Supplier relationship management of the road construction industry: a case study of Ghana Highways Authority

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November, 2015
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Supplier Relationship Management (SRM) plays a major role in construction procurement. It becomes more relevant when coordinating public procurement activities between Ghana Highway Authority (GHA) as the entity and Road Contractors as the suppliers in which, the engagement could be described as short-term in nature. The principal roles of SRM are covered by the generic Supply Chain Management methodology which offers general guidelines that can be used to analyze, reengineer, properly coordinate, and improve the road construction procurement for the entity (GHA). Resolving and controlling problems plaguing the relationship between the entity and suppliers within supply chain collaborations requires consolidating long-term relationships in improving performance. Improving performance is better realized if SRM methodology is employed through capacity training and development for both staffs and suppliers. Managing the relationship between these entities requires that lessons learnt are transferred between various entities. Due to its recurring character, the SRM methodology implies a continuous process improvement of which the scope can be changed over time, involving an increasing collaboration between GHA staffs and suppliers in smoothing the differences. Furthermore, Public Procurement Act is aimed at ensuring entities obtain value for money and ensure that scarce public funds are well spent and that important public projects are carried out in sustainable manner (PPA, Act 663, 2003). Such core objectives become very important when entity implements “SRM” in public procurement through adaptation of key variables such as ensuring effective communication and maintaining mutual trust and commitment between buyers-to-consultants, buyers-to-consultants and buyers-to-suppliers towards long term relations in public procurement decisions. The objective of the study was to determine the relevance of managing relationship and its challenges, effects and possible strategies in improving performance for the Ghana Highway Authority and the Ministry of Road and Highways in general. Sample size of eighty, (80) from the sample frame was used for which questionnaires as research instrument were used to collect data for analysis. The data were analyzed using one-sample t-test and descriptive statistics in which the mean values and p-values were determined and ranked accordingly. It was found from the study that trust and commitment, long term orientation and client engagement through capacity training and development as well as effective communication play major roles in developing and maintaining long term relationships between the Buyer/entity and the Suppliers/Contractors, despite short term nature of contract engagement between them. And that entity staff (GHA) should be project and customer focus in their Public Procurement decisions if value for money and principles of transparency as stated in the Public Procurement Act, Act 663, 2003 are to be realized.
A thesis submitted to the Department of Building Technology,College of Art and Built Environment, Kwame Nkrumah University of Science and Technology in partial fulfillment of the requirement for the Degree of Master of Science in Procurement Management, 2015