Supply Chain Management

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Implementing a world-class sourcing process at Eskom with specific reference to the supplier selection process for large transformers.
(2005) Mungroo, Sashnee.; Poulter, Mike.
The research aims to identify ways to enhance the supplier selection process for large transformers at Eskom. The research was based on the hypothesis that there are significant opportunities to increase the effectiveness and efficiency of transformer purchases at Eskom. Large transformers are a strategic commodity for Eskom, due to the criticality and impact of the commodity on Eskorn's business. Eskom plans to spend R2.2 billion on transformers over the next five years. This indicates a substantial financial spend on the commodity. The opportunities that could be derived from transformer purchases are not only quantitative but also qualitative. The commodity, therefore, requires strategic effort in order to maximise the opportunities. The key findings of the research were as follows: • Transformer purchases and the organisational entity is complex, as it entails numerous stakeholders, complex systems, people and processes. • Eskom has not progressed from 'procurement management' to 'supply management'. • Eskom has a decentralised approach to transformer procurement, despite the strategic nature of the commodity and the fact that it purchases across the three main Eskorn Divisions. Procurement requirements are not consolidated. • There is a lack of communication and collaboration across and within Divisions. • There are no purchasing strategies, methodologies or tools to enhance the procurement process. • Procurement Officers lack knowledge on many well known methodologies, commodity knowledge, market knowledge, and supplier knowledge. • There is no focus on supplier relationship management. • Suppliers have indicated substantial opportunities for transformer procurement at Eskom. Implementing 8 World-Class SourcingProcess at Eskom with specificreference to the SupplifJr Selection Process for Large Transformers Pagei . The key recommendations based on the findings of the research are as follows: • Supply management personnel should be trained in world-class methodologies like total cost of ownership (TeO), strategic sourcing, supplier economics, supplier analysis, market research, etc. • A centralised approach to the procurement of strategic items must be instituted. This should result in a single person being responsible and accountable for Eskom's Supply management. • A collaborative approach must be encouraged by means of cross-functional teams. • Opportunities identified in the research must be implemented by a cross-functional team whom should be responsible and accountable for the implementation of the opportunities identified. • Supplier relationships must be initiated and effectively managed by the cross-functional team leaders. • The implementation must be monitored and tracked by the project sponsor. If the above recommendations are implemented Eskom would realise significant opportunities in large transformer purchases at Eskom. Should the recommendations be implemented on other commodities Eskom would achieve quantum leap improvements to Supply Management.
Core competency analysis of a professional world class procurement practitioner, with specific reference to the Eskom Generation Division.
(2005) McCurrach, Melody.; Poulter, Mike.
Purchasing and supply education and training are vital to the success of Eskom and most importantly to the survival and growth of the profession. In the last decade, the field of procurement has been faced with many changes which have had dramatic impacts on the field of purchasing and supply chain and which ultimately have influenced education and training needs. Eskom is currently facing a number of key challenges to meet current increasing demand fuelled by economic growth and to manage a build program of some R84 billion over the next five years to meet future load demand. These challenges have to be met in the face of Chinese and Indian consumption of raw materials which is affecting their availability to Eskom suppliers. This is putting further strain on the procurement practitioners within the Generation Division who are required to be both highly skilled and knowledgeable in order to meet the challenges in this dynamic and competitive profession. However, continual poor audit results achieved by the majority of the Power Stations in addition to the inclusion of Procurement and competencies and skills development on the Big Five List of high risk areas, have been a clear signal that there is a major problem in the Procurement field, not only across the Generation Division, but Eskom wide and possibly country wide as well. Although the focus of this dissertation will be on the Generation Division, it is envisaged that the recommendations made will be able to be utilized Eskom wide and possibly even in other organizations external to Eskom. A three pronged approach was utilized when conducting the research. This approach consisted of an extensive literature review of the existing body of knowledge available, this was used in conjunction with surveys and interviews conducted. The results obtained from a sample of 89 procurement practitioners, managers and training practitioners were used to reach findings and to make conclusions. It is important to note that there is a dire lack of local information concerning the subject, overseas journals and books were thus used as a reference source a majority of the time. Although there is currently a Procurement Curriculum which Procurement Practitioners are required to complete, it was found that the curriculum did not meet the requirements of the practitioners and did not adequately provide them with the necessary competencies required of them to perform their tasks effectively. There is thus a dire need for this curriculum to be reviewed and to take into consideration the competencies required to assist the Procurement Practitioner to become world class and to elevate the status of the organization to that of a worldclass organization which possesses the competitive advantage. The above mentioned issue was however not seen to be the major issue. Other possibly more important issues were deemed to have also contributed to the poor audit results and subsequent poor image of Procurement. The major issue, the author believes is due to the fact that there is no professional body recognized by Eskom. This has contributed to a host of problems for example, lower graded jobs, discrepancies in grades between divisions, no standardized entry level criteria to name but a few issues. This has resulted in the Theory of Self Sealing Behavior taking place in the form of a de-motivated body of employees which in turn has contributed to the poor image procurement possesses in the organization. It is believed that if a new nationally recognized and credible professional body is created, a multitude of problems will be minimized. This body will however be required to provide guidance and a professional status which is so desperately required in the procurement field. It is furthermore believed that this will positively change the perception that management currently possesses of Procurement. Other important recommendations made include: • Generation Commercial Training to be re-linked to the Corporate Supply Chain Management Office which will enable the Department to provide guidance and World Class Procurement and Supply Chain Management Training Eskom wide. • Standardized entry level criteria. This should preferably be a Degree in Supply Chain Management. Further studies must be encouraged as it is envisaged that in the next decade a Masters Degree will be seen as the minimum requirement. Retention and succession plan policies must be encouraged to ensure that employees are retained and that a transfer of skills occurs. The survey conducted indicates that a majority of the people are over the age of 50. • The entire manner in which Commercial Training is currently training practitioners must be reviewed. For example, alternate training interventions must be introduced for example the internationally recognized International World Trade Centre Supply Chain Program. Alternate forms of training should be introduced for example, the reading of journals, updating of skills by looking at a video etc. The introduction of adult principles of learning into training interventions is of vital importance to ensure maximum transfer of learning. Senge (1990: 64) states that "Tackling a difficult problem is often a matter of seeing where the high leverage lies, a change which with minimum of effort - would lead to lasting, significant improvement." With this in mind it is suggested that the change which would have the highest leverage would be the introduction of a formalized coaching and mentoring system in Eskom. By utilizing the competencies and past experiences of the older people, coupled with the correct world class skills will ensure the success of this discipline. Without this sharing of knowledge, the required professional status will never be obtained. In conclusion it is believed that the current skills issues which are currently being experienced by Eskom are not unique to Eskom, there is currently a skills shortage country wide. However, because Eskom is such an significant and visible organization in South Africa it is imperative for the future economic growth of South Africa that there is a culture change in Eskom towards Procurement with the career development of purchasing and supply change management professionals being viewed as a top priority.
