The Effects of Global Sourcing on Supply Chain Performance in Dairy Manufacturing Companies in Zimbabwe.
- April 8, 2022
- Posted by: rsispostadmin
- Categories: IJRISS, Social Science, Supply Chain Management
International Journal of Research and Innovation in Social Science (IJRISS) | Volume VI, Issue III, March 2022 | ISSN 2454–6186
Dumisani Mawonde, Josphat Nyoni, Peter Ngarize and Servious Gaviro
Women’s University in Africa, Harare, Zimbabwe
Abstract
This study aimed to determine the effects of global sourcing on supply chain performance in dairy manufacturing companies in Zimbabwe. A mixed-method approach was used and a sample size of 24 procurement staff for the questionnaire was selected from a population of 25 procurement professionals in dairy manufacturing companies. Interviews were carried out with procurement professionals from dairy manufacturing companies. The Statistical Package for Social Sciences (SPSS) version 16 was used to analyze quantitative data whilst thematic analysis was used to analyze qualitative data. The findings of the study show that global sourcing practices had a significant positive effect on the quality of purchased materials, an insignificant positive effect on landing cost of materials, and a significant negative effect on stock availability of materials. The study concluded that the adoption of global sourcing may not guarantee improved supply chain performance in dairy manufacturing companies. This means that the effectiveness of global sourcing may depend on the sector and context in which it is applied. Therefore, it was recommended that dairy manufacturing companies need to consider adopting global sourcing practices and other supportive local sourcing strategies to improve their supply chain performance in the context of developing countries.
Keywords: dairy, dairy manufacturing, global sourcing, supply chain performance
1.1 Introduction
The shortage of milk and other critical inputs that are used to produce dairy products on the local market is affecting dairy manufacturing companies that are operating way below full capacity utilization. According to Njarui et al., (2019), in Africa, dairy manufacturing companies face the challenges of excessive power cuts, lack of production equipment, erratic supplies of milk from dairy farms, and the deficiency in skills which are required to produce milk products. On the other hand, the economic crisis in most African countries compels dairy farmers and producers to operate below normal capacity which causes low milk output (Chari and Ngcamu, 2017). The dairy manufacturing industry in Zimbabwe is not spared from the aforementioned challenges that the country is failing to become self-sufficient in terms of producing adequate milk and milk products.
Significantly, the dairy manufacturing industry plays a vital role in a country since it provides nutrition to people while concurrently creating employment and earning the country much-needed foreign currency from exports of milk and milk products. However, there has been a general decrease in the production of milk and milk products in the local market and this has created serious shortages of milk and milk products. Also, the operations of dairy manufacturing companies have been interrupted by the severe shortages of milk and other inputs which are used to produce dairy products that many employees lost their jobs. This problem dates back to the year 2008 when the country started to experience serious economic challenges which affected local dairy farmers that they could not sustain their dairy farming activities. According to Phiri (2014), a repeated sharp decrease in the production of 50 million liters of milk as opposed to the annual demand of 120 million liters was recorded from the year 2008 to the year 2014. Furthermore, Nyamwanza et al., (2015) put forward that both the shortage of milk and the high prices of inputs that are used to produce milk products on the local market have led to low levels of capacity utilization by the dairy manufacturing industry. Presently, the aforementioned challenges have worsened that dairy manufacturing companies find it difficult to carry on with their operations and contain operating costs whilst at the same time satisfying the demand of the market.
As there are serious shortages and high prices of milk and critical inputs that are used to produce milk products on the local market, many dairy manufacturing companies have adopted global sourcing to obtain adequate supplies of milk and inputs from foreign markets at inexpensive prices. Therefore, this study intends to investigate the extent to which global sourcing has influenced performance variables of supply chain performance of dairy manufacturing companies in Zimbabwe.
