Supplier-buyer relationship dynamics in sup-

ply chain management

LAB University of Applied Sciences

Bachelor of International Business
2022
Caroline Njuguna
 Abstract

Author(s) Publication type Published

Njuguna, Caroline Thesis, UAS 2022
Number of pages
38 pages
Title of Publication
Title of the thesis
Supplier-buyer relationship Dynamics
Degree and field of study
Bachelor of Business Administration, International Business
e.g.
Haco Industries Limited

Abstract

The supply chain is rapidly becoming complex in the new era of procurement. The effects of
recent disruptions such as climate change, COVID-19, and the ongoing crisis in Europe have
led many businesses to re-think their business operations. Manufacturers are now working
with many suppliers in the effort to reduce the price to maintain healthy margins, keep up with
ever-changing customer demands and reduce risk. Working with multiple suppliers comes with
its hurdles as it requires the building of supplier-buyer relationships. It is therefore important
for procurement professionals to deploy a systematic approach in their sourcing strategy. The
supplier relationship management (SRM) concept is an approach that allows the establish-
ment of a mutually valuable relationship with an organisation and its key suppliers. Successful
implementation of SRM in an organisation can enable an organisation to achieve reduced
long-term costs, improve availability issues, improve quality, and reduce delays in supply.
However, SRM is not easy to implement as it requires an extensive and mutual understanding
of buyer and supplier processes, and human and technical resources.
The purpose of this study is to determine factors that influence supplier-buyer relationship
dynamics in supplier relationship management across the supply chain function of a business.
This is achieved through understanding the supplier relationship management concept, its role
Keywords
in the supply chain management, ways of developing supplier/buyer relationships, and finding
Supplier relationship
relatable examples management,
of ways Buyer,
that can lead Supplier,
to good and badSupply chain management
supplier/buyer relationships with the
case company involved. From the information gathered, the final goal is to provide recom-
mendations to the case company as well as give suggestions on possible areas for further
research.
The approach used in this study is the deductive reasoning approach where the supplier rela-
tionship management concept and stakeholder management theory have been used as the
base for this study. Primary and secondary data are used. Primary sources have been derived
from the company’s website and an online survey that is distributed to the case company em-
ployees. Secondary sources have been derived from news blogs, books, articles, and jour-
nals. Both qualitative and quantitative research methods are utilized in this study. Qualitative
research has been used to allow answering of the why, and how questions and thus gain a
deeper understanding of the experiences, events, and context. Quantitative research on the
other hand allows numerical data that is measurable to be presented in charts, graphs, and
tables. The method of analyzing data collected used in the study is content analysis.
From the analysis of the results, the study shows that Haco Industries Limited, has some good
supplier/buyer relationship practices such as consistent communication, leveraging technolo-
gy, and having advanced collaborations. However, not all SRM processes discussed in the
literature are followed by the case company. This may be the reason why issues reported
such as contractual violation, delivery of poor quality, late payment, and incompetence are
being experienced.
CONTENTS

1 Introduction ................................................................................................................ 1
1.1 Background ........................................................................................................ 1
1.2 Thesis objectives, research questions, scope, and significance .......................... 2
1.3 Limitations of the study ....................................................................................... 3
1.4 Theoretical framework ........................................................................................ 3
1.5 Research methods, data collection, and analysis ............................................... 5
2 Supplier relationship management ............................................................................. 7
2.1 Supplier relationship management Concept and definition.................................. 7
2.2 Developing relationship process ......................................................................... 9
2.3 Supplier relationship management skills & Tools ...............................................11
2.4 Technology ........................................................................................................14
3 Stakeholder management .........................................................................................16
3.1 Stakeholder management concept and definition ..............................................16
3.2 Principles of stakeholder management ..............................................................17
3.3 Stakeholder management in supply chain management ....................................18
3.4 Suppliers as stakeholders ..................................................................................18
4 Case company ..........................................................................................................20
4.1 Profile of Haco Industries Limited ......................................................................20
4.2 Sourcing & supplying at Haco Industries Limited ...............................................21
4.3 Haco Industries Limited and partners relationships ............................................22
5 Empirical results and data analysis ...........................................................................23
5.1 Data collection ...................................................................................................23
5.2 Survey results ....................................................................................................23
5.3 Data analysis .....................................................................................................25
6 Conclusion ................................................................................................................31
6.1 Answers to research questions ..........................................................................31
6.2 Recommendations for the case company ..........................................................33
6.3 Reliability & validity ............................................................................................33
6.4 Suggestions for further research ........................................................................34
7 Summary ..................................................................................................................35
References ......................................................................................................................36

APPENDICES

Appendix 1. Questionnaire form

List of Abbreviations

COMESA- Common Market for Eastern and Southern Africa

CPG- Consumer packaged Goods

ECOWAS -Economic Community of West African States

ERP- Enterprise Resource Planning

FMCG -Fast-moving Consumer Goods

IT- Information Technology

R&D- Research and Development

RFQ- Request for Order

SCM- Supply Chain Management

SRM -Supplier relationship management

 1

1 Introduction

1.1 Background

Emerging trends such as sustainability and disruptions that were caused by the ongoing
Covid pandemic have seen many businesses rethink and reform the way they operate.
The needs and demands of customers are changing. As a result of these changes, busi-
nesses need to keep up by being flexible and innovative hence, these two aspects have
become important for a business to survive. A flexible Business can easily adapt to differ-
ent situations and take advantage of these situations by perceiving them as opportunities
to invent. Innovation, on the other hand, enables a business to stand out among its com-
petitors.

Companies such as Proctor & Gamble formed a customer-driven network. The supply
transformation efforts made by the company had high goals such as reducing inventory by
50%, trimming stock-outs by 50%, and saving logistics costs by 20%. Achieving these
goals required the addressing of key areas such as product availability, shelf quality, and
on-time delivery. These efforts are achievable with the right partners involved throughout
the supply chain. Choosing the right supplier to buy from is crucial but so is it for the sell-
er. The 21st century of doing business has evolved from suppliers being viewed as just
individuals that companies buy stuff from to partners in business. Manufacturers are not
the only choosy players in the field suppliers are also becoming choosy about who they
want to sell to. (Blanchard 2007.)

The disruptions of 2020 and 2021 led to pandemic lockdowns, human resource shortages
slowed down the shipping and logistics industry and simultaneously experienced import
surges caused by the shifting of consumer spending. For example, the tissue paper stock-
outs and Singapore eggs shortage due to the hoarding behavior of the consumer. Retail-
ers in consumer-packaged goods (CPD) dread moments when the shelves are empty.
Out-of-stock status is bad for business as it means a loss of revenue from frustrated cus-
tomers who are unable to spend their money on the products they need. Responding too
quickly without a proper demand forecast can lead to oversupply which results in too
much stock that is not good for business. (Schiffling & Kanellos 2022.)