A proposed contract management framework for Eskom Transmission Division (ETD)
(2005) Khomo, Thembisile.; Poulter, Mike.
Eskom Transmission Division (ETD) is being forced to rethink its business development strategies, in order to deal with rapid technological, capital and social changes. As a result, there is a high need for contract managers to learn to procure goods and services effectively and efficiently. Subsequently, the capabilities and skills of buyers, and in particular contract managers, need to reflect Eskom's challenges faced in delivering on South Africa's developmental needs for affordable electrification. Because of the complex nature of contract management, it is required that a detailed and carefully written contract management framework that defines the commercial supplier relationship, contract management aspects of the results and the desired behaviour of the contracting parties, be established beforehand. Therefore, there needs to be greater emphasis on structuring and delivering of procurement training in the future, as contract managers will need to have skills to be able to work within a cross functional team, be strategic thinkers, and manage supplier base and relationships. A variety of methods can be used to implement training and they range from formal education, coaching, on job training and intemet training. The ETD senior managers need to monitor the performance of the contract managers wants the training methods have been introduced to identify the gaps. The aim is for this contract management framework to provide intangible elements of quality cost to enable contract managers to perform strategic sourcing in order to be innovative in their decision making. The contract management framework will focus on identifying and discussing strategic ideas that will enhance and improve the effectiveness of contract management at ETD. Contract managers need to be trained to enhance and update their skills. The training should focuses on: • Total cost of ownership in selecting the suppliers rather than concentrating on price only, • Reducing their supplier base and building strategic relationship with their suppliers, • Formation of formal cross functional teams, • Formation and management of supplier relationships, A Proposed Contract Management Framework for Eskom Transmission Division (ETD) By Thembisile Khomo ix • Monitoring and Measuring the performance of the suppliers and contract managers, • Strategic Sourcing, and all other cost reduction methods. This contract management framework will focus on the following cost saving and risk sharing opportunities, which will result in an efficient and effective contract management at ETD: • Expenditure Analysis In terms of expenditure analysis ETD should consider reducing the supplier base in order to consolidate and leverage expenditure and to manage the relationship with strategic suppliers more effectively. This will result in contract managers concentrating more on long term partnership and strategic relationships with its suppliers. As a result, ETD could benefit in terms of an increase in access to technology, where those suppliers that have received more volume and longer-term contracts become willing to invest in the manufacturing equipment that will improve their equipment production and processes. Because of the long term relationship that will be developed with these suppliers, they will also be willing to share the costs and risks with ETD. • Training and the Skills of Contract Managers It is very important for contract managers to be trained and have the required skills to manage contract. This was confirmed by the case study conducted in one of the ETD contract to refurbish transformers. In analyzing this contract, it was found that: ~ The rates quoted in the contract are above the market rates. ~ ETD contract managers do not challenge the specifications or operating practices and quotation costs. As a result most of the quotation costs or rates and ideas of how the transformers should be refurbished come from Rotek. ~ Contract managers do not know how much they spent in paying the labour, materials and other varied costs associated with the refurbishment of the contract. ETD has been paying numerous indirect costs or rates, such as A Proposed Contract Management Framework for Eskom Transmission Division (ETD) By Thembisile Khomo x additional overtime, rework due to unacceptable components quality, materials costs on heavily engineered components and so forth. All this contract mismanagement matters could have been avoided if the contract was managed effectively, and there is collaborative relationship with the supplier to ensure a solid working relationship and to reduce lead-time and costs. This relationship should be based on trust, cooperation, interdependence, joint quality improvement efforts, information sharing, risk and benefit sharing, and joint problem solving. Especially during the future capital expansion projects which ETD will be engaged in, there will be a high need for dependable suppliers to provide the required design and technological input needed for marketable profitable products and for satisfactory services to result. • Cross functional teams The formation of formal cross functional teams will help in making the decisions that impact multiple functional areas. Without the representatives of various areas the decisions are likely to meet resistance. Thus, if the representatives of each of the functional areas are involved on the team, they will provide beneficial input in the resulting agreement. In turn, each representative will be responsible for ensuring acceptance by his or her functional area, of the team's decisions. Cross functional teams also enhance problem resolution as the team will be bringing their different expertise in solving problems or making decisions. • Top Management Support For successful implementation of this framework, ETD top management need to support it by communicating its importance in terms of helping contract managers to think out of the box and see the competitive benefits of the new ways of managing the contracts. • Cost Reduction The cost reduction can be through the use of: A Proposed Contract Management Framework for Eskom Transmission Division (ETD) By Thembisile Khomo xi ~ Total cost of ownership (TeO) - where not only the price is considered when evaluating tenders from the supplier, but quality, delivery, maintenance, disposal and other cost saving ideas, including flexibility levels offered by the suppliers are considered by the contract managers. Thus, the contract managers need to have the skill to see the value stream, sequence of value creating steps required to design, make