Pharmaceutical Supply Chain and its Impact on health care quality in Ethiopia.docx

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PESC INFORMATION SYSTEMS COLLEGE
THE EFFECT OF MEDICAL SUPPLY CHAIN MANAGEMENT PRACTICES ON
HEALTH CARE SERVICES IN SELECTED PUBLIC HOSPITALS IN ADDIS ABABA,
ETHIOPIA.
PRINCIPAL INVESTIGATOR: ALEMAYEHU DANDENA (B.Pharm, BA, MBA
CANDIDATE.)
ADVISOR: SHIMELIS ZEWDIE (Ph.D)
A RESEARCH THESIS SUBMITTED TO THE DEPARTMENT OF BISINNESS
MANAGEMENT AND PUBLIC ADMINISTRATION, PESC INFORMATION SYSTEMS
COLLEGE, IN PARTIAL FULFILLMENT OF MASTERS DEGREE IN MBA
July, 2021
ADDIS ABABA, ETHIOPIA

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ETHIOPIA.
BY
Alemayehu Dandena
PMBA/003/03/18
THESIS SUBMITTED TO PESC INFORMATION SYSTEMS COLLEGE GRADUATE
STUDIES, IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE
OF MASTER OF BISINUS MANAGEMENT AND PUBLIC ADMINISTRATION
September, 2021
ADDIS ABEBA, ETHIOPIA

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PESC INFORMATION SYSTEMS COLLEGE GRADUTE STUDIES
ETHIOPIA.
BY
Alemayehu Dandena
PMBA/003/03/18
APPROVED BY BOARD OF EXAMINERS
____________________ ____________ ________________
Dean, Graduate Studies Signature Date
_______________________ _____________ ________________
Research Advisor Signature Date
________________ _____________ _______________
External Examiner Signature Date
________________ _____________ _______________
Internal Examiner Signature Date

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DECLARATION
I, the under signed, declare that this thesis is my original work, prepared under the guidance of
Dr. Shimelis Zewdie. All sources of material used while working on this thesis have been duly
acknowledged. I further confirm that the thesis has not been submitted either in part or in full to
any other higher learning institution for the purpose of earning any type of degree.
Alemayehu Dandena ______________________
Name Signature and Date

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ENDORSEMENT
This thesis has been submitted to PESC Information Systems College, School of Graduate Studies
for examination with my approval as a university advisor.
___Dr. SHIMELIS ZEWDIE_(Ph D)__ _____________________________
Advisor Signature

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Acknowledgment
I am grateful to Almighty God for giving me strength, health and knowledge to accomplish this
research paper successfully. His grace and sufficiency has brought me this far and I really
appreciate the life and successes he has helped me. I would like to extend my appreciation to
PESC Information Systems College for giving me a chance to conduct a thesis on this topic.
I want to express my great thanks to my advisor Dr Shimelis Zewdie for giving me valuable
comments and information to the thesis writing up.
My appreciation and thank extends to all the study participants and the respondents of the
questionnaires that made this study come to final.
Finally, I would like to extend my great pleasure to my wife Feyine Adane, to my two sons Yadet
Alemayehu and Nathan Alemayehu, to my Mother Worknesh Muleta and the Federal Hospitals,
which made this research accomplished.

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Table of Contents
Table of Contents.......................................................................................................................................... i
List of Tables ............................................................................................................................................... iii
List of Figures................................................................................................................................................. iv
Acronyms and abreviation........................................................................................................................... v
Chapter One ..................................................................................................................................................... 1
Introduction...................................................................................................................................................... 1
1.1. Background of the Study.................................................................................................................. 1
1.2. Statement of the Problem................................................................................................................. 3
1.3. Research Questions.......................................................................................................................... 4
1.4. Objective of the Study .......................................................................................................................... 3
1.4.1. General Objectives of the study................................................................................................... 3
1.4.2. The specific objectives of study are the following: ..................................................................... 3
1.5. Hypothesis........................................................................................................................................ 4
1.6. Significance of the Study................................................................................................................. 5
1.7. Scope and the limitation of the study............................................................................................... 6
Chapter 2.......................................................................................................................................................... 7
Literature Review......................................................................................................................................... 7
2.1. Pharmaceutical supply chain...............................................................................................................10
2.2. Supply Chain Management................................................................................................................... 7
2.3. Supply Chain Management Practices and Service Quality in Public Hospitals .................................11
2.4. Pharmaceutical Supply chain practices in Ethiopia ............................................................................13
2.5. The impact of supply Chain Management on Service Quality Delivery ............................................14
2.6. Conceptual Framework.......................................................................................................................17
Chapter Three.................................................................................................................................................20
Methodology..............................................................................................................................................20
3.1. Study area............................................................................................................................................20
3.2 Study design and period.......................................................................................................................20
3.3. Population ...........................................................................................................................................21
3.3.1. Source population ........................................................................................................................21
3.3.2. Study population ..........................................................................................................................21

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3.3.3 Inclusion criteria ...............................................................................................................................22
3.3.4 Exclusion criteria ..............................................................................................................................22
3.4.1. Dependent variables.........................................................................................................................23
3.5. Measurement and Data collection.......................................................................................................23
3.5.1 Sample size calculation and sampling method..................................................................................23
3.6.2 Data collection ..................................................................................................................................24
3.5.3 Data collection procedure .............................................................................................................25
3.5.4. Method of Data analysis ..............................................................................................................26
3.6. Data quality assurance (Validity and Reliability of the Study)...........................................................27
3.6.1 Validity of the Study.....................................................................................................................27
3.6.2. Reliability of the Study ................................................................................................................27
3.7. Ethical Consideration..........................................................................................................................28
CHAPTER 4 ..................................................................................................................................................29
DATA ANALYSIS....................................................................................................................................29
4.1. Introduction.........................................................................................................................................29
4.3. Result ..................................................................................................................................................30
4.3.1. Analysis of the status of pharmaceutical supply chain management...............................................31
4.3.2. The status of health service quality..................................................................................................37
4.3. Regression analysis.............................................................................................................................40
Chapter 5........................................................................................................................................................49
Finding, Discussion, Conclusion and Recommendation............................................................................49
5.1. Finding and Discussion.......................................................................................................................49
5.2. Conclusions and Recommendations ...................................................................................................51
5.2.1. Conclusions......................................................................................................................................51
5.2.2. Recommendations............................................................................................................................51
References......................................................................................................................................................52
Annex I………………………………………………………………………………………………………65

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List of Tables
Table 1, Sample size of the population..................................................................................................... 22
Table 2, Reliability test result of the study .................................................Error! Bookmark not defined.
Table 3, Response rate of the questionnaires............................................................................................. 29
Table 4, Characteristics of Study sample................................................................................................... 30
Table 5, Descriptive Statistics for Logistics Management Practices among the Hospitals ....................... 31
Table 6, Supplier Relation Management Practices within the Hospitals ................................................... 32
Table 7, Descriptive Statistics of Customer Relation Management practices of the Hospitals ................. 34
Table 8, Descriptive Statistics of Information sharing Practices ............................................................... 35
Table 9, Order fulfillment practices........................................................................................................... 36
Table 10, the status of Health care service quality of the Hospitals .......................................................... 37
Table 11, Regression coefficient Regression Coefficients of order fulfillment versus availability of safety
equipment....................................................................................................Error! Bookmark not defined.
Table 12, Regression model summary of impact of supply chain management practices on patient safety
....................................................................................................................Error! Bookmark not defined.
Table 13, Impact on availability of Safety equipments, Regression, ANOVAa
....... Error! Bookmark not
defined.
Table 14, regression Coefficients on supplier relation in correlation to chronic health care service......... 45
Table 15, model summary of impact of Supplier relation versus chronic care equipments
Model summarya
........................................................................................................................................ 46
Table 16, the correlation between Supplier relation and chronic care equipments availability................. 47
Table 17, Regression analysis, Logistics management impact reliability...Error! Bookmark not defined.
Table 18, PSCM practices versus service reliability Model Summaryf
............. Error! Bookmark not
defined.
Table 19, logistics management versus service reliability..........................Error! Bookmark not defined.

