Role of Sourcing in the Achievement of the Profit Objective of Organization
CHAPTER ONE
Objective of the study
This study has general and specific objectives.
General objective
The general objective of this study is to examine the effects of strategic sourcing in the achievement of the profit objective of organization at Nigeria bottling company
Specific objective
The specific objectives of this study are:
- To find out the effect of Supplier Development in the achievement of the profit objective of organization.
- To examine the effect of Long term supplier relationship in the achievement of the profit objective of organization.
- To investigate the effect of Effective procurement plan in the achievement of the profit objective of organization.
- To determine the effect of Communication in the achievement of the profit objective of organization.
CHAPTER TWO
RELATED LITERATURE REVIEW
Introduction
This chapter presents literature reviews related to the purpose of this study. The purpose of reviewing the literature is to give insight on strategic sourcing processes. The purpose of reviewing the literature is to establish the conceptual foundation for the study, to define and establish the importance of research question. According to Saunders (2003), a literature search is “a systematic search of one or more databases for material on a specific subject”. It gives the researcher an insight to see clearly how the research at hand relates to previous researches. Thus, literature is reviewed under the following subheadings.
Theoretical Literature Review
Concept of strategic sourcing
Strategic sourcing is an institutional procurement process that continuously improves and re-evaluates the purchasing activities of a company. In the services industry, strategic sourcing refers to a service solution, sometimes called a Strategic Partnership that is specifically customized to meet the client’s individual needs. In a production environment, it is often considered one component of supply chain management (Tzokas, 2007).
The principal objective of strategic sourcing is uncertainty reduction and improvement of flexibilities when faced with supply, competitive, and demand uncertainties (Milliken, 1987; Johnson & Johnson, 1991). Carter et al. (1990) described strategic sourcing as an initiative to build competitive advantage through early supplier involvement in product engineering, sharing of supplier technology, and supplier assistance in developing product and process improvements. Strategic sourcing is a way to obtain manufacturing capabilities without capital investments.
CHAPTER THREE
RESEARCH DESIGN AND METHODS
Introduction
Methodology comprises the approach, strategy, methods and procedures adopted to conduct research (Chanston and Mangles, 2003). This chapter deals with the methods that are used in this study. This chapter is organized under the following sub-headings: research approach, research design, method of data collection, sampling technique and sample size, data source and type, validity and reliability, methods of data analysis, and ethical consideration.
Research Approach
The choice between a qualitative and quantitative approach depends on the type of study. Qualitative research is widely used in both business and academic environments. Nonetheless, quantitative research is considered more scientific (Malhotra, 2007). For the purpose of this study quantitative research approach of doing research is employed. Quantitative research approach is used for statistical procedures to analyze and develop inferences from data that’s statistical models such as means, standard deviations, correlations and regressions analysis are used.
CHAPTER FOUR
DATA PRESENTATION, DATA ANALYSIS AND DISCUSSION RESULTS
Introduction
The major aim of the study was to find out the effects of strategic sourcing in the achievement of the profit objective of organization. This chapter, therefore, presents a discussion of the final results and the process through which the results were obtained. In addition to this, background information of respondents is presented. Finally, the statistical methods of analysis are discussed, which included a descriptive analysis, a correlation analysis, and a multiple regression analysis through Statistical Package for Social Science (SPSS version of 24.0).
In order to archive the objective of the study and tackle the key research questions, the researcher has tried to conduct a detailed and technical investigations related to the study matter. In doing so the researcher collected relevant and reliable data from primary sources. Thus, the gathered data have been completed and analyzed meaningfully.
The data from the employees were collected using a five point Likert scale questionnaire measuring at an ordinal level and it is usually non parametric in nature. In analyzing, correlation and multiple regressions, between the response variable (organization performance) and the predictor variables (the factors), the averages of the responses were calculated since this conversion helps the data to be changed into continuous form and hence took the nature of parametric data for statistical manipulation (Creech, 2009).
Generally as basic analysis methods the researcher used descriptive statistics, regression analysis and multiple regression analysis for the quantitative data to find out the relation between the dependent and independent variables. The correlation analysis between each factor and organization performance has been analyzed based on measures of associations and descriptive adjectives using SPSS. Facts of the study have been presented in tables. The relative influencing degree of each factor and hypothesis test acceptance or rejection has been tested. Multiple regression analysis is used to discuss and express the effect of the whole factors in one equation. Assumptions of normality, linear relationships, homoscedasticity, independence of errors and multicollinearity are analyzed using SPSS. To find out all the necessary relationships between organizational performance (dependent variable) and factors (independent variables), model summary of regression results, the ANOVA, standardized and unstandardized beta (β) coefficient are used.