and deliver the product and to learn to remove the waste, mistakes and rigidities. Therefore in analyzing Tea, it is vitally important to understand the suppliers' market and financial reports to come to an effective solution with regard to the factors that make up the prices for the product or services they procure in addition what drives cost into the product or service in the market place. ~ Strategic sourcing - contract managers should focus on development of competitive value based pricing, where the overall costs are considered, and innovative strategic sourcing, where consideration is based on new products and services that deliver a competent advantage and new ways of doing business. For example, how quickly can the supplier adapt to changing ETD requirements? ~ Performance monitoring and measurement - contract managers need to continuous monitor the performance of suppliers based upon metrics that are directly derived from the service. By monitoring the performance of the supplier the contract manager will know in advance about any production or service delivery problem and come with mitigation steps together with the cross functional team. This will then prevent ETD in continuously accepting late and inadequate products or poor services from the suppliers. ~ Supplier relationship - the formation of supplier relationship with suppliers will benefit ETD in risk sharing and cost reduction. Therefore, the objective of a contract management framework must be to establish relationships with suppliers that have resources in order to integrate their specialist capabilities in a way that yield significant value potential from both sides. A Proposed Contract Management Framework for Eskom Transmission Division (ETD) By Thembisile Khomo xii ~ Training of contract managers - as there is greater emphasis on structuring and delivering of procurement training in the future, contract managers will need to have skills to be able to work within a cross functional team, be strategic thinkers, and manage supplier base and relationships. A variety of methods can therefore be used to implement training, which can range from formal education, coaching, on job training and internet training. Networking with other contract managers can also assist in the development of personal skills and adoption of better practices whether formally (as part of membership of a professional body) or informally (at conferences), exchanging ideas and meeting with other professionals can be extremely useful. The ETD senior managers need to monitor the performance of the contract managers wants the training methods have been introduced to identify the gaps. • Conclusion In conclusion, before a new contract is established, it is important to review the success and failures of the current contract, in order to establish a clearer understanding of what makes contract management successful. These lessons will then form the basis of planning tender requirements and negotiations for the next contract. For successful contract management, contract managers should ensure that a preferred relationship type and pricing structure is selected, and agreed succession plan. A contract review should also examine the cost-effectiveness and efficiency issues.
The effectiveness of Eskom's Black economic empowerment programme in fostering sustainable business : a study into the implementation of the programme in Eskom transmission.
(2008) Langenhoven, Henk.; Poulter, Mike.
This study sets out to test the hypothesis that the Eskom Black Economic Empowerment, as implemented by the Transmission Division of Eskom Holdings Limited, has had only limited success in fostering sustainable businesses. Although Eskom Transmission has been reporting excellent achievements in terms of the programme, the author argues that the performance measures are flawed in that they do not distinguish between small black owned businesses and large international businesses which conform to the Eskom definition of a Black Economic Empowerment supplier. Large companies with at least a 10% black shareholding, and meeting other criteria in terms of skills transfer, black management and procurement from other black owned suppliers could qualify as a Black Economic Empowered supplier. By including spend on such suppliers together with the Transmission spend on small, black owned suppliers, distorts the effects of the programme. The research has highlighted the following concerns: • The most important reason that employees support the BEE programme is because it is a policy requirement; • No development of suppliers apart from the indiscriminate use of price matching and setting aside of contracts; • Supplier assessments are inconsistent and are not always transparent; • Contract conditions and contracting methods are not always conducive to growth and development of small suppliers; • Minimal performance evaluation of suppliers is conducted; • The BEE programme is perceived as being most successful in enriching a few elite black individuals. In addition, it is perceived as having been successful in the creation of non value adding agents for white owned companies;Henk Langenhoven - MComm UKZN 2005 • Very few respondents to the survey indicated that they spend any time on the development of or giving advice to suppliers; • There is a 50% impression that BEE suppliers are capable of taking part in Eskom Transmission business; • A very low percentage of Small Medium and Micro Enterprises and Black Woman Owned suppliers applying for listing in the database are qualified to supply Eskom Transmission; • The very same suppliers tend to win contracts all the time, hence the indication is that there are few new entrants; • Historically, the indication is that the suppliers have generally have been on the database since before the implementation of the BEE programme. They have continuously changed ownership to keep pace with the changing requirements of policy; • The support ofBWO suppliers has come at the direct expense ofSMME suppliers. Recommendations derived from this research include: • Continuing with the current BEE reporting which is external to Eskom, but • Enhancing Key Performance Indicators to include measurements and targets for job creation as well as support of both SMME and BWO suppliers; • Structured supplier development programme with dedicated resources to take ownership of the programme; • Consideration is to be given to the methods of contracting when dealing with SMME and BWO suppliers; • Supplier performance evaluation is to be enhanced for inclusion of a wider spectrum of suppliers and end users.
Dynamics of short-term operations scheduling in systematic supply chain distribution centres.
