economic conditions and directly affect to humanitarian supply chain processes
with their decisions and it may refuse to allow humanitarian agencies to assist their citizens
and may object to conditionality of aid and development assistance, citing defense of their
national sovereignty. Those challenges are associated with type of regime, the national
regulations toward relief organizations, complex customs clearances procedure and security
context (Van Wassenhove, 2006).

Socio-economic challenges: The socio-economic challenges are associated with the

uncertainty in demand and supply, uncompetitive of market economy, the absences of local
suppliers, availability stiff competition, absences financial donors, the culture and language
of the host country, and lack of trust among the supply chain partners (Beamon, B. M. &
Balcik, B., 2008).

8
Infrastructure challenges: mean those challenges associated with the absences of a road
network, railway, airports, power supply, geographical dispersion, insufficient or inaccurate
communication that hindering efficient delivery and distribution of relief cargoes to the
needy (Van Wassenhove, 2012).
Internal organization challenges: Internal environmental challenges are events that occur
within an organization associated with inadequate resources, employee turnover, lack of
contingency plan, poor organizational structure and systems, lack of employee
accountability, internal budget constraints and lack of top management support (Thomas, A.
S. and Kopczak, L. R., 2005).

1.9. Structure of the study

To introduce and develop the arguments summarized here in detail, the thesis comprises
five chapters. These chapters are constituted as follows.

Chapter -1 Introduction: In the first chapter all introductory parts of the study like
background of the study, problem statement, research question, objective of the study,
research hypothesis, conceptual frame work, significant of the study, delimitation and
limitation of the study, as well as conceptual definitions are included.

Chapter -2 Literature review: The second chapter of the study comprises the theoretical
framework, which is a compilation of other author‘s journals and articles, literature about
the humanitarian supply chain challenges. This section also includes a review of various
empirical studies that have been made on supply chain challenges and performances of
humanitarian aid organization.

Chapter -3 Research methodologies: The methodology part of the thesis represents the
processes to mapping out the study area, research design, target Population, method of data
collection and research instruments, reliability test, methods of data analysis and ethical
consideration.

Chapter -4 Results and discussions: The ranges of issues that bear, both directly and more
peripherally, on the research approach adopted were discussed within this chapter. This
section covers data analysis, results, interpretation and discussion. It also describes the

9
expected results and findings based on primary data gathered and secondary data collected.
The research questions shall be answered.

Chapter 5: Summary, conclusion and recommendation: This section covers the summary of
the finding, conclusion, recommendation and consideration for future research.

10
 Chapter -Two

2. Review of Related Literatures and Conceptual Framework

The purpose of this paper is to examine the effects of supply chain management challenges
on performances of humanitarian aid organization in Addis Ababa City Administration. The
intention of this section is to explore previous work in the area of humanitarian supply chain
challenges, performances dimension and to define the main elements in successful
humanitarian supply chains. The literature review is structured into seven main sections.

2.1. Theoretical Framework

2.1.1 Supply Chain Management

Supply chain management encompasses the planning and management of all activities
related to material, information and financial flows in supply chain operation (Karen M.
Spens, 2012). The following most commonly used definition of SCM is provided by the
Council of Supply Chain Management Professionals (CSCMP):

“Supply Chain Management encompasses the planning and management of all activities
involved in sourcing and procurement, conversion, and all Logistics Management activities.
Importantly, it also includes coordination and collaboration with channel partners, which
can be suppliers, intermediaries, third-party service providers, and customers. In essence,
Supply Chain Management integrates supply and demand management within and across
companies” (CSCMP, 2006).

Humanitarian supply chain is the network created through the flow of services, supplies,
information and finances between donors, beneficiaries, suppliers and different units of
humanitarian organizations, in order to provide physical aid to beneficiaries (Mentzer et al.,
2001). Humanitarian supply chain is delivering the right supplies, in the right quantities to
the right location at the right time. Tasks such as managing relationships with donors,
planning for supplies required, performing needs assessments, and monitoring and
evaluating the impact of distributed supplies, are usually the responsibilities of non-logistics
units. Humanitarian logistics is essential for disaster relief operations because it is
characterized by effectiveness and speed in supplying beneficiaries with health, food,

11
shelter, water, medicines and sanitation in case of disaster (Thomas and Kopczak, 2005).
The field of humanitarian logistics and relief supply chain management is receiving
increasing attention among academics, as well as practitioners (Kovács & Spens, 2012).

Hella Abidi and Matthias Klumpp, (2005, p.2) defines Humanitarian logistics as:

“… the process of planning, implementing and controlling the cost effective flow and
storage of goods and materials, as well as related information, from the point of origin to
the point of consumption for the purpose of alleviating the suffering of vulnerable people.
The function encompasses a range of activities, including preparedness, planning,
procurement, transport, warehousing, tracking and tracing, and customs clearance”.

2.1.2 Humanitarian supply chain structure, objectives and characteristics

The operational structure and characteristics of humanitarian supply chains differ,

depending on the type of the disaster and the actors involved.

Figure 2.1: Relief supply chain structure

Source: (Beamon and Balcik, 2008)

The first step of the humanitarian relief supply chain is the supply acquisition and
procurement. Supplies can be procured locally and/or globally. Another source for relief
supplies is in-kind (non-financial) donations, which usually come available after a disaster
occurs. After the supply acquisition, the supplies will be transported to distribution centre.
According to Beamon and Balcik and (2008), pre-positioned stock may be held by relief
organizations at multiple intermediary levels, such as global, regional and in country levels.

12
The relief organizations, however, usually have difficulty finding secure, affordable,
undamaged warehousing / storage accommodation in areas affected by disaster.
Transportation is also a major issue for humanitarian relief operations. Post disaster
transportation can be challenging for the humanitarian organizations, due to the damaged
infrastructure at the site, limited transportation resources, and the large quantities of
supplies to be imported. According to UNDP signed resolution in 2003, humanitarian relief
aims are described in three steps.

1. It aims to save lives, alleviate suffering and maintain human dignity during and in the
aftermath of man-made crises and natural disasters, as well as to prevent and strengthen
preparedness for the occurrence of such situations.

2. Humanitarian action should be guided by the humanitarian principles:

 Humanity: The centrality of saving human lives and alleviating suffering wherever it
is found.

 Impartiality: The implementation of actions must solely on the basis of need,

without discrimination between or within affected populations.

 Neutrality: The humanitarian action must not favor any side in an armed conflict or
other dispute where such action is carried out. Autonomy of the humanitarian
objectives from the political, economic, military or other objectives that any actor
may hold with regard to areas where humanitarian action is being implemented.

Humanitarian action includes the protection of civilians and those no longer taking part in
hostilities, and the provision of food, water and sanitation, shelter, health services and other
items of assistance, undertaken for the benefit of affected people and to facilitate the return
to normal lives and livelihoods. Rolando Tomasini and Van Wassenhove, (2009, pp. 9-11)
identified the major characteristics of humanitarian supply chain as ambiguous objectives,
limited resources, high uncertainty, urgency and politicized environment.

2.1.3 Humanitarian supply chain Actors

Humanitarian supply chain management engages very different players, who may have a
high degree of heterogeneity in terms of culture, purposes, interests, mandates, capacity, and
logistics expertise. As stated by Kovács and Spens (2007) there are six actors that are

13
involved in the humanitarian aid supply network as cited by Daniel Willner and Stavros
Zafeiridis (2013). Key players can be categorized as follow: governments, the military, aid
agencies, donors, non-governmental organizations (NGOs), and private sector companies-
among which logistics service providers are preeminent. Thus, typically, no single actor has
sufficient resources to respond efficiently to a major disaster.

Figure 2.2: Humanitarian supply chain Actor

Source: Kovács & Spens, (2007) as cited by Daniel Willner and Stavros Zafeiridis,
(2013).

Donors are important actors in the humanitarian supply chain as they provide funding for
major relief activities. In recent years, in addition to country specific funding, individual
donors, foundations and the private sector have become important sources of funds for aid
agencies (Daniel Willner and Stavros Zafeiridis, 2013).

2.1.4 Humanitarian versus Business supply chains management

Humanitarian organizations are non-profit organizations and differ from the commercial
(private) sector in terms of revenue sources, strategic goals, stakeholders and performance
measurements. According to Kovács and Spens (2007) discuss several important differences
between business logistics and humanitarian logistics. While business logisticians work
with predetermined actors or partners and predictable demand, humanitarians deal with

14
unknown or changing actors and unpredictable demand. Aid agencies receive many
unsolicited and sometimes even unwanted donations, such as: drugs and foods past their
expiry dates, where infrastructure has been destroyed; and heavy clothing not suitable for
tropical regions. Compared to their business counterparts, humanitarian logisticians have
greater challenges in collaboration and coordination with different aid agencies, suppliers,
and local and regional actors. McLachlin, Larson and Muna Mohamed Adan (2015) offer the
differences between business and humanitarian logistics.

Table 2.1: Humanitarian versus Business supply chains

Logistics context

Aspect Commercial Humanitarian

Purpose Economic profit Social impact

Environment Uninterrupted Interrupted

Perspective on time "Time is money" Time is life (or death)

People Served Paying customers Beneficiaries

Source of funds Paying customers Donors

Workforce Paid Staff Volunteers; Staff

Sources: McLachlin, Larson and Muna Mohamed Adan (2015:13)

According to Beamon and Balcik (2008), defined the humanitarian organization as:
“NFP (Not for Profit) sectors which serves multiple stakeholders, including two
fundamentally different types of customers: beneficiaries or recipients (those in need of
food, material and services); and donors (those who provide funding, material and/or
service support)”.

Donors are customers since their wishes and mission statements can mean restrictions on
the use of funds or loss of funds altogether. NFPs face stiff competition for donor support,
rather than competition for paying customers. NFPs typically deploy volunteers, in addition
to paid staff. More effective supply chain management can be the difference between life
and death.

15
 2.2. Humanitarian supply chain challenges

The literature illustrates several challenges relating to the humanitarian supply chain that are
specific to disaster response contexts. These include a lack of coordination between
government and humanitarian actors at the operational level and in pre planning and after
action reviews/evaluations, weak structures and processes to facilitate regular and
appropriate interaction and substantive gaps in existing guidance on specific issues.
According to Peter Nyandega Agwata (2014), classified humanitarian supply chain
challenges as natural and man-made. The major categories of the humanitarian supply
chain barriers covered in this research dealt with governmental related challenges, socio-
economic challenges, infrastructure challenges and internal challenges. Each of the major
categories had multiple subcategories. The subcategories address individual facets of the
major categories which pose more specific problems for the humanitarian supply chain.

2.2.1. Governmental challenges

The government related challenges category has subcategories associated to political,

collaboration, security, earmarking fund, interferences and customs clearances challenges
etc.

According to Van Wassenhove (2012), “host governments, neighboring country

governments, and other country governments within the international community are the
activators of humanitarian logistics stream after a disaster strikes since they have the
power to authorize operations and mobilize resources”. In fact, without the host
government authorization, no other player with the exception of national aid agencies and
the military can operate in the disaster theater. Host governments have the responsibility to
put into place protocols and take action to reduce the probability of disasters (Mingli Liu.,
2013).