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List of Figures
Fig. 1. Conceptual frame work....................................................................Error! Bookmark not defined.
Fig 2, the status of health care Service quality at the Federal Hospitals.................................................... 38

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Acronyms and abbreviation
PSCM Pharmaceutical supply chain management
AMC Average monthly consumption
FMOH Federal Ministry of health
FEFO First expiry first out
WHO World health organization
EPSA Ethiopian Pharmaceutical Supply Agency

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Chapter One
Introduction
1.1. Background of the Study
Access to health care, which includes access to essential drugs, is part of the fulfillment of the
fundamental human right to health. The provision of complete healthcare service by health
facilities necessitates the availability of safe, effective and affordable medicines and medical
equipments of the required quality, in adequate quantity at all time. Today, as nations strive to
make medicines available and affordable to all citizens, countries have adopted a national drug
strategy. These strategies specify the goals set by government for the pharmaceutical sector, their
relative importance and the main action needed for attaining them (Sultan S, May 2016).
In Ethiopia the health system is guided by the National Health Policy issued in 1993 and the
Health Sector Development Program (HSDP). Accordingly the government of Ethiopia has
developed the National Drug Policy (NDP), which is part and parcel of the health policy with the
objective to meet the country’s demand for essential drugs and to systematize its supply,
distribution and use and to ensure the safety, efficacy and quality of drugs. The policy outlines its
commitment to provide and determine the types of drugs to be used in the health services on the
basis of the country’s health problems and capability (Health Policy Project., 2021).
According to Ethiopian good storage practice Pharmaceutical products can be defined as “any
product intended for human use, presented in its finished dosage form, which is subject to control
by pharmaceutical legislation in either the exporting or the importing state and includes products
for which a prescription is required, products that may be sold to patients without a prescription,
biological and vaccines” (Ministry of Health, 2015).
Pharmaceutical products (drugs) are the prime crucial and indispensable resource element of a
healthcare system, irrespective of varying size of the health institution. To ensure better

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accessibility and availability of adequate quantity of drugs in the required dosage and strength,
they need to be stocked (Farrokhi, Gunther, & Williams, September/October 2015).
Supply chain management involves planning, coordinating, and controlling the movement of
material, finished goods from supplier to customer, through flow of material, finance, information,
sand decisions made at different levels throughout. Cooperating with the supplier improves
purchasing management and supply chain performance for better control, to achieve competitive
advantage through their network of suppliers examining whether the service provided will meet
with customer’s requirements and expectations (Al-Saa'da RJ e. , 2013).
Implementation of advanced technology in supply management system helps to organize vendor,
storage location, and equipment data, able to respond more rapidly and accurately to inquiries for
information related to inventory, purchase order activity, and supply usage, and the system proven
to be effective making significant improvements to material management system with a net
savings in operating expenses (Chandra SK., 2004;).
The study was conducted at public hospitals found in Addis Ababa, the capital city of Ethiopia, the
seat of the African Union and Economic Commission. It is located in the geographic center of the
country and covers a landmass of 540 sq. km. It is administratively subdivided into 11 sub-cities
and 116 Woredas as lowest level administrative unit in the city has an estimated population of 3.67
million in the city proper and a metro population of more than 5,005,524 people according to W.
The study includes all 14 (fourteen) public hospitals, among which 2 are Specialized, 5 are
referrals and 7 are Generalized Hospitals (Ethiopian Central statics Agency., 2021).
Thus the city has, six Hospitals under Addis Ababa Health Bureau, 5 were under FMOH, one
from federal police and one from Ministry of defense, and one under Addis Ababa University
providing teaching, specialized, and referral services. Public hospitals in Addis Ababa are Saint
Paul’s Hospital Millennium Medical college, Black Lion Specialized Hospital, Saint Peter TB
Specialized Hospital, ALERT Hospital, Yekatit 12 Medical College, Ras Desta Memorial
Hospital, Gandi Memorial Hospital, Zewditu Hospital, Tirunesh Beijing Hospital, Minilik

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Hospital, Amanuel Hospital, Armed Force Hospital, Police Hospital and Eka Kotebe General
Hospital (Andarge, 2016).
Managing stock effectively is important for any organization. Management of basic health
commodities concept is growing as it is very important in various countries. Managing
pharmaceutical products and materials up to their point of use in health facilities is an important
task in order to provide quality healthcare service. Running a hospital is no exception because
without enough stock, health services to patients will come to a halt. Without adequate pharmacy
inventory management practices, hospitals run the risk of not being able to provide patients with
the most appropriate medication when it is most needed (Muhammad, 2017).
1.2. Objective of the Study
1.2.1. General Objectives of the study
From the stated problem, the study sought to examine factors affecting pharmaceutical Supply
chain management and the impact on health care service quality on the selected health facilities in
Addis Ababa City administration.
1.2.2. The specific objectives of study are the following:
1. To assess the current status of Pharmaceutical Supply Chain Management practices at selected
health facilities
2. To assess the status of the quality of health care service at the selected hospitals
3. To identify the effect of the Pharmaceutical Supply Chain Management practices on health
care service quality.
1.3. Statement of the Problem
Patients are expecting improved access to routine health care, including care for diseases and
conditions, but until recently, it has received little attention though, there is a growing demand for
access to quality laboratory diagnostic services. Healthcare Supply Chain Logistics is series of
processes, workforce involved across different teams and movement of medicines, surgical

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equipment, and other products as needed by healthcare professionals to do their job (Gigras,
2018).
The Management of Medical equipments, Laboratory reagents and other supplies of public
hospitals in Ethiopia was identified as a major gap in ensuring quality and uninterrupted laboratory
testing leading to recurrent stock outs of testing reagents, frequent equipment breakdown, and
customer dissatisfaction and the overall increased cost of the health (Loko, 2020).
In developing countries like Ethiopia, where budget is tight overstocking of certain pharmaceutical
items may block a substantial portion of the medicine budget, resulting in insufficient funds for
procuring other more important perhaps life saving medicine. For this reason, it is important to
implement or upgrade an inventory control system in health facilities pharmaceutical supply to
maintain a steady supply of medicine to the public. This ensures good health to all while
minimizing the costs associated with inventory holding, lowering order processing, procurement or
delivery costs, controlling stock levels and minimizing stock out conditions (Nimanpure A, 2013).
In Ethiopia many health facilities faces various challenges like an inadequate supply of quality and
affordable essential pharmaceuticals, poor storage conditions and weak stock management resulted
in high levels of waste and stock outs. (Shewarega A. D., 2015).
1.4. Research Questions
The study sought to answer the following research questions:
1. How does Pharmaceutical (health Commodities) Supply Chain management practices are
currently looked like at selected health facilities?
2. What are the challenges of Pharmaceutical (health Commodities) Supply Chain management at
selected health facilities?
3. What is the effect of pharmaceutical Supply Chain management on the quality of health care
services at selected health facilities?
1.5. Hypothesis
a). There is no significant statistical effect of logistic management on quality of health care
services (Responsiveness, Reliability, Mental health care, Chronic health care and Safety of lab

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services)
b). There is no significant statistical effect of Supplier relation management on quality of health
care services (Responsiveness, Reliability, Mental health care, Chronic health care and Safety of
lab services).
c). There is no significant statistical effect of Customer relationship management on quality of
health care services (Responsiveness, Reliability, Mental health care, Chronic health care and
Safety).
d) There is no significant statistical effect of order fulfillment on quality of health care services
(Responsiveness, Reliability, Mental health care, chronic health care and Safety).
e) There is no significant statistical effect of information sharing on quality of health care services
(Responsiveness, Reliability, Mental health care, chronic health care and Safety).
1.6. Significance of the Study
This study gives an indication on the status of supply chain management practices; the public
hospitals can use the findings to form new strategies to improve the current level of supply chain
management and quality of Health care service provision. And this research will help the as
stakeholders information source to intervene to health care service quality problems. This research
fills a knowledge gap knowledge gap through evidence-based information to managers of public
hospitals and other stakeholders.
This research will contribute to the availability of literature on this area, the findings can be
baseline information for Pharmaceutical Managers, policymakers, and system designers that can
strive to improve the supply chain management and finally improving the quality of health care
service.
The researcher hopes that the findings of this research enlightens the pharmaceutical supply chain
practitioners in health facilities on the effect of health commodities supply chain management and
its importance in improving the institution performance and also help the mangers in decision
making concerning the sustainable supply of health care commodities in the hospital so as to
ensure the patients are accorded appropriate service level while ensuring overall efficiencies in the
hospital is maintained.

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1.6. Scope and the limitation of the study
Health facilities manage their health commodities supply chain system in different way from one
organization to another. The nature of the hospital, as well as the nature of the medical devices
used, determines types of the system to adopt. This study focuses on the practices and factors
affecting pharmaceutical supply management at selected hospitals in Addis Ababa. The hospital
has been chosen because of that they manage large number of Pharmaceuticals (health
commodities) as compared to health centers and health posts. These hospitals were Saint Paul’s
Hospital Millennium Medical College, Black Lion Specialized Hospital, Saint Peter Specialized
Hospital, ALERT Hospital, Amanuel Mental Specialized Hospital and Eka Kotebe General
Hospital.
The management of pharmaceutical supply chain was covered by this study. The data were
gathered from Pharmacy professionals, biomedical professionals and laboratory coordinators with
specific focus on those responsible for pharmaceutical stock movement function in the hospital.
However, due to time and other constraints, the scope of the study was limited geographically,
conceptually and methodologically. Geographically; the study was limited only selected public
hospitals in Addis Ababa; conceptually; the study was used limited variables to assess the
inventory control practice applied and methodologically; the study was limited on descriptive
statistics techniques.

