Impact of Supplier Relationship Management on Procurement Performance in Manufacturing Firms

Thesis Abstract

Effective procurement performance is critical to the operational excellence and competitive advantage of manufacturing firms; however, the influence of supplier relationship management (SRM) on procurement outcomes remains insufficiently understood in the context of contemporary supply chains. This study aims to empirically investigate the impact of SRM practices on procurement performance in manufacturing organizations, with particular focus on supplier collaboration, communication, and trust as key components. The specific objectives are to assess the extent of SRM adoption, evaluate its influence on procurement efficiency and quality, and identify the mediating effects of supplier integration on procurement outcomes. Employing a cross-sectional quantitative research design, the study targeted a population of 150 manufacturing firms operating within the steel and automotive sectors in a densely industrialized region. A stratified sampling technique yielded a sample of 120 procurement managers and supply chain practitioners, selected to ensure representativeness of firm size, sector, and geographical distribution. Data collection was conducted through structured questionnaires, incorporating Likert-scale items, validated through a pilot study and subjected to Cronbach’s alpha testing, which confirmed the instruments’ reliability (alpha > 0. Eight). To supplement quantitative data, semi-structured interviews with 15 senior procurement executives were conducted to explore contextual insights. Data analysis employed multiple linear regression techniques using SPSS Version 26 to examine the relationships between SRM dimensions and procurement performance indicators, including cost savings, lead time reduction, and supplier defect rates. Prior to hypothesis testing, data were checked for normality, multicollinearity, and heteroscedasticity. Additionally, structural equation modeling (SEM) with AMOS was conducted to explore the mediating role of supplier integration, providing a comprehensive understanding of the mechanisms through which SRM impacts procurement effectiveness. The anticipated findings suggest a positive and statistically significant relationship between robust SRM practices and procurement performance metrics. Specifically, strong supplier collaboration and trust are expected to correlate with reductions in procurement cycle times and defect rates, while effective communication is projected to enhance cost efficiencies. The analysis is also expected to reveal that supplier integration mediates the relationship, implying that the integration of suppliers into firm processes amplifies the benefits of SRM initiatives. Theoretically, the study is grounded in the Relationship Quality Theory and the Resource-Based View, which explain how relational capabilities and strategic resources influence procurement outcomes. The results aim to fill gaps identified in prior literature regarding operational mechanisms linking SRM to procurement performance, particularly in manufacturing sectors within developing economics contexts. This research significantly contributes to the body of knowledge by providing empirical evidence of the direct and mediated effects of SRM on procurement, highlighting the importance of relational strategies for supply chain competitiveness. The study concludes that manufacturing firms should prioritize the development of trust, communication, and integration practices with suppliers, supported by supplier performance metrics and collaborative platforms. Based on the findings, recommendations include designing comprehensive SRM frameworks aligned with organizational goals, adopting technological tools for communication and information sharing, and fostering supplier development programs. Future research should consider longitudinal designs to examine the evolution of SRM practices and their long-term impact on procurement performance, as well as explore sector-specific variations that influence the applicability of the findings.