[Link] Political challenges

The politics play a great role on donor and government influence. Governments hold the
main power with the control they have over political and economic conditions and directly
affect to humanitarian supply chain processes with their decisions and it may refuse to allow
humanitarian agencies to assist their citizens and may object to conditionality of aid and

16
development assistance, citing defense of their national sovereignty (Van Wassenhove,
2006). Another major problem faced by logistics managers in humanitarian organizations is
that the donor has significant influence over where and how aid is distributed while the
victim is a third party with little voice in the matter (Long and Wood, 1995:225). Funding
for organizational support and infrastructure is often neglected under donor demands that as
much aid as possible is pushed to victims. Thus, distribution channels may suffer as
warehouses, equipment, communications infrastructure, and training remain unimproved or
deteriorating. Donors have become particularly influential in prompting humanitarian
organization to think in terms of greater donor accountability and transparency of the whole
supply chain.

[Link] Collaboration challenges

The major difficulty in coordinating the humanitarian supply chain has strong ties to the
political interests and military forces of donors and recipient countries (Oloruntoba and
Gray, 2007). The supply network is huge and complicated with numerous players (donors,
NGOs, government, military, and privates), and it is hard to coordinate all of them along
with all the items that need to be delivered. Lack of Coordination is usually seen in a
negative light. Each situation faced by organizations working in relief options is unique.
According to Jane Kiende Kinyua (2013), the ever changing shape of natural disasters and
man-made conflicts continuously presents new challenges and coordination issues often
arise. Many authors argue that coordination is important due to possible gains in program
effectiveness. If there is a lack of collaboration, there is not found pooling information and
resources and in forming alliances that allow each organization to contribute its core
competence.

[Link] Security challenges

The security context in a country is also dependent from the government (or its absence),
and strongly impacts the performance of the logistics response. Despite humanitarian
workers efforts to strengthen operational security in insecure environments, attacks that
have led to death, kidnapping or serious injury, continue to exact a heavy toll on
humanitarian personnel (Walton, et al., 2011). Kidnappings and the use of explosive
weapons in populated areas became the most frequent means of violence against aid

17
workers. As stated by Karen M. Spens (2012), member states, the United Nations and its
partners need to identify policy and operational options that might be taken to protect
civilians from the short and long-term effects of such weapons as cited by (Jones, A. 2000).
In spite of special protection afforded by international humanitarian law and applicable
international human rights law for health care and health care providers, in many countries
attacks or threats directed against health care personnel, facilities, vehicles, and services are
continuing to prevent the wounded and sick from receiving the care and protection they
require. Local health care providers were directly affected by violence, primarily in the form
of threats. Host states possess clear formal responsibility for the safety and security of aid
workers. Protection encompasses all activities aimed at securing full respect for the rights of
individuals in accordance with international humanitarian law, human rights, and refugee
law (Van Wassenhove, 2012). In addition to the above, McLachlin and Muna (2015)
identified others challenges associated with the government as; the government
bureaucracy, stuck national regulations toward relief organizations, Lack of government
support, highly government interferences, restrictions of entry of staff and goods, complex
customs clearances procedure, high level of corruption, higher taxes, which influence
organizations’ operational decisions and their ability to conduct humanitarian logistics
operations.

2.2.2. Socio-economic challenges

Economic issues can lead to humanitarian crises or humanitarian crises can lead to
economic downfalls. If it occurs after a humanitarian crisis affects a nation, it is imperative
to return the livelihoods in the economic settings of the nation and the society would have
been in a state of civil insecurity and economic shortfalls, which could cause the
government to collapse. This can also result from food insecurity, famines, corruptions and
various other issues and direct effects of this situation on human rights violations.
According to (Gary P Ramsden, 2014), the socio-economic challenges described as,
uncertainty in demand and supply, uncompetitive of market economy, the absences of local
suppliers, availability stiff competition, absences financial donors, the culture and language
of the host country, high inventory and transportation cost and lack of trust among the supply
chain partners. In a well-developed economy, some basic supplies can be purchased from
local suppliers, and staff can be hired locally for logistical activities. In a less developed

18
context, all supplies have to be imported and most tasks must be managed by expatriate
staff (Zhi Cao et al. 2015).

[Link] Uncertainty in demand and supply

In the category of uncertainty, there are subcategories for unpredictable supply and demand,
and inconsistent processes. Unpredictable supply problems include issues such as
inconsistent quantity, quality, and lead time. The customers in a disaster supply chain
include the population at the affected area, as well as intermediate customers at local or
global storage facilities. Their needs change significantly according to disaster types and the
phases in the disaster timeline (Jahre, M. and Jensen, L.M. 2010). Unlike logisticians in the
private sector, humanitarian workers are always faced with the unknown: when, where,
what, how much, where from and how many times; in short, the basic parameters needed
for an efficient supply chain setup are highly uncertain (Van Wassenhove, 2006). Disaster
demand forecasting is also difficult due to the lack of historical data. Even though there do
exist some databases from the past experiences prepared by both NGOs and governments,
they are occasionally inadequate because of inconsistent and/or insufficient data collection
and reporting problems. Hence, historical data is not always very useful for predicting
future demand. Inconsistencies within the process include problems initiated by poor
organization, variability in lead time, and agency culture. The distribution process may not
provide attention to investment in safety/anticipatory stock to prevent stock outs,
transshipment or direct shipment to keep the process from failing at the retail end, or hiring
a third party logistics to facilitate logistics so that partners can concentrate on core
competencies (Jones, A. 2000). Development assistance can promote conflict when it is
administered without considering social and political conditions. Problems arise primarily
due to the institutional cultures and organizational dynamics of donor agencies, which are
not geared to dealing with the needs of deeply divided societies. Success is often measured
in terms of the amount of money disbursed, rather than the outcome of programs. The
mandate of these donor agencies is to promote economic growth and development "without
regard to political or other non-economic influences or considerations (Tomasini, R.M. and
van Wassenhove, L.N. 2004).

19
2.2.3. Infrastructure challenges

An effective and timely humanitarian relief operation has the capacity to save thousands of
lives. Within the category of infrastructure, there are subcategories for degraded
infrastructure. Those are inefficiencies’ information flow, degraded/inadequate logistics
infrastructure, distances problems and chaotic environment. The degraded infrastructure
concerns on road network, railway, airports, power supply, warehouses, communications
lines, etc. that are damaged in the disaster or were non-existent to begin within the affected
region ( Rolando Tomasini and Luk Van Wassenhove,2009). Indeed, the existence of a
well- developed road infrastructure will, facilitate the logistical operations, while a poor
road network tends to disrupt and slow down the distribution of relief items. The presence
of an airport close to the disaster location will facilitate, for delivery of relief aid.

[Link] Communication and information challenges

During a disaster, communication is as important as food and water. According to Long and
Wood, (1995) the communications Problems categorize as, lack of standard terminology,
absence of media for institutional learning and relaying best practices, and lack of
information intra- and inter-agency information sharing. Also communications problems
might concern the reliability of information and poor coordination. Across the community
of humanitarian organizations, different languages and word definitions act as a barrier to
carrying out the mission. During a crisis, humanitarian agencies require information relating
to the disaster situation, the affected population and the availability of resources (Gary P.
Ramsden, 2014). The participating agencies will have their own operating methods and
sometimes there is competition amongst them for the limited resources. However, collecting
information may be very difficult because of inaccessibility to the affected areas due to the
destruction of infrastructure and in some cases the remoteness of disaster affected areas.

[Link] Transport challenges

Transportation makes it possible for assistance to reach those in need. Transportation can
involve global sourcing, drop shipment, military transport, commercial transport, non
commercial transport, third-party logistics firms, freight forwarders, charter aircraft, or even
local transportation such as mules and donkeys (Saunders N., 2004). Goods are often
brought into a country at an entry point and then moved to collection sites run by relief

20
organizations. In relief work, both in disasters and complex humanitarian emergencies,
damaged infrastructure, inaccessible, and the lack of infrastructure needed for large scale
assistance lead to bottlenecks, delays, and congestion at entry points to the disaster area.
According to (Beamon, B. M. 1999) in an emergency situation coordinating the efforts and
activities of different national and international organizations requires strong leadership.
However, in practice, the various organizations normally tend to work independently. The
emergency preparedness and response stages are driven by information. As goods flood into
a region, they can be held up at the ports, border crossings, and airports due to lack of
transportation, permission to enter certain areas, or even.

Emergency humanitarian logistics operations frequently require the involvement of several

governments and independent NGOs, as well as the use of a number of transport modes
(GlobeScan, 2009). International humanitarian operations may be hindered by
administrative and logistical bottlenecks because of poor infrastructure in the aid-receiving
region and the multiplicity of agencies and governments are often in conflict zones, thus
hindering efficient delivery and distribution of relief cargoes to the needy (Van Wassenhove
and Samii, 2003). Coordination may be inadequate because of geographical dispersion,
insufficient or inaccurate communication between the field and the head offices of
humanitarian organizations, and between different organizations.

2.2.4. Internal challenges

The internal organization challenges category has subcategories associated to: inadequate
resources (in terms of supply, people, technology ), high employees turnover, corruption,
lack of contingency plan, poor organizational structure and systems, lack of employee
accountability, internal budget constraints, excessive inventory, lack of top management
support and complexity of performances measurement etc. Relief organizations’ enablers
(resources, processes and capabilities) are influenced by the availability of donations, which
in turn is influenced by the requirements of the beneficiaries and by performance as well.

[Link] Organizational resource

Before the response to a disaster begins, an organization obtains and sets into motion
resources. Financial resources must be mobilized to begin procurement, to send personnel
across the globe, and to acquire vehicles, warehouses, and other tangible parts of the relief

21
supply chain (Thomas, A. S. and Kopczak, L. R., 2005). Human resources play an
important part in the success of the relief mission. The scarcity of trained and experience
logistics personnel lead to significant organizational reassignments. With no local capacity
or staff, organizations pulls logistics people from other programs and disasters. This
possibly reduces the effectiveness of relief efforts. Further, organizations may have
ineffective processes to develop logistics skills in local staff. Limited human resources are
the result of high staff turnover and a scarce pool of qualified and readily deployable
personnel, whereas capital resources are subject to unpredictable donations that limit the
liquidity of managers in the field.

[Link] Procurement

Emergency supplies enter the relief chain through different sources, forms, and locations.
They can be given as donations, grants, or gifts in kind (non-monetary goods or services).
These donations can be solicited or unsolicited. Often unsolicited donations are goods that
are not a priority and have not been requested. Aid can be multilateral, administered by
international institutions which collect resources from countries and redistribute them, or
bilateral, given directly from a donor government to a recipient country (Lars Gustavsson,
2002). Procurement can be done at the local level or sourced globally. Goods can be
acquired in many different ways such as in bulk or stored at the vendor until needed.

[Link] Emergency Planning/ Preparedness

Before a disaster, logistical procedures and activities must be planned. Improvised

procurement and transportation activities are less effective. A plan includes what tasks are
to be done, what part of the organization will be responsible, and how to procure needed
resources. They must also have a national or regional plan based on the vulnerabilities of
the infrastructure, the logistical support in the area, and governmental emergency response
abilities. It is not possible to anticipate how crises evolve, but it is advantageous to have a
plan. If proper planning is in place with realistic if then else cases, implementation can be
less challenging (Julien Balland and Neda Angela Sobhi, 2013). When disaster strikes and
the needs peak, it is already too late to develop solutions that were not in place before.
Embracing supply chain management as a central function to respond to disasters is a

22
process humanitarian agencies only formally started in the last decade. Focusing on supply
chain structures and processes to respond to disasters is important to improve preparedness.

