The status of supply chain risk management in manufacturing Small and Medium Enterprises (SME) in South Africa
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Date
2020-05
Authors
Sunjka, Bernadette Patricia
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Abstract
This research explores that status of supply chain risk management (SCRM) in
manufacturing small and medium enterprise (SMEs) in South Africa. This is
accomplished through the development of a conceptual framework based on the
extant literature on SCRM, risk and risk management in SMEs and risk theory.
The framework is tested through a mixed-method multiple case study design in
eight South African manufacturing SMEs of different sizes in the furniture and
metal industries in Gauteng, South Africa. This approach addresses theoretical
gaps relating to the lack of frameworks that develop and present a holistic
approach to better understand how supply chain risk is managed in SMEs, as well
as, methodological gaps where there is a call for more case study based empirical
studies on SCRM, and in particular in SMEs.
A significant finding of this research is that while SME owner-managers do not
have formal risk management procedures like their counterparts in large
organisations, they informally follow risk management processes advocated in the
literature, namely, the risk identification, risk analysis and risk handling aspects of
the formal process. This finding, supported by the evidence, is significant as the
literature has been ambivalent. Hence, this research is ground-breaking as it
provides for a strong position on this debate. These implicit processes make use of
environmental scanning for ongoing risk identification, risk analysis and risk
handling is exhibited in the owner-manager’s conversations and actions regarding
risk to and in the business. Prevention and mitigation are the most common risk
handling modes employed by SME owner-manager and are based on the
experience; knowledge and intuition of owner-managers.
This research contributes through another important finding in that SMEs possess
risk management capabilities. Risk management capability is demonstrated by the
OMs in this research through their capability to leverage resources and use them
effectively in preventing and/or mitigating risk. This research, hence, augments Lindbom et al.’s (2015) theoretical proposition of risk management capability by
providing empirical evidence that tests and supports the proposition.
Further key findings of this research are that supply chain risks are not the most
prevalent risks in manufacturing SMEs in South Africa. Risks within the company
operational environment, such as, financial, strategic and operations risks, take
precedence. Supply chain risks on the demand side receive more focus than those
on the supply side
Description
A thesis submitted to the Faculty of Engineering and the Built Environment in fulfilment of the requirement for the degree Doctor of Philosophy (PhD), University of the Witwatersrand, Johannesburg, 2020