Problems and challenges of global sourcing at Defy Appliances.
Loading...
Date
2017
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Abstract
Studies have shown that global sourcing is in one direction whereby global manufacturers from developed countries purchase low-cost materials and products from developing countries. Undoubtedly, one of the purchasing bases for them is China because of its abundant resources and cheap labour. That is why China is called the “Global Factory.” However, the higher demand for technical quality and an increase in manufacturing cost is driving more manufacturers to adopt a global sourcing strategy to improve their competitive advantage. That is why many South African manufacturers are currently adopting a global sourcing strategy to help optimize the use of global resources.
The purpose of this study is to analyse what problems and challenges DEFY, a domestic appliance manufacturing company in South Africa, face in the implementation of a global sourcing strategy.
The study analyses the problems encountered at Defy Appliances (Pty) Ltd when implementing a global sourcing strategy. To achieve this objective a quantitative investigation will be performed amongst employees in the relative departments within the organization that are involved in material design selection, international purchasing, global sourcing, supplier selection and overall costs gain/loss. The respondents will be selected from the following departments within the organization that is, Research & Development, Procurement, Planning, Logistics and Production Engineering. Hence a quantitative research study is adopted using a questionnaire as the research instrument.
Pursuing global sourcing is a time-consuming process and involves many challenges. In this complex situation, there is no universal compass to pursue global sourcing. Inexperienced South African manufacturers experience challenges related to logistics capabilities, selecting foreign sources, protectionism, regulations, and so on when developing policies and procedures for advanced level of global sourcing.
The important driving force for Defy Appliances pursuing global sourcing is improved technology and cost savings. The investigation and analysis carried out in the study shows that Defy will not pose a major risk in implementing global sourcing.
Description
Masters Degree. University of KwaZulu-Natal, Durban.