STRATEGIC CHANGE IN PROCUREMENT ORIENTATION IN THE SOUTH AFRICAN AUTOMOTIVE INDUSTRY: A CASE STUDY

C.E. Kalenga, A.C. Brent

Abstract


ENGLISH ABSTRACT: The South African automotive industry faces increasing challenges for Original Equipment Manufacturers (OEMs) and their suppliers to produce high-quality products at low costs. Items purchased by OEMs from the supply chain typically account for more than seventy percent of the total costs of manufactured automobiles. The strategic significance of the purchasing function is subsequently recognised as a major determinant of competitiveness. From a review of literature, a conceptual model is introduced whereby localisation strategies of OEMs, with respect to their main suppliers, can be optimised for competitive advantage. The findings of a case study of a South African OEMs localisation strategies are presented. Based on the findings, an improved model is proposed that could be used as a guideline to orientate procurement strategies for optimal performance, so as to guarantee the competitive advantage of local OEMs. It is anticipated that these results will provide a platform of effective strategy development for the South African OEMs.

AFRIKAANSE OPSOMMING: Verskeie uitdagings, met die klem op vervaardiging van hokwaliteit produkte teen verlaagde koste, word in die gesig gestaar deur beide die Oorspronklike Toerusting Vervaardigers (OTVs) en hulle verskaffers in die Suid-Afrikaanse motorindustrie. Items wat OTVs van hul verskaffers verkry verteenwoordig tipies meer as sewentig persent van die totale vervaardigingskoste van motors. Die strategiese implikasie van die aankopingsfunksie word dus erken as belangrike aanwysing van n goeie kompeterende basis. n Konseptuele model word neergelgebaseer op n oorsig van die literatuur, waardeur die lokaliseringsstrategievan OTVs, in terme van hulle verskaffers, geoptimiseer kan word as kompeterende voordele. Die bevindinge van n Suid-Afrikaanse OTV, as gevallestudie, se lokaliseringsstrategieword verder voorgel Deur hierdie bevindinge word n verbeterde model voorgestel wat moontlik gebruik kan word as 'n gids om the aankoopstrategiete oriteer ten einde kompeterende voordele te verseker vir plaaslike OTVs. Dit word voorspel dat die resultate van hierdie studie n platform daar kan stel vir die effektiewe strategiese ontwikkeling van die Suid-Afrikaanse OTVs.


Full Text:

PDF


DOI: https://doi.org/10.7166/16-2-165

Refbacks

  • There are currently no refbacks.




Copyright (c) 2015 The South African Journal of Industrial Engineering


ISSN 2224-7890 (on-line)


Powered by OJS and hosted by Stellenbosch University Library and Information Service since 2011.


Disclaimer:

This journal is hosted by the SU LIS on request of the journal owner/editor. The SU LIS takes no responsibility for the content published within this journal, and disclaim all liability arising out of the use of or inability to use the information contained herein. We assume no responsibility, and shall not be liable for any breaches of agreement with other publishers/hosts.

SUNJournals Help