The management of the logistical supply chain drivers in Sowetan small businesses

Abstract

The performance of small businesses contribute substantially to the South African economy. In recent years the South African Government has prioritised the development of township retail industries by implementing numerous initiatives. The primary objective of this study was to determine how formal independent small retail businesses in Soweto manage their logistical supply chain drivers, namely facilities, inventory and transportation, in terms of responsiveness and cost-efficiency in order to survive. The logistical supply chain drivers should not only be managed as a cohesive unit, but also be aligned with the orientation of the selected supply chain strategy, in terms of responsiveness and cost-efficiency. During 2014, a quantitative survey was conducted among 650 formal independent small Sowetan businesses of which the responses of 556 retailers were analysed in terms of responsiveness and cost-efficiency. The study also investigated the role of the relevant industry group in the management of the logistical supply chain drivers by the business owners. The data was analysed and tested by the Kruskal-Wallis test, the Pearson Chi-square test and factor analyses were performed. Two binary logistic regression models were developed to determine the influence of the management of the logistical supply chain drivers on the small retailers’ odds of survival. The results showed that the small retailers manage facilities and inventory focused more towards responsiveness, whereas transportation is managed focused on either cost-efficiency or responsiveness. The study concluded that age and growth in income can predict the odds of survival for small businesses.