Supplier-buyer relationships have proven to be the backbone of most supply chains and
hence cannot be overlooked. This means the need to improve and nurture supplier-buyer
relationships today is important for long-term success. Despite having similar principles
that base supplier-buyer relationships, a study conducted by Accenture interactive report-
ed that 80% of B2B buyers switched from their suppliers due to their inability to position
 2

their products and services with consumers' expectations. These findings indicate that
many buyer-seller relationships have issues. In this study, the researcher aims to estab-
lish factors that influence supplier-buyer relationship dynamics in the supply chain function
of a business. (LarBar 2019.)

1.2 Thesis objectives, research questions, scope, and significance

Thesis objective

The purpose of this research is to establish factors that influence supplier-buyer relation-
ship dynamics in the supply chain function of a business.

Main question

The main research question for the thesis is: What are the factors that influence supplier-
buyer relationships in supply chain management?

Sub-questions

Specific sub-questions which are derived from the main question of this thesis include the
following:

• What is supplier relationship management?

• What is the role and responsibility of supplier relationship management in supply
chain management?
• How is a supplier-buyer relationship developed?
• What ways can lead to good and bad supplier-buyer relationships?

Scope

This study will focus on determining the factors that influence supplier-buyer relationship
dynamics with reference to the supply chain management of Haco Industries Limited. Ha-
co Industries Limited’s headquarter is in Kasarani, the city of Nairobi, Kenya. The study
will cover top-level management, middle-level management, and tertiary-level manage-
ment at Haco industries limited Kenya Limited. The study will be conducted within a period
of three months starting from January to May 2022. The researcher aims to target 15 em-
ployees whose roles involve interacting with either suppliers or buyers.

Significance of the study

The data and information collected with this research will benefit, the case company in-
volved. It will provide insights into the factors that influence the dynamics of the supplier-
 3

buyer relationship in supplier relationship management in the current world of business.

Besides the case company involved in this research, the supply chain management of
other companies can benefit from this research. This research study can provide them
with a better understanding of the factors that influence the supplier-buyer relationship
and thereby allowing them to formulate and improve their supplier relationship manage-
ment processes. Future researchers can benefit from this study as it may be a reference
point for future studies. By acting as a reference point, this research might arouse interest
among other researchers hence encouraging further research on related studies.

1.3 Limitations of the study

Non-co-operation

In the process of this study, various limitations might be encountered. Some employees
are likely to not respond to some questions in the questionnaires. Some employees might
also fear that the information they provide could be accessed by their supervisor hence
this might interfere with their ability to answer questions truthfully. This will be solved by
ensuring anonymity and allowing a convenient time to respond.

Confidentiality

Most businesses limit sharing information to individuals who are not in management or at
the leadership level. Therefore, important literature involved in the case company may be
challenging to obtain due to confidentiality. Confidentiality is crucial as it protects business
secrets. Competitors or other agencies might use it to affect the business. The researcher
will overcome this challenge by making use of reports of the company, Interviews, News-
letters, and Journals available. In addition to this, the researcher will try to gather data
clearly explaining the purpose of the study and how it will benefit them. Confidentiality in
the information collected will be emphasised as well.

1.4 Theoretical framework

A literature review is defined by (Felix & Smith 2019) as the presentation of validity and
significance of research through existing research. The reader can see how the research
relates to existing research as well as new information that will be developed in the field
concerned. Existing research help the researcher develop concepts for the research.
These concepts will come from work done by other researchers, scholars, analysts, theo-
rists, and authors.
 4

Theories in academic research are created to explain the events in a particular field. The
theoretical framework provides a structure that supports the research study. The theoreti-
cal framework contains concepts, definitions, and references that are important to the lit-
erature, and the existing theory was chosen for the study. The chosen theories that will
enable gain a better understanding of the dynamics of supplier-buyer relationships are
supplier relationship management and stakeholder management theory. (Lunenburg &
Irby 2007, 13.)

The SRM concept is about creating, managing, and supporting relationships with suppli-
ers. Traditional supplier relations involved interaction between different functions of a
company and its suppliers. The problem with this is that this leads to a lack of transparen-
cy from the external perspective as well as internal governance in fostering relationships.
The main aim of SRM is to develop a two-way relationship that is mutually benefiting both
the organization and the suppliers. This involves developing activities that are collabora-
tive and relationship-building with the suppliers that deliver great value to the business.
SRM activities also involve complementing supplier performance, and contract manage-
ment for most suppliers of a company. (Deloitte 2015, 2.)

Stakeholder management theory is a theory of management that emphasizes intercon-

nected relationships between a business and its stakeholders. The theory debates that a
business should aim to create value for all stakeholders and not shareholders alone.
Freeman (1984), a great contributor to stakeholder theory defined stakeholders as any
group or individual that can affect or is affected by the achievements of an organization.
There are different types and levels of stakeholders such as internal and external. An in-
ternal Stakeholder is an individual or group that is directly or financially involved in a busi-
ness operation. An external stakeholder on the other hand is an individual or group that is
outside the organization but can affect or be affected by the operations of a business. The
contributors of this theory developed three aspects of the stakeholder theory, and they
include the descriptive approach, instrumental approach, and normative approach. More
detail about the theory and its application to this study will be discussed in Chapter 3.
(Friedman & Miles 2006, 30.) Figure 1 shows how the two concepts have been used to
create the theoretical framework for this study.
 5

Figure 1. Theoretical framework

1.5 Research methods, data collection, and analysis

When conducting research, a researcher should decide on the research approach to use.
There are two types of research approaches in academic research namely, deductive,
and inductive reasoning. Deductive reasoning is an approach that is used to test a theory
while inductive is used to develop a theory. Inductive reasoning is generally used in quali-
tative research while deductive is used in quantitative research but there are no defined
rules as there are some qualitative studies that use deductive reasoning. This study will
involve a deductive approach because the main aim of this study is to test the applicability
of the theory to the research topic. Research methods are the techniques, strategies, and
procedures used by a researcher throughout a research study when collecting data. When
establishing the methods to use, a researcher should consider two things. first, is how
data will be collected, and second, is how the data collected will be analysed. (Kothari
2004, 7.)

Based on the research questions and the objective of the study, the researcher will use
both qualitative and quantitative research. The qualitative research method will enable the
author to understand the concepts, views, motives, and experiences of the data collected.
Moreover, a thorough understanding of the context of the research question will be
achieved. Quantitative research involves numbers. Data collected in the study will be
counter able and measurable numerically and presented using graphs, tables, and charts.
Data collected during this study will mostly be from primary data, but also secondary data
will be used. The use of both methods will ensure partiality. Primary data will be collected
through questionnaires while secondary data will be gathered through data collected from
government agencies, business associations journals, and news forums.
 6

Methods used to analyse data generally depend on the data collected and how it is orga-
nized for analysis. As mentioned earlier, data collected in this study will involve both quan-
titative and qualitative research. The survey questions will include both open-ended and
closed-ended questions. Based on these methods, the research will use content analysis
methods to analyse data.

Research Structure

The structure of this thesis will be divided into five parts as shown in Figure 2 below.

