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 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 Enabling information sharing by establishing trust in supply chains: A case study in the South African automotive industry

2011 ◽  
Vol 13 (1) ◽  
Author(s):  
Roxanne Piderit ◽  
Stephen Flowerday ◽  
Rossouw Von Solms
Keyword(s):  
Supply Chain ◽  
Supply Chains ◽  
Information Sharing ◽  
South African ◽  
Information Flow ◽  
Automotive Industry ◽  
Supply Chain Relationships ◽  
Two Factors

Background: The significant economic importance of the country’s automotive industry provided the context for this study. The success of the industry relies on the effectiveness and efficiency of the supply chain, which can be significantly affected by the strength of the supply chain relationships. The role of trust and information sharing in relation to two key theories was considered, namely: organisational information processing theory and game theory. Previous studies have recognised the importance of trust and information sharing in supply chain relationships and considered the effect of trust on information sharing, or the effect of information sharing on trust in a single direction. Thus, the potential cyclical relationship between the two factors has been largely ignored.Objectives: This paper explored the relationship between trust and information sharing in South African automotive supply chains, and establishes the importance of nurturing a cyclical relationship between these two factors. In addition, the role of information technology (IT) in supporting this relationship was considered. By improving both trust and information sharing, the performance and competitiveness of the supply chain can be improved.Method: An examination of the effects of a lack of trust in a supply chain relationship, and the consequential lack of information flow, was conducted by means of a case study of an Eastern Cape-based automotive supplier. A case study research method was followed for this study, which made use of multiple data collection methods, including document survey and participant observations. The case selected is an East London based subsidiary of a larger multinational automotive component supplier to both local and international automotive original equipment manufacturers.Results: The findings led to the conclusion that the way forward for competitive supply chains is to build trust in the supply chain in order to improve information flow, and vice versa. Information technology can be used to nurture this cyclical relationship between trust and information sharing.Conclusion: It is proposed that simultaneously improving information flow and trust in an interorganisational relationship leads to improved supply chain performance and competitiveness.

Relationship Value, Trust And Supplier Retention In South African Automotive Supply Chains

2016 ◽  
Vol 32 (5) ◽  
pp. 1329 ◽  
Author(s):  
J.A. Badenhorst-Weiss ◽  
A.S. Tolmay
Keyword(s):  
South Africa ◽  
Supply Chains ◽  
South African ◽  
Extra Effort ◽  
Best Value ◽  
Relationship Value ◽  
Second Tier ◽  
Automotive Supply ◽  
The Relationship

Suppliers have a particular role to play in assuring competitiveness in supply chains. This article investigates the relationship between first and second tier suppliers in automotive supply chains in South Africa. Automotive component suppliers (first tier suppliers to assemblers (OEMS) such as Toyota) should make an extra effort to retain their suppliers (second tier), particularly suppliers of strategic parts, to assure the best value adding by the suppliers in the highly competitive supply chain landscape. To assure best value from suppliers they need to be retained in an active trusting, long term, collaborative relationship.  The more the customer trusts the supplier, the higher the perceived value of the relationship and the more likely parties will work together to retain the business relationship. The aim of this quantitative study amongst first tier suppliers is to obtain more insight into the relationships and the hierarchical correlation between the relationship value, trust and supplier retention in automotive supply chains in South Africa. With a regression analysis it was found that both trust and relationship value are substantial predictors of supplier retention, but trust is more important for supplier retention.

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 The bullwhip effect phenomenon in automotive supply chains in South Africa

2011 ◽  
Vol 11 (1) ◽  
Author(s):  
M. J. Naude ◽  
J. A. Badenhorst-Weiss
Keyword(s):  
South Africa ◽  
Supply Chain ◽  
Empirical Study ◽  
Supply Chains ◽  
South African ◽  
Bullwhip Effect ◽  
Chain Management ◽  
Automotive Component ◽  
Automotive Supply ◽  
Automotive Component Industry

Purpose: The purpose of the article is to report on research that was completed to explore the concept of the bullwhip effect in supply chains and to illustrate empirically the presence of the bullwhip effect in automotive supply chains in South Africa. Problem Investigated: This article investigates the presence of the bullwhip effect - which was identified through an empirical study - and its causes and implications for supply chain management in the South African automotive component industry. Methodology: A literature study was conducted on the causes and implications of the bullwhip effect phenomenon. This was followed by an empirical study in the form of a survey among South African automotive component manufacturers. Descriptive and inferential statistics were used to determine the significant supply chain problems relating to the bullwhip effect in automotive supply chains. Findings and Implications: The results indicate that automotive component manufacturers are dependent on demand-forecasting information from their customers. They experience long lead times, fluctuating orders, cancellation of orders, excess and slow moving inventory and a lack of integration with suppliers and customers. There are also signs of relationship problems and a possible silo mentality. The mentioned results indicate the presence of the bullwhip effect in South African automotive supply chains. Since the bullwhip effect can have a major impact on organisations' costs, knowing where to invest effort and resources should be a high priority for supply chain managers. Value of the Research: Since the field of supply chain management is extremely dynamic, this article contributes to the body of knowledge and provides new insight into the bullwhip effect phenomenon. The results included in this article could assist parties in automotive supply chains to focus their attention on problems that might be within their control and if solved could lead to improved competitiveness. Furthermore, there is little empirical research on this topic in the South African automotive component industry. Conclusion: It is possible that the bullwhip effect is responsible for inefficiencies in automotive supply chains. Knowledge of the indicators of the bullwhip effect can enable supply chain managers to identify it at an early stage and thus be proactive in preventing its costly influence on the efficiency of the supply chain. The bullwhip effect can be experienced by any industry. This is possibly the case in the automotive component industry in South Africa.

