ROLE OF SUPPLIER RELATIONSHIP MANAGEMENT ON PROCUREMENT PERFORMANCE IN MANUFACTURING SECTOR IN KENYA: A CASE OF EAST AFRICAN BREWERIES
Njagi Mercy Murugi - Master of Science in Procurement and Logistics, Human Resource Development, Jomo Kenyatta University of Agriculture and Technology, Kenya
Dr. Noor Shalle - Lecturer, Human Resource Development, Jomo Kenyatta University of Agriculture and Technology, Kenya
ABSTRACT
Procurement services department is the key to success of any manufacturing sector in Kenya. However, the department face myriad of problems including high cost involved in maintenance of water tight procurement systems, guaranteeing supplier confidence, wild fluctuation of tag reads and lack of top management support leading to poor supply chain performance. The purpose of the study was to assess the integrative role of supplier relationship on procurement performance in manufacturing sector in Kenya. Companies are inclined to work with different suppliers in different ways. In commodity products, it is common to find an adversarial relationship mainly based on price between buyer and supplier. The study used the case of East African Breweries Ltd and focused on employees working in different departments at the Company. It adopted a descriptive research design which was appropriate because it involved collecting data in order to answer pertinent questions concerning the current status of subjects under study. The target population was 450 employees working in different departments who were directly involved in managing manufacturing activities in the Organization. The sampling frame was the Human Resource register at EABL. The sample size of 80 respondents was selected using stratified sampling technique. This technique was used since the population was not homogenous. Structured questionnaires containing both open ended and closed ended questions were used to collect primary data through a drop and pick later method. Each questionnaire was attached with an introduction letter which assured the respondents of the purpose of data collection and confidentiality. The questionnaires were filled by the respondents and collected by the researcher for analysis. A response rate of 83% was achieved and this was found to be adequate for the study. Prior to conducting actual data collection, a pilot study was carried out to test the validity and reliability of the data collection instrument. Validity test considered the accuracy as well as the meaningfulness of the references used. This was done through seeking expert opinion especially on the content as well as the format of the research instrument to ensure objectivity of study. Reliability test was done by pre-testing the questionnaire on some respondents from EABL who were not included in the final analysis. Cronbach alpha value of above 0.7 was achieved in all cases and therefore the instrument was regarded as reliable. Data collected was analyzed using SPSS version 23. Analysis of variance (ANOVA), correlation and regression analysis was done. Descriptive analyses such as frequencies and percentages were used to present quantitative data in form of frequency distribution tables and pie charts on major research questions while open ended questions were analyzed qualitatively, arranged thematically and presented on narrative form to draw conclusions and recommendations. The results of the study indicated that there is a positive relationship between the predictor variables and procurement performance. The relationship was significant apart from the relationship between organisational policy and procurement performance. The results also indicated that lead time management contributes more to procurement performance, followed by organisational policy then ICT integration. Supplier integration contributed the lowest to procurement performance. These results will be helpful to EABL management to design appropriate policies and procedures that will reduce on supplier lead time so as to enhance on the procurement performance. To researchers, an empirical question as to whether supplier integration contributes to procurement performance need to be pursued further. Although the findings of this study may be replicated in other manufacturing companies, the study recommends that further research should be done on the same topic in other sectors of the economy for instance motor industry to determine the role of supplier relationship management on procurement performance.