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Chapter 2
Literature Review
2.1. Supply Chain Management
The Global Supply Chain Forum defines SCM as “the integration of key business processes from
end user through original suppliers that provide products, services, and information that add value
for customers and other stakeholders”. The concept Supply Chain Management spans all
movement and storage of raw materials, work-in-process inventory, and finished goods from point
of origin to point of consumption (Shekhar, 2012).
PSCM practices involve a set of activities undertaken in an organization to promote effective
management of its supply chain. The short-term objectives of SCM are to enhance productivity,
reduce inventory and lead time. The long-term objectives of SCM are to increase market share and
integration of supply chain. SCM practices can be defined in various ways. Donlon (1996) coined
SCM practices as practices that include supplier partnership, outsourcing, cycle-time compression,
continuous process flow and information technology sharing. PSCM practice is defined as the set
of activities that organizations undertake to promote effective management of the supply chain.
And is also elaborated PSCM practice as a special form of strategic partnership between retailers
and suppliers (Willis, 2005).
PSCM practices are also viewed in terms of reducing duplication effects by focusing on core
competencies and using inter-organizational standards such as activity-based costing or electronic
data interchange, and eliminating unnecessary inventory level by postponing customizations
towards the end of the supply chain. The researchers categorized SCM practices from the
following aspects: close partnership with suppliers, close partnership with customers, just-in-time
supply, strategic planning supply chain benchmarking, few suppliers, holding safety stock and sub-
contracting, e-procurement, outsourcing and many suppliers. Some authors identified seven
theoretical processes of service supply chains which include information flow, capacity and skills
management, demand management, customer relationship management, supplier relationship
management, service delivery management and cash flow. In general, SCM practices are
categorized into demand management, customer relationship management, supplier relationship
management, capacity and resource management, service performance, information and

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technology management, service supply chain finance, and order process management
(Pongpanarat., 2011).
Evidences ascertain that effective supply chain management practices will reduce costs, boost
revenues, increase customer satisfaction, assurance and improve service delivery. Pongpanarat
(2011) adapted the seven SCM practices from which are demand management, customer
relationship management, supplier relationship management, capacity and resource management,
service performance management, information and technology management, order process
management. Based on the detailed analysis, there are five main dimensions of SCM practices
widely acknowledged by the researchers as well as suitable to be applied in healthcare industry.
These five service SCM practices are information & technology management, customer
relationship management, supplier relationship management, demand management, and capacity
and resource management. For the purpose of this study, the SCM practices in healthcare industry
are conceptualized as a multidimensional construct comprising of these and other dimensions
(Pongpanarat., 2011).
An organization’s strengths can be mapped to two categories which are cost advantage and
differentiation. Applying the organization’s strengths will result in cost leadership, differentiation
and focus. These are the results which will be relevant for public healthcare organization. The
differentiator of a public healthcare organization is to provide affordable healthcare to all citizens.
The focus is the well-being and quality of life for patients. Good supply chain practices will result
in cost leadership due to optimal contracting and supplier relationship management. Supplier
relationship management is defined as a process where both customers and suppliers maintain
long-term close relationship as partners (Basri, 2013).
The five key components include coordination, cooperation, commitment, information sharing and
feedback. Customer relationship management is as maintaining and developing long-term
customer relationships by developing information continuously and understanding what customers
want. A number of researchers identified interactive management, understanding customer
expectations, empowerment and personification as ways of effectively implementing CRM (Jiang
H. J., 2006).

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It is affirmed that interactive management which is a component of CRM comprises all actions
designed to transform the prospective client into an active and effective customer. This can be in
form of attitude of staff to patient in the hospital. A cordial and humane attitude will definitely
make a patient become an effective one. Patient feedback and suggestion can be used by the
hospital for better performance. There are identified understanding customer expectations which
stressed the importance of identifying the customers‟ desires and supplying to those customers
products and services that meet their expectations through interaction with the patients noted that
empowerment which refers to the process a firm adopts to encourage and reward employees who
exercise initiative, make valuable, creative contributions and do whatever is possible to help
customers solve their problems (Sengupta K., 2006).
Partnerships are created when suppliers work closely with customers and add desired services to
their traditional product and service offering. And partnering is the extreme end of loyalty scale
and regarded as an important step that usually leads to the development of a close and durable
relationship between supplier and customer (Shaikh B. &. R., 2005).
(Rajesh R., 2012), considered partner selection as the first step in the CRM (customer relation
management) process. And concluded that personalization which refers to the extent to which a
firm assigns one business representative to each customer and develops or prepares specific
products for specific customers. It is about selecting or filtering information for a company by
using information about the customer profile.
According to (Leaven L. & D., 2017) demand management is the process of managing and
balancing customer demand by keeping updated demand information. Another aspect of SCM
practice is information technology and the deployment of e-business which are closely linked to
the co-ordination and integration of operational processes. Many studies have advocated the
important role information technology plays in supply chain practices and it will be of no surprise
therefore that many studies on health care supply chains focus on the role of e-business
technologies across hospital supply chains.

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(Kwon, Kim, & Martin, 2016), define “Supplier Relationship Management to include both
business practices and software and is part of the information flow component of supply chain
management (SCM). SRM (Supplier relation management) practices create a common frame of
reference to enable effective communication between an enterprise and suppliers who may use
quite different business practices and terminology. As a result, SRM increases the efficiency of
processes associated with acquiring goods and services, managing inventory, and processing
materials.”
According to (McGain & Naylor, 2014) health care is considered to be different from most other
industries due to the high level of regulation, the high proportion of governmental investment, the
associated low pressure in respect of effectiveness and efficiency of state-subsidized health care
organizations and the lack of orientation towards customer benefit. As a consequence of that, the
health care sector shows a relatively underdeveloped information system structure. However, in
order to provide optimal health service delivery there is a long-standing practice of including
information beyond the traditional boundaries of a single health care organization.
Furthermore, there is an imminent obligation for cooperation in order to comply with the
requirement of both, internal (doctors, pharmacists, nurses) and external stakeholders (patients,
governmental agencies, suppliers). The capacity and resource management is the management of
capacity and resources of service that are organized effectively and operated efficiently at optimal
level (La Rotta & Pérez Rave, 2017).
2.2. Pharmaceutical supply chain
The pharmaceutical industry can be defined as a complex of processes, operations and
organizations involved in the discovery, development and manufacture of drugs and medications.
The World Health Organization (WHO) defines a drug or pharmaceuticals as: any Equipments,
substance or mixture of substances manufactured, sold, offered for sale or represented for use in
the diagnosis, treatment, mitigation or prevention of disease (WHO, 2006)
Pharmaceutical supply chain management is the managing arts involved in a network of supplier,
manufacturing, and distribution and logistics facilities of various pharmaceutical products. The
pharmaceutical supply chain management is a complex process that requires the participation of

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different stakeholders such as pharmaceutical manufacturers, wholesalers, distributors, customers,
information service providers, and regulatory agencies. And it is proper implementation ensures to
avail medicines in the right quantity, with the acceptable quality, to the right place and customers,
at the right time and with optimum cost to be consistent with a health system’s objectives. There
are instances where international trade can have direct health and safety impacts on poor
individuals. Perhaps most importantly, improving the health outcomes of poor people usually
involves imports of medical products. It is simply not possible for a small developing country such
as Ethiopia to produce all the entire range of medical supplies, medicines, and advanced medical
equipment (Abu-kharmeh S., 2012).
2.3. Supply Chain Management Practices and Service Quality in Public Hospitals
The effects of supply chain management on health care service quality, has to do with quality from
an administrative point of view, medical service quality can be measured from a professionally
medical perspective, or from the recipient of such services, the patient, or from an administrative
perspective, which is the focus of this study. The service quality of health care services rendered
from an administrative perspective primarily has to do making use of available resources and the
ability to attract new ones to cover the required needs of exceptional service, which provides the
right service at the right time at a reasonable cost. Supply chain management (SCM) deals with the
management processes of flows of goods, information and funds among supply chain partners in
order to satisfy consumer needs in an efficient way (haikh, 2005).
Providing quality of health care service at a reasonable cost and rationalizing resources should
never be at the expense of a quality performance, which requires efficiency at both the planning
and executing phases, personal and professional competency and finally an internally structured
philosophy to deal with external parties. More accurately, the search for more resources requires
the development of public relations with the health sector as a whole. This personal relation
requirement is evident in the vague and complicated administrative organizations. The health
system, in general, is vague and complicated, requiring tremendous effort for the promotion of
administrative quality (Kazemzadeh, 2011).
This demonstrates the great importance of supply chain management and its role in ensuring the
quality of medical services. Supply chain management includes the management of product,

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information, and financial flow from the source of supplies to the manufacture and assembly of the
product right to the delivering of the final product to consumers.
A public health supply chain is a network of interconnected organizations or actors that ensures the
availability of health commodities to the people who need them. Organizations in the supply chain
often include departments of ministries of health (procurement, planning, drug regulatory board,
human resources, and health programs); central medical stores; donors; non-governmental
organizations (NGOs); regions and districts; health facilities; teams of community health workers;
and private sector partners, such as third-party logistics providers, drug manufacturers, distributors,
and private service providers (Rakovska & Stratieva, 2018).
The supply chain management practices are viewed to be related to supply chain responsiveness
which will increase supply chain competitive advantage and then lead to organizational
performance. The effective supply chain management practices will reduce costs, boost revenues,
increase customer satisfaction, and also improve service delivery (Abu-kharmeh, 2012).
The healthcare supply chain is composed of three major players at various stages, namely,
producers, purchasers, and healthcare providers. Producers include pharmaceutical companies,
medical surgical products companies, device manufacturers, and manufacturers of capital
equipment and information systems. Purchasers include grouped purchasing organizations (GPOs),
pharmaceutical wholesalers, medical surgical distributors, independent contracted distributors, and
product representatives from manufacturers. Providers include hospitals, systems of hospitals,
integrated delivery networks (IDNs), and alternate site facilities (Ali, 2012).
Many different stakeholders are involved in health care supply chain practices. Therefore, the
application of supply chain management practices in a health care setting is almost by definition
related to organizational aspects like building relationships, allocating authorities and
responsibilities, and organizing interface processes. Different studies have highlighted the
importance of organizational processes when applying supply chain management practices.
Moreover, recent studies reveal that elements like organizational culture, the absence of strong
leadership and mandating authority, as well as power and interest relationships between

