The Effect Of International Procurement Multiple Sourcing And Single Sourcing Strategy On The Organization Performance : The Case Of Mesfin Industrial Engineering Plc
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Date
2020-07
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Addis Ababa University
Abstract
The integration of the global market makes the supply chain more complex and has great
impacts on efficient supplier management strategies. Companies continuously try to find ways to
improve their sourcing and better handle their supplier relationships. There is often a tussle
between choosing a right sourcing strategy which says, whether the buyer should go for single
sourcing or multiple sourcing. This thesis will present the effect of international procurement
multiple and single-sourcing strategy on the organizational performance. Mesfin Industrial
engineering plc.’s foreign procurement is the object of study. The purpose is to assess the
rationale behind their sourcing strategies. To achieve the research objective, the study used the
total population of Mesfin Industrial Engineering’s International procurement stakeholders in
the organization. Descriptive and explanatory research design employed in which primary and
secondary data utilized where the primary information collected through questionnaires and
semi-structured interview guides. The data analyzed and interpreted using quantitative and
qualitative descriptive methods. The primary data were collected using a survey method by
applying a questionnaire and interviews as a tool. 27 questionnaires were distributed and a
response of 27 was analyzed using correlation and regression methods on SPSS version 25.0.
And the rest 4 Mesfin industrial engineering supply chain managers undertake in-depth
interviews to grasp their perspective on their respective fields. Accordingly, the findings of the
analysis confirmed the positive correlation between the independent variables (Single and
Multiple Buyer-Supplier Relationship, Delivery of Quality Goods, Supply Dependability and
Communication, and the dependent variable of the study (Organization performance). On the
other hand, the regression analysis outcome for International procurement Single and multiple
Sourcing showed that Ninety Two percent and Eighty-Nine percent of the variance on
organization performance is accounted for independent variables. Based on the findings of the
study, the researcher recommends Maintaining the outstanding Buyer-Supplier relationship and
Communication with International procurement single suppliers and Upgrading the relationship
with the multiple suppliers, maintaining the quality control for both International souring
strategies and goods needs supply uncertainty and urgency the company should shift to totally to
International Procurement Single-Sourcing strategies. These findings clearly state the actual
performance of each international sourcing strategy in the organization and show the way
forward to increase their efficiency in international procurement and take the superior share in
this turbulent market.
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Keywords
International Procurement, Organization performance, Supply Dependability and Communication