Pictured:  Imperial Logistics’ chief integration officer, Cobus Rossouw

Over the past decade, integrated supply chain management has been recognised as an essential driver for business success and increased competitive advantage. But are South African organisations doing more than paying lip service to adopting the best practices required for successful supply chain integration?

Imperial Logistics’ chief integration officer, Cobus Rossouw, reports that a recent investigation into the current status of integrated supply chain management (ISCM) within South African organisations yielded some positive findings, but also highlighted areas where South African firms are falling short. The research was based on surveys conducted with 31 South African organisations operating within the retail and manufacturing sector.

Aligned for success
Among the study’s key findings was the encouraging confirmation that South African organisations are aligning their supply chain strategies with the broader organisation strategy. Rossouw elaborates: “Almost 80% of the survey’s participants indicated that they mostly or always fully implement this best practice strategy. Retail organisations scored particularly high in this area, indicating this sector’s success in aligning their strategies.” Other good news coming out of the study is the finding that South African companies recognise the importance of being customer focused – and this is extending to their supply chains.

“The investigation revealed that South African organisations across all sectors are designing and managing their supply chains to be customer focused – but there is a large variation in the implementation and success thereof. Customer focus is an essential driver for a successful supply chain and this is a positive indicator of supply chain best practices within South African organisations.”

A-plus for planning
Planning, forecasting and replenishment strategies emerged as the backbone of South African supply chains. The investigation revealed that South African organisations place great importance on the implementation and successful management of supply chain coordination control methods in terms of planning, forecasting and replenishment. Top marks in this area go to the South African manufacturing sector, however, since role players in this sector were found to be making the most effective use of supply chain coordination control methods, Rossouw notes.

Mind the gap
Rossouw notes that – according to the study – there are two areas in which South African organisations are being most hampered by the gap between their current ISCM status and prescribed best practices. The first is in information technology, where supply chains are being impaired by the lack of implementation of information best practices. “As a strategy, information best practices scored the lowest overall within South African organisations, which reveals that they are not generally held in high regard. Since many of the key frameworks available for ISCM rely heavily on the use of information best practices to monitor and successfully integrate a supply chain, South African organisations are really impairing their supply chain capabilities.” Rossouw says that the second area of concern is supply chain collaboration, with the study revealing that South African organisations have yet to realise the benefits of collaborating with supply chain partners. It was found that the best practice strategy of aligned i centives ranked just 41st overall, and “never or sometimes” was how 46% of the participating organisations rated their collaboration with supply chain partners. He explains that aligned incentives and aligned roles are best practice strategies that work together within a successful supply chain management strategy, yet it was found that both strategies ranked in the lower quartiles of the study. “This indicates that there is a gap between the knowledge of supply chain management and the successful implementation of supply chain collaboration strategies within South African organisations.” Rossouw believes that many South African organisations remain groupings of functional excellence and have difficulty in aligning processes across the business system. “Change management is required to integrate the supply chain across all functions within organisations and between partner organisations in the value chain. Supply chain integration means that knowledge and experience can be applied beyond the field of supply chain management; it can be leveraged into the world of transforming entire organisations. This creates an opportunity for supply chain professionals to broaden their aspirations to fundamentally reposition the business environment in which they participate,” he concludes.