SCHOOL OF ENTREPRENEURSHIP AND BUSINESS

SCIENCES

DEPARTMENT OF SUPPLY CHAIN MANAGEMENT

Assessing the influence of supplier evaluation on performance in the public procurement

sector. The case of NatPharm.

By

ANOTIDAISHE JOEL ZIRAMBA

C18133247W

Supervisor: Mr CHISUNGO

A research project submitted to Chinhoyi University of Technology, School of Business

Management and Entrepreneurship in partial fulfilment of the requirements of the award
of Bachelor of Science (Honours) degree in Supply Chain Management

Chinhoyi, Zimbabwe
Year 2021
Table of Contents
CHAPTER ONE..............................................................................................................................4
1.1 Introduction............................................................................................................................4
1.2 Background of the study........................................................................................................4
1.3 Statement of the problem.......................................................................................................5
1.4 Research Questions................................................................................................................5
1.5 Objectives of the study...........................................................................................................6
1.6 Significance of the study........................................................................................................6
CHAPTER TWO: LITERATURE REVIEW..................................................................................7
2.1 Introduction............................................................................................................................7
2.2 Theoretical framework...........................................................................................................7
2.2.1 Multiple Criteria Decision Making.................................................................................7
2.2.2 Grey System Theory........................................................................................................7
2.2.3 Analytic Hierarchy Process.............................................................................................8
2.2.4 Dickson’s supplier evaluation criteria.............................................................................9
2.3 Empirical studies....................................................................................................................9
CHAPTER THREE: METHODOLOGY......................................................................................11
3.1 Introduction..........................................................................................................................11
3.2 Research design....................................................................................................................11
3.3 Population of the study........................................................................................................11
3.4 Sample and sampling procedures.........................................................................................12
3.5 Data collection methods.......................................................................................................12
3.5.1 In-depth interviews........................................................................................................12
3.5.2 Focus group discussions................................................................................................13
3.6 Data analysis........................................................................................................................13
3.8 Ethical considerations..........................................................................................................14
3.11 Chapter Summary..............................................................................................................15
CHAPTER FOUR: DATA PRESENTATION, ANALYSIS AND DISCUSSION.....................16
4.1 Introduction..........................................................................................................................16
4.2 Suppliers’ Quality Commitment..........................................................................................16
 4.3 Suppliers’ Financial Stability...............................................................................................17
4.4 Suppliers’ Competence........................................................................................................18
CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSIONS AND
RECOMMENDATIONS...............................................................................................................19
5.1 Introduction..........................................................................................................................19
5.2 Summary of findings............................................................................................................19
5.3 Conclusions..........................................................................................................................19
5.4 Recommendations................................................................................................................20
5.5 Areas for further study.........................................................................................................20
REFERENCE LIST.......................................................................................................................21
CHAPTER ONE

1.1 Introduction

Supplier evaluation is an integral part of the supply chain function as it determines the general
performance of the supply chain in terms of quality, cost and delivery time and enhances
continuous supply (Florio, 2017). It involves critically analyzing potential suppliers which
involves tasks such as periodical visits, supplier rating and appraisal. This study seeks to explore
the influence of supplier evaluation on performance, in the context of Zimbabwe’s public
institutions such as public hospitals. This thrust is motivated by the little regard that had been
given to the procurement process in public organizations (Tinarwo, 2016), like health institutions
where delays in time required for supply and delivery of goods and services has really affected
procurement performance function in the health institutions.
1.2 Background of the study

Supplier evaluation is one of the major areas of concern in the field of purchasing and supply.
Past reviews of literature in supplier evaluation and selection indicated strong diversity in the
systematic approaches in supplier selection approaches as well as supplier selection criteria
(Florio, 2017). Although the study of supplier evaluation and selection is believed to have started
in the 1960s, it is in the 90’s that scholars developed much interest in the field of supplier
evaluation and selection (Andersen, Ellegaard and Kragh, 2016).

