The Effect of Total Quality Management Adoption on Procurement Performance of Manufacturing Sector in Rwanda: A Case Study of Bralirwa Ltd

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1 The Effect of Total Quality Management Adoption on Procurement Performance of Manufacturing Sector in Rwanda: A Case Study of Bralirwa Ltd Geoffrey Muvunyi 1 and Dr. Patrick Mulyungi 2 1 (Student, Jomo Kenyatta University of Agriculture and Technology, Kigali Rwanda) 2 (Lecturer, Jomo Kenyatta University of Agriculture and Technology, Kigali, Rwanda) Abstract: This study aimed at investigating the effect of Total Quality Management to the procurement performance of manufacturing sector, and in this case, was the focused manufacturing sector in this study, problems of manufacturing enterprises all over the world and Rwanda in particular have been compounded in recent years due to changes in customer behavior and increased competition from newly established companies and importers, the effects of system failures, poor product design, delivery delays, untrained staff and ignorance of quality. Nowadays, BRALIRWA is facing competitors like Skol which obstacles for its performance are. Moreover to prove the general objective, the results of this study were presented in accordance with specific objectives stated by the researcher such as, to find out if process management affect procurement performance of, to establish if knowledge management affect procurement performance of and to determine if leadership affect the procurement performance of. Descriptive research design was adopted for this study using both qualitative and quantitative methods of data collection. The study used a sample of 82 employees of and was selected by using purposive sampling techniques from a targeted population of 82 employees from departments of Human resources, procurement, marketing, production and finance. Findings indicated that process management has positive high correlation to the procurement management of equal to.821 ** and the sig. is.000 which is less than Leadership has positive high correlation to the procurement management of equal to.873 **. Knowledge management has positive high correlation to the procurement management of equal to.795 **. The main conclusion was made as Total Quality Management has a significant role in enhancing procurement performance of manufacturing firms. The main recommendation was that top management of manufacturing company should improve innovation capacity through knowledge management Keywords: Total quality management, procurement performance, Manufacturing Sector, Bralirwa 1. INTRODUCTION 1.1 Background of the study During the last few decades, organizations all over the world have been trying to cope with a rapidly changing business environment in which management have to be more and more astute in finding ways to sustain or gain competitive advantage. To withstand new global challenges, most manufacturing businesses have adopted new philosophies such as Concurrent Engineering, Lean Production, Just-InTime (JIT) strategies, Total Quality Management (TQM), Business Process Re-engineering (BPR) and others, to become more effective in the way they conduct business (Rategan, 2000). The main driver behind these philosophies is the optimization of the organization s performance both internally and externally within its respective market targets. Given the competitive pressures due to increasing input prices, high interest rates, high cost of research and development as well as high customer expectation on the quality of products and services, many manufacturing companies continuously seek ways to improve quality and remain cost-effective. Product quality is the degree to which the product or service meets the specifications and the needs of customers. Total quality management (TQM) is a firm-wide management philosophy of continuously improving the quality of the products/services/processes by focusing on the customers needs and expectations to enhance customer satisfaction and firm performance. There are mixed results about the relationship between total quality management practices and performance (Olcay, 2014). Supply chain management in TQM implies reducing and streamlining the supplier base to facilitate managing supplier relationships, developing strategic alliances with suppliers, working with suppliers to ensure that expectations are met, and involving suppliers early in the product development process to take advantage of their capabilities and expertise. Inputs from suppliers constitute the first phase of producing the products and/or services in a firm. High quality inputs provide high quality products and/or services. Therefore, the suppliers Page 152

