Abstract
Background: In the current business environment, the rivalry is no longer between
companies, but among the organisations' supply chains. How merchandise gets onto
the shop floor is a crucial differentiator for clothing retailers. While the South African
retailers have relied on fashion trends in the northern hemisphere and seasonal
delay to mimic these designs for local tastes, international retailers’ entry, like H&M
and Zara, will challenge local players to adopt shorter lead times. Retailers that have
sound supply chain management systems are expected to reap benefits in the long
run. While supply chain management is well researched and identified across
industries, a gap still exists due to lack of information on its performance
measurement. To address the problem, we construct an index for evaluating supply
chain performance to facilitate organisations’ efforts when measuring supply chain
performance. The index aims to help firms in their continuous improvement work by
selecting and categorising new performance measures and evaluating existing
performance measures.
Methods: A quantitative method was applied to conduct the study. The study is
limited to a total of six publicly listed companies across the Johannesburg Stock
Exchange board. The data used were obtained from the companies’ publicly shared
financial statements. A fixed-effects regression model was used to analyse the data
the relationship between the dependent and the independent dependent variables.
Results: In the study, the six retailers are ranked using their supply chain
performance as measured by the index. Those with good Supply Chain Management
practices are ranked higher. The Woolworths Group Limited has the highest supply
chain index ranking based on an overall ranking of the firms based on a combination
of the strength, balance, and resiliency metrics. This was followed by Mr Price Group
Limited, which consistently maintained second place. The Foschini Group was at the
bottom.
Conclusion: This study emphasises the importance of supply chain performance in
developing the supply chain. It argues that if supply chain management practices are
correctly employed, they offer an added advantage. This framework for the
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measurement of supply chain performance provides a valuable guide useful in the
clothing retail industry and across other industries. Overall, the results encourage
organisations to measure supply chain performance and share performance
information with their network partners.