Andersen et al (2016) added that suppliers were traditionally selected from the pool of suppliers
based on the ability to meet the quality requirements, delivery schedule and cost or price offered
by the supplier. The main purpose was to obtain the lowest possible price by developing long
term relationships with suppliers and negotiate with them. Choosing the right supplier is one of
the essential strategies for enhancing the quality of goods and services, improves on delivery
time and to ensure security of supply (Lysons & Farrington, 2016). As such, supplier evaluation
is fast becoming an important strategic consideration in purchasing and supply. Suppliers play an
influential role to the overall success of the buying organisation. Nowadays, supplier evaluation
all over the world is firmly positioned as an alternative source for competitive advantage for
organisations with regards to offering low cost, high quality products and services or achieving
reliability to customers. As organisations become more dependent on suppliers, the direct and
indirect consequences of poor decision making on supplier selection will become more critical.
With the increasingly important role of suppliers in supply chain management, the selection
process strategy therefore to changed. Other than scanning a series of pricelists only, qualitative,
quantitative and environmental supplier evaluation should be incorporated into the process.

According to Tinarwo (2016), the public procurement in Zimbabwe is directed towards

achieving value for money and efficient use of public funds and state resources. The main aim is
to harmonise public procurement processes and ensure sustainable and efficient use of public
funds and state resources. Furthermore there is need to ensure promotion of fair, transparent, non
discriminatory and to eradicate corruption. However, the challenge that has been facing the
public procurement sector in Zimbabwe is a series of non completion of orders, delayed
deliveries and poor quality products or services (Chitiyo, Dengu, Mbae & Vandome, 2019). For
example, according to the Audit Report (2013) produced by the Office of Auditor and Controller
General, in 2013 the Ministry of Sport, Arts and Culture bought heavy duty generator which was
planned to be used for Youth games in Bulawayo but the generator only to be delivered after the
games. This has been attributed to the error of only focusing on supplier price lists while turning
a blind eye to capacity evaluation as well as corruption and nepotism. It is against this
background that this study intends to examine the impact of supplier evaluation on purchasing
performance in the Zimbabwean public institutions.
1.3 Statement of the problem

Delayed deliveries, poor quality products or services, non completion of orders and even threats
of litigation due to delayed payments is a common problem experienced by both public and
private institutions in Zimbabwe (Chitiyo et al, 2019). Empirically, there is little regard to the
procurement process in public organizations like health institutions where delays in time required
for supply and delivery of goods and services has really affected procurement performance
function in the health institutions. Therefore lack of empirical evidence on feasible contributing
factors of procurement performance function in public organization motivated this study to
investigate influence of supplier evaluation on procurement performance in Zimbabwe.

1.4 Research Questions

 What are the procedures involved in supplier evaluation by public institutions?

  Which factors are considered when evaluating a potential supplier within public
institutions?
 How does supplier evaluation impact on performance of the procurement function in
public institutions?
1.5 Objectives of the study

 To explore the supplier evaluation process in Zimbabwe’s public institutions.

 To document the factors considered when evaluating a potential customer.
 To examine how supplier evaluation influences performance of the supplier.
1.6 Significance of the study

This research is potentially crucial as it contributes to the existing body of knowledge about how
public institutions select their suppliers. Of importance is also the fact that the research findings
would make it possible for providing possible solutions to the supplier selection problems which
are leading to the deterioration of quality service delivery in public health institutions. The
research is expected to rectify the proposed flaws that currently characterise the supplier
selection process.
CHAPTER TWO: LITERATURE REVIEW

2.1 Introduction

This chapter presents the theoretical framework and a review of literature onsupplier evaluation
and procurement performance. This will help the researcher to have an understanding of the
processes and procedures involved in supplier evaluation and to identify gaps, thereby locating
the position of this study.
2.2 Theoretical framework

As cited in Florio (2017), Chaudry et al (1993)says quantitative approaches used in supplier

selection range from simple linear weighting models to complex mathematical programming
models. Linear weighting models are basically scoring models which place weight on
subjectively determined criterion and provide a total score for each supplier. On the other hand,
mathematical programming models make use of linear programming and mixed integer
programming to determine supplier selection.
2.2.1 Multiple Criteria Decision Making

According to Chopra,  Meindl & Kalra (2016), Tung and Torng presented a fuzzy decision
making approach that deals with the supplier selection challenges in supply chain system. In
their work, the two used linguistic values to assess the ratings and weights for different factors.
The linguistic ratings can be expressed in trapezoidal or triangular fuzzy numbers. Following that
is a hierarchy Multiple Criteria Decision-Making (MCDM) based on fuzzy-sets theory is then
proposed to deal with the supplier selection problems within the supply chain system. The
authors further explain that according to the concept of the TOPSIS, a closeness coefficient is
defined to determine the ranking order of all suppliers by calculating the distances to both Fuzzy
Positive Ideal Solution (FPIS) and Fuzzy negative ideal solution (FNIS) simultaneously.
2.2.2 Grey System Theory