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stakeholders might severely hinder the integration and co-ordination of processes along the health
care supply chain (Kritchanchai, 2018).
2.4. Pharmaceutical Supply chain practices in Ethiopia
PSCM (Pharmaceutical supply Chain management) practices, performance and challenges in
different industry of Ethiopia were studied in different dissertations. The results of different
researches in the practices of SCM in different commercial sectors of Ethiopia are poor. the
practice of SCM in Ethiopian pharmaceutical companies. It was found that, SCM practices in
Ethiopian pharmaceutical firms are weak and not considering SCM as a strategic tool for
competition (Sisay A, 2015).
In another sector (Tesfaye D, 2015) tried to measure the performance of SCM in metal and
engineering industries. The result of the study shows that the implementation of measuring the
SCM in this industry is weak. Also the SCM practices don’t have any relationship with
organizational performances except internal lean practices. In addition, the practices of SCM in
cement industries. The result of the thesis shows similar to other industries in the country i.e. the
practice of SCM in cement industry is almost poor.
(EPA (Ethiopian Pharmaceutical Association), 2011), also studied the SCM and model
development study as a case study of Pharmaceutical Industrial companies. The result of this study
shows that most of the employees of the companies don’t have awareness of SCM. The company
also don’t use supply chain cost analysis rather than using the traditional accounting system. Based
on the assessment of FMOH for monitoring and evaluation of national drug policy, there was only
one local pharmaceutical manufacturing plant in 1993 G.C that is owned by the government.
Currently, drug production activity is being under taken by 13 local pharmaceutical manufacturing
plants: One government owned, eleven private (unaffiliated with multinationals) and one private
(affiliated with multinationals) (FMOH. (. D., october 2019).
Three of the factories are engaged in medical supplies production, one on empty gelatin capsule
production and nine on finished product formulation using imported raw materials Supply chain
management (SCM) links a firm with its customers, suppliers and other members of the supply
chain system, including logistics and warehousing companies.

14
The goal of SCM is for members in the organizations to integrate, work together, and build a
partnership with each other to increase the competitive advantage of the supply chain as a whole
(Gabriel, October 2017).
According to (Paulraj, Chen, & Lado, 2012) and different experts the pharmaceutical supply chain
of Ethiopia has two wings. The first is addressing those of the public health facilities through
PFSA. The second is addressing the private health facilities through different importers,
wholesalers and also PFSA to some extent. PFSA was established in 2007 based on
pharmaceutical logistics master plans implementations designed by FMOH. The mandate of PFSA
is; it is a sole provider of forecasting, procurement, storage, inventory management and
distribution of pharmaceuticals to the public health sector in Ethiopia. PFSA’s current supply chain
starts with the import of most drugs via the port of Djibouti and purchasing from local
manufactures.
These products are then trucked into central PFSA based in Addis Ababa, before being distributed
to the various distribution centers (Hubs) and on to the hospitals and health centers. Recently
PFSA has established pull system known as integrated pharmaceutical logistics system primarily
using the essential data items reported from health facilities regularly every other month. Using its
11 distribution centers (Hubs), PFSA will distribute drugs and supplies to public health facilities
throughout the country (Wolbrum, 2014).
2.5. The effect of supply Chain Management on Service Quality Delivery
Health institutions encounter many challenges accompanied with new requirements, namely;
customer dissatisfaction, increasing cost of the health services, competition and reducing the
reimbursement for services. All of these factors force the health organizations to adopt a system
that can meet these requirements, dealing with the continuous changes, technology changes,
increase in the health services costing, increase in competitive position and gaining customers‟
satisfaction in a round table discussion at meeting for Transport and Logistics pointed out a few
important constraints in healthcare supply chain as: high cost of healthcare, wasteful behaviors,
and complex regulations and requirements (Ayers, 2010).

15
There are suggested solutions focused on making supply chain more demand driven, increasing
collaboration between involved parties, increasing visibility of practices and inventory and better
standard implementation. The key supply chain challenges are: the underutilization of supply chain
data standards results in significant inefficiencies across the entire supply chain continuum; lack of
representation at the top executive level to recognize its strategic importance within the
organization; supply chain silos as many organizations still operate disparate supply chains serving
individual departments and service lines, inhibiting an organization's ability to coordinate
purchases and limiting its ability to understand total supply chain costs; and clinician resistance to
change as physicians and other clinicians like choices and autonomy and are often loyal to
particular products and brands (Carter & Washispack, 2018).
(OECD., 2017), had identified the service quality challenges to include: government funding, lack
of government interest in development of new healthcare projects in rural areas and overburdened
public hospitals due to rapid growth in population and people trends to move from rural areas to
major cities. Their research results showed that doctors, nurses and supporting staff are not taking
pain to attend the patient or to provide individual care to the patients, take care of cleanliness, and
sterilization of equipments, lack of feedback mechanism showed a low commitment level towards
their responsibilities in public hospitals.
(Bozarth C., 2009) identified the following PSCM challenges, namely: poor infrastructure, bulky
materials to be transported, poor planning special materials to be transported, poor order request
form filling and late arrival of order request form, loyalty of clinicians to certain products by
prescribers or clinicians, lack of financial resources, late arrival of order request form, uncertainty
in terms of supplies, lack of qualified personnel, uncertainty in terms of demand and lack of proper
planning.
Among the major challenges facing the public hospitals are stock outs and expired drugs occur at
all levels in the public systems including distribution outlets, district stores, and hospitals
particularly in the public system in rural communities. The causes, as suggested by previous
studies and during recent interviews with stakeholders are related to lack of funding and limited

16
control of drug quality and pricing such as counterfeiting mark ups expired drugs and lack of
transparency and regulation concerning price (Ermias., 2019).
Problems also constitute leakages including commissions and pilferage and lack of coordination
with the private sector in procurement, forecasting, problems of unsolicited drug donations,
parallel production and lack of overview of available stocks. While some of the above are closely
linked with logistic problems, specific challenges with the drug supply chain are pointed out
including: Lack of efficient funding and ordering processes means it can take six months to
complete tendering process, lack of competent staff and poor coordination between store manager
and medical clinicians (WHO & FMOH., 2003).
People are constantly looking for quality health products and services. The existence of this desire
for quality has caused health facilities throughout the world to consider it as an essential
component of any service and production process. The definition of health care quality is that
developed by the Institute of Medicine (IOM): "the degree to which health care services for
individuals and populations increase the likelihood of desired health outcomes and are consistent
with current professional knowledge, efficient; accurate; patient-centered; reliable; and timely
(Shewarega &. A., 2015).
Access dimensions are summarized as the availability (or physical access), affordability (or
financial access) and acceptability (or cultural access) of health care services. Affordability
concerns the ‘degree of the individuals’-to-pay the ability context of the household budget and
other demands on that budget. Acceptability is concerned with the fit between provider and patient
attitudes towards and expectations of each other. The availability dimension of access deals with
whether the appropriate laboratory services are available in the right place and at the right time to
meet the needs of the clients (National Health policy (NDP)., 1993).
Quality of health care service is “degree of fit” or compatibility on the one hand and individuals
who need to use these services on the other hand; it can be also defined as accuracy, timeliness of
the health care service and reliability of the outcome. The health care services must be as
responsive as possible in all aspects of the health care operations and must be reliable, and care

17
giving must be timely to be useful in a clinical or public health setting. The health system, in
general, is complicated, requiring effort for the promotion of administrative quality, including the
management of product, information, and financial flow from the source of supplies to the
manufacture and assembly of the product right to the delivering of the final product to consumers
(Edward Kelley., 2006).
The quality of health care services from a management perspective, use available resources to
provide the right service, at the right time, at a reasonable cost, dealing with the management
processes of flows of goods, information, funds among supply chain partners to satisfy customer
needs. High quality level of health services must provide efficiently to improve patient
satisfaction, patient retention, loyalty, profitability, service guarantees, and growth of health
institution (Fireman B., 2004).
2.6. Conceptual Framework
Based on the above literature review, the following conceptual framework can be drawn.
Independent variables Dependent variables
Pharmaceutical Supply Health care service
Chain Management Practices Dimensions Quality Dimensions
Fig. 1. Conceptual frame work of the Study
(Al-Saa'da RJ, 2013 )
The study framework defines the relationships between supply chain management dimensions
specific to healthcare (Logistics management, relationship with suppliers, Information sharing and
Supplier relation
management
Information
Sharing
Customer Relation
management
Order fulfillment
Responsiveness
Trust /Reliability/
Chronic health care access
Safety
Mental health care access
Logistic
Management

18
order fulfillment) on the quality of health services' dimensions among public hospitals in Addis
Ababa from the perspective of procurement officers or equivalents and Laboratory officers or
equivalents. The independent variables are the supply chain management dimensions which
include:
i). Logistics Management is an operational component of supply chain management, including
Quantification, procurement, inventory management, transportation, and data collection and
reporting, focusing more on specific tasks within a particular supply chain management. It process
of getting right laboratory commodities in the right quantities in the right condition delivered to the
right place at the right time (Biedron., 2018).
ii). Supplier relation management: is a process where hospitals and suppliers maintain a
long-term close relationship of the relationship by supplying products, specifications set by the
hospitals as conditions for the supply in the tender, indicates to delivery dates between the supply
officer at the hospital and the company that supplies medical equipment and supplies. After
procurement service: follow-up maintenance service and supply parts and needs by suppliers to
the hospital after the Compatibility is the appropriateness of medical equipment and supplies
(Wendo, 2021).
iii). Customer relationship management: is maintaining long-term customer relationships by
developing information continuously and under attitude of staff to the patient in the hospital
through performance evaluation that includes customer satisfaction and customer involvement in
design and feedback processes (Biedron., 2018).
iv). Order fulfillment is one of supply chain activities in an organization involving classifying
inventories according to their needs, capacity to respond to demand fluctuations, supplier buyer
integrated planning, forecasting, replenishment, reducing lead time, maintaining high level of
emergency supplies in meeting the customer requirement service level (Shaikh B., 2005).
v) Information Sharing:- Information sharing among partners in a supply chain is commonly
considered as a key factor to enhance supply chain performance and it is about exchange of
data from one logistic part to another which is mostly related to Information technologies
(Wendo, 2021).