2 should adopt TQM and be involved in this process. Effective supply management practices enable the suppliers to adopt quality management and deliver reliable and high-quality products and/or services timely (Arkadi, 2000). 1.2 Statement of the problem TQM could then be an appropriate solution to remain competitive in an ever-aggressive global market. The problems of manufacturing enterprises all over the world and Rwanda in particular have been compounded in recent years due to changes in customer behavior and increased competition from newly established companies and importers, the effects of system failures, poor product design, delivery delays, untrained staff and ignorance of quality. The implementation of TQM could be beneficial to manufacturing when the principles are effectively adopted (Neely et al., 2005). The overall procurement performance depends on how well it is positioned in management to serve the organization. If not well managed, the firm s value adoption process was jeopardized and procurement as a whole will lose focus leading to inefficiencies that will expose the firm to risks. Also, It has become well known that poor quality control, poor quality activity and system failure are foe to industries and might lead to loss in competitive advantage and market share (Sagir, 2001).Some organizations fail to recognize how new business paradigms have changed their procurement practices. And those that do may accept under belief that they can t do anything about it. Due to this turbulent business environment, procurement management has become an area of interest in modern organization since it enables firms to better manage various costs and wastes thus leading to high customer satisfaction and value generation to the stake holders (Adhiambo, 2012). Nowadays, BRALIRWA is facing many competitors like Skol which obstacles for its performance are. BRALIRWA ltd is faced with both a competitive and dynamic market setting, though the company is doing many things to maintain its leadership role in the industry. The mere existence of total quality management documentation, such as quality plans, procedures and work instructions, in company head offices, does not necessarily reflect the presence of deep-rooted operational practices and procedures needed for ensuring the ultimate delivery of a well-operated quality management procedure, capable of giving customer satisfaction which enhances good performance of procurement of, the company recognized lack of knowledge in total quality management (BRALIRWA, 2014). 1.3 Objectives of the study The main objective of this study was to assess the effect of Total Quality Management adaption on procurement performance in manufacturing sector in Rwanda: a case of. Specific Objectives To find out if process management affect procurement performance of To determine if leadership affect the procurement performance of To examine if knowledge management affect procurement performance of Research questions To what extent does process management affect procurement performance of? Does leadership affect the procurement performance of? To what extent does knowledge management affect procurement performance of? II. REVIEW OF LITERATURE 2.1 Empirical Review Over the last two decades, several studies have been taken on TQM and IT. Many researchers have demonstrated the positive impact of both TQM and IT in industry performance. IT is used to measure, understand and improve the organization s level of sustainable quality. When TQM and IT introduced in combined embrace, both social and technical dimensions aim to achieve excellent results. Industries are maximizing the use of technology to increase the quality performance. Technology is one external factor which is influential for the development of TQM in an organization. IT issued to increase productivity, improve quality, reduce cost and enhance competition of industries (Henderson, 2005). Amir & Ahmad (2012) studied Knowledge Management, Total Quality Management and Innovation: A New Look.In the present challenging dynamic environment, innovation is considered as a capability that renews the competitive advantage of a company. In recent years, considerable effort has been made to examine the factors that affect innovation in organizations. Knowledge management and total quality management, which play an important role in the contemporary management progress, are among the factors investigated. On the one hand, knowledge management has been recognized as an enabler that can deploy innovation by creating, storing, transferring, and applying knowledge, while on the other hand, the implementation of total quality management practices is addressed as one of the important factors that can influence innovation in a positive way. Lately, although a few researchers have shown some interest in the relationship of total quality management and knowledge management and there has not reached a consensus to conceptualize this relation. Page 153