Another theory widely used in Asia for supplier selection is the Grey System theory which was
initiated in 1982. In terms of information, the systems which lack information such as structure
message, operation mechanism and behaviour document, are referred to as Grey Systems. The
term grey in this theory means poor, incomplete or uncertain. The goal of the Grey system is to
bridge the vacuum that exists between social science and natural science. Following this
assertion, the Grey System theory is said to be interdisciplinary. The theory cuts across a variety
of specialised fields. Florio (2017) purports that different supplier selection methods present
different characteristics and are suitable for different environmental requirements, but in real
economic activity, supplier selection usually takes place in an environment with insufficient
information. The selection or evaluation indicators therefore show both the quantitative and
qualitative characteristics. The Grey System Theory solves the selection/evaluation problems
under the situations with limited data and incomplete information. The system can quantify the
grey qualitative indicators and effectively minimise the subjectivity of indicators weight
measurement in the previous expert investigation or level analysis, then provide new ideas for
effectively solving supplier evaluation index weight problems and scientifically choosing
suppliers (Chopra, et al, 2016) The theory has obtained universal significance in supplier
selection problems under the environment with insufficient information and evaluation indicators
are both quantitative and qualitative.
2.2.3 Analytic Hierarchy Process

Lyson and Farrington (2016) acknowledged Saaty (2008)’s decision making tool as greatly
useful in selecting best supplier(s), which is the Analytic Hierarchy Process (AHP). This is a
theory of measurement through pair wise comparisons and relies on the judgements of experts to
derive priority scales. The scales measure the intangibles in relative terms. The comparisons are
therefore made using a scale of absolute judgements that represents how much more one variable
dominates another with respect to a given attribute. The concern for AHP is the measuring of
inconsistency and to improve on judgements. Decision making under this theory is done by first
defining the problem and determine the kind of knowledge that is being sought. Decisions
hierarchy are then structured from the top with the goal of the decision, then the objectives from
a broad perspective through the intermediate levels (Lyson and Farrington, 2016). After that one
should construct a set of pair wise comparison matrices with each element in an upper level is
used to compare the elements in the level immediately below with respect to it. Priorities
obtained from the comparisons are used to weigh the priorities in the level immediately and this
is done for every element. For every element in the level below its weighed values are added to
obtain its overall priority. The process continues until the final priorities of the alternatives in the
bottom most level are obtained.
2.2.4 Dickson’s supplier evaluation criteria.

According to Ivanov, Tsipoulanidis and Schönberger (2019), another study on supplier

selection, to which the majority of people dealing with the problems on supplier selection make
reference is the work done by Dickson (1966). Dickson came up about 23 criteria that he
classified according to their importance. According to Dickson, the most important criteria is
quality of the product, on-time delivery, performance history and the warranty history of a
supplier. Dickson suggest contracts are supposed to be awarded based on the ratings on the
above selection factors beginning with the most extreme important to slight importance.
Depending on the organisation interested, suppliers scoring higher marks on the extreme
important criterion factors win the tenders (Ivanov, et al, 2019). However Florio (2017),
presented a classification of various selection factors and observed price, quality and production
capacity and location as the most critical respectively. The researcher would carry out the study
driven by the Multiple Attribute Utility Theory (MAUT).This theory is simple to use in coming
up with a suitable supplier and also provide a fair ground for competition for the bidding
companies. To complement the theory, reference would also be made to Dickson’s
supplier/vendor selection criteria (Ivanov, et al, 2019). The researcher would measure the
supplier selection methods used at CDH against this theory and criteria as the basis for supplier
selection.
2.3 Empirical studies

According to the study carried out by De Boer (2017) at the University of Twente in
Netherlands, different supplier selection situations present themselves ranging from complexity
to the importance of the tender under consideration. The writer goes on to say decision making
on selecting suitable suppliers depends on the complexity and importance of goods and services
required. De Boer considers Kraljic (1983) purchasing portfolio approach to be a useful tool for
decision making during supplier selection. Using the portfolio, the perceived importance and
complexity of a purchasing situation is identified in terms of profit impact and supply risk
factors. In a research conducted by Beil (2019), the researcher says the primary goal of supplier
selection is to reduce the likelihood of supplier’s non performance, such as late delivery, non
delivery or delivery of non conforming goods. The secondary goal is simply to ensure that the
supplier will be responsible and responsive partner in the day to day business relations with the
buyer.

