Supplier Relationship Management and Supply Chain Performance in Alcoholic Beverage Industry in 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. Supplier relationship management 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 necessary to develop innovative new products and successfully bring them to 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 (Swink et al., 2007; Singh and Power, 2009; Flynn et al., 2010). An additional benefit of cross functional, collaborative relationships with key suppliers is the ability to co-create value (Enz and Lambert, 2012). The study applied a multistage sampling technique to select the sample size 38 respondents from 38 supply chain professionals in the alcoholic beverage companies. Questionnaires were used as the main data collection instruments. Descriptive statistics was used aided by Statistical Package for Social Scientists (SPSS) to analyze the quantitative data. The study utilized descriptive and multiple regression analysis to determine the relationship between Supplier Relationship Management and Supply Chain Performance. The objectives of the study was to establish the extent of SRM in alcoholic beverage industry, its impact on supply chain performance and challenges faced in implementation of SRM. This research indicates that by adopting collaborative relationships with their suppliers contribute to competitive advantage and value creation in Supply Chain Performance.