Figure 2. Thesis structure

In the first part, Chapter 1 will be the introduction. The introduction will show an overview
of this thesis. It will consist of the background of the study, research objectives, research
questions, probable limitations, theoretical framework, research methods, and data collec-
tion methods. The second part will be about the two theories used in this study. Chapter 2
will involve the supply relationship management concept while Chapter 3 will discuss
stakeholder theory. The third part will include Chapter 4. This will be about the case study
of Haco industries limited. This will involve an overview of the company and the Insights
into Supplier relationship management practices at Haco.

The fourth part will include Chapter 5 of the study which will have the empirical research
and data analysis. This will involve Surveys, interviews, structure and design, and the data
collecting process with analysis. The fifth part of this study will involve Chapters 6 and 7.
Chapter 6 will be the conclusion that will answer the thesis questions, discuss the validity,
and reliability of the analysis as well as recommendations for future research. Lastly,
Chapter 7 will be the summary.
 7

2 Supplier relationship management

2.1 Supplier relationship management Concept and definition

The birth of the supplier relationship management concept was first mentioned in a Har-
vard Business Review article in September 1983 by Peter Kraljic. Soon after other experts
built on his core idea to develop SRM. Peter Kraljic then was a director at a consulting
firm called McKinsey & company. In this article, he discussed how companies can protect
themselves against interruptions (risks) in the supply chain while simultaneously handling
the rapid changes in economics to their advantage (profitability). He called for a change of
perspective in the approach from purchasing which is an operating approach to supply
management which is the strategic approach. (Kraljic 1983.)

The operation approach involves buying the goods and services that a company requires
to operate while supply chain management involves the process where a company en-
sures that the supply chain is efficient and goal-oriented. In supply chain management
there SRM concept is involved. There are two distinct definitions of SRM. One discusses
building relationships between buyer-supplier and the other discusses assessing the con-
tribution of suppliers to a business. (Lambert & Schwieterman 2012)

The first definition according to Lambert & Schwieterman (2012), SRM is an approach for
establishing and sustaining the business relationship along the supply chain. This defini-
tion goes further to explain that SRM is about the practical process of integrating the
communication and coordination between organizations and suppliers.

The second definition according to Daniel & Pratt (2020), SRM is the systematic approach
to evaluating suppliers and determining each supplier's contribution to the success, and
developing strategies to improve business performance. SRM is a continuous process
that involves steps such as segmenting, governing, and performance management sup-
plier development (Deloitte 2015).

Benefits of Supplier relationship management

Suppliers are important but the need for them is often viewed as inconvenient, expenses
that should reduce as much as possible. This way of thinking from managers may lead to
a business missing the out on the value that business partnerships bring to a business.
Some of the strategic values that supplier relationship management brings to a business.
These advantages include competitive advantage, value creation, and innovation and last-
ly, it aids in performance.
 8

Benefits gained through SRM come from having close interactions and connections with
suppliers. This results in transparency in the supply chain. Benefits gain from SRM include
reduced production costs, reduced R&D costs, Improved material flow and delivery time,
and lower administrative costs. Unfortunately, it is often difficult to confirm that an in-
creased focus on SRM has resulted in a particular improvement. Because of this, making
close cooperation attractive for the parties involved should do done in such a way that the
benefits gained are greater than the cost incurred. Moreover, prior qualitative and quanti-
tative assessments of the benefits should be conducted by the top management to find
out the expected result from cooperating with suppliers. (Jespersen & Larsen 2005.)

Some of the benefits that can arise from a close connection with suppliers include lower
transaction costs through automating and simplifying the process. This ensures employ-
ees are working on other value-adding tasks that they find meaningful. Increased quality
and service reliability is another benefit of SRM. This leads to efficient communication and
a better understanding of the supplier and buyer process. Through Supplier relationship
management the competencies, knowledge, and skills of the supplier can be utilized. For
example, by sharing product development projects, closer cooperation with suppliers can
also lead to the integration of similar goals and visions for future collaborations. (Jesper-
sen & Larsen 2005.)

Supplier relationship management issues in Supply chain management

Even with the benefits that come with having a SRM in place, implementing supplier rela-
tionship management is not an easy task. Some issues can hinder the successful imple-
mentation of the SRM approach. These issues include over-emphasis on cost reduction
which results in the suppressing of long-term goals but rather focusing on short-term
through KPIs. Lack of functional competencies such as negotiating skills, and market
analysis skills. Costs and risk management among the parties involved is another issue in
SRM. Contrary to the traditional way of sourcing where hard skills are mostly required
than soft skills, SRM requires different skills for influencing, leadership, and change man-
agement. Incompatibility of supplier-buyer strategic objectives is another challenge in
SRM. An example of situations where incompatibility of supplier-buyer strategic objectives
can manifest is when the buyer is interested in developing a partnership with the supplier,
but the supplier is interested in exploiting the buyer. (PWC,2019.)

Principles of supplier relationship management

Apart from choosing the right supplier and fostering a good relationship, there are three
key areas that SRM focuses on, and they include, information, cooperation, and integra-
tion.
 9

Information

Having access to necessary and correct information at the right time can be useful for the
supplier and buyer throughout the supply chain. This allows easy adjusting and adapting
of supply chain activities required. This kind of information sharing also creates supply
chain transparency. Examples of information and data shared are, forecasts, historical
data, trends, production plans, and any strategic information that is likely to affect (Jes-
persen & Larsen 2005.)

Cooperation

The way a business cooperates with its supplier varies from one supplier to another. for
example, how a business cooperates with an international supplier can be different from
how they cooperate with a local supplier. A business needs to evaluate the nature of co-
operation with each supplier. This allows businesses to understand and ascertain the level
of information and data they can share and the number of processes they can integrate
with their suppliers. (Jespersen & Larsen 2005.)

Integration

The integration allows the easy, quick, and accurate exchange of information. This is done
with Information technology. Implemented IT systems both from the supplier and buyer
are integrated to provide support in the purchasing process which allows them to use a
common communication platform. The cooperation, extent of information sharing, and
integration of the IT systems are dependent on two aspects namely, the strategic nature
of the product and if it is indirect or direct purchasing. Indirect purchasing of goods is
known to demand a lot of resources compared to their relevance in the production pro-
cess. Because of this, many businesses opt for e-procurement intending to reduce rela-
tionship costs that can be otherwise utilized in maintaining close cooperation with suppli-
ers' indirect purchasing. (Jespersen & Larsen 2005).

2.2 Developing relationship process

The process of strategic sourcing in supplier relationship management varies from one
business to another. However, an article by Deloitte proposes a set of core complemen-
tary processes and they include, supplier segmentation, governance, supplier perfor-
mance management, and supplier development. (Deloitte 2015.) Figure 3 shows the pro-
cess involved in SRM.
 10

Figure 3. SRM process Deloitte (2015)

Supplier segmentation

The supplier segmentation stage occurs after the procurement department has eliminated
the suppliers that are unsuitable for their business, and they start to focus on the suppliers
that they want to partner with. Supplier segmentation is the process where the chosen
suppliers are categorized according to a defined criterion. Categorizing allows better iden-
tification of key suppliers to engage in supplier relationship management. The supplier
segmentation process is important because not all suppliers should be given the same
level of attention. In most cases, priority is given depending on the strategic importance of
the supplier to the business. If the supplier segmentation stage is not well implemented,
ineffective supplier relationship management programs will be the outcome. (Deloitte
2015.)

