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Introduction [Figure Omitted - Please see PDF.]
A large amount of locally manufactured vehicles in South Africa are destined for the export market, which affects the balance of payment and employment in the country. It is therefore important that these vehicle supply chains stay globally competitive. Because of this, it was decided to focus a study, and this article particularly, on the supply chains of locally manufactured vehicles. Supply chain management (SCM) has undergone transformation in the last two decades (Cooney & Yacobucci 2005; Swieki & Gerth 2008:2). Traditionally in the automotive industry, supply chains revolved mainly around making supplier collaboration and manufacturing operations more efficient (Lam 2008). However, with the boom of the Internet, data have become much more accessible to both manufacturers and consumers (Tang & Qian 2008:288). The industry has tended to reduce inventory levels rapidly, forcing automotive component companies to redesign and expand their SCM initiatives (Hugo, Badenhorst & Van Biljon 2004:76). First-tier suppliers are becoming increasingly important as design is pushed up the supply chain by original equipment manufacturers (OEMs) (Braese 2005:14).
According to Zhang and Chen (2006:66), real-time sharing of design, planning, production, logistics and sales information have served to make the ‘global automotive industry’ truly global. Globalisation has added complexities and costs to capture and maintain market share (Swieki & Gerth 2008:2). In Asian markets, more than 20 new OEMs, joint ventures and thousands of suppliers were positioning to capture a piece of the projected 140 million new vehicle owners in China by 2010 (Deloitte Touche Tohmatsu 2009). In Eastern Europe, lower cost structures and the availability of highly skilled labour enticed OEMs and suppliers to establish new facilities, technology and design centres. Point-to-point technology solutions were used to leverage the ubiquitous, low-cost capabilities of the Internet (Zhang & Chen 2006:668). First-tier suppliers and OEMs looked to extend demand-driven capabilities to 100% of the supply chain. In mature markets, automotive firms faced stiff competition and demanding customers (Afsharipour, Afshari & Sahaf 2006:5).
In South Africa, SCM is one of the important functional areas in the automotive industry and its contribution has been particularly noteworthy (Pires & Neto 2008:328). The industry sector’s contribution to 7% of South Africa’s gross domestic product (GDP) was R3251.4 billion in 2012 (Automotive Industry...