The writer suggests there are factors that should be considered in coming up with a suitable
supplier. Reference checks should be done during which the buyer must contact previous
customers to ask about the supplier’s performance. The decision makers should also assess the
financial status of the prospectus suppliers which helps the buyer to determine the supplier’s
financial capability. To counter for buyer’s uncertainty about their exact quantity needs over the
life of a contract, the supplier’s capacity to increase delivery quantities within short notices is
critical, hence the need for assessment. They must require that the supplier have ISO 9000
certification or similar. In addition to that, the buyer may also request for samples from suppliers
to test for conformance or visiting supplier’s production facility to ensure all members of the
supplier’s team understand the product. To ensure that the internal customer has the confidence
in the supplier and is willing to work with the supplier, the buyer must set up meetings between
the buyer firm’s user department or representative and the supplier.
CHAPTER THREE: METHODOLOGY

3.1 Introduction

This chapter presents the research methodology for this study, which is essentially a blueprint of
the procedures involved in the investigation of facts and concepts. It outlines the path that the
researcher took in the observations and explanations of social reality (Burns and Grove
2003:195). This chapter therefore presents an overview of the procedures involved in this
research process. It constitutes the research design, the sampling process, data collection
methods, data analysis, the ethical issues considered and some of the limitations involved in this
study.

3.2 Research design

This research adopted a qualitative research design in its endeavour to explore the individual
perceptions on the influence of supplier evaluation on procurement performance. Qualitative
research is a form of inquiry that focuses on the way people interpret and make sense of the
phenomenon under study based on their experience, knowledge or expertise (Neuman, 2016). In
this particular study the main objective was to understand supplier evaluation and I its influence
on procurement performance from the perspective of those involved in the industry and within
the setting where it happens. Given that one of the objectives of this study was to explore the
individual perspectives of the procurement staff and suppliers on the phenomenon of supplier
evaluation, a qualitative research design became the most appropriate gateway to an in-depth
understanding. Therefore, the researcher employed in-depth methods of data collection,
particularly in-depth interviews and focus group discussions which were amenable to the quest
of this study.

3.3 Population of the study

According to Bryman (2016), a population refers to the whole group of people in which the
study is conducted. It is from this collective group that a representative part is selected as
research participants. In this particular research, the population of the study was constituted by
all the procurement staff and suppliers in the public health sector. For the purposes of this study,
the researcher looked for a particular characteristic within that population and only picked one of
the parastatals in the health sector, which is NatPharm. Therefore, the procurement staffs at
NatPharm were considered as the population from which the sample was finally extracted.

3.4 Sample and sampling procedures

A sample is defined by Patton (2016), as a representative part of the whole population, which is
selected as participants in research. Sampling is therefore, a process of selecting a representative
part of the population. In this study, a purposeful sampling procedure was followed. Patton
defined purposeful sampling as the selection of information-rich cases for in-depth study.
Information-rich cases are those from which one can learn a great deal about issues of central
importance to the purpose of the inquiry. The purpose of inquiry for this study was to explore the
individual perceptions on the influence of supplier evaluation on procurement performance in the
health sector. Therefore, the sample was basically constituted by procurement staff at NatPharm,
which is one of the parastatals under the Ministry of Health and Child Care. However, the
researcher also deliberately and purposefully included only the management and staff from the
procurement department as the information rich sources because they are the ones with
experience on the phenomenon under study.

A total of 16 participants were recruited as a sample in this study. Of these 16 participants, 8

were male and the other 8 were female participants. Gender balance was deliberately observed to
ensure that the findings will represent the perceptions of all genders. Out of a sample of 16
participants, 8 were reserved for in-depth interviews, in which 4 were from management, 4 from
the general procurement department. The other 8 respondents participated in a focus group
discussion which was constituted by 4 members of the management staff, 4 general procurement
staff.. In the focus group discussion, gender balance was also adhered to.

