The Role of Logistic in Agribusiness Firm in Ethiopia

Abstract

Agribusiness logistics is defined as the process of planning, implementing and controlling the efficient, effective flow and storage of agricultural products, services and related information from point of origin to point of consumption for the purpose of conforming to customer requirements. The ability to transport goods quickly, safely, economically and reliably (logistics) is seen as vital to success of Agri-businesses, and to a nation’s prosperity and capacity to compete in globalized economy. The objective of the paper is to review the role of logistic in agribusiness and its challenge in Ethiopia for the reference of further improvement by using secondary data and observation. Logistics plays a key role in the economy, and the market volume of logistics has already reached a substantial level in many economies as a result. Companies that are successful worldwide have long recognized the critical role logistics plays in creating added value. In addition, a close focus on the customer is a critical factor for companies working together in a supply chain. The scope of logistics practices has been extended beyond its traditional coverage of transportation and warehousing to include packaging, labeling, assembly, purchasing, distribution, manufacturing, finance, customs clearance, and other forms of customer service. The logistic challenge in manufacturing firm in Ethiopia categorized in to five areas in their logistic operation: Geographical, Demographic, environmental, Legislative, and Technological challenges. Effective and efficient agribusiness logistics management is a key to the success of business firms. Otherwise, poor logistics management can result in higher logistics costs in agribusiness firms.

Keywords: Agribusiness, Logistics, firms