19
Dependent Variable (Quality of Health Services dimensions): the delivery of health care
services and it's continuous improvements to meet the needs of patients, through work completion
by highly skilled staff members dedicated to high quality service (Adam Oliver., 2004).
The dimensions of health service quality are represented through:
i. Responsiveness: Responsiveness has high validity and reliability in measuring the quality of
services in health care sector. It refers to how a system treats people to meet their legitimate
non-health expectations. Another term that is often used synonymously with responsiveness is
patient-centeredness. Patient centeredness is the degree to which a system actually functions by
placing the patient/user at the center of its delivery of healthcare and is often assessed in terms
of patient’s experience of their health care. This experience of care refers to the caring
communication and understanding that should characterize the clinician-patient relationship.
The emphasis here is on the patient's report of her or his experience with specific aspects of care
and goes beyond her or his general satisfaction or opinion regarding the adequacy (Adam
Oliver., 2004).
ii.Trust/ Reliability: The degree of reliability enjoyed by the supplier from the viewpoint of
supply officers at the hospital. Trust is conveyed through faith, reliance, belief, confidence in
the supply partner and examines the ability of the service provider to perform services right the
first time and keep service promises (FMOH, 2017).
iii. Safety: Service provided to be free from uncertainty, risk and doubt to a certain degree. By
increasing the complexity of health care, the demand for improving patient safety and
monitoring the quality of services has become a critical issue (FMOH, 2017).
iv. Chronic health care access:- is the easy availability of health care to the patients with
chronic illness and deceases like Diabetes Mellitus and Hypertension (FMOH. &. M.,
2015).
v. Mental Health care access:- is health care services devoted to the treatment of mental
illnesses and the improvement of mental health in people with mental disorders or
problems and is the access all patients gain for the treatment services of any mental health
problems (FMOH. &. M., 2015).

20
Chapter Three
Research Methodology
3.1. Study area
The study was conducted at public hospitals found in Addis Ababa, the capital city of Ethiopia,
the seat of the African Union and Economic Commission. It is located in the geographic center
of the country and covers a landmass of 540 sq. km. It is administratively subdivided into 10
sub-cities and 116 woredas as the lowest level administrative unit in the city has an estimated
population of 3.6 million in the city proper and a metro population of more than 4.6 million (36).
The study includes 6 (six) Federal public hospitals, those which were under FMOH, one under
Addis Ababa University providing teaching, specialized, and referral services (FMOH., 2021).
The Selected Public Federal hospitals in Addis Ababa are Saint Paul’s Hospital Millennium
Medical college, Black Lion Specialized Hospital, Saint Peter TB Specialized Hospital, ALERT
(All Africa Leprosy Rehabilitation and Training center) Hospital, Amanuel Hospital and the
Newly established Eka Kotebe General Hospital; and they are not only limited to providing
services for the people residing in the Capital city, rather they serve the multitude of population
in the surrounding areas outside the city and other regional states and peoples of other nations
too. As the city is the center of the country in many socio-economic aspects of peoples’ life and
due to the community assumption that better health services are available in the city, hospital
services became overcrowded (FMOH., 2021).
3.2 Study design and period
The study used an explanatory research design. According to (Helen L. Dulock, 1993), a
descriptive research was used to obtain information concerning the current status of the
phenomena to describe what exists, with respect to variables or conditions in a situation.
Descriptive study design enables the researcher to collect data easily and timely by way of
interviews and administering of questionnaires to the selected sample. Therefore, descriptive
research design was adopted in this study since the researcher was intended to assess the practice
at hand thoroughly to define it, clarify it and obtain pertinent information that could be of use in
Pharmaceutical supply chain management at health facility and to identify the effect of supply

21
chain management of Medicines, Medical equipments, Medical supplies, Laboratory reagents,
consumables on quality of Health care service from March to May 2021 using questioner and
key informant interview.
3.3. Population
3.3.1. Source population
The source of the population was the staffs of the selected public Federal Hospitals who were
responsible in supply chain management activities and the pharmacy service employees,
biomedical employees and Laboratory service professionals of the selected Hospitals.
3.3.2. Study population
Pharmacy Professionals (Pharmacists and druggists working as Pharmacy Director, Store
Managers, Dispensers, Logistic officers (Pharmaceutical Supply Mangers), Unit coordinators) of
public hospitals, Laboratory managers (Laboratory directors, laboratory quality managers and
logistic officers) and Biomedical professionals.
3.3.2.1. The List of intended respondents
All pharmacy Professionals from all selected Hospitals who were willing to participate were
among the respondents.
All pharmacy and Laboratory directors of the selected Hospitals who were willing to participate
in the study were among the respondents. All Biomedical Engineers, Laboratory Logistics
officers and Laboratory unit coordinators who were willing to participate were included.
3.3.2.2. Sample Design
The table below shows the sample size determined from the selected Hospitals: Federal Public
Hospitals under administered under the Federal Ministry of Health (FMoH) in Addis Ababa,
Ethiopia. As it is briefed below in the table by convenience method, since biomedical
professionals and laboratory coordinators are few in number we included all of them in the
sampling which comprise 59% of the sample. Hence, since the Pharmacy professionals are
directly involved to PSCM practices, the remaining 41% respondents are sampled from all
Hospitals as of the Pharmacy employees purposively. Thus the total number of sample size was
179.4 = 200.

22
Table 1, Sample size of the population
S.N
Selected Hospitals for the
Study
Number of
Pharmacy Staff
Number of
Biomedical
Staff
Number of
Laboratory
coordinators
Total Sample
Size
Total
Pop.
Sample
size
Total Sample
size
1 St, Paul Hospital Millennium
medical College
60 25 6 6 5 5
2 Eka kotebe General Hospital 40 16 4 4 4 4
3 Black Lion Comprehensive
specialized Hospital
76 32 15 15 7 7
4 ALERT Hospital 40 17 6 6 4 4
5 Amanuel Mental specialized
hospital
46 19 1 1 2 2
6 St, Peter Tb Specialized
Hospital
64 27 6 6 4 4
Total Number of staffs 326 38 26
Proportional total sample Size 136 136 38 38 26 26
Total target Population = 326 Total Sample Size = 179.6= 200
3.3.3 Inclusion criteria
Voluntary employees who have worked over six months in the selected public hospitals were
included
3.3.4 Exclusion criteria
Employees who were unwilling to participate and not available during study time

23
3.4. Study variables
3.4.1. Dependent variables
Status of Pharmaceutical supply chain management practices, Provision of quality Health care
Service (responsiveness, reliability, Mental Health care access, chronic health care access and
safety)
3.4.2. Independent variables
Age, Sex, Educational levels, Experiences that are management and professional factors, Supply
chain management practices
3.5. Measurement and Data collection
3.5.1 Sample size calculation and sampling method
The study units were an employee of public hospitals. The researcher conducted the study on the
selected 6 hospitals out of 14 (fourteen) public hospitals found in Addis Ababa, Ethiopia.
Sampling frame consisted of conveniently selected target groups of Pharmacy professionals
(Pharmacy Directors, Logistic officers, pharmacy unit coordinators) and all other Pharmacy
professionals, Laboratory coordinators i.e. Laboratory service directors, Laboratory quality
managers, Safety officers, Logistic officers and Unit heads as they are more familiar with health
commodities supply chain management practices and provide accurate and objective
information. Simple random sampling was used to select pharmacy (operational), Laboratory
professionals (operational) and biomedical professional’s employees other than managers from
study hospitals to avoid bias. The sample size of the study participants was determined by using
single population proportions formula: by considering level of significance = 0.05, marginal of
error (d) =5%.
𝐧 =
𝑵
𝟏+𝑵𝐞²
Where:
n = the new sample size
N = the population size
e = margin of error

24
There were totally 326 employees who are in the sampling frame of the study to participate.
According to the above formula the total number of our sample size was 179.6 and thus
favorably the researcher made the sample size 200 respondents. Finally we proportionally
selected the employees by 41% (from Pharmacy staffs) from each hospital at operational level in
random selection from all hospitals and total number of the other rest two departments.
Therefore, more specifically the sample size for the study was consisted of 200 respondents.
Pharmacy director and Laboratory directors and selected by non-probable sampling purposively
for the key informant interview.
3.6.2 Data collection
The study was founded on both primary and secondary data. Primary data was collected from the
pharmacists, biomedical professionals and Laboratory professionals who are responsible for the
pharmacy and laboratory departments in all ordering, receiving, storing of pharmaceutical items
and deliver them to end users and maintaining and reusing equipments in the health facilities.
The primary source of data for this research was semi structured questionnaire and Key
informant interview. On the other side the study also use physical observation against a standard
check list according to WHO standard requirements and local guideline. Secondary data was also
obtained from external sources such as reference books, journal articles and research papers
related to the topics.
The purpose of sourcing for secondary data was to help in the formation of problems, literature
review and construction of questionnaire. This study employed three types of data collection
instruments to collect primary and secondary data. The primary instrument used to collect data
was questionnaire. This study majorly depends on data gathered by use of questionnaires other
than interviews and observations.
The study tool has been prepared constructed into two parts; the first part is to measure the
supply chain and divided on five dimensions: the relationship with suppliers, customer
relationship, information sharing, Logistics management and order fulfillment, consisted of 25
questionnaires. While the second part of the questionnaire, which measures the quality of health

