Abstract
M.Comm.
The South African economy is currently in a dynamic phase of change. In
seeking a solution to rebuilding the economy and attaining a growth rate
which is capable of creating jobs and sustaining economic development, it is
widely recognized that a competitive platform needs to be created for a
powerful expansion by the tradable goods sector.
Many South African products cannot compete in international markets because
of high unit costs and the consequential high prices offered to consumers.
One of the primary reasons for product uncompetitiveness can be described
as supply chain inefficiencies.q The supply chain is defined as the network of
organisations that are involved in the various processes and activities that
produce value in the form of products and services in the hands of the ultimate
consumer.
This study analyzes a single stand-alone component of the supply chain
organisation, namely the public warehouse. The study recognizes that
warehousing plays a vital role in enhancing end-user value by providing time
and space utility and suggests that in order for the warehouse to fulfil a valueadding
role, it must adjust its functioning to meet the supply chain's
requirements.
The study shows that conventional techniques are incorrectly focused and are
thus inappropriate in an organisation aiming to achieve competitiveness and
profitability, optimise the logistics trade-off between cost and quality and
simultaneously supply the customer with a high level of service performance.
The use of conventional costing and management techniques are shown to
lead to the incorrect calculation and misallocation of costs which in turn result
in inaccurate product (service) costing. This has made the public warehouse analyzed uncompetitive in the market and as a result unable to add any
additional value to the customer. It is suggested that a completely new and
differently focused system needs to be implemented if supply chain objectives
are to be realised. It is suggested that activity-based management is capable
of achieving supply chain goals.
Activity-based management (ABM) is a system or discipline which focuses on
the management of activities as the route to improving the value received by
the customer and the profit achieved by providing this value.
The study shows that ABM, as applied to the public warehouse, was able to
achieve cost reductions, better and more effective management, enhanced
strategic positioning, and, most importantly, competitiveness in the market
place, a prerequisite for adding value to the supply chain.
The study recognizes that supply chain management and activity-based
management are relatively new fields of expertise, and that these are not yet
recognized as a fully fledged profession in South Africa. Supply chain
management needs to be established and promoted as a formal profession.
Finally it is recognized that more research is necessary before ABM and
supply chain management can become the standard in South African
organisations. Information needs to be obtained regarding key South African
performance indicators and information needs to be recognized as a strategic
asset. Once this recognition is achieved strategic information plans can be
designed and used to enhance the competitiveness of South African products.