An investigation into supply chain challenges at Durban North liquor distributors in eThekwini Metro, KwaZulu-Natal
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Date
2022
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Abstract
The liquor industry plays an important role in the South African economy. It contributes
greatly towards job creation as well as economic growth. The fragmented structure of
the industry provides an opportunity for firms of different sizes to play a role in the
liquor supply chain. The large companies act as suppliers and manufacturers, while
medium-sized companies are involved mainly in wholesale distribution, and the
smaller companies act as retailers who connect with the final consumers. Although the
industry is a strategic player in the economy, it is not without challenges. Some of the
challenges include high operating costs due to statutory controls, yet margins are low.
As a result, the industry is highly competitive. The aim of this research was to
investigate supply chain challenges within the liquor industry, with an intention to
propose solutions to unlock the industry’s full potential. A qualitative research design
was adopted in this study, in which the researcher interviewed customers to
understand the liquor supply chain challenges from their perspective. A research
sample was drawn from a list of targeted participants who deal with the distributor
Durban North Liquor Distributors. A purposive sampling strategy was used to draw a
sample of clients from different wards around eThekwini Municipality. According to the
research findings, the distributor provides an impeccable customer service. However,
the challenges identified include lack of and inconsistent communication around nonavailability
of products and anticipated time of delivery. The respondents also
highlighted that the prevalence of receiving incorrect products that were not part of the
initial order was high, which points to the lack of quality controls at Durban North Liquor
Distributors. Due to a centralised distribution strategy, the respondents also felt that
the distributor should improve on delivery plans. Recommendations include that the
distributor should standardise the ordering system by using e-commerce platforms,
and immediately communicate non-available items to customers, before sending
orders for picking. In addition, there is a need to conduct quality control before
dispatching orders. Finally, to address the delivery constraints caused by centralised
distribution, the distributor should complement their fleet by procuring the transport
services of third-party transport service providers, so as to improve geographical
coverage, within customers’ operating hours.
Description
Masters Degree. University of KwaZulu-Natal, Durban.