With the development and advancement of integrated supply chain techniques and frameworks there is untapped potential for supply chain management to provide a platform for integration within a South African organisation’s strategic operating plan.
Cobus Rossouw, chief integration officer at Imperial Logistics, and Nicole Binnekade from Volition Consulting Services outline the results from their investigation into the current status of integrated supply chain management. This investigation provides 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 prescribed best practices. The 31 organisations participating in the investigation were classified into groups for analysis purposes. The allocation of groups was based on the role the organisations play in industry and the type of products they produce. The three roles are manufacturing, retail and mining, and the three types of products are consumables, industrial products/feed stock and semi-durables/durables. Results 1. Within the survey sample, 62% of the participating organisations that operate within the consumable products industry were found to have an overall average that indicates a mature supply chain compared to organisations that operate within the non-consumables industry, such as the semi-durable and durables and industrial products/feedstock, where only 44% were found to be mature. This reveals that the consumables industry is more likely to have a mature supply chain, than role players operating within the non-consumable industry. 2. It was found that South African organisation’s chose to align their supply chain strategies with the organisation’s overall strategy, as this strategy ranks the highest, considering its low standard deviation of 0.79 Of the particants, 84% indicated that they mostly or always fully implement this best practice strategy, opposed to only one of the participants stating that they implement an aligned strategy to some extent. It was also found that organisations involved in the retail sector scored a high average of 4.5 out of 5, indicating an emphasis on successfully aligning their strategies. 3. Information best practices scored the lowest overall within South African organisations, with an overall average maturity rating of 2.90 out of 5 and a standard deviation of 0.87. Six of the eight information techniques prescribed as best practice were within the top ten lowest ranking best practices. This reveals that information best practices are not generally held in high regard within South African supply chains. As established in the research project, 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.Thus by not successfully implementing these information techniques, South African supply chains could be impairing their capabilities. 4. The investigation revealed that South African supply chains, across all role player sectors, have chosen to design their supply chains to be customer focused. This was evident from the study in that the implementation of a customer-focused strategy ranked third overall within the study, with an average mean of 4.03 out of 5 and a standard deviation of 1.00. The large standard deviation reveals that South African organisations are attempting to design and manage their supply chains to be customer focused, but there is a large variation in the implementation and success thereof. Seventy per cent of the supply chains mostly or always fully attempted to be customer focused, while 27% of the supply chains partially implemented this strategy. 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. 5. It was found that within South African organisations, the best practice strategy of aligned incentives ranked 41st overall and 46% of the participating organisations never or rarely collaborated with their supply chain partners, while 46% of South African supply chains are partially managing to successfully collaborate and fully utilise aligned incentives within their supply chains. Aligned incentives and aligned roles are best practices strategies that concurrently work together within a successful supply chain management strategy and 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. 6. The investigation revealed that South African organisations place great emphasis on the implementation and successful management of supply chain coordination control methods, in terms of planning, forecasting and replenishment, as supply chain coordination ranked secondhighest overall with a mean of 4.19 and a standard deviation of 0.95. The effective use of supply chain coordination control methods can be particularly noted within the manufacturing sector participants.7. The investigation revealed that South African organisations on average are not placing emphasis on designing agility within their supply chains, as agility ranked 29th overall, with a mean of 3.32 and a standard deviation of 0.98 within the total sample. This is supported by the observation of a large distribution across the implementation ratings in the retail sector, where 50% of the participants barely or only partially implemented the best practice and 50% of the participants frequently or mostly implemented the best practice. Furthermore it was found that 68% of the manufacturing role players barely or partially implemented the best practice.
8. Minimised inventory scored very low overall throughout the investigation, ranked 43rd within the overall investigation, with a mean of 2.84 and a standard deviation of 0.86. It was found that the lack of implementation did not differ between role players, though the manufacturing and mining value chain members chose to keep buffer stock, while the retail value chain members placed very little emphasis on minimising inventory and maintaining buffer stock, which is indicated by the ranking of 46th overall. Closing the information gap The lack of implementation of information best practices within South African supply chains is one of the barrier’s hampering performances within South African organisations. This is due to the fact that information management and integration thereof is a crucial part of the three fundamental dimensions of supply chain integration and that many of the information techniques support and promote broader best practice strategies. This has resulted in a gap, as South African organisations are choosing to implement best practice strategies such as positioning their supply chains to be customer focused, as well as implementing collaboration strategies – yet they do not have the information structures to support, manage and control these strategies. This can be substantiated by the fact that participants in the manufacturing of consumer goods sector have identified information management maturity as one of the greatest gaps their organisation is currently facing and have implemented a three- to five-year plan to bridge this gap. Aligning the understanding and implementation of supply chain collaboration The successful collaboration between supply chain partners requires implementation of both aligned incentives and aligned roles within a successful supply chain management strategy, as these two best practices work concurrently together. The investigation revealed that South African organisations were implementing the best practices of aligned roles and aligned incentives at different implementation levels, which indicates that there is a gap in the understanding of supply chain management and the successful implementation of supply chain collaboration strategies within South African organisations. Conclusions The investigation established by means of a qualitative study that South African organisations are recognising the advantages of managing their supply chains as a competitive weapon and are positioning their supply chains as essential components within their strategic management. This can be seen by the high level of awareness and transformation initiatives being implemented by means of aligning their supply chain strategies with the broader organisational strategy, becoming more customer focused, realising the benefits of collaborating with their supply chain partners and implementing planning, forecasting and replenishment strategies. A successful supply chain requires a holistic approach and there is no single best practice that can optimise and manage an entire supply chain. It was found that the issues mentioned were hampering the successful operation of supply chains within South African organisations. The first being the lack of implementation and successful deployment of information management techniques within South African organisations and the second being the gap in the understanding of supply chain management and the successful implementation of supply chain collaboration strategies within South African organisations.
