The University of the Witwatersrand School of Mechanical, Industrial and Aeronautical Engineering

119 Pages·2015·2.66 MB·English

by  Mpho Maje

The University of the Witwatersrand
School of Mechanical, Industrial and Aeronautical Engineering

The application of Soft Systems Methodology to Supply Chain Risk
Management in Small and Medium Enterprises

Mpho Maje
(Student number: 690960)
Supervisor: Bernadette Sunjka

A research report submitted to the School of Mechanical, Industrial and
Aeronautical Engineering, Faculty of Engineering and the Built
Environment, University of the Witwatersrand, in partial fulfilment of the
requirements for the Degree of Master of Science in Engineering.

Johannesburg, 2015
DECLARATION
I declare that this research report is my own unaided work. It is being
submitted to the Degree of Master of Science to the University of the
Witwatersrand, Johannesburg. It has not been submitted before for any
degree or examination to any other University.

..................................... ........... day of ................................, 2015
Mpho Maje (day) (month)
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ABSTRACT
Supply chain risk management is one of the strategies that assist
enterprises in the identification, assessment and control of supply chain
risks. With the increased dynamics and complexity of supply chain risks for
small and medium enterprises, an innovative approach in analysing these
risks is required. The purpose of this research is to assess supply chain
risk management in five small and medium enterprise cases using soft
systems methodology.

The systems thinking approach will assist in the analysis of the dynamics
and complexity of supply chain risks for small and medium enterprises. A
qualitative approach was utilised to obtain insight into current issues that
small and medium enterprises, in the manufacturing sector, face within the
supply chain.

The results of the application of soft systems methodology on small and
medium enterprises for obtaining insight into supply chain risk
management for these enterprises proved to be fruitful. The replication
logic used in each case, lead to similar results as expected.

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In memory of my father
Darius Sinki Maje
(24 January 1955 - 08 January 2010)

“I carry your heart with me (I carry it in my heart)
I am never without it
(Anywhere I go you go, my dear;
and whatever is done by only me is your doing, my darling)

I fear no fate (for you are my fate, my sweet)
I want no world (for beautiful you are my world, my true)
and it's you are whatever a moon has always meant
and whatever a sun will always sing is you

here is the deepest secret nobody knows
(here is the root of the root and the bud of the bud
and the sky of the sky of a tree called life;
which grows higher than the soul can hope or mind can hide)
and this is the wonder that's keeping the stars apart

I carry your heart (I carry it in my heart)”

~ E.E. Cummings

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ACKNOWLEDGEMENTS
First and foremost, I would like to thank my Supervisor, Bernadette
Sunjka, for her guidance, continuous support and invaluable commitment
to me as a student. She kept her office open for me to answer my
questions and clear my confusion but also allowed me the freedom to put
my point across on the research report. In addition, I would also like to
thank her for her excellent feedback, which has helped me improve the
quality of my research report.

My thanks also go to the management team of each company I
interviewed for the valuable time and information. This research report
would not be possible without their willingness to share their company
information and experiences.

My thanks also go to my colleagues and the management team at Impala
Platinum Refinery for their professional and financial assistance. The
moral support I received when I had to abandon my role at the workplace
has allowed me to complete my research report with minimum delays.

Finally, I want to thank my fiancée, Sithembiso Temba, for his support and
encouragement. I would not have been able to achieve all my goals
without his support and understanding. Thanks to my son, Thabo, for
understanding why I had to be away during some weekends and
evenings. I am also indebted to my parents, Darius and Duduzile, for all
their sacrifices. Thanks to my sister, Lerato, for her love and faith.

