Effects of Supplier Relationship Management on Supply Chain Performance at Bamburi Cement Mombasa, Kenya

Abstract

Supplier Relationship Management (SRM) plays a pivotal role in reduction of costs and increased efficiency in the supply chain function. Supplier relationship management is the business process that provides the structure for how relationships with suppliers are developed and maintained. SRM has become a critical business process as a result of competitive pressures; the need to consider sustainability and risk; the need to achieve cost efficiency in order to be cost competitive and the need to develop closer relationships with key suppliers who can provide the expertise skills necessary to develop innovative ideas of new products and successfully bring them to the market. Significant benefits are possible from better managing relationships with key suppliers. It has been shown that integration of operations with suppliers can improve firm performance. An additional benefit of cross functional, collaborative relationships with key suppliers is the ability to co-create value. The main objective of the study was be to establish the effects of SRM on supply chain performance at Bamburi cement limited Mombasa, specific objectives will be, To establish the effects of value creation on the supply chain performance at Bamburi cement,to determine the effects of competitive advantage on the supply chain performance at Bamburi cement, to determine the effects of quality improvement on the supply chain performance at Bamburi cement,to find out the effects of lead time reduction on the supply chain performance of Bamburi cement. The theories include value configuration theory,Capability-Based View theory, and Economic order quantity theory. Questionnaires was used as the main data collection instruments.Stratified sampling method was used. Descriptive statistics was used aided by Statistical Package for Social Scientists (SPSS) version 22 was used to analyze the quantitative data. The study was used also utilize multiple regression analysis to determine the relationship between Supplier Relationship Management and Supply Chain Performance. From the study it was revealed that value creation has led to increase of market shares and competency and that there is understanding and closeness between customers, long range relationship and contract to encourage suppliers to improve quality of their products and that inventory related cost has been reduced through lead time. From the study it was concluded thatindependent variables studied have significant effect on supply chain performance Recommendation was that Bamburi cement limited should collaborate with suppliers in order create value to their supply chain processes and products and endeavour to have a competitive advantage against their competition and maintain their position in the market as the best compared to other cement companies by ensuring customer satisfaction.