DEBRE BERHAN UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF LOGISTICS AND SUPPLY

CHAIN MANAGEMENT

ASSESSMENT OF LOGISTICS SERVICE QUALITY

(Case Study: Debre Berhan Referral Hospital)

A RESEARCH PROPOSAL IS SUBMITTED TO THE DEPARTMENT OF LOGISTICS

AND SUPPLY CHAIN MANAGEMENT IN PARTIAL FULFILLMENT FOR THE
REQUIREMENT OF BA DEGREE IN LOGISTICS AND SUPPLY CHAIN
MANAGEMENT BY:

Demek Halemariyam 3066

Eleni Twedros 2704

Kedir Mohammed 3176
Sine Temegnu 3088
Yohannes Ayele 3065
Wondesen Eshetu 3295

ADVISOR: INSTRUCTOR DAWIT.H (MBA)

DATE: 29/08/2011

DEBRE BERHAN, ETHIOPIA

 Table of contents

1. Introduction…………………………………………………………………1
1.1 Back ground of study……………………………………………………….1-2
1.2 Statement of the problem……………………………………………………3-4
1.3 Object of study .................................................................................................. 5
1.3.1General objective of the study .................................................................. 5
1.3.2 Specific objective of the study ................................................................. 5
1.4 Significance of study......................................................................................... 5
1.5 review of literature……………………………………………………….......6-9
1.6 Research methodology ..................................................................................... 10
1.6.1 Research design ..................................................................................... 10
1.6.2 Sample and sampling techniques ............................................................ 10
1.6.3 Source of data and data collection method ............................................. 11
1.6.4 Method of data analysis ........................................................................ 11
1.7 Definition of term……………………………………………………………..12
1.8 Scope of the study ............................................................................................ 12
1.9Time
schedule…………………………………………………………………………...12
1.10 Budget schedule………………………………………………………………..13
 List of ACRONYMS

CSCMP council of supply chain management professional

SERVQUAL services quality

CLM council of logistics management

IOM institute of medicine

BA bachelor degree
 Introduction
1.1 background of study

According to Gianpaolo Ghiani; Gilbert Laporte and Roberto Musmanno (2013), logistics (from
the Greek term l ́ogos, which means ‘order’, or from the French loger, which means ‘allocate’) is
the discipline that studies the functional activities determining the flow of materials (and of the
relative information) in a company, from their origin at the suppliers up to delivery of the finished
products to the customers and to the post-sales service. Logistics was applied exclusively in a
military context until the end of Second World War. Subsequently, it was extended to
manufacturing companies in order to determine all the activities aimed at ensuring the correct
purchasing, moving and managing of materials.
Logistics activities involve planning, designing, implementing and managing material flows in a
supply chain to support functions such as procurement, distribution, inventory management,
packaging and manufacturing (Pokharel, 2005). Poulin (2003) mentions that more than 30 percent
of total hospital expenses are invested in logistics activities and half of this cost could be eliminated
through logistics management. The logistics activities in hospitals involve purchasing, receiving,
inventory management, management information systems, food services, transportation and home
care services (Aptel and Pourjalali, 2001). The above review shows that logistics activities are
important activities in hospitals and significant cost reduction can be achieved through a good
logistics management. Therefore, we need to identify different logistics parameters that
characterize logistics activities in Debre Berhan so that a better system, if required, could be
devised to make hospitals more effective in delivering patient care services

As was studied by Juran and Defoe (2010) quality as fitness for use. Quality is adynamic state associated with
product, services, processes and enviroments that meets or exceeds expectations and helps produce superior value -
goetsch and Davis (2010).

Service quality is an important area to academicians because of its relevancy to service companies
and therefore many researchers have tried to develop various models to measure it, even though
some claim it is hard to measure because of its intangibility which is hard to quantify (Eshghi
;Roy and Ganguli, 2008); (Douglas & Connor, 2003).

