The effect of supplier relationship management on the operational efficiency of an organization

Abstract

This paper sought to examine the impact of supplier relationship management on organization's operational efficiency: A case study of on Seahorse oil company limited. The objective of the study was to examine the supplier relationship management practices at Seahorse oil company, to evaluate the effect of SRM on organizational efficiency at Seahorse oil company limited and also to determine the challenges of SRM on Operational efficiency at Seahorse oil company limited. The study design used for the study was descriptive and analytical sample survey. The researchers simple randomly selected 60 workers. The research instrument used for the study was interview with closed questions.
Findings from the study revealed that, Seahorse oil company limited has a vendor relationship management policy and joint with vendors to resolve issues is established. In addition, suppliers are involved in key decisions regarding their operations, and a quality assurance system is in place for suppliers. Additionally, Seahorse oil company is also investing in its suppliers through the extension of financial assistance. Also, the study discovered that the supplier relationship had a positive impact on operational efficiency, as well as cooperation with suppliers which improved Seahorse’s competitive advantage in the market. In addition, a good relationship with suppliers improves flexibility and robustness for customers. Again, there is an improvement in the quality of purchases from suppliers, which leads to a reduction in risks and co-management costs.
The study found that differences in organizational culture and vision affect the relationship. Also, a secret business organization is easily diffused through the provider relationship and lack of provider engagement affects the relationship and operational efficiency. Finally, distrust and lack of interest in the relationship affecting the operational efficiency of Seahorse oil company limited. The implication of this study for business practice is that, organizations as a whole have much to gain by practicing strategic supplier relationship management. Although SRM practices are not the only contributing factors to organizational performance, it is imperative that organizations examine existing SRM systems to identify weak points and correct them accordingly that positively influence their performance.