Global Sourcing of International Construction Companies in the Middle East and North African - Dissertation Example

2016

By

Subbarao Moka

Student No:

Dissertation Supervisor:

Submitted in partial completion of the degree of

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Word Count: 16,272

[**The word count only includes the text contained in your main body and does not include footnotes if they contain only references; however, footnotes containing e.g. explanation, analysis / discussion or background information are included in the word count. Cover page, abstract, acknowledgements, contents page, tables of cases, tables of statutes, appendices and bibliography are not included in the word count.]

ABSTRACT

This dissertation examines the dominant trends in global sourcing amongst international construction companies operating in the Middle East and North African. The study examines the strategic, operational, performance management and risk management pointers that are most relevant in undertaking global sourcing in multinational construction companies in the region under review.

The research identifies that strategically, decisions vary on the basis of the size of an international construction company. Smaller construction companies often have centralised systems that focus on quality indicators as a means of gathering products from different parts of the world. Such smaller international construction firms operating in the MENA region have strong relationships with suppliers in different parts of the world and they rely on trust and specialisation to source for products in these regions around the world. Larger entities on the other hand maintain a specialised procurement function which utilises advanced and often bespoke information systems to make orders and monitor orders.

Operations are based on strong information systems and the supply chain system for global sourcing is often linked to the national petroleum logistics policies of governments in the MENA region. Most of the ports and transport infrastructure in these MENA states are advanced and have modern information system approaches and environmental footprint metrics that are similar to other western nations.

The most important performance indicators are quality standards which favour the clients’ quest for ostentation. Due to this, Europe and North America are popular destinations for global sourcing. However, internally, most international construction firms seek to balance their budgets and increase their earnings. This culminates in the ordering of cheaper components from China and Africa to cut down cost. Timeliness and the ability to receive products on time are important pointers in measuring the performance. Also, information system needs cover the need for reliable, relevant and real-time information that is used to monitor the movement of products from international sources.

ACKNOLWEDGEMENTS

This course has been very demanding and has required a lot of attention and patience. However, it has enabled me to grasp and internalise a lot of knowledge relating to construction and its management. I will like to thank my professors and lecturers who gave me a wealth of knowledge which formalised many things I had encountered in my work as a professional. It is my firm belief that the knowledge will help me to bring a lot of good in this world.

I will like to thank my parents and relatives who nurtured me from childhood to this day. A wise man once said that parenting in our times is more of an opportunity to give love than to receive love. My parents have spent a lot of time and effort to show me a lot of love and affection which has enabled me to gain a decent life. All I have is owed to my parents. I will also like to thank my wife and family for their care and patience in times when I had little time to give them the love, affection and attention they are entitled to. This project is dedicated to them.

Special thanks go to my supervisors who gave me constructive criticisms and encouragement. Sometimes, going back to fix things was frustrating. But after weeks of going back and forth, we have put together a wonderful project that will add up to knowledge. I thank them for their guidance and mentoring in various ways and forms.

Finally, my thanks go to the interviewees and respondents who took part in the data collection process. This consisted of years of experience and hard work which they were willing to share to provide information about global sourcing in construction – an emerging field that seem to be the future of the construction industry. It is my privilege to share this information with the world. Hopefully, this will lay the foundation for greater things to be done in the field of global sourcing.

List of Abbreviations

Global Sourcing (GS)

Global Supply Chain Management (GSCM)

International Construction Companies (ICCs)

Middle East and North Africa (MENA)

Supply Chain Management (SCM)

CHAPTER 1: INTRODUCTION

This chapter provides the blueprints of the research works. It will commence by conducting a review of the research problem by examining the background of the chosen topic. This will lead to the discussions of the conflict experienced in global sourcing in the construction industry of European and American construction firms in the Middle East and North Africa. From there, there will be the deduction of the research questions which will lead to the formulation of the research aims and objectives.

This chapter will also outline the motivation for the study and an outline of the chapters for this research. This chapter brings to bear the main essence of the dissertation and also explains how the study and analysis will proceed. This will be the basis for the core theories and concepts that will be utilised in the next chapter, which is the literature review.

1.1 Background of Study

Global sourcing at its lowest level involves the outsourcing of activities and relationships that are managed across different countries with a global outlook. This includes the purchase and supply of goods and products used in a construction process from an array of countries that come together to define a coherent framework of products used in construction contracts.

Global sourcing in the construction industry is often undertaken by entities that have international operations and this includes entities that operate across different nations with a large capital base. The critical success factors in achieving optimal results from global sourcing in the construction industry is classified in three main headings:

• Internal features;
• Intermediate features &
• External features

Internal features are based on various pointers and linkages which lay the foundation for the achievement of the goals of a company through global sourcing. This is influenced by the strategic plan and conception of the company and this is translated into productivity targets, outsourcing partnerships and investments, transportation and logistics movements and information technology and systems strategy. The internal factors define the framework and factors that are representative of an international entity. Internal features are mainly guided by the decisions of the top level management of an international construction company and they serve to define the main framework and process through which the company will define its global sourcing contracts and procedures.

The elements of integration and how a firm connects to the outside world leads to the intermediate variables of global sourcing in the construction industry. The intermediate features include “worldwide integration of engineering, operations, and procurement centres within the upstream portion of a firm's supply chain.”. This refers to how an international construction firm is able to set up an effective and efficient supply chain system that works to achieve the internal goals and strategic objectives of the top level management. The intermediate system of a global sourcing system in the construction industry consists of various processes that are often independent and are regulated by contracts and national laws as well as realistic constraints that might stand in the way of the supply chain.

There are also external variables that define the macro-environment within which a global sourcing system of an international construction company will work and operate. The main variables of the external features of global sourcing in construction include “macroeconomic forces, domestic and offshore national policies, industry dynamics, and firm-level offshoring capabilities driving today's offshoring decisions”.

In operating the global supply chain system of a construction entity, there is the need for some kind of risks to be identified and managed regularly to ensure success. The main risks include political risks, economic risks, currency risks, export and transport risks, lead time risks, inventory risks, quality risks and intellectual property risks, . These risks can be managed through predetermined standards and directives by the board of directors and managers. There could be other ad hoc arrangements that ought to be made to responsively deal with major problems and issues that comes up in running a global sourcing mechanism in an international construction company.

Once the system is also put in place and all arrangements are made, there is the need for constant improvement and quality management and improvement. Performance management in global sourcing in the construction industry is achieved through cost, time and production quality. This ensures that a construction company is able to monitor its gains and match it with its losses. This will enable the construction firm to gain important ends and goals and this leads to major results.

The benefits that are gained through global sourcing is enormous. Due to this, most international construction companies are able to utilise it in the 21st Century to cut down costs and improve performance. The process guarantees better returns and due to the increase in globalisation and standardisation, global sourcing has become popular in the construction industry and has caused most construction firms to overcome major obstacles. Thus, this study provides an inquest into the deeper elements and features of global sourcing and how it is carried out in the contemporary construction industry.

1.2 Research Problem

There has been a contact between Europe and the Middle East and North Africa. These interactions predate the periods of religious conflicts between Europe and the Muslim world in the height of the Middle Ages (1095 AD to 1600). The interactions were mainly due to the expansion of empires, particularly the Greek Empire which sought to create advanced architecture and systems in pre-Islamic times. Thus, the interaction between the West and the Arab world has a long history. This laid the foundations for the era of the Westphalia model of nations which led to the creation of secular nations in the 1600s and laid the foundation for the colonisation of nations around the world by European nations.

These periods led to eras of gradual connections between Europeans and Muslim lands. The exploration of petroleum continued in the early 1900s and large unlimited quantities of oil was found in nations in the Middle East and North Africa. The oil boom led to unprecedented wealth in the Muslim world and this culminated in the massive development of these countries. This culminated in the erection of major edifices in the Middle East and North Africa. These construction developments were led by a mixture of local Middle Eastern and North African firms and expatriate firms – mainly from Europe and North America. Together, these companies advanced the international construction industry significantly. Some of the largest and most significant edifices on the planet can be found in nations like Saudi Arabia and the United Arab Emirates. These rich Gulf countries as well as countries in North Africa like Egypt, Tunisia and Morocco have attracted a lot of international construction contracts.

The geostrategic nature of the locations of countries in the Middle East and North Africa put them at the crossroads for major interactions and development. This is because they could be easily accessed from all parts of the world – Sub-Saharan Africa, North and South America, the Far East, Pacific, Russia and other parts of the world. Thus, international construction companies were able to conveniently order products and services that were shipped to these countries and communities without issues and difficulties. This culminated in a system whereby experiments that could not be undertaken in North America and Europe were carried out in the Middle Eastern and North African construction sites.

There are a lot of lessons that can be conjured and put together from these projects that can shape up and improve the operation of international construction activities and processes. Thus, there are questions about some fundamental elements and features of the global sourcing process used by the leading European and American construction firms in the Middle East and North Africa to complete mega projects.

What are the main methods and systems that are utilised by these international construction giants to integrate and set up the global sourcing system of their construction firms? What are the main elements of the global supply chain system they institute to carry out global sourcing? What are the technical requirements and elements? What are the external variables that are relevant to the global sourcing system and process? Then there is the question of what the major risk management frameworks for global sourcing systems in the region was. And finally, there is the question of the performance measurement systems that are used by international construction companies (ICCs) in the Middle East and North Africa (MENA).

1.3 Aims and Objectives

The aim of the research is to critically analyse the internal, intermediate, external and external variables for the operation and monitoring of global sourcing systems in international construction firms (primarily from Britain and the United States of America) in major projects in the Middle East and North Africa. In order to attain this end, the following objectives will be explored:

• An identification of the strategic and operational systems for the creation of global sourcing systems in ICCs in the MENA;
• An evaluation of the relevant external variables and indicators of global sourcing that ensure the growth, survival and competitive advantage of ICCs in the MENA;
• The evaluation of the main risk management techniques and performance management systems utilised to ensure consistency and satisfactory results in the operation of the global sourcing systems of the ICCs in the MENA.