(2014) Jojozi, Fani Nicholas.; Mbhele, Thokozani Patmond.
A warehouse or distribution centre has a key and vital role to play in the success of modern supply chains within business in recent times – where the term ‘warehouse’ is referred to as the commercial buildings for buffering and storing of goods. Cross docking on the other hand is more concerned with the minimisation of transportation costs within the supply chain. In as much as it is a warehouse, cross docking looks at the transit of shipment of inbound goods to their prescribed destination within a period of less than 24 hours with no intention of keeping an inventory. One of the motivating facts that drive warehouses and distribution centres into being more efficient are the customer demands to deliver the requested shipments on time, in the right quantity, in the right place with affordable price. In this study, the researcher analyses the dynamics of short-term scheduling in systematic supply chain distribution centres. The aim is to understand inbound and outbound operations, internal information sharing and to understand the role of short-term scheduling on resolving bottleneck. The phenomena of short-term scheduling is modeled by efficient scheduling of trucks, challenges encountered from inbound right through to outbound and the magnitude of information sharing within and among supply chain partners.
Optimising information sharing within the Massmart supply chain network.
(2014) Naidoo, Kashmira.; Mbhele, Thokozani Patmond.
The promotion-driven retail chain within the Massmart group resembles variability upstream and downstream of the supply chain. This variability may be associated with mis-alignment of supply chain activities and the in-house electronic systems of communication. Despite the implementation of a logistics network and regional distribution centres, the movement of stock from manufacturers to retail stores remains a challenge in managing out-of-stock situations at various stores. The supply chain partners across extended enterprises epitomise limited demand information sharing within the retail promotion-driven model. The foundation upon which information is currently shared emanates from long, silo-oriented forecasting periods (eight weeks), oversimplified point-of-sale data and a poorly synchronised supply chain strategy. The study aims to optimise supply chain integrated information sharing through collaborative, forecast-based performance outcomes and electronically-shared information tools across extended enterprises. Research objectives in this study aim: firstly, to examine the extent to which optimised information sharing is enhanced by integrated supply chain activities across the extended enterprise; secondly, to establish the magnitude of supply chain value-added performance outcomes in the collaborative planning, forecasting and replenishment model across functions and across enterprises; and finally, to establish the role of electronically-enabled information sharing tools in an integrated and effective supply chain structure. This study uses questionnaires to collect data from the returned sample size of 143 respondents out of an initial distribution of 165 questionnaires. This quantitative approach uses descriptive statistics and frequency distributions to analyse individual variables. Pearson correlation was chosen for bivariate analysis while multiple regression analysis further considered the relationship between information sharing and the independent variables using multivariate analysis. The findings of this study suggest that optimised information sharing across the extended enterprise is dependent on the accessibility and performance of information systems and technological tools. This result indicates that the information systems adopted should facilitate the extended supply chain collaboration and mitigate supply chain network variability from the promotion-driven model. These managerial implications indicate that supply chain efficiency and integration is the responsibility of each individual supply chain partner involved in a retail supply chain network.
Effects of intermodal transportation networks on the inbound and outbound Durban containerisation.
(2014) Govender, Nerissa.; Mbhele, Thokozani Patmond.
The use of containers can be noted to focus entirely on the transportation of shipments with the use of intermodal networks. Those intermodal transportation networks commonly utilise inbound (sea networks) and outbound (road networks) frameworks. The structural design of the Durban Port facilitates movement and creates a transitional configuration of networks to function. The objectives of this study aim to understand the effects of capacity constraints on transitional inbound and outbound containerisation within the Durban harbour intermodal networks. It further attempts to establish the intermodal relationship of containerisation between the transitional shipping and road freight transportation networks. Finally, to examine the role of the Durban Port customs system in cargo clearing and forwarding processes. The nature of this study will be triangulation where both qualitative and quantitative studies are being used. The current logistical system in Durban has negatively impacted the transportation sector. Therefore, there is a need for developmental and strategic approaches to ensure that infrastructure is maintained and improved to accommodate the increase in international trade. The factors contributing to containerisation in relation to transitional transportation networks can create negative elemental designs, especially with the increase in global trade. Overweight containers can lead to mishandling and incorrect stowage capabilities on board shipping vessels. Deficiencies in technological systems such as the newly introduced NAVIS SPARCS increase the chances of longer standing time and cargo dwelling time. These systems were meant to streamline the movement of cargo from inbound to outbound; instead, there have been significant capacity constraints. Such constraints experienced at the Durban Port have led to congestion that has weakened business development. Delivery and cycle time have lengthened, resulting in inefficient service delivery on the part of facilitators and forwarding agents. The outbound transportation networks have struggled to maintain efficient and effective delivery time and service status due to their inability to facilitate the timeous movement of containers through customs for final delivery.
Perceptions of professional service staff on the effects of outsourcing of courier services : University of KwaZulu-Natal.
(2015) Neboh, Nkechi Dorothy.; Mbhele, Thokozani Patmond.
