scholarly journals Supplier–customer relationships: Weaknesses in south african automotive supply chains

2012 ◽  
Vol 6 (1) ◽  
Author(s):  
M. J. Naude ◽  
J. A. Badenhorst-Weiss
Keyword(s):  
Supply Chains ◽  
South African ◽  
Automotive Industry ◽  
Customer Relationships ◽  
The South ◽  
Collaborative Relationships ◽  
Automotive Components ◽  
Optimal Efficiency ◽  
Automotive Supply ◽  
Original Equipment Manufacturers

The South African automotive industry, which is an important sector in the South African economy, needs to function efficiently if it is to compete internationally. However, South African automotive components manufacturers (ACMs) are not internationally competitive and automotive assemblers, also known as original equipment manufacturers (OEMs), often import cheaper components from abroad. All parties in the South African automotive supply chains need each other to ensure optimal efficiency and competitiveness. Furthermore, it is vital that good relationships exist between customers and suppliers in the automotive supply chains in South Africa. ACMs are central to automotive supply chains. A survey was conducted among ACMs to determine the nature of relationships that exist between buyers and suppliers in South Africa’s automotive supply chains. The results showed that collaborative relationships do indeed exist between members of the supply chain but that communication, understanding of the parties’ situations and cooperation can improve this relationship and so create total alliance between OEMs and ACMs.

scholarly journals The correlation between relationship value and business expansion in the South African automotive supply chains

2017 ◽  
Vol 11 ◽  
Author(s):  
Aletta S. Tolmay
Keyword(s):  
Supply Chain ◽  
Linear Regression ◽  
Supply Chains ◽  
South African ◽  
Automotive Industry ◽  
Tier 2 ◽  
The South ◽  
Tier 1 ◽  
Relationship Value ◽  
Automotive Supply

Background: The South African automotive industry includes complete supply chains. The South African automotive supply chain stakeholders operating within the global arena are faced with opportunities as well as challenges. The South African government supports the automotive industry and encourages the vision to drastically expand the industry by the year 2020. However, having to adhere to strict prescriptions from customers regarding product quality and logistics, automotive component suppliers have only the actual relationship with customers through which value can be added. Literature acknowledges the importance of relationship value and agrees that it results in business retention. However, literature fails to prove whether relationship value can result in business expansion where more business is generated.Objectives: The objective of this article was to provide a better understanding of how to optimise relationship value within the South African automotive supply chains between Tier 1 and Tier 2 suppliers. Furthermore, the correlation between relationship value and business expansion was tested through a linear regression model. It was also important to determine whether supply chain stakeholders from different countries of origin and cultural backgrounds attach the same importance to relationship value.Method: This article reports on research which followed a positivistic paradigm, through a quantitative study undertaken in the South African automotive supply chains. Members of the National Association for Automobile Component and Allied Manufacturers of South Africa (NAACAM), defined as Tier 1 suppliers, were approached to describe their best Tier 2 suppliers. Questions relating to relationship value and business expansion were asked via a closed-ended questionnaire. The aim was to obtain the perceptions of Tier 1 suppliers of their best Tier 2 suppliers in terms of relationship value and business expansion. The data were analysed through a linear regression model.Results: It was found that relationship value directly correlates with business expansion and is therefore highly regarded as important by Tier 1 suppliers in terms of their Tier 2 suppliers in the South African automotive supply chains. Notwithstanding the different countries of origin, respondents are in agreement regarding the importance of relationship value.Conclusion: As the South African automotive industry plays an important role in the South African economy, all efforts should be made to retain and expand the industry. The industry is characterised by a difficult economy, and supply chain role players should constantly investigate new strategies to gain a competitive advantage. It was found that there was a high regard for relationship value which could result in business expansion. Automotive component suppliers are encouraged to invest in a relationship value governance strategy to actively pursue added benefits for all stakeholders.

scholarly journals Supply chain relationships between first and second tier suppliers in South African automotive supply chains: A focus on trust

2015 ◽  
Vol 9 (1) ◽  
Author(s):  
Aletta S. Tolmay ◽  
Johanna A. Badenhorst-Weiss
Keyword(s):  
South Africa ◽  
Supply Chain ◽  
Supply Chains ◽  
South African ◽  
Automotive Industry ◽  
Collaborative Relationships ◽  
Supply Chain Relationships ◽  
Second Tier ◽  
Automotive Supply ◽  
High Degree

