Impact of buyer-supplier relationship on procurement performance: evidence from Goldfields Ghana Limited, Tarkwa

Abstract

In the past, buyers never seemed to notice the importance of their relationship with suppliers, they view each other as adversaries and do not consider the overwhelming benefits of working together as a team with shared objectives. However, in modern business, organizations have realized that the competition is no longer between organizations, but among supply chain members. Many forward-looking companies have found it more effective to work collaboratively with their suppliers to serve the ultimate customer. This study therefore sought to find out whether buyer-supplier relationship has the efficacy to impact procurement performance at Goldfields Ghana Limited. The study’s objectives were to determine the collaborative activities practiced by Goldfields and their suppliers, to identify the challenges in building collaborative relationships and to examine the impact of buyer-supplier relationship on procurement performance. The study adopted a combination of descriptive and quantitative approaches to research. The study sampled 154 respondents using purposive sampling technique from a targeted population of 250 employees at Goldfields. The results of the study showed that Goldfields has embraced the concept of buyer-supplier relationship by way of practicing collaborative activities such as information sharing, resource sharing, communication, incentive alignment and joint knowledge creation with its upstream suppliers. The results of the regression analysis indicated that, all the collaborative activities had a positive and significant impact on procurement performance. The study identified challenges that hinders the company from forming closer ties with key suppliers and the most prevailing factor was unwillingness to share sensitive information. The study recommends that Goldfields should strive to enhance improvements in all areas of collaboration in other to reap all the benefits that comes through effective collaboration, especially in procurement.