3.5 Data collection methods

3.5.1 In-depth interviews

The researcher adopted in-depth interviews as one of its main data collection methods. As
defined by Neuman (2016), an in-depth interview is a conversation with an individual in an
endeavor to deeply explore the respondent’s point of view, feelings and perspective. The
researcher engaged in face-to-face in-depth interviews in which a total of 8 individuals were
interviewed. The adoption of in-depth interviews as one of the primary methods of inquiry went
together with the objectives of this study, which sought to allow the researcher to be engaged
with those who are involved in supplier evaluation and procurement, to get evidence based
information from their own personal accounts. Therefore, through the use of in-depth interviews
the researcher was in a better position to explore in greater detail, the individual perceptions of
the respondents. In-depth interviews allowed the researcher to probe the respondents to dispose
and explain in-depth some of the information. Therefore, the researcher was quite justified in his
choice of in-depth interviews as a method.

3.5.2 Focus group discussions

This study also employed focus group discussions as its data collection method. This involved
group discussions on the topic, organized for purposes of this particular research, which were
guided, monitored and recorded by the researcher. Bryman (2016) pointed out that focus group
discussions can be used to clarify, extend, qualify or challenge data collected through other
methods. In this study, 1 focus group discussion was conducted, in which a total of 8 people
were recruited to discuss a wide range of issues to do with supplier evaluation and its influence
on procurement performance in the public health sector. This study purposefully chose the use of
focus group discussions so that the findings could be used to test the validity or truthfulness of
the findings from in-depth interviews. To achieve that, the researcher made sure that the
respondents of in-depth interviews were different from those who participated in focus group
discussions. Indeed, the use of FGDs proved to be very useful in the process of corroboration,
which is confirmation of results through the use of different methods. In addition, focus group
discussions allowed the respondents to lay bare some of the issues which seemed hidden in
individual face to face interviews. Through collective discussion on the phenomenon under
study, the researcher was provided with a large pool of information and multiple viewpoints.

3.6 Data analysis

This study adopted a content analysis as its instrument for qualitative data reduction and
categorization, which was based on core consistencies and meanings. The qualitative data
collection methods used in this study, particularly in-depth interviews and focus group
discussions, yielded vast amounts of descriptive data and the process of data analysis sought to
reduce and make sense of those vast amounts of information, so that the impressions that shed
light on research questions could emerge. Most of the data in this study was in the form of notes
jotted down during interviews and FGDs, and statements transcribed from the recordings. The
process involved documentation, in which all the interviews, audiotapes and notes were saved
and listed. This was critical for keeping track of the rapidly growing volumes of data, as well as
providing a way of developing and outlining the analytical process. The data analysis process
also involved conceptualization, coding and categorization of data. This involved identifying and
refining important concepts, where comments and statements were pulled out of the huge pool of
data and then put back together more meaningfully.

3.8 Ethical considerations

Ethics refers to the moral guidelines or responsibilities of the researcher to ensure that the
interests of those participating in the study are not harmed as a result of the research being done
(Bryman, 2016). “This study particularly considered three fundamental ethics to protect the
participants of the research.” These involved informed voluntary consent, anonymity and
confidentiality. Informed consent is one of the fundamental ethics in research which requires the
researcher to seek the voluntary consent of the respondent to participate in the research, after
fully informing them of the processes and procedures involved in the study. In this particular
study, the researcher started by seeking the consent of the staff and suppliers at NatPharm. The
researcher orally briefed the potential respondents about the whole research processes and
purpose of the findings. In addition, the researcher was very conscious about protecting the
identity of the participants by respecting the ethics of confidentiality and anonymity. The
researcher ensured anonymity of participants by avoiding the use of their real names in all
research processes. Instead, the researcher forged pseudo names for participants. Given that this
study utilized in-depth methods of data collection, which allowed respondents to disclose any
sensitive information about their company’s supplier evaluation processes, the researcher
ensured that the privacy of such information is protected. Therefore, the findings of this study
have been reserved only for academic purposes, not for any other public consumption.
3.11 Chapter Summary