2.3. Humanitarian supply chain performance measurement

Performance measurement and its application continue to grow and encompass both
quantitative and qualitative measurements and approaches (Hervani and Helms, 2005). The
variety and level of performance measures depends greatly on the goal of the organization
or the individual unit’s characteristics. The field of performance measurements and metrics,
at an organizational level, has been the focus of many researchers and practitioners. The
measurement of performance in humanitarian supply chains has become vital for all
humanitarian aid organizations. According to Beamon and Balcik (2008), the effective
performance measurement systems can assist humanitarian relief supply chains in their
decisions, to improve their efficiency and effectiveness, and increase the accountability and
transparency of their response in disaster situations. Kovács and Spens (2007) define
performance measurement as the process of quantifying the effectiveness and efficiency of
an action. The system can be used as a basis to measure performance of humanitarian
organizations in terms of response time, service quality, and technical and cost efficiency.
According to (Giulia S. et al. 1998, pp.1-9) defined the performance measurement in an
extended view: through four performances dimensions; responsiveness, flexibility,
collaboration and cost performances and for each of them several key performances
indicators (KPI) are stated.

a) Responsiveness; in a humanitarian supply chain, time is the most critical measure of

performance. Many factors can contribute to relief chain response time, including relief
organizations assessment, supplier location, procurement, delivery strategies, and
transportation choice.

b) Collaboration: in humanitarian supply chain the cooperation and exchange of data

between actors involved in a disaster are indispensable in order to effectively respond to the
emergency. Moreover, the standardization of procedures could accelerate and improve the
resolution of the disaster.

23
c) Flexibility: in humanitarian supply chain the ability to change according to external
conditions (e.g. number and different typologies of goods to deliver, delivery time of goods,
etc.) as well as the reliability in delivery date and quality, assumes a fundamental role.

d) Cost performance: although the costs are not the predominant resource metrics for
humanitarian supply chain. Due to the unpredictable demand, the evaluation and control of
costs are difficult. This kind of performance indices can be evaluated only after the disaster
occurrence and restoration of normalcy. Beamon (1999) suggest a supply chain
measurement system must place emphasis on three separate types of performance measures:
resource measures, output measures, and flexibility measures.

Hella Abidi and Matthias Klumpp (2005) propose to use the four perspectives of the
Balanced Scorecard for supply chain entities’ measurement which are: financial, customer,
internal business processes, the organization’s learning and growth perspectives. The
performance of a supply chain depends on how its members coordinate their decisions and
sharing information is the most basic form of coordination especially in the today’s
globalized environment. Increased globalization and competition has made supply chain
management a very important and critical issue for any company if they have to deliver
quality and timely services and products to their customers. Humanitarian supply chain
management performances measurement ensures that organizations get the right things to
the right places at the right time thereby creating time and place utility. Keebler and Plank
(2009) categories the logistics performance measurement into effectiveness measures
involving trading partner, effectiveness measures internal focus, efficiency measures,
productivity and utilization.
Inline to the above key dimensions of supply chain performance of the humanitarian supply
chain management, the study were equipped responsiveness, collaboration, flexibility and
cost performances to measure the performances of humanitarian aid organization found in
Addis Ababa City Administration in relief and emergency sector.

2.4. Synthesis of empirical study

This section of the study includes a review of various empirical studies have been made on
supply chain challenges and performances of humanitarian aid organization. Managing the

24
supply chain can become very complex with the presence of different stakeholders and large
quantity of materials to be distributed.

Daniel Willner and Stavros Zafeiridis (2013) investigated the challenges and the use of
performance measurements in humanitarian supply chains on Sweden and Greece that
concentrates on humanitarian organizations which have activities in more than one crisis
zone and are active in international supply chain coordination. The research strategy were
employed the holistic multiple case study and empirical data were collected through
interviews. The sample sizes were used total 3 organizations’ representatives and 2
volunteers were interviewed. The collected data were analyzed by combining theories and
previous studies in the literature. The variables have been used to measure supply chain
performances were responsiveness, flexibility, reliability, cost efficiency and collaboration.
The main findings of the study were, humanitarian organizations face different challenges in
their supply chains.

Jane Kiende Kinyua (2013) studied the status and factors that affect humanitarian supply
chain performance in Kenya. The researcher was equipped a descriptive research design and
selected 40 respondents out of total population 70 humanitarian organizations through
systematic sampling. The variables have been used to measure humanitarian supply chain
were organizational factors, socio-economic factors, environmental factors, supply chain
Decisions, funding status, and government situational factors. The performances was
measured by used four variables of supply chain responsive, meets deadlines, flexible and
reliable. The data was collected through structured questionnaire and key informant
interviews and analyzed using through application of descriptive statistics, cross –
tabulations and binary logistic regression. As a result, using cross tabulation and chi-square
revealed that financial limitations, government bureaucracy, infrastructure challenges,
environmental challenges, procurement delays showed statistically significant association
with supply chain performance.

Peter Nyandega Agwata (2014) investigated the supply chain management challenges and
supply chain performance of humanitarian organizations in Nairobi, Kenya. The studies was
equipped a descriptive survey research design and selected 142 respondents out of total
population 708 humanitarian organizations through stratified sampling. The study were

25
employed the key performances indicators; cost, supply chain reliability, improvement,
collaboration and timeliness to measure the performances of humanitarian organization. The
study were used questionnaires as the instrument of data collection and quantitative data
was analyzed through descriptive statistics and correlation analysis while qualitative data
was analyzed through content analysis. As a result the findings showed that, the SCM
challenges highly contributed to supply chain inefficiency in delivery of the relief supplies
and negatively affected the operations of the humanitarian organizations. The SCM
challenges results SC cost increment, lead to failure to deliver relevant humanitarian aid
materials, and lack of reliability and efficiency in the humanitarian supply chain.

Andreas Wieland, and Carl Marcus Wallenburg, (2012): investigated the effects of supply
chain risk management (SCRM) on the performance of a supply chain on Germany, Austria
and Switzerland on 270 manufacturing companies. Survey data collection method was used
to collect the quantitative data through structural equation modeling. Additionally,
qualitative data were used to explore the nature of non-hypothesized findings. Business
performances has been measured based on the dimension of supply chain risk management
and supply chain performances (agility, robustness). The finding of this study indicates,
agility has a strong positive effect only on supply chain performance, but not directly on
business performance, robustness has a strong positive effect on both performance
dimensions. The studies provide insights to the fact that robustness can be considered a
basic prerequisite to deal with supplier-side risks, while agility is necessary to deal with
customer-side risks. The amount of agility and robustness needs to fit to the competitive
strategy.

Zhi Cao et al. (2015) studied the impact of organizational culture on supply chain
integration: a contingency and configuration approach. This study establishes a conceptual
model for the relationships between organizational culture and supply chain integration and
uses both a contingency approach and a configuration approach to examine relationships by
data collected from 317 manufacturers across ten countries. The study is measure the
organization culture by the variable of development culture, group culture, rational culture
and hierarchical culture and supply chain integration by supplier integration, internal
integration and customer integration. According to the finding of this research, the
contingency results indicate that both development and group culture are positively related

26
to all three dimensions of supply chain integration. However, rational culture is positively
related only to internal integration, and hierarchical culture is negatively related to both
internal and customer integration.

2.5. Humanitarian aid organizations in Ethiopia

2.5.1. Historical Background

Charities and societies, national and international Non-Governmental Organizations

(NGOs) have been operating in Ethiopia for a long time. The laws governing their
registration and operations were first drawn up in the early 1950s and were based on the
1952 Ethiopian Civil Code and Regulation 321/1959. However, by the turn of the
Millennium, this no longer provided a workable environment due to the many legislative
and other changes that had taken place in Ethiopia and elsewhere. Hardly surprisingly,
legislation that had existed for more than five decades had become ineffective. It was
incapable of ensuring the maximum benefits for the country from NGO activities. Indeed,
some charities and societies repeatedly requested the government for more up-to-date
regulations to enable them to carry out their operations smoothly, and put an end to unclear
procedures and bureaucratic hindrances. Another significant factor that needed to be taken
into account was that, after the demise of the former military regime and the introduction of
a democratic federal government allowing for full freedom of association in the country, the
number of humanitarian aid organization dramatically increased and their areas of activity
multiplied. The government therefore issued a new proclamation of charities and societies
in 2009 in order to facilitate and strengthen the effective contributions of humanitarian
organization to the socio-economic development of the country. The proclamation made the
necessary amendments to reflect new realities and incorporate the best practices from the
similar regulations of other nations. There were also extensive public discussions during the
drafting process with all aid organization operating in the country and with other
stakeholders. The newly enacted Proclamation No.621/2009 for the registration of Charities
and Societies came into force on February 13th 2009, and on November 9th 2009, the
Council of Ministers also issued Regulation No.168/2009 to ensure its implementation in a
transparent manner.

27
The Proclamation had two main objectives. One of these was to ensure the realization of
citizens’ rights to association as enshrined in the Constitution of the Federal Democratic
Republic of Ethiopia, and secondly to support and facilitate the role of Charities and
Societies, and of NGOs, in the overall development of Ethiopian peoples. The Charities and
Societies Agency was established under the Proclamation as an autonomous administrative
body to handle the registration of Charities, Societies and NGOs properly and assist them to
achieve their goals with transparency and accountability (Federal Democratic Republic of
Ethiopia Charity and Societies Agency).

2.5.2. Types of Charities in Ethiopia

The Ethiopia Charities and Societies Agency gather its members from international,
regional and national humanitarian organizations operating in Ethiopia. There are more than
three thousand humanitarian organizations that currently operate in Ethiopia. These
humanitarian organizations are active in a cross section of sectors including: Relief and
Emergency, Agriculture, Peace and security, Water, Education, Environment, Health,
Human rights, Energy, Justice, Micro finance support, Gender and development, Children’s
rights, Poverty alleviation, Population, Training, Counseling, Small scale enterprises,
Disability, Tourism among others. The reasons for the existence of such organizations are
diverse.

Proclamation No. 621/2009 introduced three forms of charities and societies. The first one
is “Ethiopian Charities” or “Ethiopian Societies” formed under the laws of Ethiopia, all of
whose members are Ethiopians and generate their income from Ethiopia and wholly
controlled by Ethiopians. However, according to the proclamation No. 621/2009, they may
be deemed as Ethiopian Charities or Ethiopian Societies if they use not more than 10% of
their funds which is received from foreign sources. The second form is “Ethiopian
Residents Charities” or “Ethiopian Residents Societies”: formed under the laws of Ethiopia
and which consist of members who reside in Ethiopia and who receive more than 10% of
their funds from foreign country sources. Finally the third forms are “Foreign Charities”
formed under the laws of foreign countries or which consist of members who are foreign
nationals or are controlled by foreign nationals or receive funds from foreign sources.
Assessing the content of the provisions of the proclamation suggests that the grounds for

28
classification are place of registration nationality or residence of members, and source of
income (Federal Democratic Republic of Ethiopia Charity and Societies Agency).