Unlike products, where quality can be easily assessed, service quality is an elusive and abstract
concept that is difficult to define and measure (Lee; Delene; Bunda, and Kim, 2000). defined
service quality as “conformance to customer specifications” (Sohail, 2003, 2005).The interactive
nature of service process results in the consumers’ evaluation of quality immediately after the
provision and performance of that service (Douglas and Connor, 2003).
. The SERVQUAL instrument has been the predominant method used to measure consumers’
perceptions of service quality. It has five generic dimensions or factors and is stated as follows
(Van Iwaarden; van der Wiele; Ball, and Millen, 2003): (1) Tangibles: Physical facilities,
equipment and appearance of personnel.
(2) Reliability: Ability to perform the promised service dependably and accurately. (3)
Responsiveness: Willingness to help customers and provide prompt service.
(4) Assurance (including competence, courtesy, credibility and security): Knowledge and courtesy
of employees and their ability to inspire trust and confidence. (5) Empathy (including access,
communication, understanding the customer): Caring and individualized attention that the firm
provides to its customers.
The Five Dimensions of Service Quality Zeithaml; Parasuraman and Berry (2009) tangibles,
responsiveness, reliability, assurance and empathy the five elements create a holistic view of any
service environment

Lim and Tang (2000) conducted SERVQUAL with six dimensions, namely, tangibles,
reliability, assurance, responsiveness, empathy, accessibility and affordability on 252 patients in
Singapore hospitals. They concluded that hospitals needed improvements across all six
dimensions. Wong (2002) found that of the five SERVQUAL dimensions responsiveness,
assurance and empathy were more important predictors of overall satisfaction.
We will use this model because it takes into account customer’s expectation of a service as well
as perceptions of the service which is best way to measure service quality in service sector (Shahin,
2005). Buttle, (1996) makes mentions of several researchers that have used the
SERVQUAL model in various industries (retailing, restaurants, banking, telecommunication
industry, airline catering, local government, hotels, hospitals, and education).

This is why we chose to use the SERVQUAL instrument to enable us to assess service equality in
Debre Berhan referral hospital. This model seeks to know the difference between consumers
‘expectations of how hospital should be like and their perceptions in terms of performance in
hospital visited using various dimensions (tangibles, reliability, responsiveness, assurance and
empathy). Trying to meet or exceed consumer expectations helps hospital to maintain a high
quality image. This shows the relevance of knowing much about the consumers’ perceptions by
hospital in order to survive in a competitive environment. Therefore the research will be to
assessing the logistics services quality and test tangibles, reliability, responsiveness, assurance and
empathy in order to know applicability at Debre Berhan referral hospital.
1.2. Statement of the problem
Every research starts with a problem. For our project we should at first identify problem. Based on
that problem we can establish our further action to solve it. Our problem statement is;

As was studied by (Parasuraman, Zeithaml & Berry, 1985) most of hospitals faces problems like
poor logistics service quality, competence of employees, reliability of logistics service quality at
proper and promised level , empathy of manager and employees towards achieving logistics
service quality in the hospital, and poor responsiveness “Patients are not satisfied with the service
of Hospitals’’

The logistics activities in Hospitals involve purchasing, receiving, inventory management,

management information systems, food services, transportation and home care services (Aptel and
Pourjalali, 2001). Consequently, it is important to examine the functions of this department to
improve services and reduce costs.
Although procurement and inventory management are non-value adding activities in hospitals
(Aptel and Pourjalali, 2001), Jarrett (1998) mentions that such activities are required since the
nature and volume of items needed on a daily basis are difficult to predict. Therefore, service
effectiveness can be enhanced by understanding logistics practices and managing them, if
necessary.