Background: The automotive industry is characterised by a network of long term collaborative agreements between component suppliers and assemblers. For collaboration to be successful trust between the supply chain partners is vital. Although many variables influence the efficiency of collaborative relationships, the human behaviour issues related to culture and trust are often much more difficult to solve. Trust is singled out in this article as a contributor to value in the supply chain relationships. Increased trust leads to more confidence resulting in better collaboration.Objectives: The purpose of the study was to explore collaborative relationships between first and second tier suppliers (component manufacturers) in automotive supply chains in South Africa and the role of trust in the relationship value.Method: This quantitative study had been conducted amongst members of the National Association for Automobile Component and Allied Manufacturers of South Africa (NAACAM), who are suppliers to the large automotive assemblers. The research utilised closed ended questions to obtain the perceptions of managers in automotive component manufacture regarding trust and relationship value with their best suppliers.Results: With a linear regression model it was found that there is a high degree of trust in the collaborative relationships between first and second tier suppliers of components in the automotive industry in South Africa.Conclusion: The automotive industry is one of the most successful industries in South Africa. They compete globally and apply best practices, particularly those in supply chain management. The industry is characterised by networks of collaborative relationships on different levels. These relationships seem to be successful as they are based on trust.

scholarly journals Relationship value antecedents in the South African automotive component supply chain

2017 ◽  
Vol 17 (1) ◽  
Author(s):  
Aletta S. Tolmay ◽  
Peet Venter
Keyword(s):  
Supply Chain ◽  
Supply Chains ◽  
South African ◽  
Three Dimensions ◽  
The South ◽  
Value Drivers ◽  
Automotive Component ◽  
Personal Interaction ◽  
Relationship Value ◽  
Automotive Supply

Orientation: Although literature agrees on the importance of ‘relationship value’, the term is still seen as ambiguous and authors fail to agree on its antecedents. Within a challenging global arena, relationship value is believed to result in business retention. It is therefore critical to have a better understanding of this value to ensure business sustainability within supply chains. Literature suggests that relationship value drivers comprise three dimensions, namely a core offering, sourcing process and customer operations.Research purpose: The contribution of the research reported on in this paper is an enhanced conceptual understanding of relationship value and its salient drivers within the South African automotive supply chains.Motivation for the study: Literature invites more research on relationship value and its drivers. Therefore, the research reported on tested the antecedents of relationship value.Research design, approach and method: Relationship value drivers were tested through empirical research within the South African automotive supply chains by means of a path analysis. The research utilised a closed-ended questionnaire, and targeted managers among Tier 1 buyers and asked them about the relationship value traits of their best Tier 2 suppliers.Main findings: It was found that personal interaction, which forms part of the sourcing process, is viewed as the strongest antecedent of relationship value within the South African automotive supply chains, followed by product quality and delivery.Practical/managerial implications: It is suggested that superior supply chain practices within the South African automotive industry might secure business retention. Automotive component suppliers are therefore advised to implement relationship value strategies to promote higher value through personal interaction.

Interdependence analysis of supplier relationship challenges in the South African automotive industry

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mohita Gangwar Sharma ◽  
Micheline Juliana Naude
Keyword(s):  
South African ◽  
Automotive Industry ◽  
Rapid Change ◽  
Ripple Effect ◽  
The South ◽  
Content Type ◽  
Automotive Supply Chain ◽  
Automotive Supply ◽  
Supplier Relationship ◽  
Relationship Challenges

Purpose The South African automotive industry, which is the most significant sector in the South African economy, needs to function efficiently to compete globally. The purpose of this paper is to report on a study that investigated the challenges faced by the South African automotive component manufacturers and their suppliers and provide a structure and identify the dependencies between these challenges. Design/methodology/approach Interpretive structural modelling (ISM) was adopted to explore the supplier relationship challenges and the dynamics and interlinkages between these challenges. ISM was deemed appropriate, as it is a multi-criterion decision-making technique suited for complex problems and provides an ordered, directional framework. Findings The findings revealed that advanced communication, rapid change in demand and dependence on a single customer are independent problems but have a lesser feedback loop and do not create instability by ripple effect. Interdependencies, on the other hand, create lesser ripples when tackled. Research limitations/implications Findings of this study will be able to guide all the stakeholders: the policymakers and the automotive industry players to target the driving issue which can bring efficiency in the South African automotive supply chain. If the automotive components manufacturers (ACMs) are able to have more than one customer, their reliance on one will decrease and the systems will improve which shall benefit the industry. This methodology can also be used in future for determining the roadmap for complex issues. Originality/value The framework presented in this paper provides decision makers with a realistic picture of their situation by providing insight into the interrelationships, ranking them by importance and aiding in creating a roadmap for addressing identified challenges.

scholarly journals Supply chain challenges in the South African automotive sector: do location, size and age matter?

2013 ◽  
Vol 16 (4) ◽  
pp. 407-417 ◽  
Author(s):  
Micheline Juliana Naude
Keyword(s):  
Supply Chain ◽  
South African ◽  
Automotive Industry ◽  
Geographic Location ◽  
Customer Relationship ◽  
The South ◽  
Automotive Component ◽  
Cost Competitiveness ◽  
Original Equipment Manufacturers ◽  
Published Research

The South African automotive industry makes an important contribution to the South African economy. However, there are deficiencies within the local automotive component manufacturers’ (ACMs) supplier base and therefore automotive assemblers, or original equipment manufacturers (OEMs), have to import many of their parts requirements. These deficiencies are caused by ACMs’ lack of technology, global supply capability, cost competitiveness and their geographic location (ACMs are scattered across the country). A study was conducted to explore the supply chain challenges South African ACMs face and whether the location, size and age of participating ACMs have a bearing on whether they face the same challenges. The results revealed that the most significant supply chain challenges in South Africa were in the customer relationship category. From the hypotheses testing, the conclusion could be drawn that, in general, participating ACMs face common supply chain challenges, irrespective of their location, age and size.This article contributes to the published research on the topic and the findings reveal that business opportunities in the automotive industry exist for entrepreneurs aspiring to enter into the automotive component industry. 