This study sheds light on the methodological path that this study followed in its endeavour to
understand supplier evaluation and its influence on procurement performance. The study adopted
a qualitative research methodology where in-depth interviews and focus group discussions were
used as methods of data collection. The chapter also outlines the process of recruitment of
participants into this study. The purposeful sampling strategy was used to recruit participants in
this study. The data collection methods employed in this study are explained and justified in
detail in this chapter. The process of data analysis is also laid out in this study, following through
the step by step procedures which the researcher went through in analyzing the data. The
researcher adopted content analysis as its approach in the analysis of data.
CHAPTER FOUR: DATA PRESENTATION, ANALYSIS AND DISCUSSION

4.1 Introduction

This chapter is a presentation, analysis and discussion of the findings from the corroboration of
in-depth interview and a focus group discussion conducted in this study. The findings are centred
on how supplier evaluation can influence the procurement performance function. The key issues
that emerged include supplier quality commitment, supplier financial stability, and supplier
competence and how these can enhance the performance of the procurement function. This are
discussed in relation to the theoretical framework adopted in this study as well as other scholarly
works on the phenomenon under study.

4.2 Suppliers’ Quality Commitment

Findings from both in-depth interviews and focus group discussion revealed that, most
respondents concurred on the importance of supplier’s quality conformance as one of the key
factors to be considered in supplier evaluation. Respondents reiterated that the company’s
service cost is improved through suppliers’ quality conformance. This is because a waste of
resources is minimized through the supply of quality products, and thus the readvertising costs
are also minimized. This was reinforced during a Focus Group Discussion where respondents
agreed that the reliability of the supplier is crucial in reducing unnecessary costs such as stock
out costs. This finding concurs with the lean supplier competence model developed by Marks
(2007), which reiterates that the company’s supply base works hand in glove with its business
philosophies in eliminating or minimizing waste of resources. This results in costs reduction both
to the ultimate customer and to the supply chain.

Corroboration of in-depth and the focus group discussion also revealed established that quality
conformance and reliability of the supplier improves the company’s customer satisfaction. This
implies that service and product quality compliance promotes customer satisfaction of procured
goods and services by NatPharm. This was affirmed by respondents who were part of
NatPharm’s management, who claimed that it is always necessary to track the reliability of the
supplier, because it has strong impact in improving service quality.
Respondents from NatPharm’s procurement management revealed that one of the measures of
the quality commitment of their suppliers is responsiveness. They reiterated that responsiveness
is key to customer satisfaction because it enhances trust. Respondents agreed that indeed
responsiveness can greatly influence on the cost of the product/service as well as the quality of
the products, which ultimately boosts the procurement performance function. Yeung and Lo,
(2002) supported this by reiterating that by supplier quality management should be measured by
the company management’s efforts to create an operational environment in which there is an
integration of the manufacturer’s supplier capabilities into the operational processes, and the
management should be responsible for ensuring supplier responsiveness.

4.3 Suppliers’ Financial Stability

Findings also centred around supplier financial stability as one of the key points of evaluation,
because it has a strong impact on procurement performance. It was established from the
interviews and focus group discussion that, that capacity of the supplier reduces procurement
costs which may be incurred through re-advertising tenders due to the financial inability of the
bidders to supply procured goods. Procurement management at NatPharm revealed that of the
key evaluation areas for their suppliers is supplier performance history, adding that poor supplier
performance history may translate into incapacity for the bidder and can definitely have a
negative effect on the procurement performance function. Inversely, good supplier performance
history can definitely translate to the supplier’s capacity to supply procured goods/services and
can allow the bidder to win the supply contract as affirmed by Ireland and Webb (2017).

Overally, the majority of respondents agreed that indeed proper supplier evaluation control
improves customer satisfaction. This implies that, if the procurement office thorough evaluation
of suppliers by the procurement office to understand their history, it can help the company to
mute out all incapable suppliers, thus, allowing reliable and financially capable suppliers to
enhance the procurement function (Mogere, 2016). This is corroborated by Kai Haseklever
(2016) who asserted that, it is a challenging and time consuming task to manage the end-to-end
capacity management cycle. It is critical to manage the impact of potential delivery short falls for
a company in between other day-to-day operation (Wisner and Leong, 2016). A structured and
cross-functional approach is required for effective capacity management.
4.4 Suppliers’ Competence

