Determinants of strategic sourcing and the impact of them on fast moving consumer goods industry in Sri Lanka

Abstract

Sourcing function has become a crucial activity in any organization from recent decades because total supply chain effectiveness of any organization is achieved mainly through efficient sourcing function. Therefore, the study aimed to findout the determinants affecting on strategic sourcing and the impact of each determinant. The study population was targeted to those who are engaged in sourcing of five top ranked players in the Fast-Moving Consumer Goods (FMCG) industry in Sri Lanka. A sample of 300 respondents were considered under stratified sampling method. Through a factor analysis, five factors have been identified as the determinants of strategic sourcing. The identified factors are, supplier’s reliability and Quality, supplier’s Business Environment, supplier’s sustainability, cost advantage and Customer Responsiveness. A linear regression analysis was undertaken to distinguish the impact of each identified determinant on strategic sourcing.