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TABLE OF CONTENTS

DECLARATION .......................................................................................... i
ABSTRACT ................................................................................................. ii
ACKNOWLEDGEMENTS .......................................................................... iv
TABLE OF CONTENTS ............................................................................. v
LIST OF FIGURES .................................................................................... ix
LIST OF TABLES ....................................................................................... x
NOMENCLATURE .................................................................................... xii
CHAPTER 1. INTRODUCTION ............................................................. 1
1.1 Background Statement .................................................................... 1
1.2 Purpose of Research....................................................................... 2
1.3 Research Questions ........................................................................ 2
1.4 Research Objectives ....................................................................... 2
1.5 Limitations ....................................................................................... 3
1.6 Report Structure .............................................................................. 3
CHAPTER 2. LITERATURE REVIEW ................................................... 5
2.1 Supply Chains Management ........................................................... 5
2.1.1 Risk Management in Supply Chains ....................................... 8
2.2 Risk Management ........................................................................... 9
2.2.1 Risk Identification ................................................................. 12
2.2.2 Risk Assessment .................................................................. 14
2.2.3 Risk Evaluation..................................................................... 15
2.2.4 Risk Addressing ................................................................... 15
2.2.5 Monitoring and Reviewing .................................................... 16
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2.3 Supply Chain Risk Management ................................................... 16
2.4 Small and Mediums Enterprises .................................................... 19
2.5 Systems Thinking .......................................................................... 21
2.5.1 Soft Systems Methodology ................................................... 22
2.6 Conceptual Framework ................................................................. 24
2.6.1 Stage One and Two – Real World ........................................ 25
2.6.2 Stage Three and Four – Ideal World .................................... 26
2.7 Summary of Literature Review ...................................................... 28
CHAPTER 3. RESEARCH METHODOLOGY ...................................... 29
3.1 Research Design ........................................................................... 29
3.2 Data Collection Techniques .......................................................... 31
3.3 Data Analysis ................................................................................ 32
3.4 Validity and Reliability ................................................................... 33
3.4.1 Internal Validity ..................................................................... 33
3.4.2 Reliability .............................................................................. 34
3.4.3 External Validity.................................................................... 34
3.5 Limitations ..................................................................................... 34
3.6 Ethical Considerations................................................................... 35
CHAPTER 4. RESULTS AND ANALYSIS ........................................... 36
4.1 Company A ................................................................................... 37
4.1.1 Stage One and Two – Real World ........................................ 37
4.1.2 Stage Three and Four – Ideal World .................................... 41
4.1.3 Stage five – Real versus Ideal World ................................... 42
4.2 Company B ................................................................................... 45
4.2.1 Stage One and Two – Real World ........................................ 45
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4.2.2 Stage Three and Four – Ideal World .................................... 49
4.2.3 Stage five – Real versus Ideal World ................................... 50
4.3 Company C ................................................................................... 53
4.3.1 Stage One and Two – Real World ........................................ 53
4.3.2 Stage Three and Four – Ideal World .................................... 57
4.3.3 Stage five – Real versus Ideal World ................................... 58
4.4 Company D ................................................................................... 61
4.4.1 Stage One and Two – Real World ........................................ 61
4.4.2 Stage Three and Four – Ideal World .................................... 65
4.4.3 Stage five – Real versus Ideal World ................................... 66
4.5 Company E ................................................................................... 69
4.5.1 Stage One and Two – Real World ........................................ 69
4.5.2 Stage Three and Four – Ideal World .................................... 73
4.5.3 Stage five – Real versus Ideal World ................................... 74
4.6 Cross-case Analysis ...................................................................... 76
4.6.1 Top Risks ............................................................................. 76
4.6.2 Conceptual Models ............................................................... 77
4.6.3 Risk Areas ............................................................................ 79
CHAPTER 5. DISCUSSION ................................................................ 80
CHAPTER 6. CONCLUSIONS ............................................................ 83
REFERENCES ........................................................................................ 85
APPENDIX A – INTERVIEW QUESTIONNAIRE ..................................... 92
APPENDIX B – COMPANY A .................................................................. 95
APPENDIX C – COMPANY B .................................................................. 98
APPENDIX D – COMPANY C................................................................ 100
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APPENDIX E – COMPANY D ................................................................ 103
APPENDIX F – COMPANY E ................................................................ 105
APPENDIX G – DIGITAL APPENDIX .................................................... 106

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LIST OF FIGURES

Figure 2-1 Components of the Supply Chain [Mitchell, 2009] .................... 6
Figure 2-2: Risk management model [adopted from the Orange Book (HM
Treasury, 2004)] ....................................................................................... 11
Figure 2-3: Supply chain risks [adopted from Deloitte (2012)] ................. 17
Figure 2-4: Stages in Soft Systems Methodology (Adopted from
Checkland [1981]) .................................................................................... 23
Figure 2-5: Rich Picture of SCRM for a Manufacturing SME [developed by
author] ...................................................................................................... 25
Figure 2-6: Conceptual model of an SME ................................................ 27
Figure 3-1: Sequence for a multiple case design [adopted from Yin (2009)]
................................................................................................................. 30
Figure 3-2: Mind map of brainstorming session ....................................... 32
Figure 4-1: Rich Picture of Company A .................................................... 38
Figure 4-2: Conceptual Model of Company A .......................................... 42
Figure 4-3: Rich Picture of Company B .................................................... 46
Figure 4-4: Conceptual Model of Company B .......................................... 50
Figure 4-5: Rich Picture of Company C ................................................... 54
Figure 4-6: Conceptual Model of Company C .......................................... 58
Figure 4-7: Rich Picture of Company D ................................................... 62
Figure 4-8: Conceptual Model of Company D .......................................... 66
Figure 4-9: Rich Picture of Company E .................................................... 70
Figure 4-10: Conceptual Model of Company E ........................................ 74

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