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Evaluation of Applicability of Low Cost Country Sourcing for Competitive Advantage in the Ship Supply Industry in Singapore


Venkataraman, R. (2015) Evaluation of Applicability of Low Cost Country Sourcing for Competitive Advantage in the Ship Supply Industry in Singapore. Doctoral thesis, Asia e University.

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Abstract

This research evaluated the applicability of low cost country sourcing strategy for SME Ship Supply companies in Singapore. A literature review on low cost country sourcing and supplier management was done. The risk factors were also identified. Primary research by way of interviews with selected purchase executives was followed by a sample order from China identified as the low cost country through a small Singapore based company. The research questions, findings and conclusions are as below: Research question 1 What are the Supply management processes adopted by companies in the marine supplies industry that apply to local settings? The supplier management practices in the ship supply industry in Singapore are as below:  Contracts and long term agreements  Consolidated Purchasing  Lowest Total Cost Selection  Vendor Managed Inventory Research question 2 How to improve the purchase prices for local ship supply companies by way of global sourcing strategy for competitive advantage. 1. The research validated that small companies can also do sourcing from low cost country like China with appropriate risk management. 2. The bigger and medium companies are already practicing LCCS. 3. The low cost sourcing country at the present moment is China. 4. Long term contracts and better supplier relationship can improve sourcing costs. 5. The company should have in place the required skill sets and the support and involvement of senior management is a critical requirement. Research question 3 What are the risks involved in this global sourcing process and how these issues can be managed by a local ship supplies company? Is creating portfolios of products a good process for risk mitigation? Risks identified are as below: 1. Quality, Supply delays, Wrong cost estimations, Geographic, Economic and Cultural distance. 2. Regulatory and political difficulties, tariff barriers and ethical standards. 3. Fluctuations in currency exchange, Infrastructure risks in power supply, Telecommunications and logistics. The following risk mitigation measures were adopted in the observational study:  By doing a country analysis and understanding the cultural factors.  By having a dedicated staff familiar with China and who is held accountable for this activity.  By selecting a supplier referred by the company’s principals in Hong Kong. The product portfolio purchase strategy towards risk management needs further research.

Item Type: Thesis (Doctoral)
Subjects: H Social Sciences > HF Commerce
Divisions: School of Management
Depositing User: Aida Rashidah Maajis
Date Deposited: 17 Aug 2017 09:00
Last Modified: 05 Aug 2020 04:06
URI: http://ur.aeu.edu.my/id/eprint/94

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