Supplier relationship management governance

Governance in SRM is about developing a governing team. The basic step includes align-
ing the organization, setting up the process, and assigning ownership of the supplier rela-
tionships. Employees or members do not always have to be from the procurement de-
partment therefore, this calls for proper selection of the stakeholders from the business in
the process. These stakeholders form a supplier governing committee for each of the top
suppliers of the organization. Examples of roles that the governing committee takes care
of include, Defining and driving a strategic road map with top suppliers and ensuring there
is a mutual understanding of the top strategic objectives with top suppliers. These objec-
 11

tives are crucial as it helps create operational measures and metrics to monitor and eval-
uate during the performance management process. (Deloitte 2015.)

Supplier Performance management

The performance management stage in SRM involves the implementation of the operating
measures that were mutually agreed upon in the governing stage. This process is contin-
uous, and it focuses on critical measures, put together in a supplier’s scorecard and the
impact on the business. Moreover, having these metrics in place is important as it pro-
vides a uniform set of defined metrics suitable for the organization as well as ensures
compliance with the values and standards of the organization. The supplier performance
process involves continuous monitoring of the supplier’s scorecard and any diversion from
the agreed terms is immediately addressed to ensure the origin of the problem is correct-
ed. Skills and tools for performance management are discussed in detail in section 2.3 of
this chapter. (Deloitte 2015.)

Supplier development

Proper supplier segmentation, SRM governance, and supplier performance management

lead to a conducive environment for including value-creating activities with top suppliers.
Examples of activities derived from SRM include joint business development. This will
require sharing the future between parties involved. This can create synergy in the ability
to both gain opportunities in Innovation, through aligning suppliers' know-how in product
development and market penetration as well as expand through joint ventures or mergers
and acquisitions. (Deloitte 2015.)

2.3 Supplier relationship management skills & Tools

The right skills and tools are required for SRM to be effective and efficient. Traditionally,
negotiating, and bargaining skills that helped in cost reduction were the primary skills re-
quired from a job title of procurement and purchasing professional. Currently, the global
supply chain is complex. These complexities include public involvement in ethical sourcing
and product standards, demand for innovation, and product/service development. Be-
cause of this, the managing of supplier relationships to mitigate risks and promote innova-
tion while simultaneously ensuring quality and high standards of products and services is
unavoidable. (Deloitte 2015.) Pedersen (2015) suggests that procurement experts should
go beyond the traditional way of cost reduction and embrace soft skills because this will
promote a collaborative relationship with suppliers and create value.
 12

Soft skills are any skills that can be categorized as personality traits or habits. These in-
terpersonal and communication skills are often traits that are natural to a person. Some of
the top soft skills important in the procurement profession today include communication
skills which involve effective listening, writing, and oral communication. another skill is
decision and problem solving, and this is about the ability to think quickly about possible
and current problems and transfer these situations into a creative and innovative solution.
Influencing skill is another soft skill required at all procurement levels and this skill helps in
influencing colleagues and suppliers. At the senior level having soft skills is important in
influencing the rising procurement profile of a business. Supplier relationship management
requires a lot of teamwork where ideas sharing with different audiences therefore team-
work skills are important. (Pedersen 2015.)

Supplier Segmenting

Besides softs skills, technical skills are essential in the procurement profession. Technical
skills help in managing and supporting strategic managerial tools and the software solu-
tions used in the Supplier relationship management process. The know-how to use the
Kraljic matrix is one of the most essential skills required in Supplier relationship manage-
ment. Kraljic matrix was developed in 1983 by peter Kraljic who was in support of a stra-
tegic approach in Supply Chain Management with a key focus on risk and profitability. A
Kraljic matrix is an effective tool used in supply Relationship management when segment-
ing suppliers. The role of the Kraljic matrix is to help in categorizing suppliers in order of
importance to the organization and hence enabling organizations to decide on the nature
of collaboration to implement on their suppliers. Figure 4 is an example of a Kraljic matrix

Figure 4. Kraljic Matrix for supplier segmentation. (Adopted from Peter Kraljic 1983)
 13

Supplier onboarding

Supplier onboarding is the process in which relevant information is collected from new
suppliers into a company’s supplier database. Supplier onboarding sets a base for an effi-
cient and reliable supply management program hence, making this process long and
complex depending on the specification of a company. The supplier onboarding process
makes it easier for procurement professions to track and manage the progress of new
suppliers throughout the onboarding process. Examples of information collected from the
suppliers include contact details, company information, product, and service offering as
well as pricing. Benefits of adopting supplier onboarding include improved supplier rela-
tionships, efficiency, and better risk management. (Nicoleta 2022.)

Supplier scorecard

The supplier scorecard also known as vendor scorecard is a document that businesses
use to rate the performance of the supplier, they do business with. It uses variables such
as delivery times, quality of a product, and communication as measurement parameters.
A supplier scorecard allows the procurement team to find out if the agreed terms have
been met. The major benefit of a Supplier scorecard includes measurement of supplier
performance, improved negotiations as well as improved supplier relationships using
available data from the scorecard. (Nicoleta 2022.)

Supplier portal

A supplier portal is a tool that is made for suppliers to use when they want to gain to ac-
cess the information system of an organization. Suppliers can access and respond to
available opportunities, send quotes, and check requirements and performance infor-
mation. Supplier portals help in managing supplier relationships by allowing suppliers and
employees to share files and communicate. Common features involved in a supplier portal
include data management, information sharing, and project management tools for com-
munication. Benefits of the supplier portal include reducing administrative costs. reduces
supplier qualification time and enhances supplier communication. (Nicoleta 2022.)

Supplier performance review

This is a software tool that is used to track and manage the performance of suppliers.
Supplier performance review software is designed to create and manage the performance
profiles of suppliers' track records, and quality incidences and generate reports on them
whenever needed. While this can be done manually, the process can be challenging and
time-consuming. Therefore, adopting a supplier performance review system into the pro-
 14

curement process ensures an effective and streamlined process due to its automating
capabilities. (Nicoleta 2022.)

2.4 Technology

Technology as defined by wood (2016), is the use of scientific knowledge for real-life ap-
plications to solve problems or improve our lives or a particular industry. The use has
technology in the business environment has evolved in ways that were deemed humanly
impossible. Alignment of business and technology results in business value. In the supply
chain, technology brings about significant impacts such as efficiency, reducing costs, and
creating value. With the modern way how, businesses view suppliers and vice versa,
technology can also be utilized to improve the Supplier-buyer relationship. The method of
involving the internet in the SRM concept has brought about e-SRM in the procurement
field. E- SRM can be defined as the use of e-business applications in the procurement
field. A business that wants to improve its supplier ties can adopt different types of tech-
nologies in four key areas. These areas include E-sourcing, communication channels,
payments, and Operations transparency. (Manufacturing Net 2015.)

