The Influence of Communication in the Buyer-Supplier Integration on Procurement Performance of Large Manufacturing Firms in Tanzania

Abstract

Despite the efficacious communication evident in the buyer-supplier integration, material procurement performance in large manufacturing firms of Tanzania remains a challenge. The Resources Dependency and Transaction Cost Economics Theories were used in this study to analyze the influence of Early Supplier Involvement in design of specification, electronic information sharing, communication direction, and frequency of buyersupplier meetings, (all considered key in enhancing communication in the buyer-supplier integration) on the procurement performance. 52 large manufacturing firms in Temeke Municipality were approached through a census to inform the study. From each firm, one procurement and one store manager were purposively sampled, totalling to 104 respondents. Data was collected using cross-sectional design and mixed approach under pragmatic paradigm was used for this study. Data obtained through questionnaires was analyzed using the Binary logistic regression. This study was supplemented by qualitative opinions stemming from the fact that buyer-supplier integration is a strategic aspect. The study revealed that poor procurement performance is attributed to lack of Early Supplier Involvement and limited electronic information sharing. It was recommended as per findings that with the assistance of the government, the performance of manufacturing firms can be rejuvenated using the framework developed from this study. This study unveiled the cause–effect relationship of communication in the buyer-supplier integration and procurement performance however, the mediating role of third-party logistics, which might affect the relationship, remains unknown. Also, the role of communication of buyer-supplier relationship was not considered as role of tiers suppliers. Therefore, future studies should identify the role of tier suppliers in buyer-supplier communication and consequently the supply chain firms’ performance.