Supply chain management problems in the food processing industry: Implications for business performance

Abstract

Orientation: In emerging economies such as South Africa, the implementation of supply chain management is characterised by significant problems. Despite its continued growth and importance to the economy, the food processing industry in the country remains vulnerable to these problems, which threaten its viability.Motivation for the study: The aim of this study was to investigate supply chain management problems in the food processing industry and their influence on business performance. The study was motivated by the need to use supply chain management practices as a tool to improve business performance in the food processing industry.Research design, approach and method: A questionnaire was distributed to a sample of 303 supply chain professionals working in the food processing industry in Gauteng Province. The collected data were analysed by using descriptive statistics, factor analysis, Pearson correlations and regression analysis.Main findings: Supply chain management problems were identified in seven areas, namely human resource management, technology, facilities, supplier relationship management, customer relationship management, regulatory factors and logistics and transportation. Except for regulatory factors, all supply chain management problems negatively predicted business performance.Contribution or value-add: Practically, the study enables supply chain professionals in the food processing industry to understand the sources of problems and use this information to develop solutions for the improvement of business performance. Theoretically, the study endorses the view that part of the key to resolving business performance complications in the food processing industry involves streamlining supply chain management by resolving its identifiable problems.