A logistics sector’s perspective of factors and risks within the business environment that influence supply chains’ effectiveness: An explorative mixed method study

Abstract

Background: Supply chains in South Africa operate in a challenging business environment. This environment influences the efficiency and effectiveness of South African businesses and supply chains. These factors further influence the competitiveness of products produced in the country, the economic growth and development of South Africa.

Objectives: The purpose of this study was two-fold: Firstly, to obtain insight into the main business environment risks and other factors, from a logistics perspective; and secondly, to demonstrate the use of methodology not often used in logistics research − the sequential mixed method.

Method: The explorative study was conducted amongst logistics service providers and cargo owners in 2013 by means of a sequential mixed method study, consisting of a survey to determine the importance of risk factors in the business environment, followed by a qualitative study in the form of a focus group discussion to obtain richer data and insight into these risks and factors. The results of these two methods were integrated with industry literature.

Results: It was found that increasing transportation costs, operational management of infrastructure and human resources-related problems pose the biggest challenges in the logistics industry. In addition, it was found that the mixed method research study has application possibilities in logistics research.

Conclusion: The factors identified as particularly problematic for the logistics industry, namely ineffective operational management of infrastructure, the general conditions in the labour market and increasing costs (to some extent) are outside the control of individual organisations. However, organisations can control how they react and mitigate these risk factors. It is shown that these factors and risks can change overnight. The use of the explorative mixed method in obtaining qualitative and quantitative inputs and integrating it with existing literature proved to be a workable and usable methodology.