Impact of Strategic Sourcing on Firm Performance

Abstract

Increasing globalisation has moved the sourcing function from a domestic, operational function to a more strategic border less activity which is recognised as a key part of the firm's product offering. This study evaluates the strategic sourcing process and measures its impact on the performance of a firm. Empirical evidence is provided from top firms in Ghana's Oil and Gas Industry. A sample of 80 respondents purposively selected from the procurement and supply chain section of the company's various plants of operation is used in the study. Data was gathered using a structured questionnaire and analysed statistically with both descriptive and inferential techniques. The study found evidence of employee learning, performance, planning and supplier relational-processes as strategic sourcing practices. Ooverall, there exist a positive and significant relationship between strategic sourcing and firm productivity. The details reveal that employee leaning, performance, and planning had significant effect on firm productivity. However,there was no support for relational processes. The study proposes that supplier relationship management practices must take centre stage in organisational decision making. Firms must move beyond transactional, adhoc supplier relationships towards more participative, long term partnerships aimed at creating shared values between the buyer and the vendor.