2.6. Literature review Summary

This section of the study focused on, review of various previous studies have been made on
the area of humanitarian supply chain challenges and performances of humanitarian aid
organization. According to different supply chain scholars, the humanitarian supply chain
management defined as, the network created through the flow of services, supplies,
information and finances between donors, beneficiaries, suppliers and different units of
humanitarian organizations, in order to provide physical aid to beneficiaries. The general
objective`s of the HAO is to save lives, alleviate suffering and maintain human dignity during
and in the aftermath of man-made crises and natural disasters, as well as to prevent and strengthen
preparedness for the occurrence of such situations. Humanitarian supply chain management
engages very different players, who may have a high degree of heterogeneity in terms of
culture, purposes, interests, mandates, capacity, and logistics expertise. The key players
categorized as follow: governments, military, aid agencies, donors, non-governmental
organizations (NGOs), and private sector companies among which logistics service
providers are preeminent.

Humanitarian organizations are non-profit organizations and differ from commercial

organizations in the sector in terms of revenue sources, strategic goals, stakeholders and
performance measurements. The literature illustrates several challenges relating to the
humanitarian supply chain that are specific to disaster response contexts and those
challenges are associated with the governmental, socio-economic, infrastructure, internal
organization operation. There are different peer reviews classified the Performance
measurement in to quantitative and qualitative measurements and greatly depends on the
goal of the organization or the individual unit’s characteristics. There are many empirical
studies which focused on the humanitarian supply chain management challenges and
performances measurement on HAO which conducted throughout the world. There are
more three thousand humanitarian aid organizations that currently operate in Ethiopia.
These HAO are classified as; Ethiopian Charities, Ethiopian Residents Charities and

29
Foreign Charities. The overall skeleton of the study indicated; supply chain management
challenges as independent variables and supply chain performances as dependent variables.

2.7. Conceptual Framework

According to Alan S. Kaufman and Nadeen L. Kaufman, (2005) a Conceptual Framework is

a basic structure that consists of certain abstract blocks which represent the observational,
the experiential and the analytical/synthetically aspects of a process or system being
conceived. This study has four dependent and four independent variables. The dependent
variables are; responsiveness, collaboration, flexibility, cost performances and the
independent variables are; government related challenges, infrastructure challenges, socio-
economic challenges and internal challenges. The model demonstrates that a number of
challenges are associated with the supply chain performance. The variables of each are
outline in the framework as follows.

Governme H1a Responsiv

nt eness
Challenges
H2a

H1b
Collaborati
Socio- H2b
on
economic
H3a
challenges
H1c

H3b H2c
Infrastruct Flexibility
H3c H1d
ure
Challenges H4a H2d

H4b H3d

H4c
Internal Cost
challenges H4d performan
ces

Figure 2.3: Conceptual Framework

Source: Adopted and modified from Jane Kiende Kinyua (2013)

30
 Chapter -Three

3. Research Design and Methodology

This chapter provides a discussion of the research methodology that was used in this study.
It discusses effective approaches equipped throughout the research process and structured
into study area, research design, target population, method of data collection and research
instruments, reliability test, data analysis techniques and ethical consideration. This is
important in ensuring that the study addresses the set objectives and in turn answered the
research questions on which it is founded.

3.1. Study area

The purpose of this study is to examine the effect of supply chain management challenges
on the humanitarian organization’s responsiveness, collaboration, flexibility and cost
performances in Addis Ababa City Administration. Addis Ababa City Administration is
selected for the study as majority of the humanitarian aid organizations “headquarters” were
based in Addis Ababa. Therefore, the areas of study were the humanitarian aid organization
on relief and emergency sectors, in Addis Ababa City Administration.

3.2. Research design

This study took a descriptive and causal cross-sectional survey research design. Descriptive
research design was used in order to describe data and characteristics about the population
or phenomenon being studied, in the form of table and frequency statistics. Causal research
design was used to examine the effect of supply chain challenges on performances
humanitarian aid organization. A cross-sectional design as a framework for the collection
and analysis of data was the preferred design for this study, because it entails the collection
of data at single point in time. According to (Neuman, 1997) note worth survey techniques
are often used in descriptive or explanatory research as cited by (Reza Mohammady
Garfamy, 2005). According to John W. Creswell (2009) survey is used to generalize from a
sample to a population that inferences can be made about some characteristic, attitude or
behavior of the population.

31
 3.3. Target Population
According to Alan S. Kaufman and Nadeen L. Kaufman, (2005), population is a group of
individuals, objects, items or it is an entire group of persons, or elements that have at least one
thing in common. The target population of this study was the one hundred twenty three (123)
humanitarian aid organizations in relief and emergency sectors at Addis Ababa City
Administration. The researcher was employing a census survey method; because, everyone has
an opportunity to participate, and it use to obtain reliable and accurate information than
sampling. Conducting a census can be very time-consuming and costly. However, the advantage
is that it allows the researcher to gain accurate information (John W. Creswell, 2009). The study
was targeted both local and international humanitarian organizations which were engaged in
humanitarian aid. The questionnaires were distributed to supply chain/ logistics/
procurement manager of the humanitarian aid organization.

3.4. Method of data collection and research instruments

The method of data collection depends mainly upon the nature, purpose, and the scope of
research conduct. Data were collected through primary and secondary sources that were
able to directly answer and fulfill the objective of the study. From the primary source of
data instrument, structured questionnaire was used in the study to collect crucial information
from the humanitarian aid organization. The secondary sources of data collection method
were used from the written materials which include peer review articles, books, published
and unpublished materials. This enabled the researcher to compare the data from the
questionnaires with the written materials.

In order to meet the objective of the study, questionnaires were prepared based on the
survey of different literature (Bonney, J. 2003; Chopra, S. & Meindl, P. 2007; Jane Kiende
Kinyua, 2013; Jahre, M. and Jensen, L.M. 2010; Mingli Liu, 2013; Peter Nyandega Agwata,
2014; Beamon, B. 2004; Oloruntoba and Gray, 2005; Daniel Willner and Stavros Zafeiridis,
2013; Vickery et al. 2003 and Saunders, N. 2004). These were empirical literature where the
researcher used and the questionnaire was implemented by modifying to the humanitarian
aid organization context. Each humanitarian aid organization was represented in the study by one
respondent. John W. Creswell (2009) suggests that pre-testing allows errors to be discovered. Expert
validity views and suggestions of the advisor initially incorporated in the questionnaire and Pre-

32
testing was conducted on 5 respondents to increase the validity of the responses; however these
respondents were not included in the study. As a result of the pilot test, changes in words selection
and instructions were made to the questionnaire. Regular cross-checking and follow ups were
conducted to ensure accuracy, relevance, completeness, consistency and uniformity of the data
collect. The questionnaires were administered using drop and pick later method with a time lapse of
one month with a view to enhance the response rate. For the purpose of simplicity and
understandability of the questionnaire to all respondents and to get valid answer for the
questions, the researcher was prepared questionnaires in English. The questions were measure
on a five point Likert-type scale as observed from different related literature review.

3.5. Reliability test

The questionnaires were pilot test in the five humanitarian aid organizations to ascertain its
validity and reliability, while those organizations do not participate in the main study.
Cronbach's alpha is the most common measure of internal consistency. It is most commonly
used when you have Likert questions in a survey questionnaire that form a scale and you
wish to determine if the scale is reliable and in order to understand whether the questions in
the questionnaire are all reliable (Fornell and Lacker, 1981). Cronbach’s alpha was
calculated by the application of SPSS for reliability analysis. Cronbach’s alpha reliability
coefficient normally ranges between 0 and 1. The closer Cronbach’s alpha coefficient to 1 is
the greater the internal consistency of the items in the scale.

3.6. Methods of data analysis

The analysis part of the study were carried out in clear and better manner as much as
possible to examine the effect of supply chain management challenges on the humanitarian
aid organization`s responsiveness, collaboration, flexibility, and cost performances. After
collection of the data using the appropriate instrument i.e. questionnaire, it was properly
edited, coded, measured by nominal, ordinal and ratio scale. For the purpose of testing the
developed hypothesis, spearman‘s correlation, simple and multiple linear regression was
used. According to Kothari (2004), Spearman’s correlation is the technique of determining
the degree of correlation between two variables in case of ordinal data where ranks are
given to the different values of the variables. Simple Linear regression was used to examine
the relationship between one predictor variable and one outcome variable. Therefore the

33
four independent and four dependent variables were measured separately and examine the
effect of different (predictor/independent) variables on a single outcome (dependent)
variable. Multiple regression analysis was used to measure the effect of supply chain
management challenges (government related, socio-economic, infrastructures and internal)
on the performance of humanitarian aid organizations. Finally, the data were analyzed using
Statistical Package for Social Sciences (SPSS V 20.0).

3.7. Ethical Considerations

Ethical clearance and permission was obtained from the College of Business and
Economics, Department of Logistics and Supply Chain Management, Addis Ababa
University. Before the data collection, permissions from the concerned organizations and
institutions are asked. During the distribution of the questionnaire, respondents were
informed about the purpose and the benefit of the study along with their full right to refuse
or completely reject in participation. The respondents` were told their response would be
kept confidential and their identity shall not be exposed.

34
 Chapter- Four

4. Results and Discussion

This chapter presents analysis, results and discussion of the study on the supply chain
management challenges and the performance of humanitarian aid organizations in Addis
Ababa City Administration. The findings were analyzed and presented in the form of
descriptive statistics, correlation and linear regression. The analysis and interpretation of
data was guided by the research objectives from which a discussion of findings has been
made.

4.1. Response rate

The study was targeted to one hundred twenty three (123) humanitarian aid organizations in
Addis Ababa City Administration. The five humanitarian organizations were excluded
from the study, because these organizations were selected for the pilot test. The
questionnaire was distribution for one hundred eighteen (118) supply chain/ procurement
/logistics managers and one hundred six (106) filled and returned the questionnaire to the
researcher. The response rate was 89.8%. This response rate was sufficient and
representative, and conforms to Mugenda and Mugenda (2003) stipulation that a response
rate of 50% is adequate for analysis and reporting; a rate of 60% is good while a response
rate of 70% and over is excellent. This commendable response rate was due to extra efforts
that were made via follow-up visits to remind the respondents to fill-in and return the
questionnaires.

35
 4.2. Reliability test

Table4.1: Reliability statistics

Cronbach's Cronbach's Alpha Based on Standardized Items No of Items

Alpha

.733 .792 39

To assess the internal consistency of each factor obtained, a reliability test was conducted.
Table 4.1 indicates results of reliability analysis. Reliability test evaluate the stability of
measures, internal consistency of measurement instruments and interpretation of reliability
of instrument scores. The Cronbach’s alpha coefficient for the 39 items is between 0.733-
0.792, suggesting that the items have relatively high internal consistency. A reliability
coefficient of .70 or higher is considered "acceptable" in most social science research
situations (Joseph A, et al, 2003). Therefore, all variables used in this research are highly
reliable for data analysis.