3 Looking at it from the methodological perspective, this problem can be tackled by using the Joint Variance analysis method where it can demonstrate correlation among independent variables and the effect of them on innovation. This study aims to propose a framework that shows how total quality management and knowledge management are reciprocally related to each other and how this affinity can impact innovation(ahmad, 2012). A study conducted by Drabikin, (2003) in New York fund that in a developed or developing country, public procurement practitioners (and private procurement practitioners for this discussion) have and will face always many challenges. Each country has its own economic, social, cultural and political environment, and each country s public procurement practitioners face different types of challenges, or the same types of challenges but at different levels from their counterparts in other countries (Drabikin, 2003). According to Thai, (2004) Public and (private for this discussion) procurement practitioners have always walked on a tight rope. Their ability to accomplish procurement objectives and policies is influenced very much by internal forces including: Interactions between various elements of the procurement systems, various officials and organizations in the three branches of government, and various actors and sub-agencies within a department or executive agency and actors and organizations external to sub-agencies; Types of goods, services and capital assets required for an agency s missions; Professionalism or quality of procurement workforce; Staffing levels and budget resources; Procurement organizational structure such as the issue of centralization vs. Decentralization; Procurement regulations, rules and guidance; and Internal controls and legislative oversight (Thai, 2004). According to Thai (2004), public procurement practitioners have always faced challenges imposed upon by a variety of environment factors including market, legal environment, political environment, organizational environment, and socio-economic and other environmental factors. Public procurement, at the local government level, is believed to be one of the principle areas where corruption in Uganda takes place. 2.2 Conceptual Framework Independent Variables Dependent Variable Process management Commitment Coordination Quality treatment Leadership Good quality Rewards Proper guidance Procurement Performance of manufacturing sector Cost effective Sourcing of supplier Knowledge management Innovation Knowledge from inside and outside of firm Figure 1, Researcher, 2017 III. RESEARCH METHODOLOGY A research design is the specification of methods and procedures for acquiring the information needed (Sekaran, 1999). This research adopted correlation and descriptive design. The target population was 460 which consisted of employees from procurement department, marketing, production and finance department of BRALIRWA. A sample of 82 respondents was calculated using Yamane s Formula. Purposive sampling technique was used for selecting 82 employees from human resources, marketing department, procurement departments, finance department and production department of BRALIRWA. Questionnaires were provided to 82 respondents which formed the sample size. Primary Data collection instrument used was the questionnaire. The instrument was tested for reliability and validity before actual data collection. Descriptive and inferential statistics were used in data analysis. Presentation was in form of tables. The formula of Yamane (Yamane, 1967), where: N n = 2 1+ N ( e) Page 154

4 Here: n = Sample N = Population e = level of precision (error) The calculation of sample size is done as follow: 460 n = 2 = (0.1) IV. FINDINGS AND DISCUSSION 4.1. Reliability Test All the 82 respondents who were issued with questionnaire returned them giving a response rate of 100%. The Cronbach s Alpha was which is greater than 0.7 indicating that the questionnaire was reliable and gave consistent results. Table 4.1: Reliability of statistics Cronbach s Alpha N of Items Source: Author(2018) 4.2. Respondents Profile Gender of the Respondents The majority of respondents employed in are male accounting for72% while female accounts for 28% as indicated in following table 4.2 Table 4.2: Distribution of Respondent by gender Frequency Percent Cumulative Percent Valid Male Age of Respondents Female Total Table 4.3: Distribution of Respondent by age group Frequency Percent Cumulative Percent years years years Total Table 4.3 shows that the large number of the respondents were between 36 to 45 years at 56(68.3%); 14(17.1%) of respondents were in the age bracket 19 to 35 years; 12 (14.6%) were age bracket 46 to 65 years Level of education of respondents Table 4.4: Distribution of Respondents by Education level Frequency Percent Valid Percent Cumulative Percent Bachelor's degree Masters' degree Total Source: Author(2018) Table 4.4 illustrates that 73 (89.0%) of respondents acquired a bachelor s degree while 9 (11.0%) of respondents acquired masters degree. Page 155

