Improving Automotive Component Supplier Service through Physical Distribution Activities to Original Equipment Manufacturers (OEMs)

Abstract

Purpose/objectives: The purpose of this study was to investigate whether physical distribution activities can significantly improve customer service for automotive component suppliers to Original Equipment Manufacturers (OEMs) in the Eastern Cape. Design/methodology/approach: By means of non-probability sampling, namely convenience sampling, 50 automotive component suppliers in the Eastern Cape were visited. Each business firm received four questionnaires to be completed by logistics practitioners. Altogether, 126 usable questionnaires were returned. The data were collected by means of a survey using a self-administered, structured questionnaire. Findings/results: The results indicated that physical distribution activities, such as transportation management and order processing, were significant predictors of customer service. Practical implications: The results have managerial implications where the logistics department should continuously update its transportation and order processing systems to keep abreast of the best practices within the automotive industry. The results could be used by managers to highlight the benefits of improved customer service, focusing on a firm’s transportation and order processing activities. Originality/value: Based on the results of the study, it is recommended that automotive component suppliers in the Eastern Cape employ transportation management and order processing (activities of physical distribution) to improve customer service. It is also recommended that the automotive component suppliers regularly benchmark their logistics practices against world-class business firms, as the results may have a positive effect on the way transportation and order processing activities are managed and executed if customer service is to be improved.