4.3. Descriptive Analysis

4.3.1 Respondents general information

The study initially sought to ascertain the general information on the supply chain/
procurement/ logistics managers involved in the study with regards to the age, level of
education and working experiences in the respective humanitarian aid organization. The
general information points at the respondents’ suitability in answering the questions on
supply chain management challenges and the performance of humanitarian organizations in
AACA.

 Respondents age bracket

The number of years that an individual has been in the organization and his or her age
determines the level of dealing with challenges in the supply chain management. The supply
chain/ procurement/ logistics managers were asked to indicate their age bracket.

36
 Table 4.2: Respondents age bracket

Age Bracket Frequency Percentage

25-35years 60 56.9

36-45years 32 31.9

46-60 years 10 7.5

61 and above 4 3.7

Total 106 100.0
Source: Survey Data, 2016

From the findings, the majority of the supply chain/ procurement/ logistics managers
(56.9%) were between 25-35 years old, (31.9%) were 36-45 years old, (7.5%) were between
46-60 years old, while (3.7%) were 61 and above years old. The findings indicate that
majority of the respondents were aged between 25-35 years and could therefore handle the
labor intensive supply chain management works owing to their youthful age.

 Respondents level of education

The level of education that an individual has acquired determines their competence in
executing their mandate in dealing with challenges in the management of their organization
supply chain. The supply chain/ procurement/ logistics managers were required to indicate
their level of education. The results are as tabulated in the table 4.3 below.

Table 4.3: Respondents level of education

level of education Frequency Percent

High school 1 .9

Diploma 17 16.0

Degree 49 46.2

Master and above 39 36.8

Total 106 100.0

Source: Survey Data, 2016

37
From the findings, the majority (46.2%) of the respondents had a bachelor`s degree as their
highest level of education, (36.8%) had master`s degree and above as their highest level of
education, (16%) had diploma, while (0.9%) had high school level of education. This shows
that most of the respondents have attained university education and thus had required skill
and knowledge on how to handle supply chain management challenges and measure the
performance of humanitarian organizations in AACA.

 Working experiences

The number of years that an individual has worked in the humanitarian sector determines
their level of experience in dealing with supply chain management challenges in their
organization in order to enhance the supply chain performance. The supply chain/logistics
managers were asked to indicate the number of years that they had worked in their
respective humanitarian organizations. Table 4.4 illustrates the study findings.

Table 4.4: Working experiences

Working experiences Frequency Percent

1-5 years 18 19.8

6-10 years 60 55.7

over 10 years 28 24.5

Total 106 100.0

Source: Survey Data, 2016

From the findings, most of the respondents (55.7%) had worked in their respective
humanitarian organizations for 6-10 years, (24.5%) for over 10 years, while (19.8%) had
worked in their respective humanitarian organizations 1-5 years. These findings mean that
most of the supply chain/procurement/logistics managers in humanitarian organizations
were highly experienced as they had worked for a long duration of 6 -10 years in the
humanitarian sector and hence had required experiences on supply chain management
challenges and the performance of humanitarian organizations in Addis Ababa City
Administration.

38
 4.3.2 Supply chain management challenges

The first objective of the study is to determine the experiences of the humanitarian aid
organization in relation to supply chain management challenges in AACA. The supply
chain/ procurement/logistics managers were requested to indicate their level of agreement
on the extent to which various SCM challenges were experienced in their humanitarian
organizations. Their responses were rated on a five point Likert- type scale where: 5-To a
very great extent, 4-To a great extent, 3-To a moderate extent, 2-To a little extent, and 1-To
no extent. The findings were presented in the subsequent sub themes.

Table 4.5: SCM challenges experienced in humanitarian organizations

Mean Std Dev

1. Government related challenges

1.1. Government bureaucracy 4.82 0.385

1.2. Stuck national regulations toward relief 4.75 0.474

organizations

1.3. Absence of security 4.22 0.956

1.4. Highly government interferences 4.92 0.312

1.5. Restrictions of entry of staff and goods 3.50 0.801

1.6. Complex local customs clearances procedure and 4.52 0.679

habits in the relief area

2. Socio-economic challenges
2.1. Unpredictable demand 4.81 0.537

2.2. Absences of local suppliers 3.81 0.885

2.3. Availability stiff competition 4.65 0.756

2.4. Absences financial donors 4.90 0.336

2.5. Culture and language of the host country 3.16 0.862

39
 2.6. Lack of trust among the supply chain partners 4.51 0.733

3. Infrastructure challenges
3.1. Inadequate logistics infrastructure 4.94 0.232

3.2. Inefficiencies’ information flow 4.91 0.241

3.3. Geographical dispersion problems 4.65 0.756

3.4. Chaotic environment 4.56 0.744

3.5. Lack of transportation mode to the relief areas 3.52 0.810

4. Internal challenges
4.1. Inadequate resources to supporting and execution of 4.94 0.232
supply chain processes
4.2. Lack of coordination among the supply chain partners 4.92 0.240

4.3. Lack of managerial commitment 4.37 0.797

4.4. Earmarking fund 4.74 0.431

4.5. High employee turnover 4.92 0.312

4.6. Lack of contingency plan 4.78 0.414

4.7. Organizational culture and resistance to change 4.42 0.894

4.8. Lack of employee empowerment 3.75 0.944

4.9. Internal budget constraints 3.88 0.452

4.10. Poor procurement procedure 4.92 0.280

Source: Survey Data, 2016

 Government related challenges

According to Table 4.5, the majority of the supply chain/ procurement/logistics managers
were agreed to a very great extent in relation to; highly government interferences
(Mean=4.92), government bureaucracy (Mean=4.82), stuck national regulations toward
relief organizations (Mean=4.75), complex local customs clearances procedure and habits in

40
the relief area (Mean=4.52) respectively and to a great extent on; absence of security
(Mean=4.22) and restrictions of entry of staff and goods (Mean=3.50) respectively. The
above result indicated that, the humanitarian aid organizations are highly experienced with
the government challenges
 Socio-economic challenges
From the findings in Table 4.5 above for the socio-economic challenges, the majority of the
supply chain/ procurement/logistics managers agreed to a very great extent with; absences
financial donors (Mean=4.90), unpredictable demand (Mean=4.81), availability stiff
competition (Mean=4.65), lack of trust among the supply chain partners (Mean=4.51)
respectively and to a great extent on absences of local suppliers (Mean=3.81) and culture
and language of the host country (Mean=3.16) respectively. This indicates that there is high
level of socio-economic challenges.
 Infrastructure challenges

The above results revealed that, the majority of the supply chain/ procurement/logistics managers
agreed to a very great extent on; inadequate logistics infrastructure (Mean=4.94), inefficiencies’
information flow (Mean=4.91), geographical dispersion problems (Mean=4.65) and chaotic
environment (Mean=4.56) respectively and to a great extent on the lack of transportation mode
to the relief areas (Mean=3.52). The above result indicated that, the humanitarian aid
organizations are highly experienced with the infrastructure challenges

 Internal challenges
According to the summary on Table 4.5 above for the internal challenges, the majority of
the supply chain/ procurement/logistics managers agreed to a very great extent on;
inadequate resources to supporting and execution of supply chain processes (Mean=4.94),
lack of coordination among the supply chain partners (Mean=4.92), employee turnover
(Mean=4.92), poor procurement procedure (Mean=4.92), lack of contingency plan
(Mean=4.78) and earmarking fund (Mean=4.74) respectively and to a great extent on;
organizational culture and resistance to change (Mean=4.42), lack of managerial
commitment (Mean=4.37), internal budget constraints (Mean=3.88), and lack of employee
empowerment (Mean=3.75) respectively. The above result indicated that, there is high
level of internal challenges on humanitarian aid organizations.

41
The findings are similar to Van Wassenhove (2012) which states that SCM challenges
facing humanitarian organizations related to government bureaucracy, lack of coordination,
high turnover of logisticians, high level of uncertainty in terms of demands, lack of
adequate financial resources, lack of proper SC planning, and inadequate information
sharing among partners.

Table 4.6: Levels of supply chain

Mean Std Dev

Leads to lack of reliability in the humanitarian SC 4.69 0.638
Deter the humanitarian organization to achieve 4.52 0.784
timeliness in humanitarian aid
Leads to failure to deliver relevant humanitarian aid 4.39 0.932
materials organization’s warehouse in relief and
emergency area
Create discrepancy information sharing between actors 4.64 0.679
belonged to the organization and involved in the supply
chain
Creates disharmony in the humanitarian organization 4.49 0.819
between actors belonged to the organization and
involved in supply chain
Leads to use un standardization procedures during the 4.33 0.953
resolution of the emergency
Leads to reduces organization’s ability to match 4.29 0.936
demand and supply
Leads to reduces organization’s ability to change the 4.23 0.949
variety of goods
Lead to reduces the humanitarian SC efficiency 4.98 0.137
Lead to increment cost of goods 4.92 0.280
Leads to increment transportation cost 4.85 0.385
Lead to increment the warehousing cost 4.92 0.265
Source: Survey Data, 2016

42
According to the summary on Table 4.6 above, the majority of the supply chain/
procurement/logistics managers agreed to a very great extent on; leads to lack of reliability
in the humanitarian SC (Mean=4.69), deter the humanitarian organization to achieve
timeliness in humanitarian aid (Mean=4.52), create discrepancy information sharing
between actors (Mean=4.64), lead to reduces the humanitarian SC efficiency (Mean=4.98),
lead to increment cost of goods (Mean=4.92), leads to increment transportation cost of the
supply chain (Mean=4.85) and lead to increment the warehousing cost for storing goods in
the surroundings of the relief and emergency area (Mean=4.92), respectively and to a great
extent with; leads to failure to deliver relevant humanitarian aid materials organization’s
warehouse in relief and emergency area (Mean=4.39), creates disharmony in the
humanitarian organization between actors belonged to the organization and involved in
supply chain (Mean=4.49), leads to use un standardization procedures during the resolution
of the emergency (Mean=4.33), leads to reduces organization’s ability to match demand and
supply (Mean=4.29) and leads to reduces organization’s ability to change the variety of
goods (Mean=4.23), respectively. The finding implies that, the SCM challenges highly
contributed to supply chain inefficiency in delivery of the relief supplies as well as
negatively affected the operations of the humanitarian organizations. The findings are
similar to Daniel Willner and Stavros Zafeiridis,(2013), stipulated that supply chain
management challenges in the humanitarian sector negatively impacted on the supply chain
performance through; SC cost increment, reduces the humanitarian SC efficiency, reduces
organization’s ability flexibility, lack of reliability in the humanitarian SC, and increase
discrepancy information sharing between SC actors.

43
 4.4. Correlation of constructs

The second objective of the study is to determine the relationship between supply chain
management challenges and the performance of humanitarian aid organizations. The
findings are as shown in the subsequent section.

