Determining supply chain practices and strategies of light vehicle manufacturers in South Africa

Abstract

This study determined whether local manufacturers of light vehicles in South Africa employ supply chain best practices and strategies. The research design employed was a combination of exploratory and descriptive research design using qualitative and quantitative approaches based on a survey of light vehicle manufacturers in South Africa. A face-to–face, semi-structured interview questionnaire was used, based on purposive sampling. Descriptive statistics using SPSS software were used for the data analysis and interpretation. The findings of the study revealed that across the supply chain, best practices were implemented to a large extent by all manufacturers. Light vehicle manufacturers in South Africa, however face supply chain challenges, which include technological, infrastructural, cost, market/service and production/skills challenges. The most important supply chain performance indicator that contributes to optimisation of performance is quality, followed by final product delivery reliability, and then cost and supplier reliability. All the manufacturers followed a lean strategy for their inbound supply chain and some had a lean supply chain strategy for their outbound supply chain. A number of them also had an agile supply chain strategy in the outbound supply chain which suggests a leagile supply chain strategy. It was also found that in some instances there was a mismatch between strategies and practices in the area of product characteristics, manufacturing characteristics and the decision drivers of supply chain. One of the conclusions of the study was that local manufacturers of light vehicles do not always make decisions and implement practices in line with their chosen supply chain strategies. The study concluded by developing a framework for determining supply chain best practices in line with a chosen strategy that could guide supply chain managers (in locally manufactured light vehicles) in the automotive in South Africa in their decision making.