Supply chain relationships between first and second tier suppliers in South African automotive supply chains: A focus on trust

Abstract

Background: The automotive industry is characterised by a network of long term collaborative agreements between component suppliers and assemblers. For collaboration to be successful trust between the supply chain partners is vital. Although many variables influence the efficiency of collaborative relationships, the human behaviour issues related to culture and trust are often much more difficult to solve. Trust is singled out in this article as a contributor to value in the supply chain relationships. Increased trust leads to more confidence resulting in better collaboration.

Objectives: The purpose of the study was to explore collaborative relationships between first and second tier suppliers (component manufacturers) in automotive supply chains in South Africa and the role of trust in the relationship value.

Method: This quantitative study had been conducted amongst members of the National Association for Automobile Component and Allied Manufacturers of South Africa (NAACAM), who are suppliers to the large automotive assemblers. The research utilised closed ended questions to obtain the perceptions of managers in automotive component manufacture regarding trust and relationship value with their best suppliers.

Results: With a linear regression model it was found that there is a high degree of trust in the collaborative relationships between first and second tier suppliers of components in the automotive industry in South Africa.

Conclusion: The automotive industry is one of the most successful industries in South Africa. They compete globally and apply best practices, particularly those in supply chain management. The industry is characterised by networks of collaborative relationships on different levels. These relationships seem to be successful as they are based on trust.