The two main approaches used to plan the logistics activities in hospitals are inventory oriented
and schedule oriented (Lapierre and Ruiz, 2005).
In the inventory oriented approach, hospitals and/or medical departments place orders with the
suppliers whenever the reorder point is met. As mentioned by the authors, this approach would
require more manpower, more inventory space and will obviously result in a higher cost of
operation.
The scheduling oriented approach focuses on developing good schedules to handle purchasing
operations. In this approach, replenishments, purchasing activities and supplier deliveries are well
scheduled so that resource availabilities are respected and stock-outs are avoided. .
Anderson (1995) used the SERVQUAL instrument to assess the quality of service offered by a
public university health clinic. The findings revealed that the clinic investigated was poor on the
assurance dimension.
. There for the basic question for this study is that of how the hospital is successful in understanding
the impact of logistics service quality in achieving its objectives. The purpose of the study was
therefore to examine the logistics service quality in Debre Berhan referral Hospital.

The researchers will be addressing the following questions;

• Does the hospital have The knowledge and courtesy of the hospital personnel and their
ability to convey trust and confidence?(assurance)

• Does The hospitals ability to perform the promised service dependably and
accurately?(reliability)
• Does the hospital have care individualized attention the hospital/clinic provides its
patients?(empathy)
• How The hospital willingness to help patients and provide a prompt
service?(responsiveness)

1.3. Objectives of the study

1.3.1. General objective of study will be

The general objective of this study will be to test the SERVQUAL model in the context of the
Of Debre Berhan referral hospital in order to know its applicability the measurement of service
quality
1.3.2 Specific objective of study will be
• This paper will be to assess assurance of logistics service quality offered in hospitals.
• The research will be to assess perform the promised service dependably and accurately in
the Debre Berhan referral hospital.
• The study will be to assess care individualized attention the hospital/clinic provides its
patients.
• The research will be to assess willingness to help patients and provide a prompt service in
the hospital.

1.4. Significance of the study

The study has the following importance

• Research will helps to get BA degree in logistics and supply chain management.

• The researchers will again some knowledge (experience) how to conduct research in
logistics and supply chain management.

• The study will also use as a reference for other junior students who is interested in this
subject matter.

1.5. Review of Related Literature

The review focus on the overview of concept of logistics, concept of quality, concept service
quality, logistics service quality and dimension of logistics service quality in ensuring and
measuring customer (patients) services quality.

1.5.1. The concept of logistics

Logistics is the process of planning, implementing and controlling of the efficient and effective
flow and storage of goods, service and related information’s from point of origin to point
of consumption for the purpose of confirming the customer requirement. (Douglas Long, 2003).

Logistics has been defined by the council of logistics management (CLM) as “that part of the
Supply chain process that plans implement and controls the efficient, effective flow and storage of
goods, service and related information from point of origin to point of consumption in order to
meet customer requirement.” (Council of logistics management, 1993).

Logistics is the management of the flow of things between the point of origin and the point of
consumption in order to meet requirement of customers or corporation (Parasuraman et, al 1985).

1.5.2. The Concept of quality

According to Schroeder (2008), quality is defined as “meeting or seceding customer requirements
now and in the future,” This means that the product or service is fit for the customer use.

Fitness for use is related to benefits received by the customer and to customer satisfaction only,
not the producer can determine it.

According to David Barnes (2008), quality is generally agreed to be a good and desirable things.
Organization in variably desirable themselves as being “quality” organization, and point to the
quality of their product and service.

“Quality is defined as the summation of the affective evaluations by each customer of

Each attitude object that creates customer satisfaction”- (Wicks & Roethlein, 2009).
“Quality is the totality of features and characteristics in a product or service that bear
Upon its ability to satisfy needs” (Haider, 2001).

1.5.3. Concept of services

Service is refers to “any activity or benefit that one party can offers to another that is intangible

And does not result in the transfer of ownership of any physical object” (Dictionary of Business,
1996). According to Crowther, Kavanagh and Ashby (2006), service is a business performs work
or supplies goods for customers, but does not make goods. Services can be delivered by any
organizations that are government of non-governmental and private one.