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 Levels of advancement in supply chain planning by large-scale petrochemical companies in South Africa

2011 ◽  
Vol 8 (3) ◽  
pp. 535-547
Author(s):  
Johan J. Louw ◽  
Wessel Pienaar
Keyword(s):  
South Africa ◽  
Supply Chain ◽  
Supply Chains ◽  
South African ◽  
Petrochemical Industry ◽  
Large Scale ◽  
Supply Chain Integration ◽  
Business Strategies ◽  
Value Chains ◽  
Supply Chain Planning

The adoption of a full supply chain approach in the chemical industry is still relatively slow compared to other industries. Although the awareness has been kindled, very few petrochemical companies have advanced to a point where supply chain considerations and influences are proactively taken into account and incorporated in the formulation of corporate- and unit-specific business strategies/tactics, and formally structured and applied. Conventional supply chain integration concepts focus primarily on the internal and external integration of individual supply chains. Due to the highly integrated nature of petrochemical value chains, the related supply chains should also be integrated by taking account of enterprise/industry-wide synergies and interdependencies. Since not much research has been done to indicate the level of advancement in terms of supply chain planning in large-scale, South African-based petrochemical companies, this empirical research is the first of its kind. This research provides useful information regarding an understanding of the petrochemical industry, appropriate supply chain planning practices and the level of advancement in a number of related planning dimensions

scholarly journals The composite supply chain efficiency model: A case study of the Sishen-Saldanha supply chain

2016 ◽  
Vol 10 (1) ◽  
Author(s):  
Leila L. Goedhals-Gerber
Keyword(s):  
South Africa ◽  
Supply Chain ◽  
Supply Chains ◽  
Competitive Advantage ◽  
South African ◽  
Iron Ore ◽  
Global Markets ◽  
Average Efficiency ◽  
Supply Chain Efficiency

As South Africa strives to be a major force in global markets, it is essential that South African supply chains achieve and maintain a competitive advantage. One approach to achieving this is to ensure that South African supply chains maximise their levels of efficiency. Consequently, the efficiency levels of South Africa’s supply chains must be evaluated. The objective of this article is to propose a model that can assist South African industries in becoming internationally competitive by providing them with a tool for evaluating their levels of efficiency both as individual firms and as a component in an overall supply chain. The Composite Supply Chain Efficiency Model (CSCEM) was developed to measure supply chain efficiency across supply chains using variables identified as problem areas experienced by South African supply chains. The CSCEM is tested in this article using the Sishen-Saldanda iron ore supply chain as a case study. The results indicate that all three links or nodes along the Sishen-Saldanha iron ore supply chain performed well. The average efficiency of the rail leg was 97.34%, while the average efficiency of the mine and the port were 97% and 95.44%, respectively. The results also show that the CSCEM can be used by South African firms to measure their levels of supply chain efficiency. This article concludes with the benefits of the CSCEM.

Opportunities for the South African Foundry Industry in the Global Automotive Supply Chain

2014 ◽  
Vol 1019 ◽  
pp. 26-35
Author(s):  
Mark Krieg ◽  
Shawn Cunningham
Keyword(s):  
South Africa ◽  
Supply Chain ◽  
South African ◽  
Tier 2 ◽  
Font Size ◽  
Supply Contracts ◽  
Automotive Supply Chain ◽  
Tier 1 ◽  
Automotive Supply ◽  
Local Sourcing

<span><span style="font-family: Times New Roman; font-size: medium;" face="Times New Roman" size="3"> </span> <p>Two rapid assessments of foundries in the automotive supply chain were conducted in 2012 and 2013 on behalf of the National Foundry Technology Network (NFTN), an initiative of the Department of Trade and Industry (dti). The investigation was not an academic or econometric study; but to identify areas where assistance was required by the foundries, and opportunities for growth. There are both Tier 1 and Tier 2 foundries that are qualified to, and do, supply the automotive sector. Castings, components and sub-assemblies are produced in South Africa for the majority of passenger vehicle manufactures. There has been an increase in volumes supplied by smaller, often Tier 2 & 3 foundries, however, drive train castings are largely imported. Furthermore, there was little evidence of supply contracts for the next model ranges. Local castings were said to be 10% to 30% more expensive than imported parts. Typically, sourcing discussions are made outside of the country, and price and security of supply are main considerations. Original Equipment Manufacturers (OEM’s) have committed to local sourcing, but it was clear that a significant intervention was required to change the downward trend. This would be outside the scope of both the Aluminium Federation of South Africa (AFSA) and the NFTN. It was recommended that a Competitive Improvement Initiative (CII) be launched by the NFTN. This was subsequently approved by the NFTN/dti.</p> <span style="font-family: Times New Roman; font-size: medium;" face="Times New Roman" size="3"> </span>

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.

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