Global Sourcing and Its Associated Challenges in the Mining Industry in Ghana

Abstract

This research investigated the extent, benefits and challenges of Global Sourcing in the Ghana Mining industry. The study looked at the level of outsourcing outside the country, the products that are sourced globally, factors that contribute to the decision to source globally, challenges of global sourcing and above all the benefits that these companies derive from sourcing globally. Three mining companies each representing the large, medium and small-scale mining companies in Ghana were used as case studies. A well-structured questionnaire was sent to these companies to gather primary data. Secondary data from various offices within the supply chain departments of these companies were also used to supplement data obtained from the survey. Using the Statistical Package for Social Sciences (SPSS) software, both the primary and secondary data were analyzed. The analysis included the use of basic descriptive statistics and graphical representations using bar charts, histograms, scatter plots, etc. Even though the literature cites cost as the key factor for Global sourcing, the study showed that for the Ghana mining Industry, product quality is the primary factor. From the study, Quality recorded 45%, Competitive advantage 20%, and combined cost and global outlook recording 16.7% when respondents were asked about the most important factor influencing global sourcing in their respective companies. Differences in the legal frameworks and business environments of foreign sources possess many challenges to the mining companies contrary to popularly observed challenges with delivery and lead time. There are no clearly defined models or strategies for doing global sourcing in the companies as various authors have noted however contrary to the traditional belief that M&M companies conduct Low Cost Country Sourcing (LCCS), the companies under study preferred Best Cost Country Sourcing (BCCS) which recorded 55.2% against 44.8% for both LCCS and BCCS.