International Journal of Business and Social Science

ISSN 2219-1933 (Print), 2219-6021 (Online) DOI: 10.30845/ijbss

Influence of Supplier Relationship on Performance of Small Scale Enterprises in Bungoma Town, Kenya
Jackline Mumelo, Dr. Odoyo Fredrick Selfano, Dr. Arvin Lucy Onditi

Small Scale Enterprises (SSEs) contributed 50% of jobs in Kenya in 2013. Statistics indicate that three out of five fail within the first few months of their operations. Efforts to stem these challenges have attributed them to inadequate financing. However, no effort has been made to link these challenges to supplier relationship (SR) activities of the SSEs, when in fact this could be a major contributor. This study sought to establish the effect of supplier relationship on performance of SSEs in Bungoma town. The study adopted correlation design. The target population comprised of 1011 owners of the enterprises. Stratified random sampling was used to select a sample of 287 respondents. Data was collected from secondary and primary sources. The latter from relevant documents, such as records of the enterprises, mobile company reports and publications and; the former by using semi structured questionnaire. Descriptive statistics such as frequency distribution tables was applied to analyze quantitative data while regression analysis and Pearson correlation test was used to establish effect. The study found out that information sharing between the supplier and the SSE organization was very crucial for the performance of these organizations. The study also revealed a strong significant (n= 279; r = .545; p<0.05) positive relationship between information sharing and organizational performance. It was also found that reduced lead time was very important for the organization because it could help in creating supply chain and avoids uncertainty and minimizes potential problem of shifting inventories by the SSEs. Pearson Product-Moment correlation coefficient computed indicated that there was a considerable negative correlation (n= 279, r = -.577) between lead time and SSE performance.The study recommends that SSEs should be encouraged to extensively adopt information technology in their operations and promote information sharing in the supply chain, SSEs should also come up with various measures and polices that promote reduction in lead time in the supply chain.

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