25
services divided into five dimensions: the responsiveness, trust, safety, mental health care and
chronic health care, and is consisted of 5 questionnaires.
A questionnaire in a 5 point likert scale was used to collect data from the sample respondent. The
questionnaire has 5 rating scale ranging from 1=strongly disagree, 2 = disagree, 3 = undecided
(neutral), 4 = agree and 5 = strongly agree. The questionnaire was designed to meet the
objectives of the study. And the questionnaire prepared for health service quality dimension were
presented as 2 point likert scale (2- for disagree or ‘No’ and 4 –for agree or ‘Yes’) questions at
one response and analyzed differently for time management.
A questionnaire which had been designed by Management Sciences for Health to assess health
facilities and other used from previous works was adopted for the purposes of this study.
Moreover some part of the questionnaire was adopted from a research done on Supply Chain
Management and its Effect on Health Care Service Quality at Jordanian Private Hospitals (Al-
Saa'da RJ e. , 2013).
To determine the minimum and the maximum length of the 5-point Likert type scale, First
method: the range is calculated by (5 − 1 = 4) then divided by five as it is the greatest value of
the scale (4 ÷ 5 = 0.80). Afterwards, number one which is the least value in the scale was added
in order to identify the maximum of this cell. The length of the cells is determined below: From
1 to 1.80 represents (strongly disagree). From 1.81 until 2.60 represents (do not agree). From
2.61 until 3.40 represents (true to some extent). From 3:41 until 4:20 represents (agree). From
4:21 until 5:00 represents (strongly agree). Second method is the traditional way: mean score
from 0.01 to 1.00 is (strongly disagree); to 2.00 is (disagree); from 2.01 until 3.00 is (neutral);
3.01 until 4:00 is (agree); Mean score from 4.01 until 5.00 is (strongly agree) (Tigist, June
2020).
3.5.3 Data collection procedure
The health facilities that were selected for the assessment was first located. Hospital chief
executives of the facilities were approached to obtain consent for undertaking the data collection
at the establishments after Hospital Ethical Review committees had evaluated it. The empirical
data for the study were collected through a well-structured questionnaire and key informant

26
interview, the respondents to this questionnaire are free to answer the questions according to
their scruples without been bound to satisfy the researcher.
Once their consent is known, the questionnaires were distributed by the researcher to each
participant by appreciating their participation and devoting their precious time for the research.
The researcher given the respondents the option of filling the questionnaires at their convenient
time and were collected after two days for analysis. The questionnaires were collected by
checking the completeness of the data. The researcher also collected data through Key informant
interview after the questions also conducted with Pharmacy directors and Laboratory directors of
the hospitals. Finally the activities were accomplished by appreciating the respondents.
3.5.4. Method of Data analysis
Data processing is an important part of the whole survey operation. The data collected through
questionnaires and interview was processed, summarized, edited, tabulated and coded to ensure
completeness, consistency and accuracy. Inferential analytical technique was used with the aid of
Statistical Package for Social Sciences (SPSS version 24) to analyze the collected data. Data was
analyzed and presented by using frequency counts, percentage, mean and standard deviation.
Quantitative explanations were made of quantitative data to give meaning to them as well as
explain their implications. Data from qualitative method was analyzed systematically in such a
way that the major issues were identified. From these, appropriate conclusions and
recommendations were made from the findings of the research.
The study was analyzed by dividing into two parts; the first part is to analyze the supply chain
divided on five dimensions: the relationship with suppliers, customer relationship, information
sharing, Logistics management and order fulfillment. While the second part of the analysis was
which deals with the quality of health services divided into five dimensions: the responsiveness,
trust, patient safety, mental health care delivery and chronic health care access.
The analysis was conducted on data gathered to assess pharmaceutical supply chain management
practices and its impact on health services at health facilities was presented in relation to the
objectives of the study. Explanatory statistics was used to analyze the data in this study based on
the responses of sample respondents on their into account that numbers a five point Likert scale
1, 2, 3, 4 and 5 represents strongly disagree, disagree, undecided (neutral), agree and strongly
agree respectively.

27
3.6. Data quality assurance (Validity and Reliability of the Study)
3.6.1 Validity of the Study
To ensure validity of the study, all questionnaires were self-administered to the right persons of
respondents by the researcher and only data that was collected was analyzed. To test validity of
the questionnaire, a pilot study was conducted with 5 persons from the pharmacy professionals 1
pharmacy director, 2 Laboratory coordinators and 2 biomedical professionals totally 9
respondents from Eka Kotebe General Hospital which was among the study site, which covers
5% of the sample size. The seven persons were given thirty minutes to complete the
questionnaire and the researcher was available to assist. Respondents were also asked to
comment on the format and wording of the questionnaire. A few changes were made to the
questionnaire after a pilot study. Some of the changes were related to questionnaire’s
terminology and repeated items. After the pre-test, some modification of the questioner was
made for unclear and difficult question. These pre-test data were not included in the analysis of
this study. Training was given for two pharmacist data collectors by the principal investigator to
clarify how to collect data (Mehmet Erdogan, 2009).
3.6.2. Reliability of the Study
In this study, a reliability test had been performed in order to see whether the study would give
similar results if the same study is repeated. To ensure reliability of this study, a Cronbach’s
Alpha was performed as a measure to see if the study repeats the same results if the same study
is performed again. The reliability of the instruments & data was established following a pre-test
procedure of the instruments before their use with actual is between 0.65 & 0.95 (Ilker Ercan,
2007).
A.
B.
Reliability test for Logistics Management
Cronbach's Alpha N of Items
.736 5
Reliability test for Supplier relation management
.911 5

28
C.
D.
E.
F.
Total numbers of questions in the questionnaire were 36 testing variables and 6 items related to
demographic variables, hence “N” of items in the above Cronbach’s Alpha test is 30. From the
analysis the Cronbach’s alpha result found from the data collected from 167 (One hundred sixty
seven) respondents for Thirty (30) questions, the overall Cronbach’s alpha for 30 items score
were ranging between 0.667 to 0.911. The coefficient between 0.65 & 0.95 is an acceptable
reliability coefficient; since scores of were between 0.667 to 0.911 at the middle of the standard
threshold level the questionnaire were reliable (Dawson, 2007).
3.7. Ethical Consideration
Ethical clearance was obtained from PESC Information Systems College post graduate Studies
coordinating office. Official letters of co-operation was written as, to whom it may concerns. In
order to secure the consent of the research, the researcher had to communicate the details and
aims of the study. The researcher had stated to the participants that they had to participate in the
research willingly. Moreover, the researcher had ensured to the respondents that not to disclose
their names, personal information and the data obtained would be treated with high
confidentiality. Besides, informed the consent of the key respondents that was obtained during
data collection. The researcher had ensured that the study did not contravene the ethical issues.
Reliability test for Customer relation management
.697 5
Reliability test for Order fulfillment
.752 5
Reliability test for Information sharing
.667 5
Reliability test for Health care service quality
.826 5

29
CHAPTER 5
DATA ANALYSIS
5.1. Introduction
This chapter presents research findings, analysis of the data and interpretation of the data
collected from the respondents. It also presents findings and the discussion about supply chain
management practices and service quality among public hospitals in Addis Ababa Ethiopia. The
data was collected and reports were produced in form of tables and figures and qualitative
analysis done in prose.
The author used descriptive statistics for the analysis of Objective 1 (the current status of
Pharmaceutical supply chain management practices at the selected Hospitals) and objective 2
(the current quality of health care service at the selected Hospitals). Additionally Regression
statistics is used for the analysis of objective 3 (the impact of Pharmaceutical supply chain
management practices on health care service quality).
A regression analysis was conducted on the model shown below:
Y = a + b1x1 + b2x2 + b3x3 + b4x4 + b5x5 + e
Where:
Y is Service Quality
a is the Y intercept
when, x is zero
b1, b2, b3, b4 and b5 are regression weights attached to the variables;
X1 = Supplier relation management; X2 = Customer relation management; X3 = Information
sharing; X4 = Logistics management; X5 = Order fulfillment; e = error term5.2. Response rate
A total of 200 questionnaires were administered, out of which 167 were completely filled and
returned and 33 questionnaires were incomplete. This gave a response rate of 83.5%. According
to (Muugenda, 2003) the statistically significant response rate for analysis should be at least
50%.
Table 3, Response rate of the questionnaires
Response Frequency Percentage