ERP systems

Enterprise resource planning commonly known as ERP is defined by Sap (2022) as a

software system that helps in the running of business operations by integrating all busi-
ness functions such as finance, supply chain, procurement, and human resource just to
name a few. The rapid technological advances in the world have seen ERP possibilities
evolve. Modern ERP systems are now provided through the cloud using the latest tech-
nology such as artificial intelligence and machine learning and this improves efficiency
through automation and real-time access to information. (Sap 2022.)

Modern ERP software also allows a business to integrate their process with their partners
which results in improved collaboration and relationships. In supply chain management,
ERP software can improve supplier relationship management. For example, ERP enables
sharing of data with a supplier to improve supply process and performance tracking by
reducing the back and forth of sending emails and documents. ERP Systems also en-
hance the quality of communication with suppliers by providing end-to-end visibility of the
actual situation in the buyer-seller processes. Most popular ERP manufacturing software
brands include Oracle ERP, SAP S/4HANA, NetSuite ERP, Acumatica, and Infor Cloud
Suite Industrial. (Select Hub 2022.)
 15

E-sourcing

Although the debate on whether e-sourcing is part of e-procurement, an independent

function, or still means the same is still ongoing, evidence shows that few businesses are
utilizing these functions to get the most in managing direct and indirect procurement. E-
sourcing is mostly used in the early stages of strategic sourcing, production, and material
life-cycle management to manage vendor sourcing, contract, supplier management, and
request for order (RFQ). E-procurement on the other hand is used in purchasing and or-
dering goods from chosen suppliers. (Ross et.al 2010.)

Advantages of using e-sourcing include, real-time access to information with complete

visibility between buyer and supplier, it has a centralized data management that is easy to
integrate with many applications thereby enhancing collaboration and productivity, vendor
issues and queries can be stored for future use, having supplier and vendor in one place
makes purchasing decisions easy and saves time and lastly, e-sourcing is cost-effective
because of its automation capabilities that make less labor-intensive. Examples of e-
sourcing software used by businesses include Jaggaer, GEP SMART, Coupa Procure-
ment, Ivalua, and Zycus. (Chakraborty, 2022.)

Communication channels

Having a unified channel of communication is crucial because it helps avoid unnecessary

misunderstandings or conflicts between the buyer and seller. Communication platforms
that are well designed for buyer-sellers needs help to develop transparency while real-
time ensures quick response to any emergencies or issues arising. Modern ERP and e-
sourcing technologies mentioned in the previous sub-sections often include communica-
tion channels. Therefore, it is often up to the organization involved whether to include it in
the package while purchasing the software.

payments

Having an efficient payment process can have an important role in strengthening supplier-
buyer relationships. How payments are made to suppliers can show how strong or weak
the SRM of a company is. The buyer should commit to abide by payment terms that were
agreed upon during the initial stages when contracting with the supplier. Delaying pay-
ment to suppliers can hurt a business, for example, the damaging reputation of the busi-
ness, destroying supplier relationships, less favorable terms, and pricing negotiations in
the future, and affecting the growth of the supplier's business.
 16

3 Stakeholder management

3.1 Stakeholder management concept and definition

A stakeholder can be defined in two ways, first one is through a manager's perspective on
who they consider a stakeholder is. The second one is by analysing available literature on
the definition of a stakeholder. From a manager's perspective, the answer as to whom a
stakeholder is can be derived from the empirical results that were done by the telecom
and financial industry in Switzerland. The results indicated stakeholders rank based on the
perspective of the manager as shown in figure 5.

Figure 5. Most important stakeholders by rank. Sachs et.al (2011)

From a literature point of view, Donaldson and Preston (1995) defined a stakeholder as
any group or individual that can affect or is affected by the achievements of an organiza-
tion. Generally, stakeholders can be categorized into two namely, Internal stakeholders
and External stakeholders. Internal stakeholders are stakeholders who are directly in-
volved in an organization. This means that the success and failure of a business directly
affect them. Examples of primary stakeholders include employees, owners, shareholders,
management, and lenders.

External stakeholders on the other hand are a group or individuals with a special interest
in the organization. These types of stakeholders are often not directly involved in the busi-
ness operations, but their actions or organizational action can impact the survival of a
business. External stakeholders include customers, suppliers, government, and the public
or community. It however important to note that the classification of stakeholders depends
on the nature of the business and its operation. For example, some business sees cus-
 17

tomers as internal stakeholders while others see them as external stakeholders. Figure 6
shows the two levels of stakeholders if an organization. (Freeman et.al, 2007.)

Figure 6. two-tier Stakeholder map Freeman et.al (2007)

3.2 Principles of stakeholder management

Stakeholder principles were developed by the Clarkson center of business ethics between
1993-1998. These 7 principles are a list of the key features of stakeholder management.
The purpose of these principles is to act as a guide for managers when managing stake-
holders. conflicts. The key action words highlighted by Friedman and Miles (2006) indicate
the attitude needed when engaging with suppliers. These action words include,
acknowledge, monitor, listen, communicate, adapt, recognise, work, avoid, and
acknowledge.

The following are the principles of stakeholder management:

• Acknowledge and monitor legitimate concerns of the stakeholders.

• Listen and communicate with the stakeholders.
• Adopt a mechanism sensitive to the stakeholder's claim and requirement.
• Recognise the interdependence of interests and distribute benefits accordingly.
• Work with other public and private entities to mitigate negative impact and to pay
compensation.
 18

• Avoid activities that interfere with the rights of stakeholders.

• Acknowledge conflicts and be transparent in reporting actions taken to address
stakeholder requirements/issues.

3.3 Stakeholder management in supply chain management

The application of stakeholder theory in SCM can be viewed from various perspectives.
One way is from the stakeholder's point of view, and this can be done by exploring how
stakeholders can adopt strategies depending on the resources they have at their disposal
to influence business operations indirectly or directly through partnering with other stake-
holders. This perspective by Frooman focused on the importance of understanding the
viewpoint of stakeholders in the stakeholder identification process as it helps in better
managing stakeholders. (Miles & Friedman 2006.)

Another perspective is from an organization's point of view, and this involves identifying
the impact of stakeholders on the supply chain of a business. For example, suppliers are
important to a business because they provide goods and services to businesses. With this
view of suppliers as external stakeholders, stakeholder management theory can be ap-
plied to better understand the impact of suppliers on the SCM of an organization. Fur-
thermore, the theory also provides guidelines that supply chain managers can utilize when
interacting with suppliers' stakeholders. Stakeholders can impact major decision points
such as strategic sourcing and contracting. ((Miles & Friedman 2006.)

3.4 Suppliers as stakeholders

Suppliers are stakeholders that provide products or services required for a business to
operate. For supply chain professions, suppliers are important external stakeholders and
therefore should be involved in relevant areas in the business. Some businesses involve
key suppliers strategically during product and process design, quality training, and online
production scheduling. Supply chain managers are responsible for staying up to date with
current and emerging trends in the supply market, looking for potential suppliers, com-
municating with suppliers about their needs, negotiating contracts, and managing the rela-
tionship with current suppliers. (Freeman et al. 2007.)

