Reduction of the causes of stock-outs in ERP supply chain management by prioritization of the causes : a case study at the City of Cape Town

Abstract

Enterprise resource planning (ERP) systems have a good reputation for automation and strength in the integration of business processes (BPs), therefore more and more organisations are adopting ERP systems. The City of Cape Town (CCT), a metropolitan municipality, is one of the organisations that have adopted an ERP system. CCT provides a wide range of services to residents and citizens in the Western Cape Province of South Africa. The ERP system at CCT manages the Supply Chain Management (SCM) processes, among others, to ensure good service delivery. ERP systems are able to provide statistical reports on stock-outs; however, the information provided is insufficient to link a specific stock-out to its causes within the SCM process at CCT. This makes it difficult to select the most appropriate solution to minimise the causes and number of stock-outs. The study aims to explore the possible reduction of the causes of stock-outs at CCT stores, therefore the study has adopted a qualitative research methodology with a case study research strategy. It uses subjectivism to understand the truth, with an inductive approach applied to five different interviewee groups, namely the ERP Support Department consultants, the Procurement Department, the Inventory and Stores Management Department, the Master Data Maintenance Department, and the reservation creators. A purposive sampling method is used because the study targets knowledge and experience on the subject from the interviewees in the investigation of the problem. The case is the SCM division at CCT, the unit of analysis is the CCT stores, and the unit of observation is the employees who work for the SCM division of CCT. All ethical procedures and policies of the Cape Peninsula University of Technology (CPUT) are adhered to. For the data collection, in depth semi-structured questions have been developed, and the data were analysed using thematic analysis. The leading causes of stock-outs were discovered by analysing the themes. The results revealed the themes, in descending order according to the causes of stock-outs, as follows: procedures, service delivery, suppliers, stock-outs, human resources, and systems. All the objectives were achieved, thereby answering the research questions.