Examining local sourcing strategies utilised by a logistics service provider in Durban.

Abstract

The study explored local sourcing strategies adopted by a logistics service provider (LSP) operating in Durban, South Africa. In an era marked by global supply chain disruptions, understanding the dynamics of local sourcing becomes crucial for enhancing supply chain resilience, reducing costs, and contributing to local economies. Through a qualitative research methodology, the study delved into key themes encompassing reasons behind local sourcing, types of locally sourced products, purchase classification methods, sourcing strategies, and critical supplier selection criteria. The study included eight participants, namely participants A-H. The participants were selected based on the inclusion criteria as described by the researcher. Whilst there was only one participating organisation in the dissertation, other candidates participated in their own capacity. This allowed the research more insight on how local sourcing was viewed in relation to the participating organisation. The first theme unveiled the rationale driving LSPs' preference for local sourcing. The findings emphasised the potential for local sourcing to alleviate costs associated with global procurement, fostering economic growth and sustainability in the region. The second theme identified various product categories that LSPs source locally, ranging from packaging materials to machinery. Notably, insights from participant interviews suggested that certain technical products were sourced locally through intermediaries due to their specialised nature. The third theme centred on purchase classification methods, revealing the prevalence of the Kraljic Portfolio Matrix among LSPs in Durban. While the Kraljic Matrix considers risk and importance, an additional classification method—disbursement and trade spend—was revealed by a participant. The fourth theme highlighted diverse sourcing strategies, such as multiple sourcing, single sourcing, strategic partnerships, and collaborative planning. Participants underscored the importance of aligning strategies with specific goods categories to balance risk and supplier competition. Critical supplier selection criteria form the fifth theme, emphasising price competitiveness, product quality, delivery reliability, lead time, and supplier financial stability. These criteria reflected the multifaceted nature of decision-making whereby LSPs must navigate complex trade-offs to optimise sourcing outcomes. Thereafter, the researcher provides recommendations such as diversification of sourcing strategies, strengthening relationships with suppliers and continuous evaluation of suppliers to further assist LSP’s in their sourcing practices. In conclusion, the study contributed substantially to supply chain management discourse by shedding light on the underexplored realm of local sourcing strategies followed by South African LSPs.