SUPPLIER RELATIONSHIP RISK AND PERFORMANCE OF MANUFACTURING FIRMS IN KENYA

Abstract

The study sought to determine the influence of supplier relationship risk on performance of manufacturing firms in Kenya. Descriptive and explanatory research designs were adopted. The unit of observation was the supply chain administrators of manufacturing firms in Kenya. Stratified sampling was conducted on all the one thousand one hundred and twenty three manufacturing firms registered by KAM, simple random sampling was carried out on the strata to identify a sample size of 295 firms. The study relied mainly on primary data which was collected through semi-structured questionnaires that were administered to administrators charged with the management of supply chain within the selected firms. Data analysis was done using descriptive statistics (percentages, mean and standard deviation) and inferential statistics through SPSS version 24. The findings revealed that supplier relationship risk had a significant influence on the performance of manufacturing companies in Kenya. It was established that through management of reputation damage, embracing innovation and enhancing the cooperation between the outsourced parties and the manufacturing firms, meeting the customer needs was enhanced, thus promoting performance. The study concluded that supplier relationship risk was among the logistics outsourcing risks that determined the performance of the manufacturing firms. It is therefore recommended that the manufacturing firms uphold proper management of supplier relationship risks so as to have win-win relationship with suppliers and enhancing performance.