Supplier development and procurement performance of manufacturing companies in Uganda: a case study of IBM steel and metal fabrication company in Kampala.

Abstract

The study assessed the influence of supplier development on procurement performance of manufacturing companies in Uganda basing on a case study of IBM Steel and Metal Fabrication Company. This study was specifically intended to achieve four specific objectives; to examine the influence of supplier training on procurement performance at IBM Steel and Metal Fabrication Company, to assess the influence of supplier financial support on procurement performance at IBM Steel and Metal Fabrication Company, to examine the extent at which supplier involvement influences procurement performance at IBM Steel and Metal Fabrication Company and to investigate the extent at which contract management influences procurement performance at IBM Steel and Metal Fabrication Company. The study employed a case study design with both qualitative and quantitative aspects. A total of 130 respondents, staff and supplier of IBM Steel and Metal Fabrication Company participated in the study. A sample of 98 respondents was selected with the aid of Yamane’s formula. Descriptive statistics (Mean and SD), and inferential statistics like Pearson’s linear correction coefficient, and linear regression model were used in analysis of data collected through questionnaire. The correlation results revealed a strong positive significant influence of supplier training on procurement performance (0.655(**); 0.000); supplier financial support had a great influence on procurement performance (r = 0.626, with probability value (p = 0.000) and strong positive influence of supplier involvement on procurement performance (0.585(**), 0.000). Supplier development in form of supplier training, supplier financial support and supplier involvement highly influenced procurement performance at IBM Steel and Metal Fabrication Company. The study concluded that concluded that the results were significantly of good degree of prediction of the outcome variable. Supplier training, supplier financial support and supplier involvement were significant to procurement performance. Therefore, firms in the fabrication industry ought to engage more in activities that help improve the operations of their suppliers. The study therefore recommended that Metal and fabrication companies should ensure there is continuous improvement in the supply base since it is critical to maintaining the advantages accrued from supplier development and this can be achieved by carrying out supplier appraisals from time to time, Metal Fabrication Company should work hand in hand with the financial institutes to curb the challenge of finances because providing funds to the supplier is not easy but when money is available it becomes much easier and should ensure that suppliers are involved in new product development decisions. Further studies should be conducted on the effect of government policies on the relationship between supplier development and performance of manufacturing firms in Uganda and more metal and fabrication firms and manufacturing companies such as; textile, sugar, plastics among others, should be included in the investigation so as to validate these findings and arrive at a consensus on the effect of supplier development on procurement performance of firms.