Interdependence analysis of supplier relationship challenges in the South African automotive industry

Abstract

Purpose The South African automotive industry, which is the most significant sector in the South African economy, needs to function efficiently to compete globally. The purpose of this paper is to report on a study that investigated the challenges faced by the South African automotive component manufacturers and their suppliers and provide a structure and identify the dependencies between these challenges. Design/methodology/approach Interpretive structural modelling (ISM) was adopted to explore the supplier relationship challenges and the dynamics and interlinkages between these challenges. ISM was deemed appropriate, as it is a multi-criterion decision-making technique suited for complex problems and provides an ordered, directional framework. Findings The findings revealed that advanced communication, rapid change in demand and dependence on a single customer are independent problems but have a lesser feedback loop and do not create instability by ripple effect. Interdependencies, on the other hand, create lesser ripples when tackled. Research limitations/implications Findings of this study will be able to guide all the stakeholders: the policymakers and the automotive industry players to target the driving issue which can bring efficiency in the South African automotive supply chain. If the automotive components manufacturers (ACMs) are able to have more than one customer, their reliance on one will decrease and the systems will improve which shall benefit the industry. This methodology can also be used in future for determining the roadmap for complex issues. Originality/value The framework presented in this paper provides decision makers with a realistic picture of their situation by providing insight into the interrelationships, ranking them by importance and aiding in creating a roadmap for addressing identified challenges.