The reputation of a supplier depends on the quality of materials they supply to a business.
A supplier that provides quality goods, with timely delivery, in the quantity requested is
likely to gain recurring order requests. suppliers are interested when the business they
work with is thriving because they want regular order requests and swift payment. Suppli-
ers can have an impact on how a business operates through rising and lowering prices,
 19

changing the delivery time, changing the quality of goods and services they provide as
well as changing credit terms. (BBC 2022.)
 20

4 Case company

4.1 Profile of Haco Industries Limited

Haco Industries Limited is a manufacturing company business that was incorporated as a

limited liability company in Kenya in 1970. It began in Mombasa as a joint venture be-
tween Kenyan investors and a Dutch company to manufacture Bic biro pens. Throughout
the years, the company has grown, expanded, and transformed into different ventures.
These ventures include manufacturing other products such as homecare cleaning, hair
care, and cosmetics products. All these products were manufactured under license from
different multinational companies. (Haco 2022a.)

The various lists of products that Haco Industry was licensed to manufacture include, the
Bic biros, BIC branded pens, lighters, shavers, and notebooks, which were licensed under
BIC S.A, a French company. Another product was Jeyes cleaning products licensed under
Jeyes PLC, a British company. It also manufactured TCB hair care products licensed un-
der Alberto culver incorporation, a US-based company. All these products that Haco In-
dustry manufactured were sold in Kenya and the entire East African region. Other interna-
tional product that the company sold but did not manufacture includes motions hair care
and the palmers lotion. Currently, the company is a distributor of Palmers Lotion and Mat-
tel toy products. (Haco 2022a.) Image 1 shows a list of multinational companies that Haco
has partnered with.

Image 1. Multinationals partner companies that Haco has worked with

 21

Today, the company is one of the leading fast-moving consumer goods (FMCG) manufac-
turing companies in the African region. The Company supplies a range of products across
the whole of East Africa, COMESA, and ECOWAS. These products include hair care
products, cleaning products, stationery products, plastic, body lotions, food products, and
many more. The nature of the fast-moving consumer goods industry is characterized by
producing volume and low margins hence goods produced sell fast at low cost. In This
fast-paced industry, Haco Industries Limited is a key player and has been growing con-
siderably. Haco industries limited attests to this success through leveraging suitable part-
ners in their supply chain who are focused on delivering quality products and services to
consumers. (Haco 2022b.)

4.2 Sourcing & supplying at Haco Industries Limited

Any strategic decision that a company makes should always aim to support the main mis-
sion and vision that a business is seeking to uphold. For Haco industries limited, the mis-
sion is to create and provide quality personal and home care products that meet the
needs of consumers in their daily lives. In 2018 the company changed its business struc-
ture after some changes in the main partners. Initially, Haco distributed products under the
licenses of multinational companies now they have mainly focused on manufacturing their
own home and personal care products. Their brand name products include Amara, Miadi,
So soft, Ace, Sparkle, and Haco plastics. (Haco 2022a.) Image 2 shows a list of the prod-
ucts produced by Haco Industries limited.

Image 2. Some of Haco Industries' limited products Haco (2022)

 22

The business model under which the company operates is intended to promote a sustain-
able driven business. What this means to the sourcing and supplying is that the company
is interested in sourcing raw materials such as natural oils locally and partnering with local
communities to nurture long and strong relationships which as result improves the eco-
nomic growth. (Haco 2022a.)

4.3 Haco Industries Limited and partners relationships

The relationship between Haco and some of its partners he had highs and lows over the
past few years. In 2008, the business announced a joint venture with a South African
company called Tiger brands. The South African company acquired a 51% stake where it
injected 250 million Kenya shillings intending to expand the company’s product line in the
country. This merger did not involve a change in the board or top-level management of the
company. (Capital Business 2007.) In 2017, a newspaper article reported the owner of
Haco Industries Limited bought back the company from the South African company. This
was due to differences in the operating model between the two companies. The owner of
the company believed in the current model that made Haco Industries Limited grow since
it was established while the South African brand announced that the model made it diffi-
cult for Haco Industries Limited to include the South African brands. (Juma 2017.)
 23

5 Empirical results and data analysis

5.1 Data collection

Both primary and secondary data were used in this report. The data collecting journey
began in January until May 2022. Data collected from primary sources were used to com-
pare with the secondary sources that supported the theories and concepts used for the
study. In short, the idea was to test the applicability of existing concepts and theories to
real-life situations. Primary sources were gathered from the websites of the case company
alongside survey questions.

The Survey questions contained a total of 11 questions (see the questionnaire is in ap-
pendix 1) with a mixture of both open and closed-ended questions. The purpose of this
was to allow the use of qualitative and quantitative research methods. In the survey, the
questions were intended to collect and gather information on various factors that affect the
supplier-buyer relationship, and this was communicated to the targeted respondents. The
target respondents for the survey were employees from upper, middle, and tertiary levels
in the organisation and should at least have experience in interacting with either supplier
or buyer.

5.2 Survey results

Achieving the set objectives of a study required the accurate collection of data. In the
study, a total of 20 surveys were carried out. The survey distribution began on 28 of April
2022 but later was extended due to a prompt 5-days national holiday to mourn the death
of a former president in the country of the case company. The response rate was 75%,
and the invalid data was 25 %. Invalid data was deleted from the research study. The rea-
son why they were deleted was because of incompleteness. Among those that were inva-
lid were the respondents who did not have experience in interacting with suppliers/buyers.
Valid data used for the study was 50%. Table 1 shows the statistical data of the survey.

Sr. No Particulars No Percentage Total

1 Total no of Survey 20
2 Total successful Surveys 15 75
3 Invalid Data 5 25
4 Data used for Study 10 50

Table 1. Statistical data of the survey

 24

When formulating questions for the survey, the biggest concern encountered by the au-
thor was the number of respondents who would be able to provide complete information.
Choosing respondents from the procurement department would not have enough data.
Therefore, the author decided to include employees from other departments who have
had experience in interacting with buyers-suppliers. SRM is also not a one department's
responsibility all departments need to work together because whether directly or indirectly
their role affects supplier/buyer relationships. This report gathered data from respondents
in the departments shown in table 2.

Sr. No Particulars No of Respondents

1 Sales & Marketing 3
2 Finanace 1
3 Procurement 5
4 Operations 2

Table 2. Department In which respondents came from

It was also important that the author was able to at least gather information from all levels
of management to get a different perspective. Table 3 shows the respondent's level of
management used in this report.

Sr. No Particulars No of Respondents

1 Top 3
2 Middle 1
3 Tertiary 7
4 other 0
Table 3. Respondent's Level of Management
 25

5.3 Data analysis

To achieve the main objective of this research, which is to establish factors that influence
supplier-buyer relationship dynamics, the survey questions were categorised. This was
also to allow an easier and deeper understanding of the supplier relationship management
practices of the case company and further help in answering the sub-questions.