The competence of the supplier was also mentioned and reiterated as one of the key areas of
supplier evaluation because it can influence customer satisfaction through customer good will.
Respondents also concurred that the supplier’s service level capability boosts quality of procured
products/services, thus enhancing customer satisfaction of procured goods/services and
ultimately boosting the procurement performance function. Respondents at NatPharm also
reinforced that f the supplier has the competence to supply all the advertised products/services in
the tender, it helps the company by minimising costs which may result from re-advertising the
tender and prequalification costs in the case of the contracted suppliers failing to supply
prequalified goods/services. Findings established that the competence of the supplier can be
evaluated by tracking the suppliers’ performance history, so that rogue suppliers can be
eliminated.

In a nutshell, there was a common agreement from the findings that proper evaluation of
suppliers by companies indeed works in enhancing customer satisfaction. This process is also
critical in identifying competent, trustworthy and financially stable suppliers, who can fulfil the
supply of goods/services in the tender. This ultimately reduces or eliminates any procurement
costs which may emanate from re-advertising tenders. This is reinforced by Gonzale and
Quesada (2019)’s research on supplier performance monitoring, which pointed that management
of performance operation supplier-buyer relationship critically requires strategic monitoring of
supplier competence. Therefore, for any company, it is critical for its procurement staff to have
the critical skill in supplier competence determination, so that the right suppliers are contracted
and for the whole procurement function to perform well (Andersen, Ellegaard and Kragh, 2016) .
Hence, it was indeed established from the findings that supplier evaluation has a great deal of
influence to the procurement performance function. It is important that any procurement and
supplies professional have the required skills in supplier relationship competence determination
so as to be in a position to develop appropriate performance criteria both for suppliers and the
entire procurement function.
CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSIONS AND
RECOMMENDATIONS

5.1 Introduction

This chapter winds off this study by giving a brief summary of the findings as well as the
conclusions drawn from the findings. The chapter also outlines suggested recommendations
based on the findings, as well as other issues which may be necessary to be researched in future.

5.2 Summary of findings

The findings of this study centred on key factors that are of paramount importance when
evaluating suppliers and how that process of supplier evaluation can influence the procurement
performance function of a company. Findings from both interviews and focus group discussions
with the procurement staff at NatPharm established that Suppliers’ quality commitment is key in
supplier evaluation chiefly because the quality supply ensures customer satisfaction and also
minimises costs which may be incurred through re-advertising tenders, in the event that the
contracted supplier fails to supply the required quality. Hence, supplier evaluation is key in
influencing positive procurement performance, because the process allows the company to
choose the right kind of suppliers with quality commitment.

The financial capacity of the supplier was also revealed to be one of the most important elements
of supplier evaluation because the supplier’s ability to supply all advertised products depends on
his/her financial capacity. It is therefore crucial for the company’s procurement department to do
a thorough evaluation of their suppliers’ financial strength as well as their performance history.
By so doing, the company will be able to weed out all rogue suppliers and choose financially
stable suppliers with good performance history. Consequently, this would definitely enhance
procurement performance.

5.3 Conclusions

“First, the study concluded that supplier quality commitment is a mandatory requirement for
boosting the procurement function.” “Secondly, supplier financial stability boost procurement
performance function by minimizing costs associated with re-advertisements of tenders due to
prequalified supplier’s financial inability. “Thirdly, supplier competence is a significant
determinant of procurement performance, since overall supplier capability in terms of
product/service quality responsiveness guarantees customer satisfaction.”

5.4 Recommendations

“First, the study recommended that the procurement office should consider supplier’s quality
commitment to ensure that procured goods/services meet customer needs and standards.”
“Secondly, the procurement office should evaluate suppliers’ financial stability in determining
suppliers’ financial capability of supplying procured goods/services.” “Lastly, to boost the
procurement performance function, procurement officers should carefully assess supplier’s
competence in supplying quality goods/services before being awarded bids.”

5.5 Areas for further study

“First, a similar study can be done but incorporate electronic procurement to assess its influence
on procurement performance function.” “Secondly, another study can be done but targeting
customers or user departments to assess procurement performance in the eyes of procurement
service recipients and not procurement officers as procurement service providers.”
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Chopra, S., Meindl, D., & Kalra, D. V. (2016). Supply chain management. Strategy, planning,

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