The dynamics of clock speed, the turbulence of business environment and the challenges of globalisation have influenced firms like University of KwaZulu-Natal in making the strategic decision to outsource some of its business activities. The university uses courier services to transport examination papers to and from external examiners but this schedule became problematic, affecting operational processes at the university thereby exerting considerable pressure on the professional service staff members. The main aim of this study is to evaluate the effects of outsourcing of courier service activities at University of KwaZulu-Natal. This study further aims to achieve the following objectives: firstly, to assess professional service staff’s perceptions of the effects of outsourcing couriers services at the University of KwaZulu-Natal. Secondly, to examine the effects of the dynamics of examination process scheduling on the capabilities of the courier service. Thirdly, to establish the extent of outside value-creation service sourcing to which resource based view decisions enhance efficient operations at the university. Fourthly, to evaluate the extent of outside value-creation service sourcing to which transaction cost economics’ decisions are strategically derived. Finally, to assess the relationship between the perceived courier service performance requirements and the university’s decision process on resource capacity maximization and transaction cost containment. An exploratory research design was used to evaluate the relationship between the courier company’s service performance and decisions relating to cost containment within the limited resources. Statistical techniques such as descriptive statistics, logistics regression, factor analysis and multiple regression were used to analyze the data collected from 124 professional staff members at University of KwaZulu-Natal (all five campuses). The main findings reveal that the most important factors to consider when outsourcing, especially during the examination period were a flexible schedule, service excellence, innovative technology, an integrated logistics system, administrative work, courier value added service and increased efficiency. The managerial implication involves some remarks and recommendations that will assist management in deciding on the factors already adopted to enhance the university’s operations as well as adopt those that are lacking thereof. The adoption of these factors will confirm the decision to outsource as a good strategy for the university.
Transportation networks and students travel patterns : the case of the University of KwaZulu-Natal.
(2015) Ponnan, Renaldin.; Mbhele, Thokozani Patmond.
An increase in students’ accessibility to tertiary education and the decline in higher education funding have resulted in a greater number of students that reside off-campus. This trend has also given rise to off-campus students spending a significant amount of time commuting to and from campuses at University of KwaZulu Natal. The research objectives for this study aim: firstly, to explore the transportation challenges and capacity constraints impeding the travel of off-campus students at the University of KwaZulu-Natal; secondly, to establish the correlation between the constraints of public and private transportation scheduling systems on students’ academic activities; thirdly, to establish students travel patterns in an attempt to effectively balance the scheduled demand for and capacitated supply of transportation; and finally, to determine the extent to which the different geographical locations in which students reside correlate with their academic performance. The total population of students residing off-campus for selected campuses totals to 20764 while sample size decision constitutes 377 respondents. This study used questionnaires to collect data from the off-campus students. Quantitative data analysis is used to respond to research questions through univariate and bivariate methods. The findings of this study reveal that most students travel five days a week to campus. The location of the campuses seems to have an influence on the mode of transportation used to that particular campus. The managerial implications on this study indicates that all the stakeholders should negotiate with each other as well as with the students when planning and putting forward proposals that involve student transportation.
Perceptions of informal local traders on the influence of emerging markets : Umlazi and Kwa-Mashu townships.
(2015) Dlamini, Machawe Victor.; Mbhele, Thokozani Patmond.
Mall development in South African townships has increased in recent times as large chains strive to increase their profitability. The emergence of township malls and suppliers’ expansion into the townships has the potential to create jobs and improve the quality of goods and services. However, it is important to note that these developments could negatively affect informal township traders. While the expansion of mainstream retailers into South African townships offers business opportunities and more choice to consumers, it also threatens to displace traditional local informal traders. Informal local traders are individuals who act as distribution channels that focus on moving products at a small scale, while formal retailers are large chain stores that provide a wide variety of goods and products in bulk and breaking bulk. Emerging markets are characterized by an increase in personal disposable income among previously disadvantaged groups. This study therefore, explored the effects of value-creating supply chain distribution systems and the perceptions of informal local traders in emerging markets in the two largest townships in KwaZulu-Natal province, Umlazi and Kwa-Mashu. Four key objectives underpinned this study: to explore informal township traders’ perceptions of the effects of value-creation supply chain distribution systems in emerging markets; to assess the influence of emerging markets on the optimal structured cost of the distribution model and propensity to improve product availability; to establish the extent of the transformation of informal retail enterprise development by formalized large scale chains through a configured supply chain; and, finally to evaluate the extent of the displacement of informal local traders as a result of the entry of both large scale suppliers and retailers into township markets. The study employed various univariate, bivariate and multivariate statistical techniques to analyse the data collected from 291 respondents. The study found that, while informal local traders appreciate the transformation and development of the townships brought about by mall development, their businesses have been somewhat or completely displaced by the emergence of township malls.
Digital supply chain distribution of music in the South Africa recording industry : Durban region.
(2015) Ramnandan, Praveena.; Mbhele, Thokozani Patmond.
The advent of the Internet as a music distribution channel led to significant transformation of the South African music industry at the end of the twentieth century. The Internet and electronic supply chain systems influences customers to migrate from physical product offerings to digital downloading platforms that offer access to digitalised music distribution and quasi-real-time consumption. While technological innovations have enhanced the digital distribution of music online, distribution systems have become a challenge within the supply chain network. This study aims to determine the implications of the paradigm shift in supply chain music distribution from analogue to digital. This research study has five objectives: firstly, to explore the challenges confronting the supply chain transition from analogue to digital music distribution systems; secondly, to examine the distribution operations processes for the digitalisation of music in relation to the effects of global market demand; thirdly, to evaluate the effects of supply chain value adding innovations in influencing digitalised music distribution and consumption in the recording industry; fourthly, to establish the extent of technological viability to which the Diffusion of Innovation theory enhances supply chain distribution competitiveness; and finally to assess the relative magnitude of supply chain competence and capability response to digital supply chain music distribution. The researcher selected an exploratory research design to explore digital music distribution in the South African recording industry. Univariate, bivariate and multivariate statistical analysis techniques are employed to analyse the data collected from 217 musicians. This study reveals several elements arising from the growth of digital music distribution in the Durban region, and makes a scholarly contribution to the promotion of the South African digital music market. The results provides support for: the disintermediation of physical retail stores which are perceived as the driver of digital music distribution; an increase in the number of independent artists and music entrepreneurs; and technologically compatible media devices that encourage more music downloads. The tools provided by the Internet inspire musicians to engage in creative music innovation, thereby creating global competitive standards. The study’s recommendations provides further insight and understanding of the digital music distribution sector.