1.4 Motivation for Research

The research seeks to present information about the success of global sourcing in the international construction industry and how it links to technical competency. To this end, the dissertation will integrate aspects of the study that have never really been done.

Additionally, this research is in partial fulfilment of my Masters’ degree. It will bring together aspects of the taught course. And enable the researcher to demonstrate some important and vital aspects of the application of research methods and processes.

1.5 Chapter Outline

This research will be done in six chapters. This chapter is the opening chapter and provides an introduction to the entire research. The next chapter is the literature review which will discuss important theories and concepts that can be utilised as the basis for the definition of the parameters for the research. Chapter 3 will be the design of a research methodology that will be utilised as the basis for preparing the framework for data collection and analysis. Chapter 4 will be the presentation of the findings of the research in the raw format. This will be interpreted in the fifth chapter. The findings from the fifth chapter will be used for the formulation of conclusions and theories that will answer the core research questions in the sixth chapter.

CHAPTER 2: LITERATURE REVIEW

Formal research is based on the ability of the researcher to build on existing ideas that have been deduced within the tradition of scientific and empirical research. This chapter will be dedicated to the identification of concepts and theories that are significant and relevant to the study. To this end, important ideas and propounded theories from authorities in the field of global sourcing will be discussed and analysed.

This chapter will draw on secondary sources including books, journals, articles and reports that provide important information about global sourcing and construction in general. This will include the evaluation of ground-breaking definitions, concepts and theories that provide insights into global sourcing and how it works in the construction industry. The analysis will be linked to the core research questions and utilised in the next chapters to design the data collection, analysis and interpretations of the findings.

The essence of this literature review is to identify the main ideas and concepts that set the parameters for understanding elements and aspects of global sourcing and the construction industry. It is important in defining the methodology that will be used for the entire fieldwork. This will also be necessary in conducting discussions and the interpretation of the findings of the research. This is because there is the need for credibility to be attained through the utilisation of previously conducted research and the work of authoritative sources. This will ensure the consistency of the dissertation and the adherence to the traditions of empiricism.

2.1 Internal Features of Global Sourcing in the Construction Industry

The approach for sourcing of materials and logistics in every construction project is extremely important. This is due to the crucial nature of materials and logistics in the production cycle. Global sourcing is a strategic level function and this is to be viewed as a part of a long-term, organisation-wide strategy that is set by the top-level executives and managers of a construction firm. This is because there is the need for global sourcing to be coordinated and brought together to achieve the best results of the entire construction company. Globalizing the entire process means there is a potentially larger margin of error which could lead to major gaps.

In the 21st Century where strategic analysis and evaluations are important and vital, it is necessary to point out that this is a mandatory part of corporate law in most nations and forms a fundamental part of leadership in organisations. This kind of system indicates that every important and vital function will have to work with all components of the company and operate to pursue competitive advantage and the optimisation of resources.

A construction company will be set up by investors and/or partners who set out to maximise their returns on investment by cutting down on cost of operations, increasing profit margins and managing efficiency and other indicators. This requires the integration of strategically productive and positive goals and means that ensures that the company achieves better results and is efficient and effective in everything it does. Therefore, strategy is an important part of the operations and it uses tools including outsourcing where necessary to cut down costs and meet its fundamental strategic objectives and goals.

Supply chain management is an important part of the critical success factors of a construction firm. This is because such pointers are essential and necessary in establishing and maintaining some of the best methods and systems for the attainment of optimal results. These results are fundamentally steeped in the ability to manage tools for competitive advantage including supply chain management, the utilization of proper planning and modern technology in production to achieve results. Global sourcing is one of the many pointers and features that forms part of the broader context and the broader system for the achievement of optimal and positive results. This includes the application of best standards and best tools for the achievement of the highest and best returns on investments. Since global sourcing is linked to operations management and operations transcends all the different components of a company, there is the need and requirement for these elements and features to be properly managed at the topmost level to take on inputs from the most senior managers and directors.

The main features of the strategic component of global sourcing in a construction company includes:

• Internal financial and operational targets;
• Competitive advantage concerns and pointers
• Integration into internal aspects of the company.

These are sensitive pointers that allows global sourcing to link and connect with the different aspects of a construction firm. They have to be planned and decisions must be taken to formulate a standard policy that will ensure that all these pointers work to achieve the best results as the management and directors of a company expects. This means that the company will have to ensure that the internal financial and operation targets are met with a new procurement system that is based on global sourcing. There are also other matters like competitive advantage and the ability to provide efficient, effective and more affordable services to consumers through a new system. However, there are aspects like integration and the ability to put together different processes and trends to ensure that the company is able to achieve optimal results in all areas.

Another dimension within which the internal elements of global sourcing can be evaluated and properly institutionalised is within the context of planning and setting up a code of best practise. Thus, Van Weele studied a number of cases of corporate entities and come up with the following steps as desirable in setting up a system of strategically integrating global sourcing into an organisation. This includes:

• Collect and analyse internal data:
• Converge internal and supplier market data;
• Develop global sourcing strategy;
• Execute strategy and implementation plan &
• Manage supplier relationship

This provides a properly structured and well thought-of system through which the management of a construction company can work to match the environmental conditions with the internal resources of the company in order to achieve the best results. Therefore, a construction firm which seeks go into a venture whereby there will be the collection of materials and sources from different parts of the world will have to be careful with data. “Data is the central and most vital element in all outsourcing decisions and its significance is exponentially enhanced in cases where a construction company outsources from several countries”. This therefore means that the collection of information and analysing it indicates the first and most vital step in the global sourcing process.

Therefore, it is vital and important to collect and analyse data within the company as a prerequisite to identifying what a company needs to complete a project and how these needed materials and logistics fit into the company’s overall strategy. Here, information about specialisation of the firm and the details of major projects is important and vital.

After the internal information and data is evaluated, there is the need for the approaches for convergence with the outside world can be done. This includes data and information about trends relating to major transportation partners and other entities related to the firm. This is about supplier information and how it works for the attainment of results and what the general option for the delivery of materials are and how they would work together for the firm in a specific set of contexts and scenarios.

With the data of the external and internal markets established, there is the need for the development of a global sourcing strategy. This will mean a plan will be formulated to identify how best the firm will operate with its international partners. This constitutes the fundamental instructions and areas of flexibility where managers can take ad hoc decisions where the need arises. This will help the company to respond to quick circumstances and opportunities that come up. On the other hand, there must be rigid rules that reflect the very vision of the top-level managers and must be set up to run over the long term operations of the company.

2.2 Intermediate Variables of Global Sourcing and the Construction Industry

The intermediate framework or the meso-environmental system is about how the firm links up to the suppliers. It relates to the medium through which a company in an outsourcing programme can ensure that there could be interactions with partners without issues. This is fundamentally related to the supply chain system that is utilised by a company to contact its partners in the system and also work to optimise these relationships. In global sourcing, the circumstances are different. Hence, it is normal and fairly common for the procedures to be adjusted and viewed in the light of the realities of transnational relationships and its management amongst others.

The process of managing relationships with partners in global sourcing is complicated. This is because it is about the worldwide integration of various aspects of engineering, operations and procurement points that must be monitored and evaluated on the basis of operations targets.

It is fairly simple to conduct a supplier relationship management within England or Ireland or within the European Union or the United States. However, in a geostrategic centre of the world, there are relationships that span through different communities and countries across the globe. In the Middle East for instance, it will be appropriate to look at relationship with partners in Africa who will provide cheap raw materials, China who will provide cheap processed or manufactured products and relationships with partners in Europe, America and other places for specialised parts. All these regions have their respective traditions, cultures, laws, standards in construction matters and many others. Therefore, it is bound to be complicated and difficult to formulate, implement and monitor such global sourcing relationships and supply chain systems.

Therefore, three main features and pointers are important in dealing with the intermediate variables of global sourcing in international construction:

• Procurement strategy
• Contracts and partner relationship managements
• Information technology and communication.

These three pointers are vital and important to ensure that the production system of a construction project is well coordinated to ensure optimal results. They all play vital roles that are linked to the procurement strategy and system and this is discussed significantly in-depth below to analyse them systematically. This process enables the meso-framework to gain the right framework for contribution in the research design process.

2.3.1 Procurement Strategy

Procurement strategy is an operational level plan that is handled by the purchasing and supply unit of a global sourcing strategy of an international construction company. It involves a series of long-term functional blueprints that are implemented by a construction company to bring together the purchasing of materials and logistics in the best way and form possible.

The procedure is fundamentally a strategic business unit (SBU) that will have to operate alongside other departments – production, research and development and many others. Therefore, care must be taken to acquire expert and professional technical inputs into the formulation of a strategy and system for the achievement of optimal results and a viable strategy.

By definition, procurement strategy is viewed as “an integrated process that consists of the people, organizations, technology, and procedures used to effectively identify, quantify, acquire, expedite, inspect, transport, receive, store, and preserve the materials, equipment, and associated information across the life cycle of a capital project.” .

This means that the procurement unit of a construction company that is involved in global sourcing will have the duty of organising the technology, people and procedures to ensure that products and logistics are moved from suppliers to the construction site of a project. This involves some technical elements and features like the identification, quantification and managing the transport and material relocation process. It is a convergence point for the decision on many activities and processes for the conduct of effective and meaningful work throughout a construction company and beyond. Procurement strategy is an operational level strategy that is backed by or validated by the top level management who ensure it fits into the corporate framework.

Thus, procurement strategy will be about the management of the movement of materials and logistics within the proper perimeters of a given operation cycle. The process will almost always involve the utilisation of different measures and processes to evaluate and analyse the needs at all points in time and provide the right kind of resources and activities to deal with issues and matters. The most fundamental view is that it is done within a context of moderation and logic. This includes the application and utilisation of methods that work and ensuring the best things are done in a corporate setting.

“The choice of procurement strategy can play an important part in the way that the construction process flows.”. This is because the procurement approach and method defines the way materials are received. There must be an optimal order system that will ensure that materials are received on time to prevent lead time. Also, this process must avoid the situation whereby excess materials can be gathered which leads to risks that relate to the lock up of capital, slack, loss and destruction of materials and property.

