An assessment of supply chain disruption in the gold mining industry in the North West Province

Abstract

Recent catastrophes such as the earthquake in Nepal, the Japanese tsunami, Icelandic volcanic ash clouds, regular floods and superstorms have brought to light the risks inherent within the modern global supply chain. The supply chain function influences many other business functions and processes that reach beyond the organisation, driven by fast-changing technologies, regulations and ethical standards that present the organisation with a range of strategic opportunities and conversely pose threats that, if left unchecked, could result in costly supply chain disruptions. The objective of this study was to establish the context in which supply chain disruption in the gold mining industry of the North West Province of South Africa influences both the upstream and downstream supply chain environment. The relevance of supply chain disruption risk sources were assessed and a proposal was subsequently put forward for a Supply Chain Disruption Framework (SCDF) as a tool for management to identify the influences and develop preventative or mitigating strategies for the relevant organisation. Various concepts relating to supply chain disruption were deliberated; this involved supply chain nomenclature that focused on relevant terminology like supply chain management (SCM), supply chain risk (SCR), supply chain disruption (SCD) and supply chain risk sources (SCRS). The situation within the supply chain disruption construct, with specific focus on drivers of supply chain disruption and sources of supply chain complexity, were investigated. A further focus area was on supply chain agility and the dimensions of agility. The study provided a view on the supply chain and mining industry risk sources that impact on supply chain disruption. Linked to the disruption context, the supply chain risk sources that can cause disruption, should it materialise, were assessed. The impact and likelihood of supply chain disruption were investigated with focus on shareholder value, revenue, costs, profit, brand, incidents and the frequency of disruptions. This resulted in the proposal of a five-sphere supply chain disruption framework including risk sources based on supply, internal demand, process, relationship management and the environmental landscape spheres. The framework further provides for the assessment of the impact and likelihood of supply chain disruption aspects. The proposed framework will enable business managers to control and mitigate supply chain disruption. The findings of the literature review as well as the survey used in the empirical research were summarised and conclusions and recommendations were made towards the establishments of a supply chain disruption framework for the gold mining industry in the North West Province in South Africa. Recommendations for the implementations of the SCDF as part of the Group Risk Management Process of the organisation were made. Emphasis was given to the identification of risk sources that, should it materialise, could result in supply chain disruption, the likelihood and impact of occurrence, the establishment of guiding policy and procedures, implementation, management, control, reporting and communication of the framework within the organisation. The limitations and implications for further research were discussed and suggestions were made towards further studies