Table 4.7 Correlation of variables

Mean S.D GC SEC IC INC R C F CP

GC 4.4272 .2948 1
.
SEC
4.3632 .4160 .802** 1
.000 .
IC 4.3245 .3769 .820** .791** 1
.000 .000 .
INC 3.9717 .8333 .511** .537** .620** 1
.000 .000 .000 .
R 4.5315 .4627 -.579** -.655** -.423* -.354** 1
.007 .000 .021 .009 .
C 4.4874 .4173 -.502** -.524** -.266** -.289 **
.898** 1
.009 .000 .006 .003 .000 .
F 4.4987 .4223 -.373** -.405** -.227* -.337 **
.218 **
.304** 1
.000 .001 .019 .000 .007 .005 .
CP 4.8963 .2812 .259** .308* .240* .212 *
.249 **
.222* . 201* 1
.007 .032 .017 .029 .009 .022 . 035 .
106 106 106 106 106 106 106 106
Source: Survey Data, 2016

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

* Correlation is significant at the 0.05 level (2-tailed).
GC: Government challenges, SEC: Socio-economic challenges, IC: Infrastructure
challenges, INC: Internal challenges, R: Responsiveness, C: Collaboration, F: Flexibility,
and CP: Cost Performances

The descriptive statistics i.e. mean and standard deviation and correlation matrix of
elements of research variables are shown in Table 4.7. The research tool has predictive
validity because according to correlation matrix, supply chain management challenges have

44
a negative correlation with dimensions of supply chain performances. In the above table, the
government and socio-economic challenges have a negative and statistical significant
correlation with responsiveness, collaboration, and a negative correlation with flexibility.
The infrastructure and internal challenges have a negative correlation with the supply chain
performances dimension (responsiveness, collaboration and flexibility). In general, there is
a negative relationship between supply chain challenges (government, socio-economic,
infrastructure, internal) and the performances of HAO (responsiveness, collaboration,
flexibility); while there is a positive relationship between the supply chain management
challenges and cost performances.

45
 4.5. Hypothesis test

The third objective of the study is to determine the effect of supply chain management
challenges on the performance of humanitarian aid organizations. Multiple linear
regressions analyses helps to analysis more than two variables simultaneously used to
understand fully the relationship between two or more variables. At this level simple and
multiple linear regressions analysis were used to test the research hypothesis. The findings
are as shown in the subsequent section.

H1: Government challenges may have a negative effect on HAO Performances

Table 4.8: Effect of government challenges on HAO performances

Un standardized Standardized
Coefficients Coefficients
Model R2 B Std. Error Beta Sig.

H1a Government challenges .187 8.769 .689

Responsiveness -.496 .178 -.412 .001

H1b Government challenges .151 7.610 .703

Collaboration -.427 .157 -.325 .003
H1c Government challenges .137 6.846 .579
Flexibility -.530 .130 -.370 .000

H1d Government challenges .040 4.055 .407

Cost performances .190 .092 .199 .041

H1 Government challenges .315 8.290 .360

HAO performances -.381 .094 -.439 .000
Source: Survey Data, 2016

Note: P ≤ 0.05,

H1a: Government challenges may have a negative effect on responsiveness.

The government related challenges that were studied, explain only 18.7% the
responsiveness of humanitarian organizations in Addis Ababa City Administration as
represented by the R2. The significance value is 0.01 which is less than 0.05. As a result, the
model is statistically significant in predicting the effect of government challenges on

46
responsiveness. The F critical at 5% level of significance was 10.9. Since F calculated is
greater than the F critical (value = 21.229), this shows that the overall model was
significant. According to the findings, the simple linear regression equation established that,
taking government related challenges to be constant at zero, the responsiveness of
humanitarian organizations will increase by 8.769 units. The findings also shows that taking
all other independent variables at zero, a unit increase in government related challenges will
lead to a 0.496 unit decrease in responsiveness of humanitarian organizations. Therefore,
this result indicates that the null hypothesis (1ao) was rejected.

H1b: Government challenges may have a negative effect on collaboration

The results of simple linear regression show that, the government related challenges explain
only 15.1% the collaboration of humanitarian aid organizations in AACA. The significance
value is 0.003 which is less than 0.05. As a result, the model is statistically significant in
predicting the effect of government challenges on collaboration of humanitarian aid
organizations. The model predicts that, government related challenges to be constant at
zero, the collaboration of humanitarian aid organizations will increase by 19.196 units.
Furthermore, the finding shows that, an additional unit of government challenges will
reduce HAO collaboration by 0.427 units. This suggests that government challenges affect
the collaboration of humanitarian supply chains negatively. Therefore this result indicates
that the null hypothesis (1bo) was rejected.

H1c: Government challenges may have a negative effect on flexibility

The results shown in the above table 4.8 indicates that all the government challenges
variables that were studied; explain only 13.7% the flexibility of humanitarian
organizations. The significance value is less than 0.05, which show that the model is
statistically significance in predicting the outcome variable. The model predict that, taking
government related challenges to be constant at zero, flexibility of humanitarian
organizations will increase by 6.846 unit. The finding also shows that taking all other
independent variables constant at zero, a unit increase in government related challenges will
lead to a 0.530 unit decrease in flexibility of humanitarian organizations. Therefore, a null
hypothesis (1co) was rejected.

47
 H1d: Government challenges may have a negative effect on cost performances

The government related challenges that were studied, explain only 4% the cost
performances of humanitarian organizations in Addis Ababa City Administration as
represented by the R2. The significance value is 0.041 which is less than 0.05. Thus, the
model is statistically significance to predict the effect of government related challenges on
cost performance of humanitarian organizations. According to the findings, the simple
linear regression equation established that, taking government related challenges to be
constant at zero, cost performances of humanitarian organizations will increase by 4.055
units. The findings also shows that taking all other independent variables at zero, a unit
increase in government related challenges will lead to a 0.190 unit increase in cost
performances of humanitarian organizations. Therefore, this result indicates that the null
hypothesis (1do) was accepted.

H1- Summary: Government challenges may have a negative effect on HAO

performances

The result in table 4.8 above shows all the government challenges variables that were
studied; explain only 31.5% the performances of humanitarian aid organizations. According
to the findings, the simple linear regression equation established that, taking government
related challenges to be constant at zero, the performances of humanitarian organizations
will increase by 8.290 units. The model predicts that an additional unit of government
challenges will decrease the performance by 0.381 units. According to the first hypothesis
result, the government related challenges negatively affects for responsiveness,
collaboration, flexibility, and cost performances. These include; government bureaucracy,
stuck national regulations toward relief organizations, registration processes, customs, and
clearance delays tax exemption processes among others. This finding is consistent with
other related studies which suggested that, government challenges have a great impact on
the humanitarian operation. In this respect the findings are aligned with Beamon, B. M. &
Balcik, B. (2008), Dr. Graham E. Heaslip and Peter Nyandega Agwata (2014), Jane Kiende
Kinyua (2013), which is government challenges, have a negative effect on HAO
performances. Therefore, the first hypothesis was supported.

H2: Socio-economic challenges may have a negative effect on HAO Performances

48
Table 4.9: Effect of socio-economic challenges on HAO performances

Un standardized Standardized
Coefficients Coefficients
Model R2 B Std. Error Beta Sig.

H2a Socio-economic challenges .341 9.748 .389

Responsiveness -.308 .051 -.576 .000

H2b Socio-economic challenges .272 7.971 .526

Collaboration -.584 .071 -.481 .000
H2c Socio-economic challenges .184 6.781 .318
Flexibility -.264 .095 -.290 .003

H2d Socio-economic challenges .086 4.525 .288

Cost performances .085 .066 .126 .198

H2 Socio-economic challenges .392 11.12 .208

HAO performances -.348 .030 -.637 .000
Source: Survey Data, 2016

Note: P ≤ 0.05
H2a: Socio-economic challenges may have a negative effect on responsiveness

The socio-economic challenges, explain only 34.1% the responsiveness of humanitarian

organizations in Addis Ababa City Administration as represented by the R2. The
significance value is less than 0.05. As a result, the model is statistically significant in
predicting the effects of socio-economic challenges on the responsiveness
of humanitarian organizations. The F critical at 5% level of significance was 18.42. Since F
calculated is greater than the F critical (value = 37.085). According to the model predicting,
taking socio-economic challenges to be constant at zero, responsiveness of humanitarian
organizations will increase by 9.748 units. The findings also shows that taking all other
independent variables at zero, a unit increase in socio-economic challenges will lead to a
0.308 unit decrease in responsiveness of humanitarian organizations. Therefore, this result
indicates that the null hypothesis (2ao) was rejected.

49
 H2b: Socio-economic challenges may have a negative effect on collaboration

The finding shows that, the socio-economic challenges explain only 27.2% the collaboration
of humanitarian organizations in Addis Ababa City Administration. The F critical at 5%
level of significance was 26.96. Since F calculated is greater than the F critical (value =
33.047). This shows that the overall model was a statistical significant. According to the
simple linear regression equation result, taking socio-economic challenges to be constant at
zero, collaboration of humanitarian organizations will increase by 7.971 units. Furthermore,
the results indicate that an additional unit of socio-economic challenges will reduce
collaboration by 0.584 units. This suggests that a socio-economic challenge have negative
effect on collaboration. Therefore, the null hypothesis (2bo) was rejected.

H2c: Socio-economic challenges may have a negative effect on flexibility

According to the above table 4.9 finding, that all the socio-economic challenges variables
that were studied, explain only 18.4% the flexibility of humanitarian organizations. The
significance value is 0.003 which is less than 0.05, which show that the model is statistically
significance to predicate the outcome variable. According to the model results, taking socio-
economic challenges to be constant at zero, flexibility of humanitarian organizations will
increase by 6.781 units. The findings also shows that taking all other independent variables
at zero, a unit increase in socio-economic challenges will lead to a 0.264 unit decrease in
flexibility of humanitarian organizations. Therefore, null hypothesis (2co) was rejected.

H2d: Socio-economic challenges may have a negative effect on cost performances

Socio-economic challenges are not a predictor cost performances of humanitarian aid

organization. The socio-economic challenges that were studied, explain only 8.6% the cost
performances of humanitarian organizations in Addis Ababa City Administration as
represented by the R2. The significance value is 0.198, which is greater than 0.05. Thus, the
model is not statistically significant in predicting the effects of socio-economic challenges
on cost performance. According to the findings, taking socio-economic challenges to be
constant at zero, cost performances of humanitarian organizations will increase by 4.525
units. The findings also shows that taking all other independent variables at zero, a unit
increase in socio-economic challenges will lead to a 0.085 unit increase in cost

50
performances of humanitarian organizations. Therefore, this result indicates that the null
hypothesis (2do) was accepted.

H 2 -Summary: Socio-economic challenges may have a negative effect on HAO

performances

The independent variables that were studied, explain only 39.2% of the HAO performance
in AACA. The significance value is less than 0.05, which show that the model is
statistically significance to predicate the effects of socio-economic challenges on
performance. The F critical at 5% level of significance was 27.54. Since F calculated is
greater than the F critical (value = 44.667). According the model predicts, the simple linear
regression equation established that, taking socio-economic challenges to be constant at
zero, the performances of humanitarian organizations will increase by 11.12 units. In
addition, the results indicate an additional unit of socio-economic challenges will decrease
the performance up to 0.348 units. According to the second hypothesis result, the socio-
economic challenges have a negative effect on responsiveness, collaboration, flexibility, and
cost performances. This finding is consistent with other related studies which suggested
that, socio-economic challenges have a great impact on the humanitarian operation. In this
respect the findings are aligned with (Jahre, M. and Jensen, L.M. 2010), which is the
unpredictable demand, stiff competition and absences financial donors have a great effect
on the HAO performances. Therefore, the second hypothesis was supported.