Procurement strategy is therefore a set of limits and policies on exact actions in the global sourcing system of a construction firm. And in the global sourcing context, procurement strategy is about a procedure and system whereby the best methods and means are used to gather and control matters and affairs through policies which might be rigid and the inputs for flexibility where emergent trends and procedures are identified and relevant to the operation of an international construction company.

2.3.2 Procurement Contracts & Partner Relationships

A survey “…found that in the UK, 52% of all construction projects ends with some type of claim.”. This implies that there is a high propensity of construction projects that end up in conflicts of sorts. This is because such conflicts lead to expensive executive disputes that can stand in the way of the proper production methods and processes. This must be avoided at all times and in all situations, through carefully defined and properly managed construction contracts. In the international context, the matter of overlapping jurisdictions and many other problems ensure that these problems can be extremely complicated.

There are different approaches to procurement strategies. This includes amongst others “Traditional – Design and build; Management - Design and manage; Construction management; and Partnering.”. These methods and approaches are applied in various ways and forms that are utilised in dealing with the best of results for companies.

In the international sourcing environment, there is a question of how these different outsourcing and procurement approaches can be streamlined to ensure that purchases across boundaries can be done in a logical manner. The global sourcing system is such that there are many possibilities and each has to be managed closely and carefully to ensure that any reasonable and logical results can be achieved in this field and area.

Each method is chosen on the basis of the scope of work, the realities of the circumstances at hand and the procurement system and process. Thus, the methods that are utilised is to be varied on the basis of the international process and its scopes and implications. Also, there are elements of international contracts that are relevant. For instance, there are questions of what people from other sides of the international sourcing arrangement is. There is also the issue of how to manage a myriad of contracts and processes. This is often viewed in the context of defining a standardised form of policy that will be used in formulating and guiding negotiators of these contracts.

Then there is the question of anticipatory breach and dispute resolution. This must be properly managed and logically presented in ways that will ensure that the best positions and the best results are attained in all conflicts and problematic scenarios are avoided where necessary to ensure that the best of results can be guaranteed in these global sourcing procedures and contracts.

2.2.3 Information Technology and Communication

Information technology in the context of global sourcing is viewed as “the technology to process data into meaningful information with international worth and prompt cross-border exchanges in an accurate manner.”. This is important because constant communication and the need for real-time information to be exchanged in every communication encounter is vital and almost inevitable.

The centrality of information technology in global sourcing is because information must be taken to monitor orders and transportation processes. Therefore, a suitable system must be in place to ensure that information can be sourced, applied and utilised in the best situations and scenarios.

There is also the question of Executive Decision and Support Systems. This is because global sourcing is sensitive and could affect the reputation of a firm and affect the quality of a project so it is logical that the board of directors and the most senior members of staff can have direct information as and when it builds up. This position is necessary because some authorities hold the opinion that aggregating and processing information across borders is fairly difficult, Then there is the question of standardisation. What could be standardised in one jurisdiction in the global sourcing system might be unacceptable in another. Therefore, it is necessary to define metrics and ensure that fundamental assumptions are established and made aware to the management of an international construction firm.

Global sourcing information systems and information technology involves performance information databases that are shared between facility owners, constructors and designer. Information exchange and flow must be fast, reliable and relevant and must be used for building and enhancing relationships between parties. This is necessary to ensure coordination, control and other variables necessary for the completion of international construction projects.

2.3 Macro-Environmental Variables of Global Sourcing in International Construction

Macro-environmental variables are fundamental and pervasive across sectors. Like any aspect of international construction systems, there are macro-environmental forces relating to the global political, economic and sociological pointers that affects the environment within which operations influence decisions. A terrorist attack in Europe or America will affect security in airports around the world and hence, have implications for trade and operations in certain parts of the world. Economic situations like the slowdown of a major economy has implications to the global supply chain system of any international construction company. Thus, global events affect specific places and communities around the world. This changes and modifies the global systems and this influences the process within which demand and supply and transportation can be defined in terms of scope and possibilities.

Another aspect of the macro-environmental framework is that it defines the opportunities and threats through the aggregation of offshore national policies, industry dynamics, firm-level offshoring capabilities. These are important pointers that are shaped and influenced by the macroeconomic pointers and macro-environmental system. Therefore, the management of an international construction company that seeks to benefit from global sourcing will have to ensure that it has a clear understanding and appreciation of these variables and their implications to the construction processes and systems.

In reality, the process through which global sourcing links to macro-environmental factors include the “the impact of managerial intentionality, past experience, and environmental factors on the probability of offshoring innovation projects”. This implies that the forecasting of trends and matters in the future in these organisations is based on circumstances and facts that the management can reasonably review to understand possible patterns and changes in global sourcing measures and processes. This kind of proactive approach and measure gives the impetus for careful consideration and rational and reasonable decisions that optimises the resources of a globally-sourced international construction entity.

Aside that, there is the general elements of the PESTLE analysis and procedure which examines the traditional aspects of macro-environmental factors including the Political, Economic, Sociological, Technological, Legal and Environmental factors that affects a given global sourcing system. These are pointers that work for most forms of macro-environmental analysis and assessments which can be utilised in dealing with the needs and positioning to optimise global sourcing processes.

2.4 Risk Management & Global Sourcing in the International Construction Industry

Global sourcing within the international construction industry comes with major risks. This is because a firm operating outside its home base is bound to have inherent challenges and this is what international construction is about. Whilst operating in a foreign land far-away from home, choosing to go the global sourcing approach will intensify and accentuate the risks and problems inherent in such an approach. This is because there are inherent risks in outsourcing in all forms. These risks tend to be elevated and increased significantly when outsourcing is done across national boundaries and sometimes, international regional zones.

Risks are in different forms. They include macro, micro and meso risks . However, these risks tend to come down to technical risks that closed up for specific pointers and situations. This is because each aspect of the global supply chain system is specialised. And every unique issue or problem is restricted in several ways and forms. Some studies identify that the risks include:

• Scheduling risks
• Quality assurance risks
• Cultural barriers

Scheduling risks involve the time and situations within which the parties to the sourcing arrangement and contract will interact and deliver products. If delivery fails, the whole process of production might be slowed down. On the other hand, having too many stocks that are not needed might lead to storage problems, especially if it involves storing products and materials in a foreign country with different circumstances. Therefore, the general need for an economic reorder regime to be instituted to monitor sourcing is necessary. However, doing this across boundaries in unfamiliar territories far away from home might come with additional challenges which will need more than just mere observation and attention.

Quality assurance is important because it ensures that the materials and the entire sourcing process meets the needs of the construction firm. Products that are purchased ought to meet the productivity standards and targets. Thus, where there are quality assurance gaps, there might be falls that might affect the productivity of the company. Sourcing across boundaries come with renewed and novel circumstances that could be peculiar to specific countries, regions and sometimes across certain routes or functions.

Furthermore, cultural barriers to the delivery traditions and expectations gaps can lead to major problems and issues in global sourcing arrangements and processes. This includes communication problems and gaps that could prove fatal and problematic due to major problems and matters in the interaction of cross-border parties in global sourcing arrangements and procedures. There are also attitudes and problems that Geert Hofstede attribute to the “software of the mind” and this could cause different nations and different countries across the global supply chain to function in specific ways and forms

A study by Accenture indicates that cost optimisation and procurement efficiency risks are significantly correlated and their relationship affects the supply chain of a company that goes on the route of global sourcing. This is because in processes and situations where the costs are piled up and there are intervening circumstances that lead to higher costs than anticipated. This could include opportunity costs and other situations that could be viewed as alternatives to what was on offer at a given point in time.

Furthermore, there are risks that procurement efficiency could be affected. This refers to the situation whereby the input-output relationship of a procurement process might be adversely correlated because of fundamental risks inherent in the global sourcing system. Hence, there is a risk that procurement might not be up to the right standard and level and must be assessed, evaluated and proactively sourced and evaluated to attain results.

2.5 Performance Management and Global Sourcing in International Construction

There are several ideologies and views on how performance must be evaluated and measured. This is because once a procurement strategy is thought out and institutionalized, there is the need for it to be monitored and controlled in order to ensure that it is meeting the objectives and expectations for which it was set up.

Monitoring and control is an essential part of every outsourcing arrangement. It is more difficult and complicated in scope where global sourcing is compared. However, it is not impossible to be achieved or put to effective use and operations. There are several performance indicators steeped in the need for attaining results in the global sourcing system and this includes:

• Reduced storage requirements
• Reduced transaction times
• Reduced transaction costs
• Improved delivery scheduling
• Maintain competitiveness capacity
• Faster response to supplier quotations
• Ability to provide instant price quotations to clients
• Improve external access to stock levels and price information
• More effective identification and assessment of new suppliers

There are aspects including the strength of relationships, productivity and design targets as well as value-added procedures and possibilities. They are technical and specific since they relate to a specific and specialised function that can be examined and reviewed fairly independently. These can be evaluated and analysed separately order to draw specific performance management targets and processes.

2.5.1 Productivity Targets

Performance management covers productivity matters and issues that are important and vital. “Productivity in global sourcing in the construction sector is a function of organizational learning and performance improvement”. This is about learning and improving constantly in order to enhance the procedures for undertaking global sourcing. It is about constant information and the observation of codes in order to establish improved systems and processes for projects and procedures. This is because the scope of operations and activities is broad as it relates to several countries and zones or regions around the world.

Organisational learning is from work under project goals, identifying roots of problems, reinterpreting performance standards on basis of prior learning. This means that the parties to a global sourcing arrangement will constantly strive to improve by identifying project goals that are more relevant and resolving problems and setting new standards and objectives for the attainment of results. Thus through this, a code of best practices evolve in the company and this comes with hard and soft elements. The hard elements relate to accountability standards and targets whilst the soft aspects are about organisational cultures and norms,

Other authorities have a completely different perspective on performance targets. As one set of writers explain, performance improvement revolves around service quality, anticipated profit standards, changes adjustments and productivity risks. This is a procedure through which a company is able to examine and identify major aspects of targets that are set on the basis of the ability to improve the quality and profitability of the company.

