Impact of Strategic Material Sourcing on Construction Performance. A Comparative Study of Domestic Verses Overseas Sourcing Strategies

Project Report from the year 2017 in the subject Business economics - Supply, Production, Logistics, grade: 3.42, Kwame Nkrumah University of Science and Technology (Supply Chain and Information System), course: Logistics and Supply Chain Management, language: English, abstract: Procurement is increasingly playing a vital role in assisting major organizations to achieve cost savings through strategic material sourcing. Strategic sourcing is a firm's procurement process that continuously improves and re-evaluates the purchasing activities of a company. There is a dilemma of trade-off between sourcing overseas and locally to increase construction or organizational performance. This study investigates the impact of strategic material sourcing on construction performance, a comparative study of domestic verses overseas sourcing strategies. In pursuance of this, the key objective was to determine the effects of sourcing strategies on the performance of construction/ real estate industry of Ghana. Stratified sampling technique was used in addition with structured questionnaires to obtain data. The study adopted descriptive research design to generate findings. Analysis of data was done using the SPSS and findings were presented in descriptive and Microsoft Excel tables with frequency and percentages. Regression analysis was also used to analyze the relationship between strategic material sourcing and construction performance. The findings show that, 55% of materials used in the real estate industry were sourced from the overseas market and it implies the industry depends highly on foreign materials which impacts construction performance. Several reasons why the industry source from the local or foreign market but ten reasons were identified as significant to domestic sourcing while eleven were recorded for overseas sourcing, implying that, there is a minute advantage in sourcing overseas to local market. Recommendations made based on the findings were: the industry should engage in technology transfer and local supplier development to enrich the local market to provide the needed materials and boost local economy; further study on the impact of quality and cost characteristics of foreign goods on construction performance.