51
 H3: Infrastructure challenges may has a negative effects on HAO Performances
Table 4.10: Effect of infrastructure challenges on HAO performances

Un standardized Standardized
Coefficients Coefficients
Model R2 B Std. Error Beta Sig.

H3a Infrastructure challenges .118 6.796 .603

Responsiveness -.282 .134 -.216 .044

H3b Infrastructure challenges .084 6.126 .678

Collaboration -.379 .156 -.231 .017
H3c Infrastructure challenges .050 5.583 .465
Flexibility -.251 .107 -.224 .021

H3d Infrastructure challenges .020 4.443 .314

Cost performances .105 .072 .140 .151

H3 Infrastructure challenges .134 6.991 .354

HAO performances -.205 .084 -.233 .016
Source: Survey Data, 2016

Note: P ≤ 0.05,

H3a: Infrastructure challenges may have a negative effect on responsiveness.

The infrastructure challenges that were studied, explain only 11.8% the responsiveness of
humanitarian organizations in Addis Ababa City Administration. The significance value is
0.044 which is less than 0.05. As a result, the model is statistically a significant in
predicting the effects of infrastructure challenges on the responsiveness of humanitarian
organizations. According to the model predict, taking infrastructure challenges to be
constant at zero, responsiveness will increase by 6.796 units. The findings also shows that
taking all other independent variables at zero, a unit increase in infrastructure challenges
will lead to a 0.282 unit decrease in responsiveness of humanitarian organizations.
Therefore, the null hypothesis (3ao) was rejected.

52
 H3b: Infrastructure challenges may have a negative effect on collaboration

The above table 4.10 shows that, the infrastructure challenges explain only 8.4% the
collaboration of humanitarian organizations. The significance value is 0.017, which is less
than 0.05. Thus, the model is statistically significant to predict the effects of infrastructure
challenges on collaboration. According to the findings, taking infrastructure challenges to
be constant at zero, supply chain collaboration of humanitarian organizations will increase
by 6.126 units. Furthermore, the results indicate that an additional unit of infrastructure
challenges will reduce the collaboration by 0.379 units. This suggests that infrastructure
challenges have a negative effect on collaboration. Therefore, this result indicates that the
null hypothesis (3bo) was rejected.

H3c: Infrastructure challenges may have a negative effect on flexibility

The results shown that, the infrastructure challenges variables that were studied, explain
only 5% the flexibility of humanitarian organizations. The significance value is 0.021 which
is less than 0.05. As a result, the model is statistically significance to predicate the effects of
infrastructure challenges on flexibility. According to the findings, the simple linear
regression equation established that, taking infrastructure challenges to be constant at zero,
flexibility of humanitarian aid organizations will increase by 5.583 units. The findings also
shows that taking all other independent variables at zero, a unit increase in infrastructure
challenges will lead to a 0.251 unit decrease in flexibility of humanitarian organizations.
Therefore, a null hypothesis (3co) was rejected.

H3d: Infrastructure challenges may have a negative effect on cost performances

Infrastructure challenges are not predictor cost performances of the humanitarian aid
organization. The significance value is 0.151 which is greater than 0.05. So, the model is
not statistically significance in predicting the effects of cost performance on humanitarian
organizations. According to the findings, taking infrastructure challenges to be constant at
zero, supply chain cost performances of humanitarian organizations will increase by 4.443
units. The findings also shows that taking all other independent variables at zero, a unit
increase in infrastructure challenges will lead to a 0.105 unit increase in cost performances
of humanitarian organizations. Therefore, a null hypothesis (3do) was accepted.

53
 H3 -Summary: Infrastructure challenges may have a negative effect on HAO
performances

The results in table 4.10 above shows, the infrastructure challenges variables that were
studied, explain only 13.4% the performances of humanitarian organizations. According to
the findings, the simple linear regression equation established that, taking infrastructure
challenges to be constant at zero, the performances of humanitarian aid organizations will
increase by 6.991 units. The analysis further showed that an additional unit of infrastructure
challenges will decrease performance by 0.205 units. According to the hypothesis three,
summary, the infrastructure challenges have negative effects on responsiveness,
collaboration, flexibility, and cost performances. These include inadequate logistics
infrastructure, inefficiencies’ information flow between the supply chain actors and lack of
transportation mode to the relief areas among others. This finding is consistent with the
other related studies. In this respect the findings are aligned with (Andreas Wieland, Carl
Marcus Wallenburg, 2012), which is infrastructure challenges have a negative impact on the
on the organizational performances. Therefore, the third hypothesis was supported.

54
 H4: Internal challenges may have a negative effect on HAO Performances

Table 4.11: Effect of internal challenges on HAO performances

Un standardized Standardized
Coefficients Coefficients
Model R2 B Std. Error Beta Sig.

H4a Internal challenge .191 7.762 .658

Responsiveness -.164 .134 -.272 .048

H4b Internal challenges .165 6.971 .271

Collaboration -.213 .109 -.160 .002
H4c Internal challenges .152 6.705 .512
Flexibility -.498 .115 -.390 .000

H4d Internal challenges .084 3.803 .354

Cost performances .247 .080 .290 .003

H4 Internal challenges .223 7.921 .428

HAO performances -.130 .096 -.267 .031
Source: Survey Data, 2016

Note: P ≤ 0.05,
H4a: internal challenges may have a negative effect on responsiveness.

The internal challenges explain only 19.1% the responsiveness of humanitarian aid
organizations in Addis Ababa City Administration as represented by the R2. The
significance value is 0.048, which is less than 0.05. Thus, the model is statistically
significant in predicting the effects of internal challenges on responsiveness. According to
the model result, the simple linear regression equation established that, taking internal
challenges to be constant at zero, the responsiveness of humanitarian organizations will
increase by 7.762 units. It also shows that taking all other independent variables at zero, a
unit increase in internal challenges will lead to a 0.164 unit decrease in responsiveness of
humanitarian organizations. Therefore, null hypothesis (4ao) was rejected.

55
 H4b: Internal challenges may have a negative effect on collaboration

The results in table 4.11 above shows, the internal challenges variables that were studied,
explain only 16.5% the collaboration of humanitarian aid organizations. According to the
simple linear regression equation result, taking internal challenges to be constant at zero,
supply chain collaboration of humanitarian organizations will increase by 6.971units.
Furthermore, the model predicts that, an additional unit of internal challenges will reduce
supply chain collaboration by 0.213 units. This suggests that an internal challenge have a
negative effect on the collaboration. Therefore, null hypothesis (4bo) was rejected.

H4c: Internal challenges may have a negative effect on flexibility

According to the above table 4.11 finding that the internal challenges that were studied,
explain only 15.2% the flexibility of humanitarian aid organizations. The significance value
is less than 0.05, which show that the model is statistically significance to predicate the
effect of internal challenges on flexibility. According to the simple linear regression result,
taking internal challenges to be constant at zero, flexibility of humanitarian organizations
will increase by 6.705 units. The data findings also shows that taking all other independent
variables at zero, a unit increase in internal challenges will lead to a 0.498 unit decrease in
flexibility of humanitarian organizations. Therefore, null hypothesis (4co) was rejected.

H4d: Internal challenges may have a negative effect on cost performances

According to the above table finding that the internal challenges that were studied, explain
only 8.4% the cost performances of humanitarian aid organizations. The significance value
is 0.003 which is less than 0.05. So, the model is statistically significance in predicting the
effects of internal challenges on cost performance. According to the findings, taking internal
challenges to be constant at zero, cost performances of humanitarian organizations will
increase by 3.803 units. The data findings also shows that taking all other independent
variables at zero, a unit increase in internal challenges will lead to a 0.247 unit increase in
cost performances of humanitarian organizations. Therefore, this result indicates that the
null hypothesis (4do) was accepted.

56
 H 4- Summary: internal challenges may have a negative effect on HAO performances

The independent variables that were studied, explain only 22.4% the performances of
humanitarian organization. The significance value is 0.031 which is less than 0.05, this
show that the model is statistically significance to predicate the effect of SCM challenges on
the performances of humanitarian aid organization. According to the findings, the simple
linear regression equation established that, taking internal challenges to be constant at zero,
the performances of humanitarian organizations will increase by 7.921 units. The analysis
further showed that an additional unit of internal challenges will decrease the performance
by 0.130 units. According to the internal challenges summary, the internal challenges have a
negative effect on responsiveness, collaboration, flexibility, and cost performances. In this
respect the findings is aligned with Daniel Willner and Stavros Zafeiridis (2013), which is
inadequate resources, lack of coordination among the supply chain partners, lack of
managerial commitment, high employee turnover and internal budget constraints have a
great effect on the on the organizational performances. Therefore, the fourth hypothesis
was supported.

4.5.1. Hypothesis test summary

Multiple regression analysis was conducted as to determine the relationship between supply
chain management challenges and the performance of humanitarian aid organizations.
Coefficient of determination explains the extent to which changes in the dependent variable
can be explained by the change in the independent variables or the percentage of variation
in the dependent variable (the performance of humanitarian organizations in AACA) that is
explained by all the independent variables. As per the SPSS V 20.0 generated in table 4.12
below, the equation;

(Y = β0 - β1X1 - β1X2 - β1X3 - β1X4 -ε) becomes:

(Y= 10.15- 0.371X1-0.402X2 - 0.201X3 - 0.286X4 - ε)

57
 Table 4.12: Effect of SCM challenges on HAO performances

Un standardized Standardized
Coefficients Coefficients
Model R2 B Std. Error Beta Sig.

H1 Government challenges .734 10.15 .505

HAO performances -.467 .003
-.371 .109
H2 Socio-economic challenges
-.402 .119
HAO performances -.506 .001
H3 Infrastructure challenges
HAO performances -.201 .142 -.229 .016

H4 Internal challenges
HAO performances -.286 .165 -.294 .042
Source: Survey Data, 2016

Note: P ≤ 0.05,
a. Dependent Variable: HAO performances

b. Predictors: (Constant), Internal challenges, Socio-economic challenges,

Government challenges, Infrastructure challenges

The finding shows that, the independent variables that were studied, explain only 73.4% the
performance of humanitarian organizations in Addis Ababa City Administration, as
represented by the R2. Therefore, this means that other SCM challenges not studied in this
research contribute 26.6% the performance of humanitarian aid organizations. Therefore,
further research should be conducted to investigate the other SCM challenges (26.6%) that
have a negative effect on the performance of humanitarian organizations in AACA. The
significance value of all independent variables (government challenges, socio-economic
challenges, infrastructure challenges and internal challenges) is less than 0.05, which show
that the model is statistically significance to predicate the effect of SCM challenges on the
organizational performances. According to the findings, the multiple linear regression
equation established that, all independent variables taking to be constant at zero, the
performances of humanitarian aid organizations will increased by 10.15 units. The findings
also shows that taking all other independent variables constant at zero, a unit increase in

58
government challenges will lead to a 0.371 unit decrease the performances of humanitarian
aid organizations; a unit increase in socio-economic challenges will lead to a 0.402 unit
decrease the performances of humanitarian aid organizations; a unit increase in
infrastructure challenges will lead to a 0.201 unit decrease the performances of
humanitarian aid organizations and a unit increase in internal challenges will lead to a 0.286
unit decrease the performances of humanitarian aid organizations. This infers that socio-
economic challenges have a great impact on the performances of humanitarian aid
organizations in Addis Ababa City Administration, followed by government challenges,
internal challenges and infrastructure challenges in the relief and emergency sectors
respectively. This finding also supports other literature that argues the supply chain
management challenges have a negative effect on the performances of humanitarian aid
organization.