30
5.3. Result
Table 4, Characteristics of Study sample
Variables Category Frequency Percentage Total
Gender
Male 119 71.3
167(100%)
Female 48 28.7
Age
26-35years 127 76.0
167(100%)
36-45 40 24.0
Educational
Qualification
Diploma 36 21.6
167(100%)
Degree 131 78.4
Profession
Pharmacist 110 65.9
167(100%)
Druggist 12 7.2
Laboratory 9 5.4
Biomedical Engineering 36 21.6
Total Years
at current
Position
0 - 1 year 33 19.8
167(100%)
1 - 3 years 29 17.4
3 - 6 years 105 62.9
Total Years
of Work
Experience
1 - 3 years 14 8.4
167(100%)
4 - 6 years 114 68.3
7 - 9 years 27 16.2
10 - 12 years 12 7.2
As shown in Table 5, most of the questionnaire respondents are males (71.3%), also the majority
of the study respondents were aged between 26-35 years (76%). Bachelor's degree holders are
the largest percentage among members of the study sample accounting for 78.4%. The
profession of the majority of the respondents was Pharmacists (65.9%) followed by Biomedical
Completed 167 83.5%
Not Completed 33 16.5%

31
Engineers (21.6%). According to experience years, the majority of the questionnaire respondents
have experience years between 4 – 6 years accounting for the percentage of 68.3%.
5.3.1. Analysis of the status of pharmaceutical supply chain management
Table 5, Descriptive Statistics for Logistics Management Practices among the
Hospitals
S.No
. Items N Mean
Std.
Deviation
1
The Selection and forecasting of Medicines, reagents and
Medical equipments is based on average monthly
consumption, current stock levels a plan and future demand
need of the Hospital
167 3.80 1.066
2
Items storage is based on special storage conditions
(sufficient space, lightening and temperature) are properly
inspected, arranged either based on FEFO/FIFO and there is
expiry tracking method.
167 3.31 0.918
3
Inventory management is regular and with updated bin card/
stock card and computer software are used for inventory
control; so that there is no stock out of essential medicines
167 3.20 1.138
4
Top managers are committed to support the
Pharmaceutical supply chain management regularly
167 2.84 1.141
5
There is sufficient fund for procurement, and there is no
challenge to practice bulk procurement when necessary.
167 2.26 1.168
Valid N (listwise) 167
Aggregate mean and Average standard deviation 3.09 1.086
Note: Values 1, 2, 3, 4 and 5 represent strongly disagree, disagree, neutral, agree and strongly
agree, respectively.
Where: Less than 2.8 = Disagree, 2.9-3.2 = Neutral, Above 3.2 = Agree
Source: (Tigist, June 2020)

32
As it can be seen from Table 5 above, the average mean and standard deviation of the total item of
Logistics management 3.09 and 1.08 respectively, which shows that Logistics management practices are
neither applied below nor above or neutral; and standard deviation indicating that it is a small value thus
respondents were agreeing to the same idea.
However, having the selection and forecasting of Medicines, reagents and Medical equipments was
based on average monthly consumption, current stock levels a plan and future demand need of the
Hospital and items storage was based on special storage conditions (sufficient space, lightening and
temperature) are properly inspected, arranged either based on FEFO/FIFO and there was expiry tracking
method having mean score above 3.2 for both, indicated that agreement to be applied at health facilities.
On the other hand having sufficient fund for procurement, and for the challenges to practice bulk
procurement when necessary with mean score below 2.8, shows that disagreement to enough fund access
for Pharmaceutical procurement at health Hospitals.
As observed in this study all hospitals were applying good logistics management practices on the selection
and forecasting of Medicines, reagents and Medical equipments by using average monthly consumption
and following good and special storage conditions. But not have sufficient fund for bulk procurement to
maintain optimum stock level of the products.
In addition to that the author found in this study by interview, even if policy or written procedure to give
priority for Medical logistics are available, majority of interviewee are agree that the top managers are not
committed as required to invest to the Pharmaceutical supply chain management.
Table 6, Supplier Relation Management Practices within the Hospitals
S.No. Items N Mean
Std.
Deviation
1 The supplier relationship with the hospital Supply chain is
dependable
167 3.89 0.712
2 Suppliers are meeting with specifications set by the
hospital conditions for the supply in the tender, which leads
to right medical equipment and supplies Acquisitions
167 3.85 0.789
3 Compatibility (appropriateness of medical equipment
and supplies to the specification) is agreed upon between
the suppliers and the Hospital
167 3.78 0.972

33
4 The PSCM follow up the maintenance service with the
suppliers after sale
167 2.67 1.138
5 Suppliers able to meet up with their delivery dates 167 2.49 0.783
supplier relation management 3.34 and 0.88 respectively, which shows that Supplier relation management
practices are applied at large extent and standard deviation indicating that it is a small value thus
respondents were agreeing to the same idea.
Hence, having the supplier relationship with the hospital Supply chain is dependable, Suppliers are
meeting with specifications set by the hospital conditions for the supply in the tender, which leads to right
medical equipment and supplies acquisitions and Compatibility (appropriateness of medical equipment
and supplies to the specification) is agreed upon between the suppliers and the Hospital having mean
score above 3.2 for three of them, indicated that agreement to be applied at health facilities.
On the other hand the follow up of PSCM officers on the maintenance service of medical equipment with
the suppliers after sale and Suppliers ability to meet up with their delivery dates have mean score below
2.8, shows that disagreement to of follow up of the Hospital PSCM officers medical equipment
maintenance after sale and adherence of the suppliers to the given delivery date during Pharmaceuticals
procurement.
As observed in this study all hospitals were applying good supplier relation management practices on the
making a dependable relation, the suppliers are meeting the given product specification and the Hospitals
and the supplier have an agreement frame work follow on the products supplied.

34
Table 7, Descriptive Statistics of Customer Relation Management practices of the
Hospitals
S.No. Items N Mean
Std.
Deviation
1 The PSCM case team interact with customers
to set reliability, responsiveness, and other
standards
167 3.19 1.483
2 The PSCM case team facilitates customers’
ability to seek assistance
167 3.17 1.240
3 The PSCM case team periodically evaluate the
importance of its relationship with its
customers
167 3.14 1.222
4 The PSCM case team measures and evaluates
customer /end user/ satisfaction
167 2.99 1.364
5 The PSCM manages and determines future
customer expectations
167 2.96 1.464
Aggregate mean and Average standard
deviation 3.09 0.62
Note: Values 1, 2, 3, 4 and 5 represent strongly disagree, disagree, neutral, agree
and strongly agree, respectively.
supplier relation management 3.09 and 0.62 respectively, which shows that Customer relation
management practices are neither applied below nor above or neutral; and standard deviation indicating
that it is a small value thus respondents were agreeing to the same idea.
On the other hand the practices of PSCM officers interaction with customers to set reliability,
responsiveness and other standards, the PSCM case team practices to facilitate customers’ ability to seek
assistance, the PSCM case team ability to periodically evaluate the importance of its relationship with its
customers, the PSCM case team practices to measure and evaluate customer /end user/ satisfaction and the

35
PSCM officers to manage and determine future customer expectations all have mean score between
2.96 to 3.19, shows that Neutral range or below agreement score.
This result indicates that Hospitals PSCM officers are not working satisfactorily on customers, end users
or Patients relation management. As author’s interview of Pharmacy service directorate directors implies,
the hospitals have identified the gap between the customers (patients) and the Hospital on assessing the
patient satisfaction level and assistance facilitation concerning the medical products supply chain
management.
As it can be visible from table 8 above, the average mean and standard deviation of the total item of
information sharing practices are 3.12 and 0.62 respectively, which shows that information sharing
practices are applied neither below or above or is Neutral; and the standard deviation indicating that it is a
small value thus respondents were agreeing to the same idea.
Table 8, Descriptive Statistics of Information sharing Practices
S.No. Items N Mean Std. Deviation
1
The PSCM team informs suppliers in advance of changing
needs
167 3.46 1.034
2
The hospital and PSCM case team ensure information flow
among its supply chain lines (frequently communicates to
upper management on any issues)
167 3.43 1.328
3
The PSCM use updated inventory management
technologies (vendor management inventory electronic data
exchange)
167 3.32 1.248
4
The suppliers keep us fully informed about issues that affect
hospitals service delivery
167 2.71 0.951
5
The suppliers share knowledge of core business processes
with the hospital
167 2.69 0.869
Note: Values 1, 2, 3, 4 and 5 represent strongly disagree, disagree, neutral, agree
and strongly agree, respectively.