2.5.2 Supply Partner Relationship Management

It is obvious in most discussions on outsourcing in construction matters that supplier and customer relationships go beyond just a transactional relationship. It is grown, enriched and enhanced to become meaningful and productive. The Construction Industry Institute’s Partnering Task Force defined “partnering” in construction supply relationships as “a long-term commitment between two or more organisations for the purpose of achieving specific business objectives by maximising the effectiveness of each participant’s resources. The relationship is based on trust, dedication to common goals, and an understanding of each other’s individual expectations and values”.

Therefore, as the relationship grows, it becomes symbiotic and there is a lot of care and attention committed and dedicated to each of the party. This means that partnering is about creating a relationship that spans into the future. This includes one that enables the organisation to undertake global sourcing over a sustained period of time and allow the parties to interact across different boundaries for a long period of time. This is for the achievement of specific objectives and goals that have mutual benefits to the parties.

There is the need for constant communication and the real-time access to relevant emergent issues and matters. This implies that the parties to a global sourcing arrangement will have to ensure they build their communication linkages and enhance it in order to achieve strong, positive and prosperous results. This leads to major improvement and major goals that must be entrenched to lead to the achievement of better results in operations and processes.

Willcocks et al (2014) identify that there are four main stages within which global sourcing arrangements thrive and this includes:

• Contract administration – hype and fear
• Contract management – first relationship best and worst practice emerge and there are fears
• Supplier management – Relationship mature, may negotiate and richer practices emerge
• Collaborative innovation

The procedure leads to growing and stronger relationships that improve from point to point. They help to improve and overcome the different limits at each point and stage. These relationships must be managed and viewed closely. In the initial state, there is a no-frills form of relationship where there is a hype and fear. There is absolutely no trust and each party considers the other as a means to an end – profitability. However, as the relationship grows, there is a contract management system whereby someone relevant and important builds a relationship with the contracting parties. This grows further to a relationship or supplier management where the supplier is closely monitored. This increases to a collaborative innovation system where they are comfortable with each other and are willing to make adjustments to help each other to achieve optimal results and the highest and best relationship.

Global sourcing is done in a context of international best practices and management theory. This therefore means that there must be the definition of standards in relationship management that is premised on the best interest of the parties. This relationship is to be nurtured and grown over time. Often, the relationship is through a contract and this is followed by a system of arbitration clauses that are used in a non-adversarial dispute resolution process. This is often done with the identification of a jurisdiction where disputes will be handled and resolved.

2.5.3 Return on Investments & Global Sourcing

There are several important levels of examining global sourcing and its relevance or importance to an international construction company or venture. Obviously, the most important performance measurement standard global sourcing is the financial indicator. Global sourcing is premised in disparity in the prices of materials and logistics and it is often done through investment in countries where these materials and logistics are cheap. There are various financial indicators and pointers that are used to evaluate and calculate the financial worth of global sourcing arrangements and processes. This shows what the opportunity cost will be and how the existing activities are helping the company to achieve its different levels of interests and goals – strategic, operational and tactical.

Return on investments is often calculated by the NPV method which is based on Savings multiplied by time, less the discount rate multiplied by time. This provides the level of earning and ability of an investment to repay itself in a given point and situation. This process is somewhat mathematical and does not always give an assessment of what actually happens in a given organisation over a period of time.

In more practical analysis and evaluations there are four popular methods that Crandall et al (2013) identify to be popular amongst those who seek to evaluate and analyse global sourcing. This includes

• Capturing companywide savings realized by global sourcing
• Assess impact of global sourcing on corporate financial measures (return on assets, quick ratio, return on inventory)
• Learning about return on investment in specific global sourcing projects
• Measuring buying location performance of suppliers.

In capturing the countrywide savings realized by global sourcing, the management and strategic leaders evaluate the cost they would incur across all the units if the global sourcing arrangement was not in place. This includes direct and notional losses and complications. Often, this is done on the basis of a fundamental approach and set of questions and issues that are checked and evaluated or the comparison of one sourcing system to the current system influenced by the global sourcing system. This is often done within a context of management accounting where costing methods and appraisal assumptions are made.

Another method is done by the comparison of global sourcing and its impact on corporate financial matters. This include the normal ratios that are used. However, it is often done on a year-by-year analysis whereby performance of a period without global sourcing is pegged with performance with a period where global sourcing investments are done and returns are checked. This is based on the financial statements and financial accounting methods and techniques. Thus, this method is more straightforward and does not include a lot of assumptions and appraisal methods and techniques which could lead to inconsistencies.

The project-management methods and processes are used by comparing one project with another. This is done by evaluating specific construction activities in a given jurisdiction and comparing it with another jurisdiction to identify important differences and similarities. This makes use of the build-up methods and segmental reporting of specific units of the international construction company. It brings out the specific costs and specific consideration that is made to ensure that the company operates within its activities and processes.

The supplier-induced method is done by checking what a supplier offers and what each supplier from each location does for an international construction company. This method is often done by historically looking at data from the decision-making and opportunity cost measurements that were utilised by the management of the construction company before the contract was made and actual results were put together and applied.

2.6 Gaps in Research

The research finds that in order to structurally analyse and review global sourcing in international construction company, there is the need to systematically segregate the components into internal, intermediate and external variables.

The internal variables are mainly strategic and based on the decisions on the top of the company by the senior managers and directors. This is meant to be long-term and organisation-wide. Some writers believe that internal variables are somewhat meant to be a part of the corporate strategy. Others believe it has to be more technically oriented.

Almost all authorities agree that international sourcing in construction is best managed within a framework of procurement contract and ran through procurement strategy. This determines the best way of managing and controlling the intermediate environment. Some writers believe that the intermediate environment can best be evaluated and assessed through a mechanism of analysing and evaluating the technical components of the company. This is by the environmental and circumstantial capture of pointers that are necessary to ensure that a procurement system is in place and functional in terms of operations and the attainment of results.

The intermediate environment is also seen by some authorities in a legal framework. Whilst some writers advocate for rigid rules, there is a general limit placed on rigid systems and procedures. And this is in the form of various options including the evolution of best practices which will be a direct response to specific needs and requirements of a given organisation or a given sector of the industry.

Information systems is identified by another set of writers as the most important and most vital aspects of the intermediate environment of the global construction systems and processes. This is because information system ensures real-time information is gathered and this includes the ability to coordinate and gather relevant and true information to promote effective and efficient work.

In terms of external variables, there is a view that global sourcing is susceptible to the general elements of the macro-environment, which can be deduced through a standardised PESTEL Analysis. However, some authors advocate for a more specific approach which revolves around national policies of countries involved in the global sourcing system, industry dynamics and offshoring capabilities. There are yet some other authorities who focus more on how managers can predict trends in the macro-environment and this is through past experiences, managerial intention and other environmental factors.

In terms of monitoring and evaluation of a procurement strategy, there is a risk-management based approach and a performance management method. Both of them have their own times and circumstances. Risk management involves various ad hoc measures that are taken to deal with potential issues that could cause projects to miss its targets. On the other hand, the performance management approaches are based on a system whereby the firm sets targets and standards that are used to measure results of a global sourcing system in specific areas that are important and vital.

Performance measures vary in various ways and forms. They vary across productivity standards and targets. This includes standards based on performance pointers like NPV and other methods of cost build ups relating to the impact of a global sourcing arrangement. There are supplier partner relationship management which includes measures of how well the measurement processes are meeting their targets. There are further pointers on return on investments which are mathematical in outlook. Different firms elect the methods and approaches that they deem to be most appropriate.

2.7 Conclusion

This chapter has broken down elements of global sourcing and how they normally operate in the world of international construction. This has led to various outlooks and views on how companies have undertaken global sourcing and what scholars and practitioners have identified to be the main elements. It has come to the fore that internal, intermediate and external variables are important in making global sourcing decisions and choices. These pointers are applied in a context of performance management and risk management. Whereas one system is based on the formulation of metrics and standards for analysing the input and output measures, another is based on a fire-fighting approach which is used to deal with incidents that occur as and when they happen. This chapter lays the foundation for the next chapter and the fourth chapter. The next chapter will be based on these theories and concepts as a foundation for formulating data collection methods and parameters. This will be followed by a chapter that will present findings after a fieldwork is done to collect data. The fourth chapter, which will be focused on the interpretation of the findings will be undertaken by using the concepts and theories of this chapter as yardstick for the discussion of the findings and formulating logical patterns of the realities that exist within the international construction industry.

CHAPTER 3: RESEARCH METHODOLOGY

This research is an empirical study. As such, there is the need to gather data, analyse it, interpret it and formulate conclusions. This chapter of the dissertation presents a design of the process of conducting the empirical study and the conduct of the research. This chapter will show how the research questions can be transposed to realistic standards and requirements that can be applied and utilised to gather findings and procedures.

In order to recap events form chapter 1, this research is to analyse and critique the most important variables that determine success amongst international construction companies (ICCs) in undertaking projects in the Middle East and North America (MENA), the global centre of the world. This is to be done in three main phases:

Phase 1: Documentation of the dominant strategic and operational systems for creating a functioning and effective global sourcing systems for ICCs in the geostrategic location of MENA

Phase 2: An identification of the relevant technical factors that lead to the success of ICCs in geostrategic locations by means of examining growth, survival and competitive advantage and

Phase 3: An identification of the risk management techniques and performance management systems that is used for the achievement of high and consistently satisfactory results in the operation of the ICC.

Table 3.1: Stages in the Research Process

In order to conduct the study, there is the need for the formulation of a research that is consistent with a logical research design and procedure that will be used to gather relevant data, critique it, and interpret it to draw conclusions on the dominant trends in global sourcing amongst international construction companies with global sourcing systems on international megaprojects.

3.1 Research Framework

In order to create a disciplined and structured research procedure that is robust and can potentially answer all the relevant research questions, there is the need to utilise the Research Onion which provides a step-by-step system for the conduct of an empirical research in the non-natural sciences. A diagram of the Research Onion is presented in Figure 3.1 below. This provides the dominant phases and stages that gives a comprehensive guideline and procedure for the conduct of an all-encompassing research that can be used as a means for drawing conclusions that can answer the fundamental research questions.

