Investigation of the strategic role and effective functioning of the supply chain function in South African organisations

Abstract

Over the last decade integrated supply chain management has been recognised as an essential driver for business success (Lu, 2011) and currently South African organisations are functioning within one of the harshest overall environment to date (Gilmore et al, 2008). These circumstances have brought about the necessity for organisations to become flexible and accommodate transformations within their industries and supply chains to increase their competitive gain. The objective of this investigation was to provide insight into the current status and role of integrated supply chain management within South African organisations, as well as to identify the major gaps between the current status of integrated supply chain management and the specific best practices. This investigation was conducted by means of a qualitative study on 31 participating members of the supply chain community from the manufacturing, retail and mining sector. The study consisted of each participant completing a standardised survey based on the SCMAT (Supply Chain Maturity Assessment test) analysis, follow up electronic based interviews and the study of current literature available. The SCMAT analysis provided a platform to subjectively evaluate each participant in terms of a broad overview of the organisations supply chain, as well as the best practice techniques that are currently being implementing and the level of such implementation. The data was analysed by means of combined analysis, where by the statistically analysed survey results were combined with the information gathered by means of the interviews and current literature to establish the following findings regarding the current status and role of integrated supply chain management within South African organisations;  Role players in the consumables value chain exhibit a significantly higher level of maturity than role players in other value chains.  South African organisations are aligning their supply chain strategies with the broader organisational strategy.  A lack of implementation of information management best practices is evident within South African supply chains.  South African organisations recognise the importance of being customer focused. University of Pretoria 2012  South African Organisations generally have yet to realise the benefits of collaborating with supply chain partners.  Planning, forecasting and replenishment strategies are the backbone of South African supply chains.  South African organisations are not placing emphasis on designing agility into their supply chains.  Minimal emphasis is placed on minimising inventory within South African supply chains. Further combined analysis revealed that South African organisations are being hampered by two gaps between the current status of integrated supply chain management and the best practices. The first being the lack of implementation of information best practices and secondly gaps in the understanding of supply chain management and the successful implementation of supply chain collaboration strategies within South African organisations. In conclusion this investigation has provided an overview of the current status of the supply chain function within South African organisations, as well as providing insight into some of the current gaps between South African supply chain practice and the global standard.