The following are the categories used in the survey questions:

• Interactions with supplier-buyer

• Importance of supplier relationship management

• Role and responsibility of supplier management

• Development of supplier-buyer relationship

• Good and bad supplier-buyer relationship

Interactions with supplier-buyer

This question was not only meant to filter out respondents that did not have experience
with supplier-buyer interaction but also to gain an understanding of the extent to which the
employees interact with their suppliers or buyers (customers). As shown on the pie chart,
72.7% have had interactions and only 18% have not the other 9.1% are those who have
interacted with suppliers and contractors for example transporters or delivery personnel.
Figure 7 shows the percentage of respondents who had experience with supplier/buyer
relationship

Figure 7. Respondent's interaction with supplier/buyer

 26

Importance of Supplier relationship management

This question was to understand whether employees in the organization find the need for
Supplier relationship management. According to the data shown in the pie chart below,
54.5% agree that Supplier relationship management is important. Figure 8 shows results
about the Importance of SRM at Haco Industries Limited

Figure 8. Importance of SRM at Haco Industries Limited

Role and responsibility of supplier management

This question was intended to understand employees' perspectives on who is responsible

for ensuring the management of relationships with suppliers. Data on the pie chart indi-
cates that 63% say that the procurement and chain team is responsible for managing
suppliers, 23% believe that the supply chain and the procurement team are not the only
ones responsible for managing suppliers, and 9.1% did not know. Figure 9 shows the re-
sults of the respondent’s response about who is responsible for managing supplier rela-
tionships
 27

Figure 9. Responsibility for managing supplier relationships

Development of supplier-buyer relationship

Developing a supplier-buyer relationship that is effective requires that both buyer-seller's

needs be met. The initial stages of choosing the right buyer-seller depend on the needs
and factors that both parties find important. According to the data on the bar chart below,
price is of importance with 81.8% followed by reputation of the organization at 72.7%, and
culture and objective of the company are the least important with 36.4 %. Figure 10 shows
the results of the important factors that the respondents consider when choosing buyers-
sellers.

Figure 10. Important factors when choosing suppliers/buyers

 28

Another question under development of the supplier-buyer relationship category aimed to

understand if the best supplier-buyer relationship comes from suppliers who have a close
connection with key employees in the organisation. Most of the respondents did not know,
and this had to do with the nature of the work they do in the organization. Employees
working in the procurement department knew about this and the majority agreed that most
of the best supplier relationships are from personal connections with key employees. Fig-
ure 11 shows results about if the case company's best supplier relationship is due to per-
sonal connection with key employees.

Figure 11. Best supplier relationships due to personal connection with key employees

Causes of good and bad supplier-buyer relationship

Questions asked under these categories were to get an understanding of the practical
examples that can lead to a good and bad supplier-buyer relationship. The author formu-
lated 2 open-ended questions for this. One question asked about issues that the respond-
ents have encountered in their supplier-buyer interactions and the other questions sought
to understand efforts that the organisation has undertaken to establish a stronger relation-
ship with their supplier and buyers. Table 4 and 5 shows examples of good and bad sup-
plier relationship practices experienced by respondents.
 29

Yellow: communication Green: leveraging on technology Turquoise: Advance collabora-

tion Purple: responding on time Red: Feedback

Table 4. Causes of good supplier-buyer relationship.

Teal: Late payment Purple: contract violation Gray: poor communication Blue: Late deliv-
ery Green: Incompetence Black: poor quality

Table 5. Causes of bad supplier-buyer relationship

 30

Factors that influence the supplier-buyer relationship

The last question in the survey was to achieve the main objective of the report. The main
objective was to establish factors that influence supplier-buyer relationship dynamics in
supplier relationship management across the supply chain function of a business. Figure
13 shows respondents' results on the factors that they find important when developing a
supplier-buyer relationship

Figure 12. Factors that influence supplier-buyer relationships

 31

6 Conclusion

6.1 Answers to research questions

The purpose of this study was to establish the factors that affect supplier-buyer relation-
ship dynamics in supply chain management. Four sub-questions helped in developing the
main question. In this report, the author first answers the sub-questions followed by the
main question.

Sub-questions:

What is supplier relationship management?

Just as the author discussed in chapter 2, The first definition according to (Lambert &
Schwieterman), is supplier relationship management is an approach for establishing and
sustaining the business relationship along the supply chain. This definition goes further to
explain that supplier relationship management is about the practical process of integrating
the communication and coordination between organizations and suppliers. The second
definition according to Daniel & Pratt (2020), is supplier relationship management is the
systematic approach to evaluating suppliers and determining each supplier's contribution
to the success, and developing strategies to improve business performance. This is a con-
tinuous process that involves following steps such as segmenting, governing, and perfor-
mance management supplier development. (Deloitte 2015).

From the survey, as analysed, the respondent's data suggests that even though the or-
ganisation is aware of supplier relationship management and its benefits. Not all process
mentioned in the literature is practiced or followed. This is because supplier relationship
management requires extra resources and goodwill both from the buyer and seller sides
for it to be successfully implemented.

What is the role and responsibility of supplier relationship management in supply chain
management?

As analysed in chapter 2, subsection 2.1.1, The role of supplier relationship management

comes from having close interactions and connections with suppliers and this brings about
transparency in the supply chain management of an organization. Benefits gain from Sup-
plier relationship management include reduced production costs, reduced R&D costs, Im-
proved material flow and delivery time, and lower administrative costs.
 32

From the survey response, most of the respondents agreed that supplier relationship is
important but also a fair number of respondents said that supplier management is the sole
responsibility of the supply chain and procurement department. Employees outside pro-
curement and supply chain do not view SRM as part of their responsibility because it is
difficult to measure the exact impact of SRM practices on achieving departmental goals.

How is a supplier-buyer relationship developed?

Developing a relationship with a supplier is a complex and time-consuming process. How

SRM is conducted varies from one organization to another. In chapter 2.2, the author dis-
cussed the steps involved in the SRM process as proposed by (Deloitte 2015) and they
include, supplier segmentation, governance, supplier performance management, and
supplier development. These steps make SRM a continuous process where certain fac-
tors are required to be carefully considered. These factors include price, performance,
risks, reputation, organization culture, and aligned objectives. According to the data col-
lected, factors that the case company value most is pricing, followed by the reputation of
the supplier-buyer, organizational culture, and alignment of objectives are the least im-
portant.

What ways can lead to good and bad supplier-buyer relationships?

Chapter 3 of the study is about stakeholder management. This concept was used be-
cause buyers and sellers are stakeholders and hence can impact and influence business
operations. Having proper stakeholder management practices can strengthen relation-
ships with business partners. The principles of stakeholder management discussed ac-
tions that a manager can implement when managing stakeholders. Friedman and Miles
(2006) further simplified this by highlighting the attitude needed when engaging with sup-
pliers. These action words include, acknowledge, monitor, listen, communicate, adapt,
recognise, work, avoid, and acknowledge.