Indivisibility, customer participation, intangibility and simultaneity (consumption and supply

Occur at one time) are the manifestation of service. Thus, quality service implies that the service

Which meets customer demand and pre-established standard. In regard to the concept of
healthcare/ health service quality, “the most durable and widely cited definition of healthcare
quality was formulated by the Institute of Medicine (IOM) in 1990” (Buttell, Hendler, and Jennifer
Daley, 2007 ). According to the IOM, quality consists of the degree to which health services for
individuals and populations increase the likelihood of desired health outcomes and are consistent
with current professional knowledge (,Lohr, Donaldson, and Harris-Wehling 1992). For these
writers, provision of healthcare service is aimed enhancing the chance of desired health outcome
for populations. The service delivery is also needs professional knowledge.
1.5.4. Service quality
Service quality has received a great deal of attention from both academicians and Practitioners
(Negi, 2009) and services marketing literature service quality is defined as the overall assessment
of a service by the customer (Eshghi et al., 2008). (Ghylin, Green , Drury, Chen, Schultz ,
Uggirala, Abraham, & Lawson, 2008) points out that, by defining service quality, companies will
be able to deliver services with higher quality level presumably resulting in increased customer
satisfaction. Understanding service quality must involve acknowledging the characteristics of
service which are intangibility, heterogeneity and inseparability, (Parasuraman et al., 1985);
(Ladhari, 2009). In that way, service quality would be easily measured.

1.5.5. Definition of logistics service quality

Logistics is that part of supply chain management that plans, creates and monitors the efficient,
cost-effective flow and storage of goods, semi-finished items and manufactured products as well
as related information between the point of origin and the point of consumption in order to meet
customers' requirements (Council of Supply Chain Management Professionals CSCMP, 2007).

Logistics has main field of study such as procurement logistics, distribution logistics, after sale,
reverse, green logistics etc. The definition of service is that Service is a patch up activity to fulfill
some ones need in the market. Service is something which can be experienced but cannot be seen
and touched or seen. Service offered by service provider cannot be seen and touched as they are
intangible activities.

WHAT IS SERVQUAL?
The SERVQUAL method from Valarie A. Zeithaml, A. Parasuraman, and Leonard L. Berry is a
technique that can be used for performing a gap analysis of an organization's service quality
performance against customer service quality needs.
SERVQUAL is an empirically derived method that may be used by a services organization to
improve service quality.
The method involves the development of an understanding of the perceived service needs of target
customers.
These measured perceptions of service quality for the organization in question, are then compared
against an organization that is "excellent". The resulting gap analysis may then be used as a driver
for service quality improvement.

SERVQUAL takes into account the perceptions of customers of the relative importance of service
attributes. This allows an organization to prioritize. And to use its resources to improve the most
critical service attributes.

The data are collected via surveys of a sample of customers. In these surveys, these customers
respond to a series of questions based around a number of key service dimension.
The five dimensions of services quality zeithaml; parasuraman and berry (2009)

1. Tangibles: Appearance of physical facilities, equipment, personnel, and communication

materials.
2. Reliability: Ability to perform the promised service dependably and accurately.
3. Responsiveness: Willingness to help customers and provide prompt service.
4. Assurance: Knowledge and courtesy of employees and their ability to convey trust and
confidence.
5. Empathy: The firm provides care and individualized attention to its customers.

This has been adapted later by some to cover:

1. Tangibles: Appearance of physical facilities, equipment, personnel, and communication

materials.
2. Reliability: Ability to perform the promised service dependably and accurately.
3. Responsiveness: Willingness to help customers and provide prompt service.
4. Competence: Possession of required skill and knowledge to perform service.
5. Courtesy: Politeness, respect, consideration and friendliness of contact personnel.
6. Credibility: Trustworthiness, believability, honesty of the service provider.
7. Feel secure: Freedom from danger, risk, or doubt.
8. Access: Approachable and easy of contact.
9. Communication: Listens to its customers and acknowledges their comments. Keeps customers
informed. In a language which they can understand.
10. Understanding the customer: Making the effort to know customers and their needs.

1.6. Research Methodology

This part outlines and discusses the research design (approach), targeted population and sampling
techniques, sample size, method of data collection deployed for gathering primary and secondary
data, and data analysis method.