Factors affecting green supply chain management (GSCM) initiatives : a case study at Cipla Medpro Manufacturing.
(2016) Reddy, Aveshin.; Naude, Micheline Juliana Alberta.
Sustainability has become a critical issue for both society and businesses globally. With the increase of natural disasters and global issues such as water shortages, acid rain and climate change companies have started focusing on reducing their carbon footprint to ensure that the world’s natural resources are sustained for the foreseeable future. Many international and local companies are now looking to incorporate green initiatives into key functional areas such as Supply Chain Management. This has given rise to Green Supply Chain Management which is the incorporation of sustainable initiatives into the supply chain of a company. In the pharmaceutical industry the implementation of Green Supply Chain Management initiatives is a challenge, because of the complexity of their supply chain. Consequently, it is essential to determine what factors affect these initiatives in order to successfully implement and maintain Green Supply Chain Management initiatives. In South Africa there are many other factors that pharmaceutical companies need to take into consideration before the implementation of Green Supply Chain Management. Some of these factors include high costs, lack of government support and pressure to lower prices. This makes it more difficult for companies such as Cipla Medpro Manufacturing to incorporate green initiatives into their supply chain. Some recommendations to overcoming these factors include the reduction of costs through better product design and the use of green technologies in order to reduce costs. If the key factors affecting Green Supply Chain Management can be identified pharmaceutical companies can focus on overcoming these factors and utilise their resources more efficiently and effectively. This will improve the success rate of Green Supply Chain Management initiatives overall and make them a more attractive method to reduce their companies carbon footprint.
The effect of omni-distribution systems in managing demand order fulfilment frequencies : an apparel retailer.
(2016) Rambaran, Sanjana.; Mbhele, Thokozani Patmond.
There is no gainsaying that the world of business is characterised by its own set of commercial dynamics. It is within this milieu that the study explores the emerging strategies that characterise the world of commerce with its myriad challenges. In the prevailing commercial environment it is observed that retailers are adopting the omni-channel approach as customers demand a more seamless shopping experience. To remain competitive, distribution networks are challenged to fulfil volatile customer demand from the omni-channel. South African retailers have taken to digital platforms despite barriers to entry in respect of the high cost of broad band and logistics challenges The research objectives of this study aim firstly, to determine the effects of omni-channel retail adoption by retail apparel companies in managing the transformation of the supply chain retail distribution systems; secondly, to examine the extent of relative change in demand to which the distribution systems enhance frequencies of order fulfilment, lead time and cycle time and fill rate; thirdly, to ascertain how the demand-driven omni-distribution systems influence the order fulfilment frequencies in a designated supply chain network; and finally, to establish the perceived contribution of integrated information systems towards information sharing and visibility within the virtual omni-distribution network. Omni-channel retailing is a contemporary topic with very little literature available especially in a South African context. The study employs deductive reasoning with the use of an exploratory case study which adopts a mixed-method approach. The exploratory nature of the study involves the exploration of new phenomena to understand the relationship between variables using interviews and a survey to collect data. Based on a population of 333 managers from 161 stores, 175 assistant store managers, store managers and area managers were surveyed and 13 senior managers and directors from Retailer X and the third party logistics (3PL) were interviewed. The univariate and bivariate methods were used for quantitative analysis while content analysis was used in the qualitative approach. The study reveals that the dispersed landscape and spectrum of cost consciousness to convenience focused customers warrants a customized distribution approach for South African retailers. Using the principles of leagility under the push-pull theory, cost and lead time has to be managed to achieve perfect order fulfilment.
Demand chain planning operations within capacity constraints : Nestlé ZAR.
(2017) Mtshali, Nontobeko Nontokozo.; Mbhele, Thokozani Patmond.
Organisations are currently faced with difficulties in effectively aligning demand plans to the volatile environments in which they operate. While operating environments and consumer needs change, capacity capabilities often do not reflect the demand plans. The absence of alignment results in inaccurate forecasts, thus putting the long-term sustainability of a business at risk. The focus and aim of the study is to understand how demand planning operations are aligned with capacity constraints at Nestlé ZAR. A quantitative explorative case study research design is being used and data was collected through a structured self-administered questionnaire in this study. The final sample size is 86, which comprised of employees from Demand and Supply Planning, Finance and Control, Sales and Marketing divisions. The sample includes top management, middle management, first level management and non-management. Data analysis uses descriptive and multivariate statistics. Ethical clearance was obtained from the University Ethics Committee and ethical principles were observed throughout the study. The study findings show that the organisation of interest in this study was perceived as adhering to capacity planning principles. The majority of the respondents perceived positively the capacity demand planning process. An average of 50% scored 22, which indicated a relatively high positive perception with regards to demand chain principles. The majority of the participants responded positively to the statements that information sharing achieves demand chain coordination and improves collaborative demand planning. An average of 50% scored 24, which indicated a relatively high positive perception with regards to information sharing. The results showed few capacity constraints that were perceived or experienced in this organisation. An average of 50% scored 17 which indicated that a moderate number of participants experience capacity constraints. Although the Spearman correlation did not sure any significant relationship between variables of interest in this study, the findings showed a wide range in the distribution of the responses of the participants in some items. This study highlighted that there is no one single approach to improving demand chain performance, but it was evident that allowing collaborative demand plans by using quality information shared can reduce impact of capacity constraints and improve planning performance. This study recommended that top management should provide full support to information sharing initiatives to facilitate the demand planning process. A national study to be conducted as this was conducted in one province, with a limited sample size. Keywords: Demand chain, information sharing, capacity.