36
Hence, the PSCM team informs suppliers in advance of changing needs and the hospital and PSCM case
team ensure information flow among the supply chain lines (frequently communicates to upper
management on any issues) having mean score above 3.2 for both of them, indicated that agreement to be
applied at health facilities.
On the other hand the suppliers keep the hospital PSCM officers fully informed about issues that affect
hospitals service delivery and the suppliers share knowledge of core business processes with the hospital
have mean score below 2.8, shows that disagreement to the proper information sharing between Hospital
PSCM officers and the suppliers knowledge sharing on core business process.
Supplier share information on how the supply delivery is going on after once they received an order for
purchase. Fearing that hospital may withdraw the agreement of purchase even though the product delivery
is being late because of deferent reasons the suppliers do not share the information even if it hurts the
hospitals. And the interviewees believe that there is a big gap of information sharing between suppliers
and hospitals.
Table 9, Order fulfillment practices
S.No. Items N Mean Std. Deviation
1
The PSCM case team classifies items according to
their needs
167 3.68 0.919
2
There is supplier buyer integrated planning,
Selection, Quantification, forecasting, procuring
and replenishment /refill/
167 3.50 0.969
3
The PSCM has capacity to respond to demand
fluctuations
167 3.39 1.156
4
The PSCM team maintains high level of emergency
supplies
167 3.39 1.326
5
The PSCM team has reduced order
fulfillment/delivery lead time
167 3.20 1.090
Valid N (list wise) 167

37
As it can be seen from table 9 above, the average mean and standard deviation of the total item of order
fulfillment practices 3.43 and 0.69 respectively, which shows that order fulfillment practices are applied at
large extent and standard deviation indicating that it is a small value thus respondents were agreeing to the
same idea.
Moreover, the hospitals PSCM officers classifies medical products according to their needs, there is
supplier buyer integrated planning, Selection, Quantification, forecasting, procuring and replenishment
/refill/, the PSCM officers has capacity to respond to demand fluctuations and the PSCM team maintains
high level of emergency supplies having mean score above 3.2 for four of the question items, indicated
that Order fulfillment practices are applied at all health facilities. As we can see from the above results the
Pharmacy directors’ interview indicates that, the suppliers do not.
5.3.2. The status of health service quality in the Federal hospitals
Table 10, the status of Health care service quality of the Hospitals
S.N Items N Mean
Std.
Deviation
1
Adequate Supplies are available to deliver timely
services to customers (responsiveness) especially during
emergency services.
167 1.66 0.589
The facility has essential Supplies required to provide
Mental health care services.
167 1.22 0.417
All safety equipments are available to keep the patients
safe enough
167 1.55 0.499
4
To serve Chronic patients like Diabetes and Cardiac
patients, Necessary Medical equipments, Medicines and
reagents are always available.
167 1.87 0.339
5
Health care services are reliable to customers and the
services prioritize patients’ needs and services are
patient centered.
167 1.46 0.500

38
Note: Values 1 = stands for 'Yes' if the answer of the respondent is Yes and Values 2 stands for 'No' if the
answer of the respondent is No.
The mean values of the above the above SPSS analysis products can be elaborated in the graph explained
below.
Fig 3, the status of health care Service quality at the Federal Hospitals
Source: research data of the author (2021)
As it can be seen in the above graph on the availability of adequate supplies to deliver the health care
service timely during emergency care (responsiveness), 59.9% of the respondents responded as “No”.
Additionally 78.4% of the respondents have responded as “Yes” on ‘essentials supplies for mental health
care are readily available.” On the questionnaire ‘All safety equipments are available to keep the
patients safe enough’ 55.1% respondents answered as “No”.
40.1%
78.4%
44.9%
13.2%
53.9%
59.9%
21.6%
55.1%
86.80%
46.10%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
Adequate
Supplies for
timely services
(responsiveness)
during
emergency
essential
Supplies for
Mental health
care are readily
available
All safety
equipments are
available to keep
the patients safe
enough
Chronic care
supplies are
always available
Health care
cervices are
reliable and
patient centered.
Yes
No

39
Moreover on the question item ‘chronic care supplies are always available.’ 88.2% of the respondents
responded as “No”. And finally 53.9% of the respondents agreed on “Yes” response to the ‘health care
services are patent centered.’
From the above findings we can observe that there is a significant gap on service quality of health care
delivery at the given Hospitals. Thus, 88.2% of “No” responses out of 167 respondents on the availability
of chronic care supplies indicates that there is a big shortage of medical supplies used to deliver a chronic
health care to the chronic patients like Diabetes mellitus, Hypertension and Epilepsy. Therefore this shows
that hospitals are not properly delivering chronic health care service due to poor availability of essential
supplies. Additionally the above result also shows, the problem on health care responsiveness as 59.9% of
the respondents responded “No” on the availability of adequate supplies to deliver the health care service
timely during emergency care (responsiveness). Even if the priority area of Health facilities is to give
immediate response to any causality, the selected hospitals are poorly on responsive to emergency
treatments due to lack of adequate supplies. Since 55.1% of the respondents answered as “No” on the
availability of safety equipments to keep patients safe enough, we can conclude that there are no enough
safety equipments at the health facilities. All the above findings show that there is no service quality of
health care delivery at a given hospitals.
Nevertheless, 78.4% of the respondents have responded as “Yes” on availability of essentials supplies for
mental health care. Based on the above finding, we can conclude that the hospitals have essential medical
supplies to give necessary service to mental health care. On the other hand the Hypothesis 0 (null
hypothesis, which was assumed as there is no significant statistical difference for the management of
Pharmaceutical supply chain due to gender, age, educational level, and experience, is accepted. Because
there is no different effect on supply chain management practices based on the gender of the respondents
according to the above result.

40
5.3.3. Correlation Analysis
Table 11, Correlation table
Correlation
Logistics
management
Adequate
Supplies
for
timely
services
(responsiveness)
during
emergency
Supplier
relation
management
Customer
relation
management
Information
sharing
Order
fulfillment
essential
Supplies
for
Mental
health
care
are
available
All
safety
equipments
are
available
to
keep
the
patients
safe
enough
Chronic
care
supplies
are
always
available
Services
are
patient
centered.
Logistics
management
Pearson
Correlatio
n
1 .340**
.369**
.004 .532**
.674*
*
.458**
-.127 .206**
.00
2
Sig. (2-
tailed)
.000 .000 .956 .000 .000 .000 .103 .008 .97
8
N 16
7
167 167 167 167 167 167 167 167 16
7
Supplier relation
management
Pearson
Correlatio
n
.36
9**
.462**
1 .270**
-.091 .380*
*
.212**
-.151 .608**
.46
3**
Sig. (2-
tailed)
.00
0
.000 .000 .240 .000 .006 .051 .000 .00
0
N 16
7
167 167 167 167 167 167 167 167 16
7
Customer relation
management
Pearson
Correlatio
n
.00
4
.295**
.270**
1 .446**
.097 .154*
.277**
-.193*
.37
7**
Sig. (2-
tailed)
.95
6
.000 .000 .000 .215 .047 .000 .013 .00
0
N 16
7
167 167 167 167 167 167 167 167 16
7
Information sharing Pearson
Correlatio
n
.53
2**
.074 -.091 .446**
1 .333*
*
.310**
.228**
-.286**
-
.16
9*

41
Based on the above Pearson correlation table showing the correlation between medical supply chain
management and health care service quality, Logistic management has a moderate correlation (value
between ±0.30 to ± 0.49), 0.340, with availability of adequate emergency service supplies. And logistics
management has also a moderate positive correlation with availability of essential supplies for mental
health care service which has a Pearson correlation value 0.458. Moreover, logistics management has a
low positive correlation with availability of chronic care supplies and all the above mentioned correlations
are at P –value 0.001.
The correlation table above shows that, the supplier relation management has a strong positive correlation
with a numeric value of 0.608 and significance of 0.001 with chronic care supplies availability and 0.463
patient centered service. And it has also a moderate positive correlation with a numeric value of 0.462 and
significance of 0.001 with adequate emergency supplies availability. In addition to that it has a positive
low correlation with availability of mental health care supplies and negative low correlation with safety
equipment availability.
The customer relation management a positive moderate correlation with patient centered service with
Pearson correlation value 0.377 and P- value 0.00. And it has also a low positive correlation with
emergency responsiveness (0.295), availability of safety equipment (0.277) and availability of essential
supplies for mental health care and has also low negative correlation with availability of chronic care
supplies (-0.193) with P-value 0.001
Sig. (2-
tailed)
.00
0
.340 .240 .000 .000 .000 .003 .000 .02
9
N 16
7
167 167 167 167 167 167 167 167 16
7
Order fulfillment Pearson
Correlatio
n
.67
4**
.169*
.380**
.097 .333**
1 .111 -.187*
.290**
.15
6*
Sig. (2-
tailed)
.00
0
.029 .000 .215 .000 .154 .016 .000 .04
5
N 16
7
167 167 167 167 167 167 167 167 16
7
**. Correlation is significant at the 0.01 level (2-tailed).
*. Correlation is significant at the 0.05 level (2-tailed).

42
From the above correlation table we could interpret that, Information sharing has a moderate positive
correlation with availability of essential supplies for mental health care with a Pearson correlation numeric
value 0.310. And has also a low positive correlation with availability of safety equipment (0.228), has a
low positive correlation with availability of emergency supplies (0.074). Moreover information sharing
has a low negative correlation with availability of chronic supplies (-0.286) with p-value 0.00 and has low
negative correlation with patient centered service (-0.169).
From the above correlation table, it was observable that order fulfillment has a low positive correlation
with availability of chronic care supplies with numeric value of 0.290, low positive correlation with
adequate emergency supplies availability (0.169), essential supplies availability for mental health care
(0.111) and patient centered service (0.156) with p-value 0.00 which was significant. Moreover it has a
low negative correlation with availability of safety equipment (-0.187).
From the above correlation table we could conclude that all most all the medical supply chain
management practices have a significant strong to low positive correlation with health care service quality
variables.
5.3.4. Regression analysis
The researcher carried out a multiple regression analysis to test the influence of the independent variables
on the dependent variable. The findings are shown in the table
Table 12, Supply chain management practices effect of adequate emergency
supplies
Coefficientsa
Model
Unstandardized Coefficients
Standardized
Coefficients
t Sig.
B Std. Error Beta
1 (Constant) 1.282 .585 2.193 .030
Logistics management .210 .066 .225 3.189 .002
Supplier relation
management
.115 .148 .082 .775 .439
Customer relation
management practices
.307 .075 .460 4.087 .000
Information sharing
practices
-.350 .113 -.365 -3.091 .002

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