1.6.1. Research approach

The research approach of this study was descriptive research for these research we were choose
descriptive approach because its used to describe the state of affairs as it exists at present and This
descriptive research helps to gather information as it occurs and explain the studies in terms of
conditions.

The aim of the researcher’s is to describe state of facts in assessment of logistics services quality
at Debre Berhan referral hospital as it exists.

1.6.2 Population and sampling technique

1.6.3. Sampling technique

A complete enumeration of all items in the ‘population’ is known as a census inquiry. It can be
presumed that in such an inquiry, when all items are covered, no element of chance is left and
highest accuracy is obtained. Researchers use census for employees because of high accuracy, and
target population is small and use random sampling technique for patients
1.6.4. Sample size

Since the research was aimed at assessing logistics service quality in Debre Berhan referral
hospital, the target population will be employees of the hospital and patients. The total population
of Debre Berhan referral hospital employees is 600 from this the student researchers focused on
9 who are working in logistics related departments such as purchasing department in number (2),
Inventory controlling department (2),quality service management departments(4) and hospital
manager(1).
We plan to take a fully structured interview to gather quantitative measurements to define the
level of service quality provided by Debre Berhan referral hospital. We intend to take interviews
of both male and female patients (20). All of the interviewee would be adult.

1.6.5. Instruments and Data Collecting techniques

The study was conducted from primary and secondary source of data in gathering relevant
information for the study reason why use because The primary data are those which are collected
afresh and for the first time, and thus happen to be original in character. in case we do research of
the descriptive type and perform surveys, whether sample surveys or census surveys, then we can
obtain primary data through observation (undisguised, structured or systematic and non-
participant ) ,or through direct communication with respondents in one form or another , through
personal interviews (with structured) and with open questionnaire and close questionnaire by
(Kothari, 2004)

1.6.6. Data Analysis and Interpretation

Descriptive analysis methods has been used in order to analyze the collected data through
interview, questionnaire, documents and observation will be analysis and interpret data
presentation system. This method was selected because it is an appropriate method to analyses and
describes the collected data for assessing the logistics service quality in case of Debre Berhan
referral hospital.

These will present and interpret through description summary statement using tables and
percentage techniques.
1.7. (Delimitations) Scope of the study

The area of the study will be limited to the topic of the “Assessment of Logistics Service Quality
(reliability, responsiveness, empathy and assurance)” in Debre Berhan referral hospital located in
Debre Berhan city.

1.8. Definitions of terms

Logistics refers to the transportation and storage of materials, parts and products in a supply chain.
Logistics includes inbound and outbound processes to and from warehouses, as well as internal
and external materials handling and transport operations. It also includes the execution of services
and the transfer of information between the various stages of a supply chain. (Council of Supply
Chain Management Professionals CSCMP, 2007).

“Quality is the totality of features and characteristics in a product or service that bear upon its
ability to satisfy needs” (Haider, 2001).
Service is those economic activities that typically produce an intangible product such as education,
entertainment, food and lodging, transportation, insurance, trade, government, financial, real
estate, medical repairs and maintenance like occupation.

1.9. Time schedule

No tasks description
Task Mar march April April May May June

(1-30) (1-15) (15-30) (1-15) (15-

30)
1 Introduction •
title and
institution
selection………
2 Review of •
related literature
3 Research •
methodology
4 End of first draft •
Research
proposal
5 Proposal •
comparisons
and data
collection
6 Data process •
and analysis
7 Report •
8 Presentation •
1.10. Budget schedule

No Task description No of unit Unit cost Total cost

1 Flash 1 180 180 birr
2 Mobile card 2 25 50 birr
3 Transportation 5 36 180 birr
4 Photocopying 60 page 0.60 cents 36 birr
5 Paper 95 page 0.50 cents 47.5 birr
6 Pen 2 pieces 7 14 birr
7 Binder 1 30 30 birr
8 Internet expense 5 25 125 birr
Total cost 662.5

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