Abstract
The purpose of this study was to investigate the effect of logistics practice on operational performance of the Arjo Didesa Sugar Factory. Therefore, explanatory research design with both qualitative and quantitative approach was used in order to explain the effect of logistics practices on operational performance. The sample of 219 respondents from Arjo Didesa sugar factory working in factory operation and supply and facility management was taken for the study and out of these, data were obtained from 186 respondents. A stratified random sampling technique was employed; in which the target population is stratified and then, sample was randomly selected from each stratum. In addition to these techniques, purposive sampling was applied for the interview of the managers of respective department. Here, both primary and secondary sources of data were used for addressing the stated research questions according to their nature. Structured questionnaire and semi-structured interview were used to gather data. Mean is employed in order to summarize and describe quantitative information. Regression analysis was used to analyze the effect of logistics practices on the operational performance and correlation analysis was also used to determine the relationship between variables. The findings of the study revealed that transportation and inventory management have high significant positive effect on operational performance even though procurement practice, information flow and warehousing have positive significant effect on operational performance. In order to improve operational performance of the factory, researcher recommend to Arjo Didesa sugar factory to upgrade investment on infrastructure for transportation of raw materials within factory. Researcher also initiated to provide recommendation on using principle of economic order quantity that enable effective inventory management. Keywords: Logistics, Logistics practices, Operational performance, and Sugar Factory. DOI: 10.7176/IEL/11-1-01 Publication date: May 31 st 2021
Highlights
Background of the Study Logistics is the process of planning, implementing and controlling the efficient, cost effective flow and storage of raw materials, in-process inventory, finished goods and related information from point of origin to point of consumption for the purpose of conforming to customer requirements (Donald, 2003)
Result and Discussion This Part presents the analysis and interpretation which carried out based on the data collected through questionnaire from respondents and interview made with managers of respective departments
From the total 219 questionnaire distributed to employees of Arjo Didesa sugar factory working in factory operation and supply and facility management department, only 186 questionnaires were returned and used for analysis that shows response rate of 84.9 percent
Summary
Background of the Study Logistics is the process of planning, implementing and controlling the efficient, cost effective flow and storage of raw materials, in-process inventory, finished goods and related information from point of origin to point of consumption for the purpose of conforming to customer requirements (Donald, 2003). It has been estimated that the cost incurred for logistics practices by USA organizations in 1997 was 862 billion dollars, corresponding to approximately 11% of the USA Gross Domestic Product (GDP). This cost is higher than the combined annual USA government expenditure in social security, health services and defense. These figures are similar to those observed for the other North America Free Trade Agreement (NAFTA) countries and for the European Union (EU) countries. Logistics practices represent a significant part of a company’s operations
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