ASSESSING THE CHALLENGES OF SUPPLIER RELATIONSHIP MANAGEMENT (SRM) ADOPTION AND ITS

INFLUENCE ON THE PERFORMANCE OF HEALTH CARE DELIVERY FIRMS IN GHANA. A CASE STUDY OF
COCOA CLINIC.

CHAPTER ONE

GENERAL INTRODUCTION

1.0 Introduction

This section opens the chapter by outlining what the chapter seeks to address in the light of the whole ‘conduct of the study. materials
and components. This introductory chapter focuses on the background of the study, statement of the problem, objectives of the study,
research questions, significance of the study, limitations, scope of the study, definition of terms and organisation of the study to
understand better the effect of supplier relationship management on firms' performance.

1.1 Background to the Study

Procurement is the process of finding, agreeing terms and acquiring goods, services or works from an external source, often via
tendering or competitive bidding process. The process is used to ensure the buyer receives goods, services or works at the best
possible price, when aspects such as quality, quantity, time, and location are compared. Corporations and public bodies often define
processes intended to promote fair and open competition for their business while minimizing risk, such as exposure to fraud and
collusion. Supplier relationship management (SRM) is the occupational practice that offers how relationships with suppliers are
developed and maintained. SRM represents the purposeful management of relationships between buyers and suppliers to ensure at the
minimum, needed supplies of the right quality and quantity are obtained in a timely fashion. Thus, SRM helps firms gain access to
valuable resources and supplies, reduce costs, enhance their flexibilities, ensure quality, implement technology successfully, and
improve overall supply chain performance. The immediate goal of SRM is to simplify and improve the sourcing procedures between
an organization and its suppliers. Even though, the processes of strategic sourcing related to SRM can vary from one organization to
the other, generally it involves three broad steps: segmenting suppliers, developing a supplier strategy, and executing the supplier
strategy.

SRM has become a crucial corporate practice because of the need to consider risk and sustainability, competitive pressures, achieve
cost efficiency in order to be cost-competitive, and the need to develop closer relationships with key suppliers who can provide the
proficiency necessary to create innovative new products and successfully bring them to market. Increasingly, SRM has become vital in
the buyer-supplier dyad because of the dynamics inherent in the global supply chain environment. These dynamics, such as changes in
demand patterns, inflationary pressures, currency fluctuations, governmental policies, among others, create conditions of supply
uncertainty. For instance, in periods of high supply uncertainty, establishing and strengthening relationships with suppliers creates
potential benefits such as gaining access to needed supplies, reducing transaction costs, and reducing risks of opportunism that are
offered by contract enforcing mechanisms. The declining global economy drives firms to reexamine their relationships with customers
and suppliers. As a result, costs must be reduced by concentrating on value addition throughout the procurement process. To create
win-win events, bottlenecks must be minimized, and performance measures must focus on supplier relationship management for
actors in the process.

Organizational performance refers to how well an organization works to accomplish market-oriented objectives as well as financial
goals.). Successful organizational performance is the key to gaining a competitive edge. Hence, firm performance delineates how well
the organization function achieves its objective or goal, linking to attaining services, materials, cost, and the reasonable price at the
correct quantity and ensuring that these resources are procured in the proper time or period an objective standard or condition. The
SRM’s short-term goals are to boost productivity while lowering costs and shortening the goods-to-service cycle. Long-term
objectives include enhancing market share and earnings for all supply chain members. SRM and other organizational initiatives must
seek to improve the organization’s performance. Supplier Relationship Management is critical to firms’ performance given the
instrumental role of suppliers towards the regulation of price, quality, reliability, delivery as well as the degree of access to products
and services of firms. Recently, supplier relationship management has become a vital tool for achieving sustainable competitive
advantage because of proliferating levels of outsourcing surfacing within global supply chains, growing supply uncertainties, diverse
customer requirements as well as demand uncertainties that companies face in the competitive environment (Amoako-Gyampah et al.,
2019). This research focuses on the effect of supplier relationship management on firm performance as well as identify the obstacles
associated with its adoption in health care delivery firms, aiming to provide insights into how organizations can effectively manage
suppliers in order to achieve competitive edge in today’s evolving business environment.

1.2 Statement of the Problem

Supplier relationships have become one of the main areas of interest in strategic supply chain management in today's competitive and
dynamic marketplace. Customers are putting pressure compelling organizations to improve relationships with their partners hence
improved customer service leading to achieving competitive edge. The focus has moved from transactional and short-term
relationships to collaborative and long-term relationships, where mutual intention is to increase flexibility and add value through
cooperation. Therefore, there has been a growing need to continuously monitor the company's position in a supply network, recognize
the interactive nature of buyer-supplier relationships, and understand how to influence the atmosphere of the relationship. Purchasing
companies have had to define their relationships with suppliers and make full use of the company's relationship skills to get the most
out of their supplier base.

One source to reduce costs and enhance service delivery can therefore be found in the management of the relationships with suppliers,
commonly referred to as supplier relationship management (SRM). In order to achieve this goal, a wide spectrum of managerial tools
and technological aids have been developed, mainly in highly competitive sectors e.g. automotive, manufacturing etc. However, the
not reflected usage of these instruments in health care delivery needs to be critically looked at since health care has considerable
differences compared with the mentioned sectors. The health-care sector is delivered in extremely regulated markets with high
proportion of governmental investment, high level of regulation, low pressure in regard of efficiency and effectiveness (particularly in
state-subsidized hospitals), limited orientation toward customer benefit and with diverse juxtaposition of private and public providers.
The weak positioning of the purchasing department in the value chain of health service delivery and resulting low attention on the part
of the hospital’s management makes it difficult to promote the purchasing function from a pure cost driver to a respectable facilitator
of health service delivery that contributes to revenue increases, knowledge acquisition, and added value to the organization.

