Supply Chain Management as a Competitive Advantage of Fast Moving Consumer Goods SMEs in South Africa

Kenneth Mathu

doi:10.11648/j.jenr.20211001.14

Abstract

The supply chain management strategy adoption by enterprises in the last four decades, has made enterprises more customer-centric, as they focus on product flow from source to the ultimate end-user. Consequently, the phrase ‘customer is king’ has become synonymous with good customer service. The study explored the coordinated supply chain processes as a competitive advantage for the South African small and medium-sized enterprises (SMEs) of fast moving consumer goods (FMCGs). The study was grounded in the theory of competitive advantage and qualitative research methodology and constructivism research paradigm were used. The SMEs from Gauteng province, which is the South Africa’s leading economic hub provided the sample for the study. Non-probability sampling was used in selecting the participants of the study who were the owner/managers of the SMEs. The interview covered enterprise relationship with suppliers of fast moving consumer goods (FMCGs) and third-party logistics (3PL) transportation service. The recorded interviews were transcribed, translated, coded and analysed via content analysis to determine the outcome of the study. The results indicated that SCM improved cost-effectiveness through savings on 3PL transportation service optimisation shared amongst the SMEs, and improved customer service, through enhanced supplier-customer relationship that maintained continuous flow of products/services.

Highlights

The adoption of supply chain management (SCM) in the last four decades has enhanced competitiveness of firms including small and medium-sized enterprises (SMEs)
This study looked at the supply chain from the fast moving consumer goods (FMCGs) manufacturers or suppliers of finished products to the customer to the consumers
The major themes comprised of transport optimisation, supplier-customer relationship, 3PL, products replacement, technology use and information sharing

Summary

Introduction

The adoption of supply chain management (SCM) in the last four decades has enhanced competitiveness of firms including small and medium-sized enterprises (SMEs). The enhancement of supplier/customer information sharing speeded–up product flow through the distribution channels to the end-customers, providing competitiveness to enterprises [15]. An exploration of supply chain management as a competitive advantage of the SMEs trading in grocery and apparel in South Africa was conducted in Gauteng province, which is the leading economic hub in the country [23]. The supply chain networks of the selected SMEs were reviewed from the suppliers through distribution channels comprising of grocery and apparel stores, and the 3PL transportation service providers. Some of the factors that led to competitive advantage of enterprises comprised ability to differentiate from the competitor’s products, and operating at the lowest cost with higher margin [2]. Other factors included supplier-customer collaboration, enhanced SCM activities such as procurement, production, sales forecasting and delivery of end-products [28]

Methods

Results

Conclusion