INFLUENCE OF VENDOR RELATIONSHIP MANAGEMENT ON PERFORMANCE OF MANUFACTURING FIRMS IN NAIROBI COUNTY, KENYA

RITA KENDI CHERUYOT, DR. JULIUS MIROGA

Abstract


The manufacturing sector’s contribution to Gross Domestic Product (GDP) improved marginally to 10.3 per cent in 2015 compared to 10.0 per cent in 2014. The sector grew from 3.2 per cent recorded in 2014 to 3.5 per cent in 2015. The growth was partly attributed to reduced cost of inputs such as petroleum products and electricity. This study sought to establish the influence strategic vendor relationship management practices on performance of manufacturing firms in Nairobi City County. The specific objectives of the study are to determine the influence of strategic vendor partnership on the performance of manufacturing firms in Nairobi City County, to establish the influence of strategic vendor communication on the performance of manufacturing firms in Nairobi City County. The study used a descriptive research design. The target population comprised of 499 supply chain managers in manufacturing firms in Nairobi City County while the sample size was 250 respondents. The study used structured questionnaires to collect primary data. The study entailed both descriptive and inferential statistics. While descriptive statistics aided in describing the standard features of the study sample, inferential statistics which defined prediction and correlation included multiple regression analysis. The study results were presented through use of tables and figures. The study concludes that vendor partnership has a positive and significant effect on the performance of manufacturing firms in Nairobi City County. In addition, the study concludes that vendor communication has a positive and significant effect on the performance of manufacturing firms in Nairobi City County. Further, the study concludes that vendor development has a positive and significant effect on the performance of manufacturing firms in Nairobi City County. The study concludes that vendor evaluation has a positive and significant effect on the performance of manufacturing firms in Nairobi City County. From the findings, the study recommends that the management of manufacturing firms in Nairobi City County should build strong trust with their vendors so as to ensure achievement of mutual goals. In addition, the management should ensure frequent communication as well as timely communication with vendors so as to improve organization performance.

Keywords: Vendor Partnership, Vendor Communication, Performance


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