Figure 3.1 Research Onion

Thus, the pointers below are going to focus on the stages and pointers that are identified in the research onion. This will be applied and utilised to show the blueprints for the actual research, data analysis and theorisation.

3.2 Research Philosophy

Research philosophy refers to the procedure and approach through which a researcher will use to add up to knowledge from the research. This includes the many means through which the research will be done in order to draw conclusions and define the main ways and means through which the research will add up to knowledge.

The research will be done through positivism. Positivism is about presenting positive knowledge through the identification of the natural consequences and circumstances within which global sourcing in international construction occurs. Positivism is about identifying what occurs. This include the documentation of what actually happens and what occurs.

Also, dominant trends and processes will be used to draw logical processes and identify what actually occurs in reality and how work is done in order to document pointers. Positivism is done through the use of sensory experiences to identify how things exist in space and in time. Therefore, to this end, this research will examine the way global sourcing is carried out and how it actually occurs and how stakeholders operate in order to ensure global sourcing occurs in the international construction industry.

Positivism is about the identification of valid knowledge. This is done by deriving knowledge and showing that there is a certain and a clear truth that will be used to provide authoritative knowledge on the matter. Therefore, those who have the ability and competency to provide information about how global sourcing occurs in international construction will be documented and defined and used for the explanation and interpretation of core findings.

Positivism is done through reason and logic. And this is a process that involves the presentation of a pattern of identifying information and procedures. This provides verifiable data or positive facts that can be used empirically to draw conclusions and define a given phenomenon.

There is a form of introspection and internalisation or intuition of the knowledge in order to present an empirical procedure and system through which findings can be used to draw logical conclusions. Positivism is about presenting the recurrent theme of a given matter as the conclusive evidence or explanation to its corresponding research question.

Positivism is the justified method that can be utilised in conducting this research because this is a somewhat novel idea and concept. Therefore, studying it will be about examining the truth and reality of what actually exists in its practice. This is opposed to other methods which might seek to add knowledge to what is already known. This is a new field and demands a lot of novel documentation and recording of trends that did not really exist in the past.

3.3 Research Approach

There are two possible approaches to a research – inductive and deductive approaches. This research will be done through an inductive research because it will be about the identification of what makes up the global sourcing industry and system. This is opposed to the deductive research which is about creating a situation whereby a hypothesis is drawn and proven or disproved throughout the entire research.

Deductive research is used when there is a wealth of knowledge and information about a given subject under study. Thus, a hypothesis is defined and this is tested in the research to draw conclusions and define trends. Inductive research is more appropriate when there is little or no information about the subject. Since global sourcing in international construction has not been extensively studied, an inductive research is the most appropriate and most desirable method.

There is also ample time to study the subject and present information about what the patterns in the global sourcing in the construction industry worldwide is. The inductive approach comes with an inherent risk of possibly ending without a theory or a logical pattern. This means that the research will try to get information in a way that is novel and try to show main trends in something that has not been heavily studied and examined.

3.4 Research Strategy

Research strategy refers to the approach through which a researcher gathers information about the subject and present it for the formulation of conclusions. This research will be done through two main strategies:

• Ethnography
• Survey

Ethnographic research is the study of people in their normal environment. This indicates the identification and documentation of what the patterns and procedures of actions are. It is done through two main methods – observation and face-to-face interviews. This helps to identify what actually happens in a given situation or matter. In this study, there is the need to identify how global sourcing is carried out and how it is used for the attainment of results. Thus, the research will conduct various levels of observations and document them. There will also be information from people at the forefront of important matters who can give inputs.

In order to test the validity of findings, there will be a survey which will complement the ethnographic study. A survey will include the collection of information to show the main trends and patterns and approaches that are used for the conduct of global sourcing in international construction processes. The surveys will help to show important matters and trends that are necessary and relevant to the core problems and issues in global sourcing.

Ethnography is preferred to other methods like action research and grounded theory research which are best applied to situations where some previous studies have been conducted into the matter. This leads to a procedure whereby some pre-existing data is available and can be built upon. However, in this situation, the existence of previous data and information is highly limited and as such, cannot be relied upon for judgement and new analysis. Thus, gathering fresh evidence through ethnography and surveys is the best.

3.5 Data Collection Techniques, Samples and Procedure

The actual fieldwork will be done through the collection of information from a relevant sample of the population being studied. And this will provide important information and guidance about what actually happens in the area of global sourcing in the international construction industry. This will be done in four phases:

• Global Sourcing in Construction Industry Analysis of a Country: A sample of the geostrategic locations will be studied and examined. The sample of the country to be studied is the United Arab Emirate of Dubai. This study will include the ethnographic study of trends and procedures of global sourcing. This will show the pattern of global sourcing in Dubai and a blend of case study and ethnographic approaches;
• Observation of Global Sourcing Patterns in Companies in the MENA Region: This will include the documentation of the patterns and trends in the supply chain systems of international construction companies in the major economies of the Middle East and North Africa – Egypt, Saudi Arabia, UAE and Kuwait. This will be done by examining how these companies operate an integrated global sourcing system that spans across two or more countries.
• Interview of Strategic Leaders: There will be an interview of 2 senior executives in the international construction industry who have operated in the Middle East and North Africa region (MENA). This will include those who have taken decisions concerning global sourcing in the region. The interview will include questions relating to major trends and procedures that define the pointers necessary to achieve results in the strategic, and competitive context. The Interview questions are going to be open ended and a sample is presented in Appendix 1 below.
• Survey: The findings of the interviews above will be used as basis to present a series of close ended questions that will be presented to middle class to top level managers involved in global sourcing in international construction companies in the MENA region. These survey questions will be close ended and they will be presented in a form that will be analysed on a Likert scale. The questions will be about operations, performance management and risk management in global sourcing. The survey will be done online and will involve 10 construction managers who have worked in the MENA region. The questions for this section is presented in Appendix 2 below.

3.6 Data Analysis & Interpretation

The findings will be presented in various forms and analysed further in order to draw conclusions and made meaningful in answering the core research questions. The findings for each stage will be put in a form that is appropriate for further analysis and conclusions to be drawn.

The first stage will be presented in a narrative form. This will include the main industry trends of global sourcing in Dubai which is known for its centrality and geostrategic strength. This stage will include the narrative and prose of what actually happens and its implications.

The second stage, observation of global sourcing patterns and practices in ICCs will be presented in a form of narrative. This will help to provide some kind of information that will lay the foundation for the drawing up of interview questions for strategic leaders and this will lead to the third phase.

The third phase will confirm the findings of the second phase and this will give a general perspective of what global sourcing in international construction companies in the MENA region is and how it works. This will be done to show major trends and highlight issues and matters.

The fourth phase will be analysed statistically in the form of the Likert scale. This will show the averages and a visual presentation of the major trends and processes from the respondents. This will help to show popular trends and patterns that will come together to define the trends and procedures in the industry.

3.7 Theorization

Finally, the main patterns and trends in the global sourcing industry of the Middle East and North Africa will be deduced and documented. This will include the identification of the main procedures and trends and this will be used as the basis to cover conclusions and patterns.

The theories will be presented in relation to the research questions and show the strategic and operational system, the external and internal variables and the risk management and technological systems. This will be a comprehensive presentation of what actually happens and how they occur and how they operate.

3.8 Conclusion

This chapter has shown that this research will be done in the form of a qualitative study. This will include the identification of the main trends and patterns and documenting it to show how the fieldwork will be done and conclusions will be drawn. The next chapter will include the findings in the raw form. This will lead to the interpretation in the chapter after that and theories in the last chapter.

CHAPTER 4: FINDINGS

This chapter outlines the findings in the raw form. This includes the presentation of the main approach that was used in the field work and how it is applied to deal with matters and issues. This is going to be reviewed and critiqued in the next section of the research.

4.1 Details of Field Work

The fieldwork was done in four stages. Each stage was to lay the foundation for the next and build upon each other to present a set of consistent and logical pointers that could aid in the formulation of conclusions and logical ends.

The first phase was a general observation and evaluation of the level of global sourcing and how it occurs in the Middle East and North Africa. This was an internet search that reflected the elements of ethnography and how it occurs in the Middle East and North Africa Region.

The second phase zooms in on a section and an industry that is somewhat known for growing and enhancing its activities and affairs in a given period. This include the examination of global sourcing and how it occurs in Dubai, a sample economy.

The findings led to the formulation of questions that were utilised as a means of conducting an interview. The interview is the third phase and provides broad pointers and features for the entire picture and trends in global sourcing as it deals with issues and matters in the Middle East and North Africa in the practical sense.

The fourth phase of the research is about the presentation of information about the views of professionals in a survey. This was conducted and presented to the respondents in various platforms and systems. This is presented in the raw statistical form.

4.2 Observation of Patterns of Global Sourcing in Major ICC Companies in the MENA Region

This section studied the Persian Gulf region and North Africa through a multiplicity of sources ranging from websites, interviews conducted by experts and observations of academics and practitioners documented in secondary sources. With the exception of Israel and Turkey, 12 Middle Eastern and North African nations were critiqued and evaluated including: Algeria, Bahrain, Egypt, Iran, Iraq, Kuwait, Libya, Morocco, Oman, Qatar, Saudi Arabia and United Arab Emirates. The main patterns through which International Construction Companies set up and maintain an international supply chain system was identified for these countries and the trends are presented below:

• These countries have national logistic entities that create the core and foundation of the country’s petroleum industry;
• The petroleum logistic infrastructure serve as the main system through which shipping and import activities occur;
• International Construction Companies create supply chain systems that link to the private sections of the transportation infrastructure;
• Products are sourced from different locations around the world and presented to regional centres;
• From regional centres, international products are distributed to various construction facilities in provincial hubs;
• Products are sent to the construction sites and utilised for projects.
• Most nations have internal computerised real-time mechanisms and monitoring points which allow for close examination of the movement of products.
• Environmental concerns and carbon footprint cutting is a relatively new phenomenon but it is deemed important in the global sourcing system of these countries.