Challenges in green supply chain management in the pulp and paper industry: a KwaZulu-Natal case study.
(2017) Munemo, Nyasha Eugenia.; Salisbury, Roger Hans Theodore.
Although, the pulp and paper industry makes a substantial contribution to South Africa’s Gross Domestic Product (GDP) it is also considered to be a major contributor to industrial pollution. As a result, various stakeholders have voiced their concerns forcing companies within the industry to seek alternative practices that support more environmentally friendly operations. This study sought to establish the impact of the industry on the environment as well as the green practices being implemented in the KwaZulu-Natal operations of a pulp and paper company to reduce this impact. The literature consulted for this study suggested that stakeholders such as customers, suppliers, activists and government, may influence a supply chain to become more environmentally friendly or may hinder its efforts to do so. These stakeholders were subsequently identified and their influence assessed. In many other industries, the integration of lean and green supply chain practices results in less operational waste and environmental harm because both paradigms support waste minimisation and both engage employees in continuous improvement. This research suggested ways in which these paradigms might be considered in a more holistic way to exploit possible synergies for the pulp and paper industry. The research was exploratory in nature and a case study approach was used. The transcripts of semi-structured interviews with senior managers in the chosen pulp and paper company were analysed in combination with secondary data. This direct content analysis provided insights into the current green practices of the company and the influence of stakeholders. Evidence was presented on the company’s considerable progress towards a greener supply chain through the introduction of appropriate technology and practices which mitigate its effect on the environment. Stakeholders played a significant role in enabling the company to achieve this. Customers demand certification by standards bodies such as the Forest Stewardship Council and the International Organisation for Standards regulates the industry and ensures that it protects the environment while local communities use waste produced by the company to produce value-added products. However, some suppliers hinder these efforts. It was concluded that the further integration of lean and green practices will allow the company to continue to reduce its impact on the environment.
Supply chain distribution system towards African marketplace : a case of Mr Price.
(2017) Mthimkhulu, Luvuyo Zolile.; Mbhele, Thokozani Patmond.
The expansion into new markets gives companies new challenges and unprecedented dynamics, which contribute significantly to the growth of the company. Companies seek to ensure that there are sufficient products available for distribution and that these are positioned correctly at the right time and right place. Companies must have the necessary supply chain technology for order fulfilment. The growth in the number of distribution centres towards creating a sustainable distribution system for the African marketplace is a means towards realising this fulfilment. The level of service and customer satisfaction cannot be completed at the store level without considering the full supply chain process, the product and its raw material, product manufacturing, logistical process, storage and product availability in the store. The non-availability of a product in a store when it is demanded by customers creates problems that dissatisfy the customers since their needs are not met. The main aim of this study, therefore, was to examine the influence of centralised, decentralised or hybrid processes in relation to service delivery, human capacity as well as supply chain technology. The objective of this study was firstly to establish whether a centralised or decentralised supply chain distribution system supports the expansion to the African marketplace. Secondly, to examine the extent of sustainable retail distribution systems towards improving product availability across the African region. Thirdly, to assess the challenges of inventory positioning on the existing outbound and inbound product flow systems across the African continent. Finally, to examine the influence of the supply chain distribution technology on the availability of real time information and visibility of inventory. A descriptive research design was used in this study. Statistical techniques such as descriptive statistics, multiple regression, factor analysis and one-way ANOVA technique were used to analyze the data collected from 100 staff of Mr Price Group. The main findings disclose that the most critical attributes of a good distribution centre are advanced supply chain systems, strong management team and strong workforce. Customer satisfaction as a driving force considers investment in human capital and technology as a vital component to the sustainability of Mr Price Group. There is a need to focus on training and development of employees which can improve productivity and efficiency of any organisation. The managerial implication comprises of some recommendations that will support management in decision making.
The implementation of supply chain management principles at the eThekwini Municipality :a case of the Department of Water Services.
(2017) Mtshingana, Lukhanyo.; Phiri, Maxwell Agabu.
Abstract available in PDF file.
Laytime and demurrage implications in voyage charter parties for chemical tankers: a case study of SASOL, South Africa.
(2017) Padayachee, Christine.; Naude, Micheline Juliana Alberta.
