The Role of Supplier Relationship Management in Enhancing Procurement Efficiency in Oil and Gas Engineering Projects

Abstract

The study examined the role of Supplier Relationship Management (SRM) in enhancing procurement efficiency in oil and gas engineering projects. The research focused specifically on the effects of supplier selection, vendor evaluation, and long-term supplier partnerships on procurement efficiency in petroleum engineering operations, including drilling projects, pipeline construction, offshore operations, and refinery maintenance. The study was motivated by the increasing procurement challenges faced by oil and gas organisations, including project delays, supply disruptions, cost overruns, and operational inefficiencies resulting from weak supplier management practices.

The study adopted a quantitative research approach using descriptive and explanatory research designs. Data were collected from procurement managers, supply chain officers, project engineers, logistics personnel, and contract managers within selected oil and gas engineering organisations. A structured questionnaire was used as the primary data collection instrument. A sample size of 60 respondents was selected for the study; 56 questionnaires were completed and returned, yielding a response rate of 93.3%. Data were analysed using descriptive statistics, correlation analysis, and multiple regression analysis with the aid of the Statistical Package for the Social Sciences (SPSS).

The findings revealed that supplier selection significantly improves procurement efficiency through enhanced supplier reliability, technical competence, quality assurance, and safety compliance. Vendor evaluation was also found to positively influence procurement efficiency by improving supplier accountability, delivery performance, and contract compliance. Furthermore, the study found that long-term supplier partnerships had the strongest influence on procurement efficiency, improving communication, operational flexibility, project coordination, and supply chain responsiveness.

The regression analysis showed that supplier selection, vendor evaluation, and long-term supplier partnerships jointly explained 74.1% of the variation in procurement efficiency in oil and gas engineering projects. The study concluded that effective Supplier Relationship Management practices significantly enhance procurement performance and project delivery within the petroleum sector.

The study recommends that oil and gas organisations strengthen supplier selection procedures, implement continuous vendor evaluation systems, promote long-term supplier partnerships, adopt digital procurement technologies, and provide regular training for procurement personnel to improve procurement efficiency and operational performance.