4.3 Global Sourcing in Dubai

Dubai is an emirate that forms an essential part of the state of United Arab Emirates. Dubai is known for its enormous oil wealth and its positioning as a global marketplace that makes use of the geostrategic location of the country. Due to this, Dubai has a need for construction and it is also able to accept materials and logistics from many different parts of the world.

This case study examined the main variables and most important elements that allows international construction companies in Dubai to gather and utilise materials and sources from different parts of the world. This included a critical review of a sample of four international construction companies of varying sizes. These companies had indulged in different classes of transactions with international and global partners. The findings are presented below in narrative notes which shows the patterns in global sourcing in Dubai’s international construction companies;

• Global sourcing is a specialised function that ICCs in Dubai undertake;
• Global sourcing is often outsourced or in most cases, operated as a separate business unit or subsidiary of a company;
• Global sourcing is a proactive activity and involves the constant monitoring of commodity prices and the evaluation of options for building logistics;
• The system of global sourcing is finalised by authoritative leaders of ICCs who consult engineers, accountants and other professionals for views;
• The global sourcing network of ICCs utilise the ports of Dubai and involve a swift and a strong system of controls and checks;
• Dubai is relatively advanced in energy concerns and focuses on environmental footprint matters in global sourcing.
• The three most important variables for global sourcing amongst Dubai’s ICCs are (a) controlling costs (construction cost and facility costs) (b) achieving quality measures and (c) expanding procurement options.
• There are numerous awards within Dubai that are viewed as a source of credibility and competition in seeking new methods and measures for achieving global sourcing success

4.4 Interview Results of Strategic Leaders

There were two interviews conducted with two senior construction figures in the Middle East and North Africa. The first respondent is a British construction company executive who has been stationed in the Middle East and North Africa for over 10 years. The second respondent is an Emirati construction company supply chain manager who has been working for an American company for over 5 years and holds a senior managerial position.

Q1: Description of Global Sourcing Function

1st Respondent: Global sourcing is just an aspect of our supply chain system. It functions through the identification of options for materials based on the purchasing plan we have for each products. Our company has a network of suppliers and they are tasked with getting us specific items which are available for cheap in certain parts of the world. Through this, we are able to acquire all materials but through a network of few options that help us to acquire them from different parts of the world based on their geographic focus. So we acquire products from Africa, India, China, Brazil and other nations through specific suppliers who have specialisations in that part of the world.

2nd Respondent: We have a subsidiary that is specialised in the purchase of materials. They are able to use various systems to source for products based on specific quality, price and other levels that is specified by each project team. The procurement department has various integrated systems that gives prices of products and opportunities for negotiations where necessary. These negotiations involve senior project team and management members who authorise purchases from different parts of the world.

Q2: Long-Term Considerations & Elements of Corporate Governance that are Considered in Designing and Formulating Supply Chain Systems

Respondent 1: Our Company is focused on building long-term relationships with our suppliers. So we ensure that our relationship with suppliers from different regions of the world are strong. Therefore, we contact them and tell them of what we need and what we are ready to pay. Then we forward their invoices to the management for authorisation. The main long-term consideration is about partnering and gaining control with the suppliers. This way, we can have good terms that can be relied upon to improve our relationship into the future. Project risk and other political risks are an important part of our relationships so we keep them under good checks.

Respondent 2: The long-term commitment we have is about ensuring that our company receives a good returns on investment over a sustained period of time. Therefore, global sourcing is linked purely to performance measures for each project. This is monitored closely and where necessary, suppliers could be changed to ensure that supply chain standards are met.

Q3: Gathering Information for Strategic Decisions in Global Sourcing

Respondent 1: Our Company is a small one which is centralised. We rely on the judgment of the senior managers and we are able to convene board meetings quickly where there are problems with a particular supplier. Strategic decisions are often highlighted in terms of a supplier’s actions or responses to requests. If there are issues that hint of risks, we are often willing to have interviews with suppliers. We gather information about specific products by dealing with one supplier at a time. We spend more time choosing a regional partner who might be sufficiently specialised. We make our demands and tell them what we want. From there, we review their prospects and decide whether to work with them or not. Where there are parts to be negotiated or modified, we inform the prospective supplier. In most cases where we fail to attain our goals, we terminate our contract with the supplier in a given region. But this rarely happens due to the rigorous shortlisting process we have for suppliers in each region.

Respondent 2: We rely on a two-layered system of procurement. We have a procurement team that shortlists from global partners. So we take quotes from several suppliers in a particular region. And when we are satisfied with the prospects, we move it to the executive team that examines information and asks for more data where necessary. Information is gathered from the general market conditions and then used to construct estimates which guide the first phase. This is presented to the executive team (second phase) who also find independent information and make adjustments where necessary.

Q4: Computerised Information System for Global Sourcing in MENA Company

Respondent 1: We are very traditional and we use the SAGE Master Builder which is now called Sage 100 Contractor. We look at the overall scope of each project. Due to our size, the topmost managers are aware of almost every project. So we use SAGE Master Builder to identify which materials we need. Therefore, we send it to our suppliers in specific parts of the world and ask them to send us products. Thus for instance, if a project needs tiles of a specific quality from a small city of Criciuma in South Brazil, we identify that option and get our partners with specialisation to get the right quantity. This is inferred from the general software and estimates are integrated into the system.

Respondent 2: Since our procurement department is specialised, we maintain a bespoke e-procurement software system. It works by gathering information and data from different projects and enables us to aggregate data for potential buyers. We integrate contact systems to various suppliers for the continents and sub-regions where we generally make purchases. Through this, we are able to request for quotes and get them in hours, aggregate them with the system and present it to the relevant project managers and project team members. Their choices and opinions are scored with the system and presented to the executive team who seek extra information and authorise purchases.

Q5: Methods of Calculating ROI on Global Sourcing Operations

Respondent 1: Each project has various cost ceilings and cost limits that we set. Therefore, procurements are to be done on them. They are set at the beginning of projects with tight limits, because we seek to avoid a reputation of being a lowballing entity. Therefore, we stick to tight cost frameworks. If a project does not pay well, we avoid it altogether. However, we have an in-house valuation expert who does a conservative and prudent estimation which we use to identify costs. International procurements are often estimated with a 20% risk element. This enables us to stay within a certain framework and not get extreme surprises.

Respondent 2: Return on Investment is estimated electronically. This is used to price projects. Procurement internationally is done by checking the bids that are presented by different suppliers around the world. We usually go for the lowest prices, but integrate other variables like quality in the estimations.

Q6: How Relationships are managed with Contract Partners in Global Sourcing

Respondent 1: We look for conservative suppliers who know our way of doing things. We avoid partners who do not understand our values and when we meet a supplier who understands us, we build a strong relationship by ordering our extra services in the region to ensure that our relationship thrives. Thus, in cases of help for other activities, we rely on their recommendations. When they need help in the Gulf region, we always do our best to assist them. Informal relationships amongst others, helps us to keep our relationships going.

Respondent 2: Our relationships are often limited to business operations and business affairs. We transact business with partners on specific pointers. When the business is over, we do not do much. Focus on our projects and maintaining good records is more important. But ultimately, since we are willing to pay a lot of money at a time from different suppliers, they are more careful to serve us and keep us satisfied.

Q7: Risk Management Systems for Scheduling in Global Sourcing

Respondent 1: Risk management is a factors of who you choose as your business partner. A loyal and trustworthy supplier who cares about his honour and reputation is more important than any other things in international procurement. So we spend more time studying our partners and managing their risk. When things are ordered, we monitor them and ensure that they arrive on time. Also, we use a very prudent and conservative scheduling system that ensures that work is always in progress and there is always one week to work at any stage without lead times. We rarely have any lead times.

Respondent 2: Scheduling is done carefully to ensure that we have a just-in-time system. In cases where supplies are delayed, we get back up from emergency suppliers. To keep the work process going. There are almost always emergency stocks that are kept for different products. Thus, we always fall on that to ensure that where there are delays, we are able to keep supplies going.

Q8: Real Time Information and Global Sourcing

Respondent 1: This is very important because it gives us a sense of continuity. We always note this and keep the team members on guard to ensure that each unit receives what it has to receive on time. Where there are issues, there is always someone to alert and make investigations by calling and following up. That is what partnering is about.

Respondent 2: Real time information is gotten on our activities each day and time. In our operations, we hardly get any issues with delays. Thus, real time information seem to provide evidence to back up our claims and demands.

Q9: Performance Targets and Pointers

Respondent 1: Our mission as an international construction company in the Middle East and North Africa is to promote rarity of architecture. So our main performance target in global sourcing is quality and uniqueness of products. We order specific parts from areas that are of a distinct quality and shows affluence and luxury. This is the main focus of our global procurement.

Respondent 2: Quality, quantity and timeliness are our most important measures. This is because we often make large orders which most suppliers cannot meet within a specific timeframe. Therefore, the ability to reliably supply the products and meet the quality standards we expect is central and vital in our procurement systems and processes.

Q10: Assessment of Most Important Elements for Global Sourcing

Respondent 1: The most important thing is to know what you want and know who can supply it. Many large firms are not experienced enough to know what goes into what projects. What has kept us successful in the region is that we have understood the architectural tastes and preferences of consumers in the region. Understanding the culture and knowing what people want is vital. And when you are done, you need to know where to get it. This is about finding relationships and knowing international suppliers in specific regions who have the right links and ability to get you what you really need. Through this, most of the global sourcing needs are met. The ability to ship and receive them on specific days is almost not a problem anymore. So knowing what you want and getting it is the most important thing.

Respondent 2: The most important thing is to have the capital and the resources. Suppliers are around with many forms of capabilities. Therefore, if you have the right level of money to pay for the right things, you can source from almost any part of the world. You also need money to have back up. Just in case there are glitches, you can have suppliers that can be used to keep the company and its operations going as you wait.