5 Experience of respondents Table 4.5: Distribution of Respondents by years of services Frequency Percent Valid Percent Cumulative Percent 2-5 years years years and above Total Source: Author(2018) Table 4.5 shows that 42 (51.2%) of respondents worked for in a period between 6-10 years, 33 (40.2%) of respondents in a period of 10 years and above while 7 (8.5%) of respondents in a period 2-5 years Effect of TQM adoption on the procurement performance in Bralirwa This was arrived at by carrying out correlation analysis The effect of process management to the procurement performance within Table 4.6: Correlation between process management and procurement performance of Process management Procurement performance of Spearman's rho Process management Procurement performance of Correlation ** Sig. (2-tailed)..000 Correlation.821 ** 1 Sig. (2-tailed).000. **. Correlation is significant at the 0.01 level (2-tailed). Table 4.10 indicates that process management has positive high correlation to the procurement performance of equal to.821 ** and the sig. is.000 which is less than It is therefore concluded that there is a high positive association between process management and procurement performance of The effect of leadership to the procurement performance of Table 4.7: Correlation between leadership and procurement performance of Leadership Procurement performance of Spearman's rho Leadership Procurement performance of Correlation ** Sig. (2-tailed)..000 Correlation.873 ** 1 Sig. (2-tailed).000. **. Correlation is significant at the 0.01 level (2-tailed). The evidences form table 4.11 indicated that leadership has positive high correlation to the procurement performance of equal to.873 ** and the sig. is.000 which is less than There is a statistically significant correlation between leadership and the procurement performance of BRALIRWA Ltd;. Page 156

6 The effect of knowledge management to the procurement performance of Table 4.8: Correlation between knowledge management and procurement performance of BRALIRWA Ltd Knowledge management Procurement performance of Spearman's rho Knowledge management Procurement performance of Correlation ** Sig. (2-tailed)..000 Correlation.795 ** 1 Sig. (2-tailed).000. **. Correlation is significant at the 0.01 level (2-tailed). Table 4.12 indicate that knowledge management has positive high correlation to the procurement performance of equal to.795 ** and the sig. is.000 which is less than It is therefore concluded by the researcher that there is a statistically significant correlation between knowledge management and procurement performance of. Generally, TQM variables considered that is process management, leadership and knowledge management have high significant effect on procurement performance. V. CONCLUSION AND RECOMMENDATIONS 5.1. Conclusion The study concluded that Total Quality Management Adoption contributes to the procurement performance of manufacturing sector. There is relationship between Total Quality Management Adoption (process management, leadership and knowledge management) and procurement performance of manufacturing sector. Innovation among the employees of is not appreciable at high level; the organization leadership do not motivate at high level their employees towards the organizations goals and objectives, the collected information that suggest new approaches, create a network of listening systems, among other strategies to understand the organizational environment are not sometime updated Recommendation Based on research findings and conclusions, the researcher felt that the following recommendations were necessary for the organization. Top management of manufacturing company should improve innovation capacity through knowledge management The organization leadership should improve on their level of motivation of their employees towards the organizations goals and objectives. Leadership should actively collect information that suggest new approaches, create a network of listening systems, among other strategies to understand the organizational environment and any signs of change Suggestion further Study The researcher suggests that a similar research should be conducted with an aim at investigating the impact procurement control on supply chain performance in manufacturing sector in Rwanda. VI. REFERENCES [1] Adhiambo et Al. (2012). Factors Influencing Competitive Advantage of Commercial Banks in Kenya. Unpublished MBA Thesis, University of Nairobi. [2] Adhiambo, B. A. (2012). Factors Influencing Competitive Advantage of Commercial Banks in Kenya. Unpublished MBA Thesis, University of Nairobi. [3] Ahmad, A. &. (2012). Knowledge Management, Total Quality Management and Innovation: A New Look. [4] Arkadi, A. B. (2000). robust solutions of Linear Programming Problems contaminated with uncertain data,. Mathematical Programming, Vol.88, No.3, pp [5] BRALIRWA. (2014). BRALIRWA Annual report Kigali: BRALIRWA. [6] Drabikin, T. K. (2003). U.S. Federal Government Procurement: Structure, Proc-esses and Current Issues. In L.Knight, C. Harland, J. Telgen, K. V. Thai, G. Callender and K. McKen (Eds.),Public Procurement: International Cases and Commentary. New York: [7] Henderson. (2005). IT and Total Quality Management. New Dhelli. [8] Neely et al. (2005). The evolution of performance measurement research. International Journal of Operations and Production Management, 1, Page 157

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