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Strategic Sourcing - MNP3701 (MNP3701)
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MNP3701
Assignment 4 Semester 1 2024
Unique Number: 528413
Due Date: 14 May 2024
QUESTION 1
a.
Introducing a low-cost country sourcing strategy (LCCS) into Pepkor’s supply chain framework
could potentially inhibit their sustainability objectives. While LCCS may offer cost savings
through cheaper labor and production costs, it may also lead to increased transportation and
environmental impact due to longer supply chains. This could contradict Pepkor's commitment
to sustainability and responsible sourcing practices. Additionally, LCCS may not align with their
focus on local manufacturing and promoting economic empowerment within the communities
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QUESTION 1
a.
Introducing a low-cost country sourcing strategy (LCCS) into Pepkor’s supply chain framework
could potentially inhibit their sustainability objectives. While LCCS may offer cost savings
through cheaper labor and production costs, it may also lead to increased transportation and
environmental impact due to longer supply chains. This could contradict Pepkor's commitment
to sustainability and responsible sourcing practices. Additionally, LCCS may not align with their
focus on local manufacturing and promoting economic empowerment within the communities
they serve.
b.
Implementing LCCS may pose regulatory and compliance hurdles for Pepkor, especially given
their commitment to sourcing locally and supporting the South African government’s 2030
Retail–Clothing, Textile, Footwear, and Leather Master Plan (R-CTFL Master Plan). Introducing
LCCS may require navigating trade agreements, import regulations, and compliance with labor
and environmental standards in the countries where the sourcing takes place. Additionally, it
may necessitate ensuring that suppliers abroad adhere to the same ethical and sustainable
practices that Pepkor upholds, posing challenges in monitoring and enforcing compliance across
geographically dispersed supply chain operations.
QUESTION 2
Porter’s Five Forces competitive position analysis for Pepkor’s locally sourced products:
1. Threat of new entrants:
Pepkor’s dedication to sourcing locally creates a barrier to entry for new competitors who may
not have established relationships with local suppliers. By working closely with local
manufacturers and raw material suppliers, Pepkor has a competitive advantage in terms of cost
efficiency, lead times, and stock turnover, making it difficult for new entrants to compete on a
similar level.
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