4.5 Survey Results

In the survey, 10 respondents were given questionnaires that were sent electronically. As of the cut-off date, only 7 out of the 10 respondents had filled out their forms. Thus, the findings are presented below to the different questions. The survey results provide information about the operational level processes and systems for sourcing and managing processes relating to global sourcing in international construction companies in the Middle East and North Africa region. The survey results are presented in the form of charts and tables to provide information about the aggregation of the findings. This provides information of the actual responses which helps to deal with major patterns as was identified by professionals who are knowledgeable about international supply chain systems.

SQ1: Most Popular Stage of Global Sourcing Contract Management

Figure 1: Chart of Frequency of Stages in Contract Management in Global Sourcing

Table 1: Frequency of Contract Stages in Global Sourcing

SQ2: Popularity of Region for Global Sourcing Partners

Chart 2: Region by Popularity in Global Sourcing Activities

Table 2: Region by Popularity in Global Sourcing Activities

SQ3: Frequency of Use of Transportation Methods in Global Sourcing

Chart 3: Frequency of Transport Methods used in Global Sourcing in Construction

Table 3: Frequency of the Transport Methods Used in Global Sourcing

SQ4: Vital Performance Measurement Indicators for Global Sourcing

Chart 4: Vital Measures for Performance in Global Sourcing

Table 4: Measurement Indicators for Global Sourcing

SQ5: Key Risk Management Indicators in Global Sourcing

Chart 5: Key Risk Management Indicators in Global Sourcing

Table 5: Key Risk Management Indicators in Global Sourcing in MENA

SQ6: Key Indicators of Information Technology System for Global Sourcing

Chart 6: Relative Importance of Information Technology Systems in Global Sourcing

Table 6: Relative Importance of Information Technology Systems in Global Sourcing

4.6 Conclusion

This chapter has presented the raw summation of information and data relating to the key research questions. It has summarised the fundamental aspects of the field work. The findings here are going to be collated, analysed and critiqued in the next chapter in order to formulate conclusions that answer the research questions of the dissertation.

CHAPTER 5: DISCUSSIONS & INTERPRETATION

This chapter will apply concepts and theories from the literature review to analyse and interpret the findings of the fieldwork. This will provide a framework for the examination of the findings in order to draw conclusions and create theories from the fieldwork which answers the research questions.

5.1 Macro-Environment for Global Sourcing amongst ICC Companies in MENA

There are strategic concerns in global sourcing when it comes to a company that is operating within a given country or region. The literature review showed some environmental concerns that affect the companies that operates. The fieldwork provided information about the patterns and the sample analysis of Dubai.

It is apparent that the main macro-environmental factors are linked to the national logistic law and circumstances at a given point in time. This is because the supply chain systems of most countries in the MENA region are fundamentally created to ensure that petroleum products can be moved out through the national petroleum entity. Therefore, the construction industry has to source for products in ways that is dependent on the level of policies and processes instituted by the ruling government at any point in time.

Supply chain systems are effectively a private wing of the public transportation infrastructure. And this is in turn dependent on the regional centres that operates to ship and move products. Thus, the supply chain is based on the policies and activities of the main nodes and transportation centres in the supply chain that is used by an entity. Most of this is general and has no specialised functions and they keep improving over the years as new policies on globalisation comes up.

Local ports have rigid controls that are used to check and review imports. This includes the use of modern and advanced technologies to screen products at the ports before they are released into the society. This is true for the case of Dubai.

Once globally sourced products go through the port of the home country, there are no rigid and complicated systems of examination. Products normally go through the transportation system without much limits. Thus, the products are treated like local products and since infrastructure in most MENA nations are of a high quality, logistic movement in local jurisdictions are easy and simple.

The computerised systems and processes in the MENA region is also of a sufficiently high level to ensure there is a general trend towards real-time analysis of information. Decisions are taken with a number of technical inputs through computer simulation and evaluation. From the case-study of Dubai, it was identified that global sourcing is mainly a technical and specialised function. This includes proactive processes and evaluation of trends and processes before decisions are taken. Complicated mathematical models are simplified through the use of computers. This usually examines information about:

• Cost reduction
• Meeting quality standards and
• Achieving more options from different parts of the world.

Environmental concerns and energy usage concerns are now important in the examination and review of the supply chain systems. This include various approaches and methods to check and ensure that supply chain systems are not harmful to the environment and they work for the attainment of the best results for all stakeholders.

5.2 Internal Strategic Context for Global Sourcing Amongst ICCs in MENA

The interviews provided information about the strategic decisions and choices made by international construction companies in the MENA region. The two interviews gave two perspectives – the perspective of global sourcing from a small centralised international construction firm and a large heavily capitalised international construction firm. This helps to provide two extreme possibilities and how they can describe the realities in practice.

Target setting in global sourcing strategy is almost always taken by the quality standards concerns and the links and connections to partners. This is common with centralised firms in the MENA region, there is always the quality preferences and the ability of trusted partners. This suggests the need for maintaining long-term relationships to retain quality standards and confidence levels However, for the capitalised entity with a specialised in-house procurement system, they get drawn into global sourcing based on what suppliers can provide at a reasonable price to meet the quality and other defined targets and standards.

Partnership in smaller firms are long-term oriented. Competition is avoided in the centralised firms. This is because they look at trust and they seek to build a strong relationship with like-thinking suppliers in remote parts of the world who have specialised knowledge. However, competition is important and vital for the larger entities operating in the MENA because these larger entities have the ability to evaluate and analyse options on the markets and choose the best. Partnership in larger firm is based on the achievement of results.

Integration of services is almost always done through the maintenance of an appropriate software system. For smaller centralised firms, there are general software that can be used, but this is contingent on intimate knowledge of projects by managers. However, larger entities prefer bespoke systems and processes that gathers information and this can be used to trace specific pointers identified to be important throughout the process.

The most important thing about global sourcing data collection systems and software include the ability to present information that is relevant, timely and reliable. This is often based on predetermined global sourcing strategies and they are used to manage supplier relationship and monitor procurement processes from request to shipment and transitioning updates.

Historical data on globally sourced products are important because they guide the way and manner in which purchase is made and gathered. This information helps to identify relationships and trends in these relationships. In smaller centralised ICCs in the MENA region, this information is often something that is closely known to managers of the firm. However, in larger entities, there are information that is stored on a specialised bespoke software system which is utilised as a reference point to study and identify trends in the supplier relationship and partnership relationship.

Forecasting before global sourcing is often done through two popular techniques. One group promotes the use of cost ceilings and cost limits. This is the basis for the provision of purchase limits presented to global sourcing partners. However, larger entities are more focused on electronically-calculated return on investment methods with the hope of getting lower prices which are compensated for through economies of scale in larger levels of orders. This includes the use of complex tools like NPV and others which are combined and utilised through a bespoke system to achieve results.

5.3 Risk Management and Performance Management

This section of the interpretation includes the survey results and their interpretation. It shows practical aspects and elements of running a global sourcing system. This includes performance monitoring and management and controlling risks.

The basic contract model seem to be the most popular system that is utilised by ICCs in acquiring products through a global sourcing process. This seem to be popular because over 71% of respondents in the survey identified that they use basic transactional systems and methods to purchase. However, over 80% of the respondents also admitted that contract management and supplier management is either frequent or common in purchases. This shows that relationship building has a fair chance of being a significant part of global sourcing relationships.

Global sourcing is typically from one of three areas – Europe, North America or the Arabian Peninsula. These are areas that have the most expensive materials for building and construction, which proves the ostentation and intention for proving luxury in purchases for MENA construction projects. In spite of this, there are sourcing from poorer parts of the world where cheaper materials can be bought like Africa and China. Such trends enable a construction company to retain a balance and achieve higher returns on investments.

The most popular and highest performing systems for global sourcing are ship transportation. This is due to the fact that construction materials require more space and are bulky. However, air transport is common because there is a lot of affluence in today’s MENA and there are a lot of options in airline cargo, so parts of building materials sourced from faraway lands can be presented through planes. Road transport is inevitable to move products from ports to inland construction sites.

Response to supplier needs and competitive capacity are the most important and most vital performance measurement indicators since they both scored over 4.14 in weighted average. However, reduction in transaction costs and improved external access to information are important pointers since they scored a weighted average of 3 or more. This indicates that in global sourcing in the MENA region, ICCs will have to watch the ability of suppliers to deliver and the ability to make the project look competitive and better than that of others. Information flow and transaction costs are important barometers in which international construction sourcing arrangements are evaluated.

The greatest risks that are evaluated and checked in global sourcing in ICCs include procurement efficiency matters and quality assurance. However, scheduling risks and cost overrun risks are important. Although cultural barriers were deemed to be important, they were downplayed by the respondents.

In terms of information technology risks and requirements, Speed, Reliability, Relevance of Information and Real Time information are all considered to be of extreme importance. This shows that information is important and plays a symbiotic relationship in furnishing supply chain professionals in the MENA region with vital resources to keep global sourcing going.

5.4 Conclusions

The main pointers of the findings are aggregated and linked to the literature review. This has drawn important parameters of the main pointers in the research and shows lines that can be used for the formulation of answers to the core research questions.

CHAPTER 6: CONCLUSIONS

This research has analysed the internal, intermediate and external variables that regulate global sourcing systems in international construction firms that operate in the Middle East and North Africa. The field work and literature review provides empirical evidence of what actually happens in practice and how they work together to define the processes and systems utilised by these entities.

6.1 Strategic and Operational Systems for Global Sourcing in ICCs in MENA

The research identifies two main strategic frameworks which include long-term oriented strategic ends and large-scale competition oriented purchasing processes which are pursued by relatively larger entities. The main strategic goals include competitive capacity, response to supplier potential, as well as reduction in transaction costs. These pointers are complemented by the need to maintain ostentation in high-end projects as well as the desire to balance cost by sourcing from cheaper countries around the world.

Long-term oriented companies focus on building relationships with suppliers. On the other hand, the strategic philosophy of larger entities is often steeped in the need to get the best from an array of producers. This shapes the kind of relationship that international construction companies build and maintain with suppliers in the MENA region.

