SUPPLY CHAIN RISKS INFLUENCING THE PERFORMANCE OF SMALL AND MEDIUM ENTERPRISE CONTRACTORS IN SEMBABULE DISTRICT-UGANDA

Abstract

This report presents findings of the study on Supply Chain Risks influencing Performance of Small to Medium Enterprise (SME) contractors in Sembabule district of Uganda. The study objectives were to; investigate the extent to which operational risks influence performance; examine how control risks influence performance and examine the influence of Supply Chain network risks on performance of SME Construction firms in Sembabule district. The study used a case study design and adopted both qualitative and quantitative approaches. A total 43 contractors and 9 contract supervisors were interviewed. Primary data was collected using self-administered questionnaires for the contractors while the interview guide was used to collect data from the contract supervisors. In this study, three hypotheses were tested using the ANOVA technique. The study findings showed that there was no significant relationship between operational risks and performance. However, the study established a significant relationship between control risks and performance (r =0.448; p=0.003< 0.05), as well as supply chain network risks and performance (r =0.362; p=0.017< 0.05). The study therefore concluded that: risks that manifest during the construction phase are originated in prior phases of the construction process normally due to client, consultant and contractor related factors; adoption of improved managerial practices by SME contractors presents the biggest opportunity for improvement of contractor performance and that collaboration plays a big role in ironing out the deficiencies that accrue as a result of poor communication and lack of linkages within parties. The study recommended strengthening of management capacity through targeted skills based training in financial, communication, human resource, procurement and contract management as a way of reducing control risks. It also recommended reduction of supply chain network risk through better relationship management by contractors through building trust, maintaining open lines of communication and proper interpretation of contract documents.