Relationship Between Supply Quality Management Practices and Procurement Performance of Supermarkets in Kisumu City, Kenya

Abstract

Procurement performance is the quantitative assessment of achievement of objectives and Supplier quality management is a set of activities initiated by management to put checks and balances on suppliers concerning quality of goods and services they offer to the organization to improve procurement performance. These activities are competitive supplier selection, supplier development, supplier integration, quality measurement and conducting supplier audits. Supplier quality management is usually one of the avenues that can assist a firm improve operational and financial performance. Existing literature has shown supermarkets in Kisumu progress on competition overtime eventually bringing down the cost of shopping. However, of great importance is the question of their supplier quality practices and how they affect procurement performance. Literature on quality and level of procurement performance of these large scale retail outlets is not well established as past studies have not focused on procurement performance. Consequently, the relationship that exists between supplier quality management practices and procurement performance of these supermarkets has never been investigated by past studies and still remains unknown. The purpose of the study was to analyse relationship between supplier quality management practices and procurement performance of supermarkets in Kisumu City. Specifically the study sought to establish the extent of application of supplier quality management practices of these supermarkets, determine extent of their procurement performance and establish relationship between their supplier quality management practices and procurement performance. Based on agency theory the study was guided by a conceptual framework in which the independent variable was supplier quality management practices and the dependent variable was procurement performance. The study adopted a correlation survey design with the entire population of 104 as respondents drawn from the procurement departments of the six supermarkets with 14 selected randomly as pilot group. Due to the small population involved a census survey was deemed appropriate, High level of internal consistency with a coefficient of 0.824 was registered. Descriptive statistics was used to analyse the primary data sourced through structured questionnaires. The study revealed that supermarkets in Kisumu City practiced supplier quality management practices to a great extent as evidenced by the overall mean of (M = 3.95, SD =0.931) and procurement performance with an average mean of (M = 3.96, SD =0.92) showing the existent of supplier quality management practices and the level of procurement performance of supermarkets in Kisumu. The study also revealed that correlation between supplier quality management practices and procurement performance measures varied, the highest correlation being that of supplier integration and cost saving with a coefficient of 0.304, this implies that practice of more supplier integration will result into more cost saving. The lowest being supplier integration and defects free products with a coefficient of -0.093 which shows that an increase in supplier integration would result to more products with defects supplied. The findings of the study could provide valuable insight into how to choose best suppliers in order to achieve better procurement performance. It could also show the relationship between supplier quality management and procurement performance. This will prompt underperforming suppliers to change their strategy of serving their clients. The study recommends best supplier lity management practices to achieve best procurement performance.