The Effect Of Digitalization On Food Supply Chain Performances (In The Case Of K.O.J.J Food Processing Complex Plc, Addis Ababa, Ethiopia

Abstract

In the increasingly competitive food processing industry, digital technologies are essential for enhancing supply chain efficiency, flexibility, food quality and safety, reducing food loss, reliability, tracking and traceability, and sustainability. Despite global advancements in supply chain digitalization, there remains a research gap concerning its impact in developing regions; specifically, within Ethiopian food processing firms. This study investigated the effect of digitalization on food supply chain performance, focusing on K.O.J.J Food Processing Complex PLC in Addis Ababa, Ethiopia, where limited research exists on its application in developing countries. By addressing this gap, the study evaluated the effects of digitalization in three critical areas: internal processes, supplier integration, and customer engagement, on key performance metrics such as efficiency, flexibility, food quality and safety, food loss, reliability, tracking and traceability, and sustainability. A mixed-methods approach was used, incorporating quantitative data from 153 structured surveys conducted with employees, customers, and suppliers, alongside qualitative insights from in-depth interviews with managers at different levels of the organizational hierarchy. Simple random sampling was used to target internal staff, while purposive sampling was employed to select external stakeholders. Data were analyzed using a multivariate multiple regression models. The results revealed that digitalization of internal processes were the most significant contributor, explaining 74.4% of the variance indicating its critical role in enhancing operational efficiency. Following this, digitalization with suppliers demonstrated a strong positive impact accounting for 56.5% of the variations significantly improving food quality and safety while reducing food loss, lastly digitalization practices with customers also contributed positively influenced traceability and customer satisfaction, contributing 49.6%. These findings indicates that while all three digitalization practices are essential for improving supply chain performance, the digitalization of internal processes is the most influential, followed by supplier integration and customer engagement through real-time data sharing as key drivers of supply chain performance. The study concludes that prioritizing digital investments in supplier relationships and internal processes can significantly improve food supply chain outcomes in Ethiopia. It is recommended that policymakers and industry stakeholders support digitalization initiatives to enhance competitiveness, resilience, and sustainability in the Ethiopian food processing sector.