The significance of supply chain management with regard to the attainment of value and strategic objectives for municipalities within South Africa : a case study

Bent, Reginald Anthony (2014-04)

Thesis (MPA)--Stellenbosch University, 2014.

Thesis

ENGLISH ABSTRACT: Supply chain management (SCM) in the public sector in general, as well as the municipal sphere in particular, has received increasing prominence over past few years. Although the focus is mainly due to the impact of fraud and corruption in public sector procurement, this author is of the opinion that SCM can also create value and aid in the attainment of strategic objectives. The study revealed that supply chain management is described as a process in literature, whilst it is described as a system by government. Of significance to this, is that both literature and government view SCM as a means to add value. The study also revealed that in order for SCM to add value and to contribute to the attainment of strategic objectives, it is important that SCM forms part of the performance management (PM) system of an organisation. Performance measurement tools, such as the balanced scorecard, benchmarking, improvement and other measurement tools, were introduced as tried and trusted methods for measuring SCM performance. The study was embarked upon because the author was of the opinion that municipalities in South Africa only implement SCM because it is required by legislation. Thus, this theory was tested at Hessequa Municipality and it was found that the current emphasis was on compliance at Hessequa Municipality. This was done by means of studying documentary evidence and through interviews conducted with various internal and external stakeholders either directly or indirectly affected by the SCM processes of Hessequa Municipality. The study tested Hessequa Municipality’s readiness to progress towards performance management and measurement by using the financial capability model for SCM as utilised by the Western Cape Government to ascertain the level of SCM implementation at municipalities. It was found that Hessequa Municipality meets almost all the compliance and control requirements, with only two areas that require slight attention before full compliance is achieved. Through the interviews conducted, the study also tested Hessequa Municipality’s willingness to progress to the next level and found that there was indeed a willingness to progress towards managing and measuring SCM activities. In conclusion, the study recommended that Hessequa Municipality uses a phased-in approach when it sets processes in place to progress towards performance managing SCM. That when developing performance indicators for SCM, it be aligned to the performance management system and targets of the municipality. It also recommended that a combination of the tried and trusted methods be used to measure SCM performance. Finally, it recommended that the municipality eradicates the silo approach to doing business and adopts a more integrated approach by firstly integrating its internal processes before embarking upon integrating the actions of all the agents within the supply chain.

AFRIKAANSE OPSOMMING: Voorsieningskanaalbestuur (VKB) in die openbare sektor oor die algemeen sowel as in die munisipale omgewing in besonder, het gedurende die afgelope jare al hoe meer na die voorgrond getree. Alhoewel die fokus hoofsaaklik toegeskryf word aan die impak van bedrog en korrupsie op verkryging in die openbare sektor, is die skrywer van mening dat VKB ook waarde kan toevoeg en tot die die behaling van strategiese doelwitte kan bydra. Die studie het aan die lig gebring dat VKB in literatuur as ’n proses beskryf word, maar deur die regering as ’n stelsel beskryf word. Wat egter van belang is, is dat beide die literatuur en regering VKB as ’n middel beskou om waarde toe te voeg. Die studie het ook openbaar dat, ten einde vir VKB om waarde toe te voeg en tot die behaling van strategiese doelwitte by te dra, dit belangrik is dat VKB ’n deel vorm van die prestasiebestuurstelsel van ’n organisasie. Prestasiemetingsinstrumente soos die gebalanseerde telkaart, doelwitstelling, verbetering en ander metingsinstrumente is ingestel as bewese metodes om VKB-prestasie te meet. Die studie is onderneem omdat die skrywer van mening was dat munisipaliteite in Suid- Afrika slegs VKB implementeer omdat wetgewing dit vereis. Hierdie teorie is by Hessequa Munisipaliteit getoets en daar is gevind dat die huidige klem op voldoening aan wetsvereistes is. Die toets is gedoen deur dokumentêre bewyse te bestudeer, asook deur onderhoude te voer met verskeie interne en eksterne rolspelers wat óf direk óf indirek deur die VKB-prosesse van Hessequa Munisipaliteit geraak word. Die studie het Hessequa Munisipaliteit se gereedheid om na prestasiebestuur en -meting te vorder, getoets deur van die finansiële vermoë-model gebruik te maak wat deur die Wes-Kaapse Regering gebruik word. Hierdie model word gebruik om die vlak van VKB-implementering by munisipaliteite te bepaal. Daar is gevind dat Hessequa Munisipaliteit aan feitlik alle vereistes vir nakoming en beheer voldoen, buiten twee gebiede wat geringe aandag verg alvorens volle nakoming behaal word. Deur onderhoude te voer, het die studie ook Hessequa Munisipaliteit se bereidwilligheid getoets om na die volgende vlak te vorder. Daar is gevind dat daar inderdaad ’n begeerte was om na die bestuurs- en metingsaktiwiteite van VKB te beweeg. Laastens het die studie aanbeveel dat Hessequa Munisipaliteit ’n infaseringsbenadering gebruik wanneer prosesse in plek gestel word om na VKB-prestasiebestuur te vorder. Wanneer prestasie-aanwysers vir VKB ontwikkel word, moet dit met die prestasiebestuurstelsel en -doelwitte van die munisipaliteit belyn word. Dit word ook aanbeveel dat ’n kombinasie van die beproefde en getoetste metodes gebruik word om VKB-prestasie te meet. Die laaste aanbeveling is dat die munisipaliteit die silo-benadering van sake doen uitwis en ’n meer geïntegreerde benadering aanneem. Die interne prosesse moet eers geïntegreer word, waarna die handelinge van al die rolspelers in VKB geïntegreer word.

Please refer to this item in SUNScholar by using the following persistent URL: http://hdl.handle.net/10019.1/86612
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