Background: Presently there are a limited number of standard Charterparties for the shipment of chemicals in bulk in a voyage charter. Most of the existing Charterparties that are presently being utilised were created for the oil tanker industry. Considerable similarities exist in these Tanker Charterparty forms which can also be applied in the Chemical Tanker environment. Purpose: Existing standard Charterparties were analysed together with additional clauses to determine whether there is an optimal Charterparty form that could cater for the requirements in the Chemical tanker environment. Clauses of existing voyage Charterparty forms were investigated and analysed as well as possible additional clauses. Particular attention was paid to laytime and demurrage implications in order to propose an optimal Charterparty arrangement which would be suitable for the bulk liquid chemical tanker environment with minimum risk to the Charterer and Shipments (ex South Africa) from Sasol South Africa. Methodology: A comparative and exploratory approach and a case study approach is adopted and carried out on selected, standard existing voyage Charterparties to provide an in-depth understanding and interpretation of the laytime and demurrage implications in these voyage Charterparties. A comparison of the differences in interpretation and meaning between each standard voyage Charterparty was also computed. Thematic analysis was used as a data analysis technique. The main theme impacting laytime and demurrage were compared in each voyage Charterparty for similarities and differences. These common themes in each Charterparty have been discussed and substantiated with case law. Through exploratory and comparative studies an in-depth understanding, interpretation, differences and similarities of the laytime and demurrage implications and clauses in each of these existing voyage Charterparties was attained. Findings: It was found that the Shellvoy6 and BPVOY5 Charterparties offer the least exposure to demurrage, since for these Charterparties the demurrage cost calculated was the lowest. This was constant for all routes. The Asbatankvoy and Asbachemvoy Charterparties are the only Charterparties whereby the principle of “once on demurrage, always on demurrage” can be enforced since their exceptions are not extended to demurrage but only laytime and therefore if the vessel is already on demurrage time would still count as used laytime for such exceptions. The areas that do not protect a charterer’s interest include multiple berth discharge, awaiting daylight, awaiting pilots, weather delays and pro rata of awaiting time for berth amongst all charterers calling the same berth. Including additional clauses to address these areas have resulted in additional savings for demurrage and therefore, if included would benefit all the Charterparties that were included in this study. Contribution: The contribution of this study is to highlight the need for a Charterparty form specifically designed for the chemical bulk liquid environment with special focus on risk minimisation for the Charterer in terms of laytime and demurrage.
Dynamics of demand order management on the Just in Time approach: a case at a stationery distributor.
(2017) Maharaj, Serisha.; Mbhele, Thokozani Patmond.
The challenges of demand order management on the underlying Just in Time (JIT) approach need a long-term solution in order to reduce expenses and enhance supply chain performance. Demand management is a very important aspect of managing one’s organisation, especially in the presence of a volatile environment, full of competitors, global pressures and sustainability requirements. Thus, organisations are placed in a position where it has become necessary to implement strategies such as the JIT approach to meet demand with minimal resources and costs. Poor demand management decisions taken in forecasting therefore increase business risk and costs. The study aims to establish the effect of information sharing and collaborative forecasting within an organisation. The demand alignment may pose some problems leading to inefficiency in customer service, poor stock rotation and a high obsolescence rate aggravated by the diversity of products. Demand management sought the rapid and appropriate integration of the needs arising from the market in the direction of the suppliers in order to balance and strategically align demand with operational capacity along the supply chain. However, the concept of demand management is not yet understood by supply chain agents as the major cause of failure is accredited to not achieving chain coordination due to the poor understanding of demand leading to inadequate customer service, poor stock rotation and large obsolescence rates. The main aspects underpinning this study are: demand management; JIT; order fulfilment; information sharing; order synchronisation; and demand order variability and flexibility, and forecasting. The objectives of the study are: to determine the challenges of dynamic demand management under the JIT order fulfilment system; to establish the effects of information sharing and collaborative forecasting for efficient operational demand management; to explore the extent of demand order variability and flexibility on the underlying JIT system; and to analyse the role of order synchronisation fulfilment to facilitate the balanced alignment of demand and supply order management. The nature of this study suggests the use of an exploratory case study design to explore the dynamics of demand management with the JIT system employed by the organisation under study. A qualitative research approach was used in this study as it added more value when determining the issues faced in the organisation. The study was conducted in KwaZulu-Natal at the Durban head office. The sampling type employed was purposive sampling. The total sample size is three. Face-to-face semi-structured interviews were used as a means of data collection. Thematic analysis was used to analyse data in the primary qualitative research in this study. The findings of this study suggest that communication and real-time data are matters of concern. These factors contribute to the poor demand management in the organisation. The results indicate that improvements in these aspects are imperative to the success of demand management processes. Effective management of communication between departments is recommended as well as more involvement from top management. Information systems that provide real time data should also be adopted. The managerial implications indicate that demand management does not depend on one specific department and is the responsibility of every supply chain member involved in the supply chain network as synchronisation plays a vital role in the balancing of demand and supply.
An integrated logistics network to enhance logistics optimisation of the University of KwaZulu-Natal’s off-campus resident students’ transportation.
(2017) Ngidi, Nduduzo Christian.; Mbhele, Thokozani Patmond.
The application of an integrated logistical network at the University of KwaZulu-Natal transportation system seeks to optimise the coordination of the movement of students in the University. The logistics network of the University of KwaZulu-Natal includes insourced and outsourced logistics services. This study is based on the nature of the University’s student transportation system along with the phenomenon of an integrated network. The main purpose of this study is to explore the nature of the logistics network of the University by identifying its compatibility with the principles of integration. The objectives of this study are: firstly, to assess the influence of an integrated logistics network in optimising the transport services of the University. Secondly, to examine the effect of the process flow of the outsourced and insourced student transportation systems of the University. Thirdly, to establish the extent of the relationship between the transportation schedule and transport facilities. Finally, to assess the perceived performance outcomes of selected logistical systems against the expectation of the selected stakeholders. This study applies the research onion that classifies research into five stages such as research philosophy, research approaches, research strategies, time horizons, and data collection methods. A quantitative approach has been adopted to analyse the data from 250 respondents. Using nonprobability sampling, the purposive technique assisted to collect relevant data from persons of interest and knowledge. The study findings reveal the extent to which an integrated logistics network influences optimisation in the off-campus residents’ transportation network of the University. Also, it reveals the perceived performance of the logistics network from the perspective of the students. Lastly, the study reveals a needed paradigm shift in meeting the transportation needs of off-campus resident students. This arises from the expressed dissatisfaction from students; it is also an opportunity for further incorporation of technology in the operational and managerial procedures within the logistics network of the University

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