59
 Chapter Five

5. Summary, Conclusion and Recommendations

This chapter presents summary, conclusion and recommendations of the study on the effects
of supply chain management challenges on the performance of humanitarian aid
organizations in Addis Ababa City Administration on the relief and emergency sectors.

5.1. Summary of major findings

This section presents the summary, about the humanitarian supply chain management
challenges and the performances of humanitarian aid organization based on the study
objectives.

According to the descriptive statistics results, the supply chain management

challenges have a very great extent effect on the humanitarian operations. Therefore,
SCM challenges have highly prevalent in the humanitarian sector in AACA
impeding their supply chain efficiency towards delivering of the relief supplies as
well as limiting achievement of their mandate.

The SCM challenges consequently reduced the ultimate effectiveness of

humanitarian supply chain management in responding to multiple interventions
within a short time frame. The SCM challenges are categorized as government
related challenges, socio-economic challenges, infrastructure challenges and internal
challenges. The humanitarian aid organizations are very great experienced with
government challenges in relation to: government interferences, government
bureaucracy, stuck national regulations toward relief organizations, complex local
customs clearances procedure and habits in the relief area respectively and to a great
experienced with; absence of security, and restrictions of entry of staff and goods. In
relation to socio-economic challenges, the humanitarian organization are a very
great experienced with the; absences financial donors, unpredictable demand,
availability stiff competition, lack of trust among the supply chain partners and to a
great experienced with; absences of local suppliers, and culture and language of the
host country respectively.

60
The finding also revealed that, the humanitarian organizations are very great
experienced with the infrastructures challenges associated with; inadequate logistics
infrastructure, inefficiencies’ information flow, geographical dispersion problems
and chaotic environment and lack of transportation mode to the relief areas
respectively. In relation to internal challenges, the humanitarian organization are
very great experienced with; inadequate resources to supporting and execution of
supply chain processes, lack of coordination among the supply chain partners, poor
procurement procedure, high employee turnover, lack of contingency plan and
earmarking fund, respectively and to a great experienced with; organizational
culture and resistance to change, lack of managerial commitment, internal budget
constraints and lack of employee empowerment.

The finding implies that supply chain management challenges experienced by the
humanitarian sector greatly hampered the performance of humanitarian
organizations. Based on the bivariat correlation finding, the supply chain challenges
have a negative impact on the performances (responsiveness, collaboration and
flexibility), while there is a positive relationship with the cost performances.

Based on the simple and multiple regression analysis results, the supply chain
management challenges have a negative effect on the performances of humanitarian
aid organization in Addis Ababa City Administration. Government challenges have
a negative effect on the performances of humanitarian aid organization. As a result,
the null hypothesis i.e. H10 is rejected. There is a negative relationship between
socio-economic challenges and the performances of humanitarian aid organization.
Therefore, the null hypothesis i.e. H20 is rejected. The other finding is an
infrastructure challenges have a negative influence on the performances of
humanitarian aid organization. The null hypothesis i.e. H30 is also rejected. Finally,
the internal challenges have a negative effect on SC performances with the
performances of humanitarian aid organization. As a result, the null hypothesis i.e.
H40 is rejected. The study indicated that; socio-economic challenges have a great
negative impact on the performance of humanitarian organizations in AACA,
followed by government challenges, internal challenges and infrastructures
challenges, respectively.

61
 5.2. Conclusion
The purpose of this study is to determine the effect of supply chain management challenges
on humanitarian aid organization’s responsiveness, collaboration, flexibility and cost
performances. According to this objective the following conclusion are drawn.

The empirical evidence from this study indicates that there are numerous SCM
challenges in the humanitarian aid organization sector in AACA. The SCM
challenges highly contributed to supply chain inefficiency in delivery of the relief
supplies as well as it have a negative on daily operations of the humanitarian aid
organizations. The study concludes that, the SCM challenges have a negative effect
on the performances of humanitarian aid organizations in the relief and emergency
sectors. These challenges are associated with; government related challenges, socio-
economic challenges, infrastructure challenges and internal challenges. Therefore,
the relief and emergency sector is affected by multiple SCM challenges.
Managing humanitarian supply chain is critical, in terms of securing SC operation
and improving the relief mission. The research study also concludes that, supply
chain management challenges have negative impact on the humanitarian supply
chain performance through; deter the humanitarian organization to achieve
timeliness, lead to SC cost increment, lead to failure to deliver relevant
humanitarian aid materials, created disharmony in the humanitarian organization,
lead to lack of reliability in the humanitarian supply chain, decreased efficiency in
the humanitarian SC, increased the risk of the firm`s ability to match demand and
supply, lead to unfair competition among humanitarian organization, leads to use un
standardization procedures during the resolution of the emergency and leads to
reduces organization’s ability to change the variety of goods respectively. Therefore,
the result of the research paper is consistent with the other related studies.

62
 5.3. Recommendations

Based on the findings of the study, the following recommendations are proposed;

In order to reduce SCM challenges, the study recommends that, panels discussion
are needed between the government and the humanitarian aid organization. The
government gives an orientation on the legal and policy issues during registration as
humanitarian aid organization. As a result, there is no panel discussion with the
humanitarian organization on continuous bases. Therefore, the government with the
HAO should prepare and organize a continuous panel discussion to avoid confusion
and misunderstanding and to get an input from all stakeholders even to reduce the
SC challenges. Humanitarian organizations should comply with the laws and
policies of the country and the government should strengthen the capacity of the
established agency, so that to render best service as much as possible.
So as to have effective SC operation, it is advisable that the management of
humanitarian organizations should invest in an integrated supply chain management
system that will help them to monitor and control their supply chain as well as in
dealing with SCM challenges. This will assist the humanitarian organization in
mitigating against the effects of the SCM challenges on their organizational
performance.
The study recommends that the management of humanitarian organizations should
allocate adequate budgetary resources towards human resource training to increase
employee competence in handling supply chain management challenges as well as
increase their retention rates through improving their employee welfare.
Moreover, the study further recommends that the management of humanitarian
organizations should conduct research on the different relief areas they are operating
in to ensure that the SCM initiatives being implemented are effective in addressing
the specific SCM challenges towards enhancing their organizational performance.

63
 5.4. Areas of further studies

Since this study examined the effect of supply chain management challenges on the
performance of humanitarian aid organizations in Addis Ababa City Administration. The
study recommends that similar studies should be done on;

I. The relationship between SCM challenges and supply chain strategy

implementation in humanitarian organizations in Ethiopia.

II. The effect of using modern technology on the SC Performance in humanitarian

organizations in Ethiopia.

III. The relationship between the disaster phases challenges and performances
management in the humanitarian aid organization in Ethiopia.

64
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 Appendixes-I: A Questionnaire to be filled by the humanitarian organization
Addis Ababa University
School of Commerce
College of Business and Economics
Department of Logistics and Supply Chain Management

Dear Sir/Madam:

My name is Mebrahtom Tesfay, I am a postgraduate student of Addis Ababa University, College

of Business and Economics and Department of Logistics and Supply Chain Management. This
questionnaire is designed to examine the effect of supply chain management challenges on the
performances of humanitarian aid organization of Addis Ababa City Administration. Therefore, I
kindly request you to spare some time and to honestly respond to all the questions. I assure you
that all your responses will be kept confidential and your identity shall not be exposed. Your
response will only be used for this study.

I thank you in advance for your cooperation, time and thoughtfulness.

Instruction:

 You do not need to write your name

 Please use a “√” Mark to select the options that best represent your response for part I, II
and III.

Mebrahtom Tesfay

Mebrahtom21@[Link]

March, 2016

69
 Part I: General information:

Age in year:

25-35 36-45 46-60 61 and above

Working experiences in the area:

1-5 Years 6-10 Years over 10 Years

Educational Background:
High school Diploma Degree Master and above

Part II: Detailed question on supply chain management challenges (government, socio-
economic, infrastructure and internal) and performances (Responsiveness, collaboration,
flexibility and cost performances).

Q1. To what extent are the following supply chain management challenges (government, socio-
economic, infrastructure and internal) experienced in your organization and fill the answers by
putting a tick mark (‟ √”) under: (1= To no extent 2= To a little extent 3= To a moderate extent
4= To a great extent 5= To a very great extent)

No Supply chain challenges Level of extent

1 2 3 4 5
No1 Government related challenges
1.1 Government bureaucracy

1.2 Stuck national regulations toward relief organizations

1.3 Absence of security

1.4 Highly government interferences

1.5 Restrictions of entry of staff and goods

1.6 Complex local customs clearances procedure and habits in

the relief area

2 Socio-economic challenges
2.1 Unpredictable demand

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2.2 Absences of local suppliers

2.3 Availability stiff competition

2.4 Absences financial donors

2.5 Culture and language of the host country

2.6 Lack of trust among the supply chain partners

3 Infrastructure challenges
3.1 Inadequate logistics infrastructure

3.2 Inefficiencies’ information flow

3.3 Geographical dispersion problems

3.4 Chaotic environment

3.5 Lack of transportation mode to the relief areas

4 Internal challenges
4.1 Inadequate resources to supporting and execution of supply
chain processes
4.2 Lack of coordination among the supply chain partners

4.3 Lack of managerial commitment

4.4 Earmarking fund

4.5 High employee turnover
4.6 Lack of contingency plan
4.7 Organizational culture and resistance to change

4.8 Lack of employee empowerment

4.9 Internal budget constraints

4.10 Poor procurement procedure

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Part III: Levels of supply chain

Q1. To what extent are the above supply chain management challenges (government, socio-
economic, infrastructure and internal) affects to your organization`s SC performances
(responsiveness, collaboration, flexibility and cost performances) and fill the answers by putting
a tick mark (‟ √”) under: (1= To no extent 2= To a little extent 3= To a moderate extent 4= To
a great extent 5= To a very great extent)

1 2 3 4 5

1 Leads to lack of reliability in the humanitarian SC

2 Deter the humanitarian organization to achieve timeliness in

humanitarian aid
3 Leads to failure to deliver relevant humanitarian aid
materials organization’s warehouse in relief and emergency
area
4 Create discrepancy information sharing between actors
belonged to the organization and involved in the supply
chain
5 Creates disharmony in the humanitarian organization
between actors belonged to the organization and involved in
supply chain
6 Leads to use un standardization procedures during the
resolution of the emergency
7 Leads to reduces organization’s ability to match demand
and supply
8 Leads to reduces organization’s ability to change the variety
of goods.
9 Lead to reduces the humanitarian SC efficiency
10 Lead to increment cost of goods

11 Leads to increment transportation cost of the supply chain

12 Lead to increment the warehousing cost for storing goods

in the surroundings of the relief and emergency area

Thank you for your time and participation

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