Supply chain design approaches for supply chain resilience: A qualitative study of South African fast-moving consumer goods grocery manufacturers

Abstract

Orientation: In today’s globalised and complex business environment, firms are ever more vulnerable to supply chain disruptions, originating both internally and externally from the supply chain. Supply chain resilience minimises the impact of a disruption through design approaches, which allows the supply chain to respond appropriately to disruptive events.Research purpose: This article investigated the supply chain risks faced by grocery manufacturers in the South African fast-moving consumer goods (FMCG) industry and explored supply chain design approaches that enable supply chain resilience.Motivation for the study: South African grocery manufacturers are faced with distinct risks. Whilst supply chain risk management studies have provided firms with certain guidelines to mitigate risk, supply chains are still vulnerable to unanticipated risks. Literature on supply chain resilience in the South African context is scant. The concept of supply chain resilience provides firms with strategies that are built into the supply chain that allow firms to react and recover swiftly from disruptions. Furthermore, supply chain resilience strategies assist firms in becoming less vulnerable to possible disruptions.Research design approach and method: This study was conducted by using a descriptive qualitative research design. Data were collected through semi-structured interviews with senior supply chain practitioners specifically within the South African FMCG grocery manufacturing industry.Main findings: The study found that labour unrest is the most common risk faced by the industry. Furthermore, strategic stock and supply chain mapping are of the most useful design approaches to enhance supply chain resilience.Practical/managerial implications: The study provides managers with new insights in guiding supply chain design decisions for resilient supply chains. Through the identification of risks and appropriate solutions linked to the various risks, the study allows managers an array of options to choose from when enforcing a resilient supply chain.Contribution/ value-add: The study contributes to the body of knowledge by being one of the first empirical studies conducted on supply chain design approaches for supply chain resilience in the South African context. The study also adds to the scarce literature on supply chain resilience in the FMCG industry, both globally and in a South African context.

Introducing Risk Considerations into the Supply Chain Network Design

“…SCRs are driven by a variety of internal and external sources of vulnerability [4,13]. For example, Vlajic et al [18] distinguish between internal and external sources of vulnerability, although they focus mainly on internal sources of vulnerability.…”

“…Globalisation, advancing technology, increasingly demanding customers, product complexity, and short product and technology lifecycles all result in more complex and vulnerable supply chains [1][2][3][4][5][6]. In addition, unforeseen events may occur beyond a firm's control and generate supply chain disruptions (see [7]).…”

UK Supermarket Supply Chains: Ending the human suffering behind our food

“…184 Forced labour and extreme economic exploitation present reputational risks, operational risks (disruption of supplies) and legal risks (fines). 185 It is in companies' and investors' interests alike to minimize supply disruption due to the kind of labour unrest seen recently in South Africa 186 and China. 187 Nearly 100 investors with more than $10 trillion in assets under management (AUM), nearly four times the GDP of the UK, 188 have backed a new Workforce Disclosure Initiative (WDI).…”

Supply chain risk management processes for resilience: A study of South African grocery manufacturers

“…Table 1 summarises the literature sources used in the discussion of the processes. Agigi et al (2016:2) describe SCRM as a set course of action taken by firms to identify, assess, analyse and manage risk in the firms supply chains. The probability of events is an essential determinant of strategies to be implemented within the SCRM process (Kumar et al 2014:879).…”

“…A study by Bredell and Walters (2007) proposed a structured and disciplined framework to integrated supply risk management. A more recent study by Agigi, Niemann and Kotzé (2016) introduced supply chain resilience in the South African context, focusing on supply chain design approaches as an enabler of supply chain resilience.…”