Print this chapterPrint this chapter

Managing Supplier Relationship in a Typical Public Procurement Entity in Ghana

Results

Since the study was descriptive in nature, there was no need to measure validity and reliability of measures. Hence, the findings are collected from the field are reported descriptively. However, data from the completed questionnaire were checked for consistency.

Collection of data for this study was centred on eight (8) sections within the two institutions that are directly involved in the Public Procurement Activities. These include Head Section, Tendering Section, Stores Account section, Evaluation Section, Local Purchase Order (L.P.O) section, Stores A and B, Contract Management Section and Correspondent (Professionals and mandatory staff obliged to undertake procurement activities). This was mainly done to gather information to find out how to manage supplier relationship to improve public procurement performance at the Procurement Office (KNUST and CCTU). It was however necessary to consider issues facing supplier relationship management.

The main findings are presented in line with the scope and objectives of the study.

Table 1. Best strategies of managing supplier relationships that brings value for money in public procurement


Table 1 represents the best strategies of managing supplier relationship. On the scale used, 1was strongly disagree, 2 was disagree, 3 was neutral, 4 was agree and 5 was strongly agree. Out of the listed items, planning everyday exceptions represents the highest strategy of the respondents. Planning everyday exceptions and expecting and rewarding honesty with means 4.66 and 4.54 respectively indicate that respondents strongly agree with the strategy for managing supplier relationship. Sharing critical information and making relationship meeting meaningful with means 4.46 and 4.34 respectively indicate that respondents agree with the strategy of managing supplier relationship.

Table 2. Institution Compliance with Public Procurement Act, 2003 (Act 663) in all their purchases and form relationship with their suppliers


Table 2 above shows that 70 respondents representing 100 percent indicated that the institution uses the Public Procurement Act in their procurement processes.

The Public Procurement Act, 2003 (Act 663) is a comprehensive legislation designed to eliminate the shortcomings and organizational weaknesses which were inherent in public procurement in Ghana. The Government of Ghana, in consultation with its development partners had identified the public procurement system as an area that required urgent attention in view of the widespread perception of corrupt practices and inefficiencies, and to build trust in the procurement system.

From the same table, 70 respondents representing 100 percent indicated that the institution create supplier relationship. It was revealed during the research study that, the institution being a public sector always follow the public procurement Act in their purchases in other to create good relationship with suppliers.

Table 3. Type of Relationship that exists between the Institution and its Suppliers


Table 3 above shows the type of relationship that exists between the Institution and its Suppliers. It was revealed during the analysis that majority of the respondent indicate that the institution practice transactional type of relationship with its suppliers as compare to Collaborative and Alliance relationship.

According to Blevins et al. transactional relationship is referred to as an arm's-length relationship where neither party is concerned about the other party's well-being. The relationship is the most common and basic type of buyer-supplier relationship. There is very little trust involved in this relationship and it is characterized by onetime transaction between the buyer and supplier. Also, there are rarely any big savings made in this kind of relationship and it usually takes very little time and effort by either party to go through with an agreement.

From the below Table 4 all of the seventy (70) respondents gave varying views on the type of relationship strategy the institution practiced with their suppliers. It was revealed during the analysis that majority of the respondent indicates adversarial approach as relationship model that the institution used as compare to the long term and partnership approach.

Table 4. Relationship Model Institution practice with Supplier(s)


Porter argues that traditional purchasing view advocates minimizing dependency on suppliers and maximizing bargaining power. Porter suggests that in order to maintain bargaining power, the buyer should source from many suppliers, commit short term contracts with the suppliers; share no information with suppliers regarding sales, cost, product design; and make (or receive) no improvement suggestions to (or from) suppliers.

Table 5. Benefits the institution derives when they engage in supplier relationship


Table 5 represents the benefits derived for engaging in supplier relationship. On the scale used, 1 was strongly disagree, 2 was disagree, 3 was neutral, 4 was agree and 5 was strongly agree. Out of the listed items, improvement in quality represents the highest benefits of the respondents. Improvement in quality, value for money, standardization with means 4.83, 4.77 and 4.57 respectively indicate that respondents strongly agree with the benefits derived in supplier relationship. Reduced lead time and improving procurement performance with means 4.43 and 4.37 respectively indicate that respondents agree with the benefits in engaging supplier relationship.

Table 6. Product(s) or service(s) that requires the use of long term relationship


The response from the above Table 6 indicates that none of the respondents was with the view that long-term relationship was ideal for both routine and leverage items. However, majority of the respondents were with the view that strategic items require long-term relationship with suppliers rather than bottleneck items.

According to Baily et al., strategic items have great implementation for relationship. This is where we are most likely to find partnering approaches in which both sides will recognize and strive for the potential benefits.

Table 7. Challenges facing supplier relationship management


Table 7 represents the challenges facing supplier relationship management. On the scale used, 1was strongly disagree, 2 was disagree, 3 was neutral, 4 was agree and 5 was strongly agree. Out of the listed items, buyer-seller power asymmetry and adversarial collaboration represents the highest challenge of the respondents. Lack of synergy and direction in strategic partnership, exploitation of intellectual property, issues in managing a large portfolio of suppliers and buyer-seller power asymmetry and adversarial collaboration with means 4.43, 4.37, 4.11 and 4.49 respectively indicate that respondents agree with the challenges facing supplier relationship management.

Table 8. The measures to mitigate/eliminate the problems facing supplier relationship management


Table 8 represents the measures to mitigate or eliminate problems facing supplier relationship management. On the scale used, 1was strongly disagree, 2 was disagree, 3 was neutral, 4 was agree and 5 was strongly agree. Out of the listed items, checking supplier's reputation represents the highest measure of the respondents. Checking supplier's reputation with mean 4.66 indicates that respondents strongly agree with the measure to mitigate or eliminate problems facing supplier relationship management. Seasonal supply of a bottleneck item, quality appraisal of key suppliers and evaluation of key suppliers with means 4.11, 4.49 and 4.49 respectively indicate that respondents agree with the measures to mitigate or eliminate problems facing supplier relationship management.