With regards to the data analysed from the case company, efforts made to improve or
maintain a strong relationship with supplier/buyer include, communicating consistently,
leveraging technology using communication channels such as supplier portal, and an ad-
vanced collaboration where they provide training to key suppliers, open day’s events
where suppliers can see the companies processes, the company also mentions respond-
ing on time and allowing a chance for receiving feedback.
 33

Main Research question:

What are the factors that influence supplier-buyer relationships in supply chain manage-
ment?

The 6 factors that influence the supplier-buyer relationship in supply chain management
analysed in this report include, communication, skills, and competencies, establishing a
both-sided rapport, listening to suggestions and feedback, timely response, and technolo-
gy. From the empirical results, communications appeared as the most important factor.

6.2 Recommendations for the case company

The recommendations for the case company in the report were derived from the theory
and concept discussed and empirical results from the data gathered. Based on the ana-
lysed results the author identified key areas that the case company can work on to im-
prove its supplier-buyer relationship.

The empirical results indicate that a fair number of employees outside the supply chain
and procurement department believe that the supply chain and procurement department
are solely responsible for supplier management. SRM practice requires collective partici-
pation not just from personnel working in the procurement department but also from other
employees in different departments. Managers should ensure that employees understand
how their role influences supplier-buyer relationships in the organization. Moreover, sensi-
tizing on how the supplier-buyer relationship benefits individual employees in achieving
their departmental goals for the overall success of the organization is vital.

The empirical results concerning the key issues that some respondents experienced in
their interactions with buyers-suppliers can be mitigated if the case company fully utilized
the SRM process discussed. Even though this report aimed at establishing factors that
influence the supplier-buyer relationship in the supply chain of the case company, and not
the SRM process, some of the issues such as contractual violation, delivery of poor quali-
ty, late payment, and incompetence indicated that SRM practice in the case company
should be improved or adapted.

6.3 Reliability & validity

Reliability is how consistent a method measures something. When the same method un-
der a similar situation produces similar results then the measurement used is reliable. The
validity on the other hand is how accurately a method measures something. Results that
relate to real properties, characteristics, or the social world means that research has high
 34

validity. Moreover, research with high validity is a sign that the measurement used is valid
and if a method is not reliable then it is not valid. In short, these two concepts are closely
related but their functions differ in the sense that reliability pertains to the consistency of
measure while validity is about the accuracy of measure. (Middleton 2022.)

In the study, pre-testing of the instrument ensured that the author was able to achieve
clarity of the instrument moreover, this made it easier to use. The objective of the study
was achieved by answering the research questions with the help of primary data from sur-
vey questions as well as using secondary data from the literature, journals, and research
conducted by recognized organizations such as Deloitte and Price Waterhouse Cooper.
Based on this information this report is valid and reliable.

6.4 Suggestions for further research

Data collected in this report solely focused on establishing factors that influence the sup-
plier-buyer relationship dynamics. During the thesis process, the author discovered the
need for further research into the SRM process of the case company. While there are
some efforts in place to ensure good relationships with partners in the organization, these
practices may not be termed SRM. In Chapter 2 the author discussed, in brief, the pro-
cess of SRM as proposed by (Deloitte 2015) as supplier segmentation, governance, sup-
plier performance management, and supplier development. Detailed research into how
the case company conducts the mentioned SRM steps in their supply chain can help see
the practices that already exist, and which need to be included.
 35

7 Summary

This thesis aimed to establish factors that influence the supplier-buyer relationship dynam-
ics in the supply chain of Haco Industries Limited. Questions developed were to allow a
deeper understanding of supplier relationship management, the role and responsibility of
supplier management, the importance of supplier relationship management in supply
chain management, ways to develop supplier-buyer relationships as well as practical ex-
amples of practices that can lead to good and buyer-supplier relationships. The two con-
cepts used as the theoretical framework for the study were the SRM concept and stake-
holder management.

The study used deductive reasoning approach by utilizing the SRM and Stakeholder
Management concept. The application and how these two concepts relate to the topic of
the thesis were also discussed in detail. In Chapter 2 the author discussed the SRM con-
cept and definition, ways for developing good buyer-supplier relationships, tools and skills,
and the different types of technology used to enhance SRM. Chapter 3 was about stake-
holder management concept and definition, principles of stakeholder management, stake-
holder management in SCM, and suppliers as stakeholders.

Introduction about the case company was introduced in Chapter 4, a brief overview of how
the company was established, the products that the company manufactures, and the
countries where the company sells its products. Secondary and primary sources were
utilized to gather information. For the empirical part, data were collected from 15 employ-
ees that work in the case company. The data collected was in the form online survey. The
type of online survey was a questionnaire that included a total of 11 questions that were
both open and closed-ended questions. Questions in the questionnaire enabled the author
to answer research questions as well and gain insight into the SRM of the case company.

Results and analysis concerning the data collected were discussed in Chapter 5 while
Chapter 6 addressed the answers to research questions, the recommendation for the
case company, reliability, and validity, and lastly, the author gave suggestions for further
research.
 36

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will-continue-but-for-some-sellers-the-problem-will-be-too-much-stock-174085
APPENDICES

Appendix 1: Questionnaire Form

Supplier-buyer Relationship Survey

Jambo!
My name is Caroline Njuguna, a 3rd-year student at LAB University of Applied
Sciences in Finland. As part of my studies, I am required to conduct academic re-
search related to my field of specialization i.e Logistics and Supply Chain Man-
agement. In this survey, I aim to understand supplier-buyer relationship dynamics.
Your time and effort to fill out the survey will be highly appreciated. Thank you in
advance.

* Required

1. Which department do you work in the organization? *

Mark only one oval.

• Sales & Marketing

• Finance
• Procurement
• Operations

2. What level of management are you in?

Mark only one oval.

(=:) Top
(=:) Middle

(=:) Tertiary

3. How long have you worked in the Haco industry?

Mark only one oval.

(=:) 0-2 years

(=:) 2-5 years
(=:) 5-more
4. Have you had any interactions with buyers-suppliers while working at Haco?

Mark only one oval.

(=:) Yes
(=:) No
(=:) Other:

5. Supplier relationship management is important for the organization's supply chain

management

Mark only one oval.

(=:) Strongly disagree

(=:) Disagree
(=:) Neutral
(=:) Agree
(=:) Strongly agree

6. Supplier management is the sole responsibility of the supply chain and pro-
curementteam

Mark only one oval.

(=:) True
(=:) False
(=:) I do not know

7. Are your best supplier relationships due to personal connections with key
employees of your business?

Mark only one oval.

(=:) Yes
(=:) No
(=:) Other:
8. Briefly describe any key issues you have experienced in the supplier-buyer
interactions

9. The following are important factors to consider when choosing suppliers-buyers.

(Tick all that apply)

Check all that apply.

D Price
D Reputation
D Organization culture
D Aligned objectives

10. Do you have ways that help build stronger supplier- relationships? if yes
whichone. if no why
11. How important are the following when developing a supplier-buyer rela-
tionship? *
(1= not very much; 5= very much)

Mark only one oval per row.

1 5

Communication 0 0
Skills and Competences 0 0
Establishing both-sided rapports 0 0
Listening to suggestions and feedback 0 0
Providing timely feedback 0 0
Technology 0 0