Information technology is identified to be a central and vital tool for competing in global sourcing. This is because the need to gather information before, during and after ordering from a particular supplier is a major strategic pointer that is utilised in guaranteeing the process.

6.2 Relevant External Variables in Global Sourcing in ICCs in MENA

The MENA region has a global sourcing system that is strongly influenced by national petroleum companies and their supply chain systems. This lays the foundation for the creation of transportation infrastructure and the regulation of transportation arrangements. Thus, global sourcing is strongly tied to the oil and gas transportation policies of these nations. The operation and success of these systems is almost always tied to the global sourcing process and systems.

The external environment within which global sourcing occurs in the MENA region is based on rigid checks at ports of entry. However, these systems have been strongly improved through the introduction of modern technology. Thus, the ports are mainly good and things operate fast enough. Due to this, most global sourcing activities in the MENA region going to ICCs are often carried out through air or by sea. These make use of regional transportation hubs that allow for products from faraway lands to be brought to the region which is in the geostrategic centre of the world.

Technology in most of these nations are extremely advanced these days. Thus, information systems of international construction companies can be connected to the supply chain system to monitor movement of logistics from international sources in real time. The modernisation of the supply chain system of the MENA region now requires responsibility standards in environmental concerns and other matters.

6.3 Performance Indicators and Risk Management Pointers

Information gathering and information utilisation is the most important and most vital aspect of global sourcing for international construction companies in the MENA region. This requires relevant, reliable, fast and real-time information that is available to decision-makers in top managerial and executive positions in these construction companies. Information is central because it helps to gather major trends and processes to aid choices and decisions.

Information system is coordinated and collated either through general software for construction procurements or bespoke systems. General software is common for smaller centralised entities that have managers who have intimate knowledge of projects. Bespoke software is more appropriate for larger entities with specialised procurement systems to back their global sourcing activities. This provides information over a wide array of suppliers to provide tracks and information for different options and processes.

Most contracts for global sourcing are basic transactional models. However, there are more relationship oriented purchases that are more suited for smaller and centralised entities. However, the basic transactional system was common with larger entities with the power to dictate purchases through economies of scale.

Transaction costs, information flow and competitive posture are important pointers that must be monitored for the control of proper results. The main risks include procurement efficiency and quality assurance demands which must be monitored closely. There are scheduling concerns and cost risks that must be handled closely to control affairs in global sourcing in the MENA region.

Appendix 1: Strategic Global Sourcing Questions

1. Please describe how global sourcing functions in your construction entity in the Middle East and North Africa.

2. What are the long-term considerations and elements of corporate governance that are considered in designing and formulating a global sourcing system for your company.

3. How do you gather data to take strategic decisions about your global sourcing system in the Middle East and North Africa.

4. What kind of Executive Support System (ESS) or Decision Support Software (DSS) do you use to monitor the global sourcing system in the MENA region and what are the salient features?

5. What is the most salient method you use to calculate Returns on Investment on your Global Sourcing System in your MENA operations?

6. How do you manage relationships with your contract partners in the global sourcing system of your MENA operations?

7. What risk management system do you put in place to ensure scheduling, quality, reducing lead times and cost optimisation?

8. What is the importance of having real-time information in ensuring the proper operation of the Global Sourcing system of your MENA construction operations?

9. What are the main performance targets and pointers that are managed in your global sourcing systems?

10. What is your overall assessment of the most important elements for the successful global sourcing operations in the MENA region?

Appendix 2: Global Sourcing Functions

1. How will you judge the frequency of the stages of global sourcing contracts in international construction companies you have worked with in the Middle East and North Africa (from 1 - 5; with 1 being low and 5 being highest in frequency)

Low

Fairly common

Common

Frequent

Extremely Likely

Basic (transactional purchase)

Basic (transactional purchase) Low

Basic (transactional purchase) Fairly common

Basic (transactional purchase) Common

Basic (transactional purchase) Frequent

Basic (transactional purchase) Extremely Likely

Contract Management

Contract Management Low

Contract Management Fairly common

Contract Management Common

Contract Management Frequent

Contract Management Extremely Likely

 Supplier Management (developed relationship)

 Supplier Management (developed relationship) Low

 Supplier Management (developed relationship) Fairly common

 Supplier Management (developed relationship) Common

 Supplier Management (developed relationship) Frequent

 Supplier Management (developed relationship) Extremely Likely

Collaborative Innovation (symbiotic relationship)

Collaborative Innovation (symbiotic relationship) Low

Collaborative Innovation (symbiotic relationship) Fairly common

Collaborative Innovation (symbiotic relationship) Common

Collaborative Innovation (symbiotic relationship) Frequent

Collaborative Innovation (symbiotic relationship) Extremely Likely

2. Region of our Global Sourcing Partners (based on popularity; 1 being rare and 5 being extremely popular)

Low

Sometimes

Fairly Regularly

Regularly

Extremely Popular

Africa

Africa Low

Africa Sometimes

Africa Fairly Regularly

Africa Regularly

Africa Extremely Popular

Arabian Peninsular

Arabian Peninsular Low

Arabian Peninsular Sometimes

Arabian Peninsular Fairly Regularly

Arabian Peninsular Regularly

Arabian Peninsular Extremely Popular

Asia (aside China)

Asia (aside China) Low

Asia (aside China) Sometimes

Asia (aside China) Fairly Regularly

Asia (aside China) Regularly

Asia (aside China) Extremely Popular

China

China Low

China Sometimes

China Fairly Regularly

China Regularly

China Extremely Popular

Europe

Europe Low

Europe Sometimes

Europe Fairly Regularly

Europe Regularly

Europe Extremely Popular

Latin America

Latin America Low

Latin America Sometimes

Latin America Fairly Regularly

Latin America Regularly

Latin America Extremely Popular

North America

North America Low

North America Sometimes

North America Fairly Regularly

North America Regularly

North America Extremely Popular

Russia and Former Soviet Union

Russia and Former Soviet Union Low

Russia and Former Soviet Union Sometimes

Russia and Former Soviet Union Fairly Regularly

Russia and Former Soviet Union Regularly

Russia and Former Soviet Union Extremely Popular

Rest of the world

Rest of the world Low

Rest of the world Sometimes

Rest of the world Fairly Regularly

Rest of the world Regularly

Rest of the world Extremely Popular

3. Transportation System used for global sourcing in most international construction companies in the Middle East and North Africa (ranked on basis of popularity 1: Unlikely; 5: Very Popular)

Unlikely

Sometimes

Fairly Common

Popular

Very Popular

Air

Air Unlikely

Air Sometimes

Air Fairly Common

Air Popular

Air Very Popular

Rail

Rail Unlikely

Rail Sometimes

Rail Fairly Common

Rail Popular

Rail Very Popular

Road

Road Unlikely

Road Sometimes

Road Fairly Common

Road Popular

Road Very Popular

Ship

Ship Unlikely

Ship Sometimes

Ship Fairly Common

Ship Popular

Ship Very Popular

4. What are the most important performance measurement targets of Global Sourcing in companies in the MENA region? (1 being not so important; 5 being extremely important)

Not so important

A little important

Moderately important

Important

Extremely Important

Reduced storage costs

Reduced storage costs Not so important

Reduced storage costs A little important

Reduced storage costs Moderately important

Reduced storage costs Important

Reduced storage costs Extremely Important

Reduced transaction times

Reduced transaction times Not so important

Reduced transaction times A little important

Reduced transaction times Moderately important

Reduced transaction times Important

Reduced transaction times Extremely Important

Reduced transaction costs

Reduced transaction costs Not so important

Reduced transaction costs A little important

Reduced transaction costs Moderately important

Reduced transaction costs Important

Reduced transaction costs Extremely Important

Improved delivery scheduling

Improved delivery scheduling Not so important

Improved delivery scheduling A little important

Improved delivery scheduling Moderately important

Improved delivery scheduling Important

Improved delivery scheduling Extremely Important

Competitive capacity

Competitive capacity Not so important

Competitive capacity A little important

Competitive capacity Moderately important

Competitive capacity Important

Competitive capacity Extremely Important

Improve external access to information

Improve external access to information Not so important

Improve external access to information A little important

Improve external access to information Moderately important

Improve external access to information Important

Improve external access to information Extremely Important

Response to supplier leads

Response to supplier leads Not so important

Response to supplier leads A little important

Response to supplier leads Moderately important

Response to supplier leads Important

Response to supplier leads Extremely Important

5. Relative Importance of Risk Management in Global Sourcing in International Construction Companies in the Middle East and North Africa (1: not so importance; 5: extremely important)

Not so important

A little Important

Moderately important

Important

Extremely important

Scheduling risk

Scheduling risk Not so important

Scheduling risk A little Important

Scheduling risk Moderately important

Scheduling risk Important

Scheduling risk Extremely important

Quality assurance risk

Quality assurance risk Not so important

Quality assurance risk A little Important

Quality assurance risk Moderately important

Quality assurance risk Important

Quality assurance risk Extremely important

Cultural barriers

Cultural barriers Not so important

Cultural barriers A little Important

Cultural barriers Moderately important

Cultural barriers Important

Cultural barriers Extremely important

Cost of operations

Cost of operations Not so important

Cost of operations A little Important

Cost of operations Moderately important

Cost of operations Important

Cost of operations Extremely important

Procurement efficiency risks

Procurement efficiency risks Not so important

Procurement efficiency risks A little Important

Procurement efficiency risks Moderately important

Procurement efficiency risks Important

Procurement efficiency risks Extremely important

6. Relative importance of the following aspects of an efficient Information Technology System for Global Sourcing in the Middle East and North Africa

Not so important

A little important

Moderately important

Important

Extremely important

Fast

Fast Not so important

Fast A little important

Fast Moderately important

Fast Important

Fast Extremely important

Reliable

Reliable Not so important

Reliable A little important

Reliable Moderately important

Reliable Important

Reliable Extremely important

Relevance of Information

Relevance of Information Not so important

Relevance of Information A little important

Relevance of Information Moderately important

Relevance of Information Important

Relevance of Information Extremely important

Real Time

Real Time Not so important

Real Time A little important

Real Time Moderately important

Real Time Important