CHAPTER FIVE
CONCLUSION AND RECOMMENDATION
Introduction
This chapter deals with conclusions and recommendations. The main purpose of the study was to evaluate the effects of strategic sourcing in the achievement of the profit objective of Nigeria bottling company. To achieve the objective of the study, relevant literatures were reviewed and quantitative data were collected through questionnaire filled by employee’s respondents. The data collected through questionnaire were presented, analyzed, interpreted and discussed using statistical package for social science (SPSS 24.0) version. Thus, based on the analysis, the following, conclusions drawn, and recommendations forwarded for the practitioners of the strategic sourcing program in Nigeria bottling company and researchers who are interested to conduct in-depth study on this issue on the same organization or other sectors in the country in general and Kaduna in particular.
Conclusion
The following conclusions were proposed as follows.
- The mean score of supplier development (3.5218), long term orientation (4.00), effective procurement plans (3.37), communication (3.79), and organizational performance (3.65) this indicated that most of employees agreed with the practice of strategic sourcing variables such as communication, supplier development, long term orientation and effective procurement plans. Hence, as per the employee perception the existing strategic sourcing activities are effective.
- The correlation result show that there is positive and significant relationship between strategic sourcing (communication, supplier development, long term orientation and effective procurement plans) and organizational performance. The finding further indicates that the highest relationship is found between communication and organizational performance (r = .738**, and P < 0.05) respectively. However, the lowest relationship exists between long term orientation and (r = .492** and P < 0.01) consecutively.
- Regarding the regression result, the findings show that supplier development significantly explains 18.4% of the variation in organizational performance. Therefore H1: there is significant effect of supplier development in the achievement of the profit objective of organization is supported and conclude that supplier development has a significant effect in the achievement of the profit objective of organization.
- Long term supplier relationship negative and insignificantly explains -4% in the variation in organizational performance. Therefore hypothesis H1: there is significant effect of long term orientation in the achievement of the profit objective of organization is rejected and concluded that long term supplier relationship has a negative and insignificant effect in the achievement of the profit objective of organization.
- Effective procurement plan was found to significantly explain 35.1% of the variation in organizational performance. Therefore hypothesis H1: there is significant effect of effective procurement plan in the achievement of the profit objective of organization is supported and concluded that effective procurement plan has a significant effect in the achievement of the profit objective of organization.
- Communication was found to significantly explain 62.4 % of the variation in organizational performance. As such, hypothesis H1: there is significant effect of communication in the achievement of the profit objective of organization is accepted and concluded that communication has a significant effect in the achievement of the profit objective of organization.
- The overall, results revealed that all independent variables accounted for 67.8% of the variance in organizational performance (R2 = 0.678). Thus, 67.8% of the variation in organizational performance can be explained by the four strategic sourcing dimensions and other unexplored factors may limit organizational performance which accounts for about 32.2%.
Recommendation
Based on the findings and conclusion of the study, the following recommendations are forwarded to alleviate or at least to minimize currently encountered problems in the Nigeria bottling company that are related to effects of strategic sourcing in the achievement of the profit objective of organization.
- Nigeria bottling company corresponding to the supplier development, the company should confirm better attention in order to maintain the company supplier development driver which is in consistent with the company vision to be accomplished what the company wants to reach. Thus, the Nigeria bottling company should supplementary warrant that they develop their suppliers by non-financial and financial support such as sharing of their expertise which will result in win-win outcome with the suppliers and can play a greater role in improving organizational performance.
- Another important issue that is suggested to the case company’s marketing department is improving the relationship with customers through a continuous information sharing, follow-up them and get feedback.
- More importantly, the case company is suggested to improve its relationship with suppliers from simply buy-sale relationship to a modern supply chain relationship through establishing strategic or long term supplier relationship and continuous information sharing in order to minimize supply uncertainty which resulted in demand and supply mismatched of the case company.
- The researcher remarks that it is difficult to generalize the results based on this single case study. Therefore, suggests for further researches to demonstrate and evaluate the models on a diversified portfolio of companies including different sectors based on their business activities, different sizes, and different current strategic sourcing practices.
- Besides, it is recommended to see the impact of strategic sourcing outside MOHA Soft Drinks since in this dynamics and complex business environment; it will help to see the variation between soft drinks industry and other sectors organizational performance.
- This study found a gap in Nigeria bottling company concerning the variable which is, long term supplier relationship are not well addressed by the Nigeria bottling company. Therefore, the future researchers can study on those and fill the gap to the maximum extent and check it the company has filled its gap after 2022.
- Finally, future researchers can make a comparison between soft drinks and beverage industry in Nigeria on the role of sourcing in the achievement of the profit objective of organization.
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