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Abstract: Strategic partner relationship is a critical issue for any business, especially in supply chain activities. Therefore, it is
expected that firms that deliver e-procurement system in the supply chain are likely to strengthen their partner relationship. The
purpose of this study was to establish the influence of strategic partnership management practice on supply chain performance in tea
firms in Kenya. The study was guided mainly by Resource Based Theory. Explanatory research design was adopted. The target
population was 4200 respondents from 12 tea firms. Purposive and proportional sampling was used to select a sample size of 365
respondents comprising of staff, top management and suppliers. Questionnaires and structured interviews were used to collect
primary data. Pearson product moment correlation coefficient and linear regressions were used to test strength of the relationship
between variables. The strategic partnership practice positively influences the supply chain performance among the tea
firms[r=.535, n=231, p<.05]. The regression model indicated that strategic partnership practice account for 28.7% variation on
supply chain performance. Hence tea firms enhanced strategic partnership practice purposely to improve supply chain performance
by widening supplier relationships among the stakeholders. Tea firms should therefore embrace sound partnership practices to
enhance firms’ supply chain performance which in turn lead to profit maximization.
Key Words: Strategic, Partnership, Practice, Supply chain Management, Supply Chain Performance, Tea Firms
INTRODUCTION
Supply chain performance refers to the evaluation of supply chain management both tangible (e.g. cost) and intangible (e.g.
capacity utilization) factors (Croom and Johnson, 2003; Eng, 2004; Presutti, 2003; Tan, Lyman, & Wisner, 2002). Supply chain
performance is the extend that supply chain activities are meeting end-customer requirements, including product availability, on-time
delivery, and all the necessary inventory and capacity in the supply chain to deliver that performance in a responsive manner. Supply
chain performance enables firms to drive rapid change in all aspects of operations. This requires end-to-end visibility into factors that
drive performance such as cash-to-cash cycle time, overall supply chain cost or perfect order fulfillment (Oloruntoba and Gray,
2006). To proactively manage the overall performance of supply chains, organizations need to know more than inventory positions,
deliveries dates, and fill rates. To maximize competitive advantage, organizations must have comprehensive visibility into supply
chain performance (Croom and Johnson 2003).
Supply Chain Management has become an essential prerequisite to stay in the competitive global environment for profitability
especially for profit government corporations and entities (Thai, 2009). As the world’s economy becomes increasingly competitive,
sustaining competitiveness and the resulting profitability depend less on the ability to raise prices (Presutti, 2003). Those competitive
dimensions cannot be delivered without an effectively managed supply chain. Firms with the most competitive supply chains are and
will continue to be the big winners in contemporary business world. Procurement is part of supply chain management activities and
has exploded into the business scene as one of corporate management’s major concerns over the past decades. According to Presutti,
(2003) almost 70% of a firm’s sales revenues is, on average, spent on supply chain-related activities from material purchases to the
distribution of goods and services of finished products to the end customers. Greunen, Herselman, & Niekerk, (2010) argues that
benefits of supply chain management have not yet been realized due to general limited understanding of how supply chain
management concept works within government environment. Problems such as poor information sharing between purchasers and
suppliers, non-automated supplier appraisal systems, adversarial relationship and non-responsive supply chain integration exist in
this electronic age according to Chartered Institute of Purchasing & Supplies (CIPS, 2011).A good e-procurement system helps a
firm organize its interactions with its most crucial suppliers. It is evident that although this study focuses on e-procurement, it fails
to address the role played by the web based technologies in both partner relationship and supply chain performance.
In the current economic environment, a value creation perspective is important for improving supply chain performance
(Wiengarten, Fynes, Humphreys, Chavezand, & McKittrick 2010). The functional characteristics of e-procurement systems can enable
companies to improve the efficiency of value creation processes in the supply chain. The process through which e-procurement
contributes to supply chain performance can only be highlighted through explaining the relationship among such processes as;
partner relationships, information sharing, and supply chain integration which are proposed as the processes that connect e-
procurement systems with supply chain performance. Partner relationships refers to mutually committed relationships between
enterprises and their strategic partners (e.g. suppliers, the same tier manufactures and channel members) in the supply chain (Li, Rao,
R a g u n a t h a n , & Ragunathan 2005; Liker & Choi, 2004; Panayides & So, 2005; Skjott-Larsen Kotzab, and Grieger 2003).
LITERATURE REVIEW
2.1The concept of Supply Chain Management Practices
The supply chain encompasses all activities associated with the flow and transformation of goods from the raw materials stage
through to the end user, as well as associated information flow. Supply Chain Management (SCM) is the integration of these
activities through improved supply chain relationships to achieve sustainable competitive advantage (Handfield and Nichols, 1999).
All the links in the supply chain must be strong and well integrated. Li et al., (2005), stated seven dimensions in SCM
practices, including strategic supplier partnership, customer relationship, information sharing, information quality, internal lean
practices, supplier appraisals and postponement. In this paper only the effect of partnership practice was considered.
RESEARCH METHODOLOGY
The study adopted explanatory research design which implies that the research in question is intended to explain, rather than simply to
describe (Maxwell & Mittapalli 2008). Traditionally, the explanatory research has been quantitative in nature and hypotheses tested by
measuring the relationships between variables, while data is analyzed using statistical techniques which attempt to identify causal
relationships through the analysis of correlations between variables (Maxwell & Mittapalli 2008). The research design was found
Where; n = the sample size, N = the population size, e = the acceptance sampling error
The research study was based on the primary collected directly from the respondents using questionnaires and structured
interviews, while secondary data used was from supply chain performance records where company’s annual records and reports were
assessed and tabulated. Cronbach’s coefficient alpha was used to determine the reliability of the research instrument, where a
reliability coefficient of 0.7 and above was assumed to reflect the internal reliability of the instruments (Fraenkel & Wallen, 2000).
After data collection, responses from all questionnaires and interview schedule items were cross -checked to facilitate coding
and processing for analysis using SPSS (Version 21.0). Pearson product moment correlation (r) and linear regression were used to
establish the relationship between independent and dependent variables.
From the findings the t-test associated with β-values was significant and the partnership practice as the predictor was
making a significant contribution to the model. The coefficients results in Table 4 showed that the predicted supply chain
performance in relation to the independent factor was significant; β 1= 0.475 (p < 0.05) which implies that we reject the null
hypothesis stating that there is no significant relationship between partnership practice and supply chain performance in tea
firms, indicating that for each unit increase in the partnership practice, there is 0.475 units increase in supply chain
performance. Furthermore, the influence of supply chain performance was stated by the t-test value = 9.61 which implies that the
standard error associated with the parameter is over 9.6 times that of the error associated with it.
The findings agree with Amit & Zott (2001) that the importance of close relationships among trading partners as a key source of
advantage to both buyer and seller. Inter-organizational relationships would arguably lead to enhanced supply chain performance and
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