A supply chain management strategy for the non-ferrous foundry industry in South Africa / by Arland Slater

Abstract

In today's global knowledge economy, progressive companies must be equipped with a good balance of internal knowledge, both in scope and depth, and must adapt to the rapidly changing business environment. The ability of an organisation to manage knowledge as a corporate strategy is becoming a key competitive advantage. The essence of building an organisation's strength or capability in strategic knowledge management is to deepen the understanding of the exploitation and exploration of knowledge. The impact of strategic knowledge management on organisations embarking on such initiatives will be significant. This is particularly C N C ~w hen organisations are. focusing their efforts on improving the performance of their supply chains. Several organisations, implementing supply chain management improvements, have generated savings of millions of rands. This has prompted the CEO's of organisations to shift from individual company performance to what is called supply chain performance. Supply chain performance refers to the extended supply chain's activities in meeting end-customer requirements, including product availability, on-time delivery, and all the necessary inventory and capacity in the supply chain to deliver that performance in a responsive manner. Supply chain performance crosses company boundaries since it includes basic materials, components, subassemblies and finished products, and distribution through various channels to the end customer. It also crosses traditional functional organisation lines such as procurement, manufacturing, distribution, marketing & sales, and research & development. Therefore, increasing international cooperation, vertical integration, along with a focus on core activities, have led to the notion that fums are links in a networked supply chain. This novel perspective has created the challenge of designing and managing a network of interdependent relationships, developed and fostered through strategic collaboration. Despite various attempts to identify stumbling blocks in the path towards improved performance and competitiveness in the non-ferrous foundry industry, no research attempt has yet been made towards a systematic development of a supply chain management strategy. This study identifies and consolidates various supply chain initiatives and factors to develop key supply chain management constructs conducive to advancing the field in the industry. An extensive literature study was undertaken to identify effective supply chain management practices and to develop constructs that could be used in the supply chain management strategy. A questionnaire was then developed based on these different constructs and circulated among industry members to determine their perception of the validity and usage of these supply chain management constructs in their own firms. These constructs would then form the basis for the supply chain management strategy. Furthermore, the results were then discussed to identify any shortfalls or areas for improvement and the possible reasons for these shortcomings. It was found that there is a clear shortfall or uncertainty in the use of information technology as a tool to improve the supply chain performance. There was also no clear indication that the respondents knew the benefits that could be realised from using an information system that could supply information from the entire supply chain. Another shortfall that was identified was the willingness to collaborate across the whole supply chain. The respondents were also, very undecided about the use of cross-functional teams, supplier involvement and logistics integration. This paper also describes the characteristics, competitive factors and supply chain management issues related to a non-ferrous foundry as part of the entire supply chain. Despite the industry members Wig aware of most of these issues, there was a clear requirement to integrate these supply chain management processes. The management of knowledge throughout the supply chain was identified as critical to achieving competitive advantage.