Use of electronic supply chain management in overcoming uncertainty constraints: South African textile industry.

Abstract

Background: The impact of the internet and other technological advancements of the 21st century have improved business capability through speeding up global supply chains, driving innovation and widening the geographic scope of purchasing activities. However, such enhancements have detrimentally affected labour-intensive industries including the South African clothing and textile industry which has faced multiple job losses. Problem: Economies of scale, enhanced technologies and lower labour costs have put international competitors at an advantage. Increased import tariffs have had a marginal impact. The impacts of Covid-19 have negatively impacted the spending power and confidence of consumers, causing demand uncertainty. Purpose: It was proposed that the alignment of industry operators with the electronic supply chain management (eSCM) activities of worldwide industry leaders may provide respite to operators in the sector amidst uncertainty. The purpose of this study was to study the truth of this proposal. Methodology: This proposal was tested in three stages. Firstly, a review of previous literature set out to explain the current uncertainties faced in the industry before providing an understanding what the possible forms of eSCM implementation are. Highlighted technologies included ERP, e-marketplaces and automation. Thereafter, the study shifted toward qualitative primary research. First, a case study was conducted to the perspective of a selected company which had implemented eSCM practices. Comprising of open-ended questions posed to managers at the company, the case study studied the uncertainties it faces and eSCM activities used to thrive amidst these uncertainties. The second part of the primary research involved face-to-face interviews with industry experts on the generalisability of the case study. Results: It was evident that eSCM technologies positively impacted business’ aims for efficiency, flexibility and improved communication to manage amidst uncertainty. However, participants cite that inadequate commitment often rendered technology futile. Participants cited that gradual implementation would be fruitful. Contribution: ESCM adoption has been studied in numerous industries globally. Not much literature focuses on local eSCM adoption, with previous research focusing on customer-facing organisations in the sector. This study included multiple tiers in the supply chain, with the company performing both retail and manufacturing activities. Implications: SMME’s nationwide should adopt needs-based eSCM practices, whether they are customer-facing or are involved in the transformation of clothing and textile goods.