An investigation into supply chain challenges at Durban North Liquor Distributors in eThekwini Metro, KwaZulu-Natal.

Abstract

The liquor industry plays an important role in the South African economy. It contributes greatly towards job creation as well as economic growth. The fragmented structure of the industry provides an opportunity for firms of different sizes to play a role in the liquor supply chain. The large companies act as suppliers and manufacturers, while medium-sized companies are involved mainly in wholesale distribution, and the smaller companies act as retailers who connect with the final consumers. Although the industry is a strategic player in the economy, it is not without challenges. Some of the challenges include high operating costs due to statutory controls, yet margins are low. As a result, the industry is highly competitive. The aim of this research was to investigate supply chain challenges within the liquor industry, with an intention to propose solutions to unlock the industry’s full potential. A qualitative research design was adopted in this study, in which the researcher interviewed customers to understand the liquor supply chain challenges from their perspective. A research sample was drawn from a list of targeted participants who deal with the distributor Durban North Liquor Distributors. A purposive sampling strategy was used to draw a sample of clients from different wards around eThekwini Municipality. According to the research findings, the distributor provides an impeccable customer service. However, the challenges identified include lack of and inconsistent communication around nonavailability of products and anticipated time of delivery. The respondents also highlighted that the prevalence of receiving incorrect products that were not part of the initial order was high, which points to the lack of quality controls at Durban North Liquor Distributors. Due to a centralised distribution strategy, the respondents also felt that the distributor should improve on delivery plans. Recommendations include that the distributor should standardise the ordering system by using e-commerce platforms, and immediately communicate non-available items to customers, before sending orders for picking. In addition, there is a need to conduct quality control before dispatching orders. Finally, to address the delivery constraints caused by centralised distribution, the distributor should complement their fleet by procuring the transport services of third-party transport service providers, so as to improve geographical coverage, within customers’ operating hours.