Balanced Sourcing As An Important Attribute Of Operations Strategy: Reality Or Myth Among Ghanaian Firms?

Abstract

Today's business context is more complex than the environment in the past due to globalisation, new technologies, rapidly shifting conditions in the marketplace, and competition arising from the most unexpected places. These important events have posed challenges for companies as far as sourcing is concerned. The process view of an operations strategy is particularly important because it focuses on how work is done. For example “how is sourcing done?” Thus, it becomes important to answer the questions “who should perform an activity or process in the value chain?” and “how we should manage the supply relationship?” (Van Mieghem, 2008). The answers to these questions bring to focus the need to strike the optimal balance between a sense of cooperation and a commitment to competitive pricing. This is what Laseter (1998) termed “Balanced Sourcing”. This paper therefore seeks to classify firms used in the research into the four quadrants of the “commitment to a cooperative relationship” and “commitment to cooperative pricing” matrix. Such a classification should serve as a guide to operation managers of firms to review sourcing strategies for a better financial performance of their firms. A survey approach was adopted using 150 firms in the Tema-Accra metropolis. The operation managers of the firms were served with questionnaire and were also interviewed. The collection of the questionnaire took a period of three months and the interviews spanned one-and-a-half months. The collected data were analysed using Statistical Package for Social Sciences (SPSS). All four quadrants were represented by the firms though majority of them are found in the balanced sourcing quadrant. It was found that many of the firms have serious challenges pertaining to the sustainability of their positions. We also found out that benefits accrued to firms which have implemented sourcing strategies that emphasise cost and quality management.

Keywords: Balanced Sourcing, Operations Strategy, Strategic Sourcing, Sustainable Competitive Advantage, Transactions