# The effect of pharmaceutical supply chain management practice on operational performance: the case of the central clusters and central Ethiopian pharmaceutical supply service

## TL;DR

This study examines how supply chain management practices affect the performance of pharmaceutical services in central Ethiopia, finding that quality and information sharing are key factors.

## Contribution

The study provides empirical evidence on the impact of supply chain practices on pharmaceutical performance in Ethiopia.

## Key findings

- Quality is a primary criterion in supplier selection with a mean score of 3.34.
- Strategic supplier partnerships and information sharing significantly improve operational performance.
- Internal integration practices explain a substantial portion of performance variability.

## Abstract

Effective pharmaceutical supply chain management ensures the availability of medicines and improves healthcare, while supply chain integration and transparent sharing of quality information are critical to increasing profitability and performance. However, the Ethiopian pharmaceutical supply service faces persistent gaps that impede operational performance. Thus, this study aimed to examine the effect of supply chain management practices on the operational performance of the central clusters and the central Ethiopian pharmaceutical supply service.

A cross-sectional study was conducted from May to July 2024. The study included all employees from central Ethiopia’s pharmaceutical supply services and central clusters, who were primarily engaged in pharmaceutical supply chain management practices. Thus, a census of supply chain management-practicing staff enabled a thorough examination of operational processes within the target organizational units. Data were collected using five-point Likert scale questionnaires adapted from the literature. Descriptive and inferential statistics, including multiple linear regressions, were employed to determine the relationships between supply chain management practices and the operational performance of the Ethiopian pharmaceutical supply service.

The results indicated that quality is a primary criterion in supplier selection (mean = 3.34) and that there is a tendency to rely on a few high-quality, committed suppliers. Information sharing practices were moderate, with 46.2% agreeing that proprietary data is shared and 50.3% confirming transparent communication from trade partners (mean = 3.51). Moreover, the results indicate a moderate to strong positive linear relationship (R = 0.576) between the predictors and the outcome, with a statistically significant correlation that explains approximately 33.2% of the variance in the outcome. Strategic supplier partnerships (β = 0.168, p < 0.010), the level of information sharing (β = 0.165, p < 0.006), the quality of information sharing (β = 0.126, p < 0.042), and internal integration practices (β = 0.224, p < 0.030) had positive and significant effect on operational performance of central Ethiopia’s pharmaceutical supply services and central clusters.

Ethiopia’s pharmaceutical supply services show moderate to strong performance, with areas needing improvement. Customer service and operational performance were positive, though gaps exist in customer satisfaction evaluation. The quality of information sharing, strategic supplier partnerships, effective information sharing, and internal integration practices collectively drove effectiveness, explaining a substantial portion of performance variability.