<p>In the increasingly competitive and globalized market, firms are under pressure to optimize operational efficiency and improve financial performance. However, despite the documented benefits of strategic sourcing, many firms struggle to effectively implement these practices, resulting in inefficiencies in their supply chains and suboptimal financial outcomes. This study adopts an explanatory research design, which is appropriate for examining causal relationships between variables. A quantitative research approach was used, as the study aims to analyze numerical data related to supply chain efficiency and financial performance. The research adopted a positivist philosophy, as it seeks to objectively observe and measure phenomena using empirical data. The study used convenience sampling techniques and sampled 300 respondents from a target population. The findings of the study reveal that strategic sourcing positively impacts a firm’s financial performance. Additionally, strategic sourcing significantly enhances supply chain efficiency. Furthermore, supply chain efficiency has a direct and positive effect on a firm’s financial performance. Finally, supply chain efficiency positively moderates the relationship between strategic sourcing and financial performance. The study recommends that firms should establish long-term contracts with reliable suppliers to minimize transaction costs associated with repeated negotiations and opportunistic behavior. Organizations should standardize supplier evaluation criteria to ensure that sourcing decisions align with efficiency goals, reducing uncertainty and coordination costs.</p>