Supply chain management problems at South African automotive component manufacturers

• Published in: Southern African business review Vol. 15; no. 1; pp. 70 - 99
• Main Authors: Badenhorst-Weiss, J.A., Naude, M.J.
• Format: Journal Article
• Language: English
• Published: University of South Africa (UNISA) 01.01.2011
• Subjects: Automotive component manufacturers; Original equipment manufacturers; Supply chain problems; University of KwaZulu-Natal; University of South Africa
• ISSN: 1998-8125; 1998-8125

The problems that automotive component manufacturers (ACMs) experience in automotive supply chains is an important contemporary issue. The role of ACMs in the competitiveness and survival of the automotive industry has never been as pronounced. Original equipment manufacturers (OEMs, also known as automotive assemblers) face pressure from government to drastically increase local content (components and services they purchase from local ACMs). The problem is that local ACMs are not as competitive as suppliers from India and China. The improvement and extension of the local ACM supplier base is therefore important. The purpose of this article is to report on a study that investigated supply chain management problems of ACMs and the extent of these problems. Supply chain problems may cause inefficiencies that impact on the competitiveness of ACMs. The study was exploratory in nature, and consisted mainly of a survey among ACMs in South Africa. It was found that of the 75 identified problems, the most significant problems were internal process problems, followed by customer-related problems. The most significant problems lie in the demand management area in the supply chain.