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

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