BUS606: Operations and Supply Chain Management

What has emerged from the research conducted is that a significant gap (of supply chain alignment) exists between the creative and innovative products produced by craft businesses in Gauteng and a correspondingly creative and appropriate SCM strategy. A number of craft businesses simply 'grew beyond their boots' and struggled to match their successful product strategies with their 'not-so-successful' SCM strategies. This lack of supply chain alignment became even more acute as the craft businesses grew and required an even greater number of products to be distributed or sold through outbound channels of distribution (once successfully produced). Certain craft businesses interviewed even revealed inbound supply chain weaknesses where the volume of raw materials, and speedy access to their raw materials required for production, did not match the actual production targets. Simply put, they often lacked the appropriate levels of raw materials needed to make an ever-expanding repertoire of popular products produced.

Some of the producers in the craft industry copy products from competitors. As a result, the majority of products are similar with little differentiation. Those producers who have unique designs have greater competitive advantages over those who do not. They are able to differentiate themselves from competitors and to attract those customers that look for something different in the market in order to satisfy their individual and unique needs.

In terms of supply chain and logistics efficiency of the small craft businesses interviewed, it was discovered that they had very poorly defined and coordinated logistics systems in general and could either not afford or utilise transport and storage optimally. The researchers also conclude that these businesses could easily have made significant savings by managing their inventory and by forecasting more effectively, by transporting products more cost-efficiently using longer-term agreements with either one or fewer suppliers, by optimising inbound supplies in terms of planning and quantities required, as well as by optimising the outbound movement of products to international customers.