Numerous studies (i.e. Anaya, 2019; Mburugu and Senelwa, 2019; Matunga et al., 2021; Ngugi et al., 2021) have examined the
influence of supplier relationship management on firm performance. These studies have primarily focused on investigating the direct
effect of supplier relationship management on firm performance. Some of the literature, such as Senelwa (2019), found that supplier
evaluation collaboration, supplier development, and trust had a positive statistical relationship on firm performance in state
corporations in Kenya. Amoako-Gyampo et al. (2019) discuss a moderated mediation analysis of supplier relationship management's
flexibility capability and ownership structure on firm performance. The researchers found that operational flexibility capability
mediates the supplier between trust, communication, timely delivery, and organizational performance and among others.

Empirical works on supplier relationship management (SRM) and firm performance linkage have focused on manufacturing (Nyarku
& Oduro, 2019; Amoako-Gyampah et al., 2019). Due to the onward ‘marketization’ of health care, open-minded hospital managers
expect that the hospital procurement department will increasingly contribute to revenue gains and to knowledge acquisition in future.
In order to achieve this goal, the hospital purchasing departments have to better integrate internal consumers as well as the external
suppliers. However, as the current research is mainly focused on industrial enterprises, it is the aim of this paper to provide an actual
and sector-specific discussion of the subject matter and present first experiences of the challenges of SRM adoption and its influence
on the performance of a Ghanaian hospital. The researchers believe that a better understanding of the meaning and perspectives of
SRM could improve collaboration between internal and external partners such as purchasing department, medical clinics, suppliers,
and trading partners and possibly enhance the adoption of SRM concepts and technologies.

1.3 Objectives of the Study

The primary objective of this study is to assess the challenges of supplier relationship management adoption and its influence on
performance of health care delivery firms. In addition, it is targeted to contribute to the literature world by fulfilling the existing
research gaps about the SRM process integration and its respective obstacles. To achieve this objective, the following specific research
objectives will be pursued;

1. To examine the extent of SRM practices adoption in health care delivery.

2. To identify the challenges associated with SRM adoption in health care delivery firm.

3. To explore the effect and relationship between SRM and firm performance.

1.4. Research Questions

Based on the study objective, the following research questions has been formulated;

1.What is the extent of SRM adoption among health care delivery firms?

2. What are the challenges faced in SRM adoption?

3. What is the effect of SRM adoption on firm performance in health delivery firms?

1.5 Significance of The Study

This research's significance is particularly relevant and holds substantial value for various stakeholders within the health care sector in
Ghana, focusing on effectively managing supplier relationships. Academically, it deepens the understanding of how supply
relationship influences firm performance in the context of health care delivery, potentially leading to tailored strategies that resonate
with the unique dynamics of this sector. For industry practitioners, the insights gained can inform health sector decisions, enabling
them to refine their services and enhance supplier relationships. By prioritizing supplier relationship, these institutions can foster
loyalty and strengthen their market position, addressing the specific needs of their clients. Policy makers can draw on the study's
findings to create regulatory frameworks that encourage service excellence, fostering sustainable growth within the health care
industry while ensuring customer satisfaction.

1.6 Scope of the Study

This study focuses on exploring the relationship between supplier relationship management on firm performance. The research design
for this study was an explanatory causal research type and in order to understand and to establish a reliable result we adopted the use
of the quantitative methods. The study focused on one (1) health care provider named Cocoa Clinic which owned by Ghana Cocoa
Board with four branches in Ghana. The population of the study was 500 made up of staff and patients of the four branches. Due to the
fact that the target population is too large in size, a sample size was selected using Yamane (1967) sample size formula in order to be
more accurate in the study. The study used purposive sampling technique to select because these were the people that will provide the
necessary information needed for the study. The primary data in this research was obtained through the use of questionnaires as the
research instrument by involving closed ended questions on a 5-point likert scale which consist of items that represent the independent
and dependent variables. To communicate the research findings, data obtained from the questionnaires were analyzed with the help of
SPSS

1.7 Limitation of the study

The limitations of this study regarding the challenges of SRM adoption and its influence on firm should be acknowledged. Firstly, the
study's scope would be confined to Ghana's health care sector, potentially restricting the applicability of findings elsewhere.
Furthermore, while the research would examine the correlation between supplier relationship management and firm performance, it is
important to acknowledge that firm performance is a complex and multifaceted construct, influenced by numerous internal and
external factors such as price, brand, corporate image etc. The utilization of self-reported data from surveys introduces potential
response bias and social desirability influences, possibly affecting result accuracy. Also, the study's cross-sectional design prevents the
establishment of causality, necessitating caution in interpreting directional effects. Lastly, although qualitative insights from both
customers and employees could offer richer understanding, the current study leans predominantly on quantitative data.

1.8 Organization of the study

This research will be into five chapters. The first chapter establishes the background of the study, statement of the problem, research
objectives. The research questions, significance, limitations and organization of the study will also be discussed in this chapter. The
second chapter will look at the literature and theories on supplier relationship management and firm performance The third chapter
will also take a look at the methodology of the study. Where the research design, research population, sample size, and technique will
be undertaken. Chapter four will discuss the results obtained. The final chapter will summarize, conclude and recommend solutions to
be used.