Performance measures in supply chain management of small manufacturing enterprises

Abstract

Supply chain was introduced in the 1980s, when the majority of existing companies realised that these are new manufacturing technologies and strategies that allowed them to minimise costs, and therefore the topic of supply chain became popular in the 1990s. Most companies needed to cut costs by identifying suppliers who could meet their demands with the best possible quality products at the lowest possible cost. Performance measures in supply chain have become one of the vital aspects of enhancing the growth and profitability of small manufacturing enterprises (SMEs). SMEs however do consider non-financial measures as crucial but still focus more on financial indicators, in essence neglecting non-financial performance measures as a whole. This study reports on the extent to which SMEs make use of these and recognise the vital role they play in the supply chain sector. A positivist paradigm was followed using questionnaires as research instruments to gather data purposively from SMEs around the Cape Metro pole in Cape Town, South Africa. The data was analysed to generate descriptive results through a statistical package for social science (SPSS). The major findings indicate that SMEs do consider and recognise the significance of non-financial measures and, to some extent, incorporate them in their Supply Chain Management (SCM), although measures are not formally implemented. Again, SMEs, in particular within manufacturing businesses, do not prepare their books adequately.