Framework for Study of Supplier Relationships in Indian Automotive Supply Chains

2015 ◽  
Vol 4 (3) ◽  
Author(s):  
Souresh Bhattacharya ◽  
D. Mukhopadhyay ◽  
Sunil Giri
Keyword(s):  
Supply Chains ◽  
Automotive Industry ◽  
Supplier Management ◽  
Supplier Relationships ◽  
Technological Advances ◽  
Management Orientation ◽  
High Level ◽  
Supplier Partnerships ◽  
Automotive Supply ◽  
Supplier Relationship

Indian automotive industry has increasingly adopted global supply chain best practices including supplier relationship as a management imperative, in the last two decades. Increased competition, globalization, wide-spread outsourcing, use of information technology and rapid technological advances have contributed in supplier relationship development with the objective to achieve competitive advantage and a high level of performance. It is evident that only if mutual benefits accrue to both Vehicle Assemblers (VA) and their suppliers, the partnership between them would be meaningful and effective. Also, VAs have necessarily, to invest considerable resources and effort in achieving collaboration with their suppliers and cost-effectiveness becomes an issue which leads to supply base rationalization and a segmented approach. Therefore understanding the issues involved and identifying focus areas for successful supplier relationships becomes an imperative. This paper, based on an exploratory study, delves into the VA-supplier interface in Indian automobile supply chains, examines various theoretical and practical dimensions, in order to identify strategic imperatives (key impact drivers), Supplier Management Orientation (SMO) of VAs, adoption of Supplier Development Practices, extent of VA-supplier partnerships and mutual benefits accruing to both entities. Based on this a framework for holistically studying the VA-supplier interface is proposed.

scholarly journals THE IMPACT OF THE COVID-19 PANDEMIC ON SUPPLY CHAINS IN THE AUTOMOTIVE INDUSTRY

2020 ◽  
Author(s):  
Goran Milovanovic ◽  
◽  
Tamara Stankovic ◽  
Keyword(s):  
Supply Chain ◽  
Supply Chains ◽  
Automotive Industry ◽  
Business Relationships ◽  
Automotive Supply Chain ◽  
Automotive Supply ◽  
The Impact ◽  
Insight Into ◽  
Chain Level

Health crises have an impact on supply chains, mainly by disrupting their regular activities. In this research, the authors have analyzed the impact that the Covid-19 pandemic has made on business relationships between supply chain partners in the automotive industry and their suppliers, which are mostly from territories where the initial outbreak of the SARS COV 2 virus occurred. The analysis shows that in some cases, there is a strong dependency between the pandemic and production levels. Being dependent prevents supply chains from maintaining stability and causes system vulnerabilities. The authors conclude their work with a thesis on the pronounced impact of the current pandemic on automotive supply chain activities. For the analysis to be complete, it is necessary to monitor changes in production levels further, since data for the current year still does not provide a realistic insight into all the consequences at the supply chain level.

scholarly journals Black economic empowerment in the Eastern Cape automotive industry: Challenges and policies

2014 ◽  
Vol 10 (4) ◽  
pp. 490-503
Author(s):  
GS Horn
Keyword(s):  
South Africa ◽  
South African ◽  
Automotive Industry ◽  
Automobile Industry ◽  
Economic Empowerment ◽  
Eastern Cape ◽  
The South ◽  
Business Skills ◽  
Black Economic ◽  
Black Economic Empowerment

Original Equipment Manufacturers (OEMs) in South Africa are under pressure to meet the Black Economic Empowerment (BEE) policies and charters of the South African government by giving BEE suppliers additional opportunities to tender. However, many BEE suppliers, due to being historically disadvantaged, experience various problems which make it difficult for them to win tenders, including lack of finances, opportunities to tender and management and business skills, and problems with quality and capacity. This paper outlines these practical problems experienced by BEE suppliers, the effects of these problems on risk and complexity in the South African automotive industry and policies that address these problems and assist BEE suppliers to become A-rated suppliers. Data for the paper was obtained from interviews with: senior employees of the AIDC involved with supplier development training; middle managers of supplier quality and development departments at the three OEMs in the Eastern Cape Province; and BEE and small suppliers identified to undergo AIDC training. The findings of the study are that unless sufficient training is given to BEE and potential BEE suppliers, supply to OEMs will remain in the hands of existing established suppliers and very little transformation will occur within the automobile industry in South Africa.

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