Analysis of factors and solutions to poor supply chain quality in a manufacturing organisation

Abstract

Background: With about 55% of operating costs in manufacturing organisations coming from costs of supply chains, coupled with a 6% increase in supply chain costs incurred by a manufacturing organisation during the financial year 2021–2022, supply chain managers need to ascertain factors contributing to high supply operating cost and ascertain suitable strategies to lower supply chain management cost.

Objectives: The purpose of this study is to unveil the factors and the solutions to poor supply chain quality in a steel product manufacturing organisation.

Method: A qualitative approach conducted via an interview guide was used in this study. Perceptions of key supply chain stakeholders within a steel product manufacturing organisation formed the basis of the exploring factors contributing to poor supply chain quality and the solutions thereof. The Pareto chart was created to ascertain the critical factors that contribute to poor supply chain quality.

Results: The study revealed that inventory stock-out, management decisions, process deviations, longer lead times, suppliers and unreliable enterprise resource planning (ERP) system issues contributed to poor supply chain quality.

Conclusion: Supply chain managers should make use of strategies such as safety and consignment stock policy, just-in-time (JIT) system, supplier evaluation exercise for supplier selection, localisation of the sourcing of raw materials, customised ERP systems, job rotation and dashboards, with a view to improve visibility and efficiency of supply chain processes.

Contribution: The study serves as a knowledge advisor to supply chain managers, on the critical factors contributing to poor supply chain quality, and the solutions thereof.