The influence of global sourcing on local firms’ competitiveness, supply chain competence and performance in the sugar sector in South Africa

Abstract

While a variety of studies have conducted research on the influence of global sourcing, only limited studies have investigated the supply chain competence, competitiveness of local firms and performance within the South African context. Hence, this study illuminates these themes with the intent of suggesting proactive strategies for the South African sugar industry. Furthermore, this study also attempts to suggest means through which the service delivery could be enhanced within the African continent and beyond, while also attracting, retaining and motivating professional business relationships with potential buyers of South African sugar cane growers and manufacturers of sugar from other countries. This study used a quantitative research approach. It focused on suppliers and manufacturers of sugar in South Africa (KZN), particularly sugar manufacturing firms and their sugarcane suppliers who are affiliated with the South African Sugar Association. A final sample size of 312 participants who were selected through the simple random sampling method was used in this study. A designed questionnaire was used to obtain relevant information from these participants. The primary findings of this study indicated a positive and significant influence of global sourcing on local firm competitiveness, supply chain competence and supply chain performance. The results from the study suggest that sourcing some products globally can make the local sugar manufacturers and cane suppliers to enjoy cost and value competitive advantage, help them to create a competence and improve performance for the entire sugar supply chain. They show that there is possibility to create situations where global sourcing and job loss minimisation/stoppage in local firms of South African sugar industry. These findings have relevance for South Africa and for other African countries within the same industry. The study indicated that, to attain competitiveness on a global scale, while meeting the global sourcing expectation standards, these sugar industries need to advance and sharpen their capacities. Invariably, findings emanating through this research may be beneficial to the South African sugar industry as the study provides recommendations on supply chain as well as its advocacy on measures which can enhance service delivery.