Supply chain management administrative burdens: A case study of five South African municipalities

Abstract

Background: The Supply Chain Management (SCM) function is indispensable for effective municipal service delivery but is vulnerable to fraud and corruption, and hence highly regulated in South Africa. This imposes significant administrative costs on compliance-driven municipalities hoping to obtain or retain clean audits.

Aim: This study explored the administrative burden of SCM compliance in five sampled municipalities, analysing its key root causes.

Methods: A qualitative case study approach within a critical realist paradigm guided in-depth interviews with 25 key senior managers and SCM practitioners in Cape Winelands District Municipality, Mossel Bay Local Municipality (LM), Overstrand LM and Saldanha Bay LM in the Western Cape and Midvaal LM in Gauteng.

Results: Complexity and fragmentated resource SCM regulations can create varying interpretations of SCM prescripts among municipalities, the National Treasury and the Auditor-General, resulting in significant administrative burdens, service delivery delays and higher prices for procured goods and services. There are sometimes trade-offs between SCM probity compliance and service delivery performance, e.g. compliance with SCM competitive market requirements can result in poorer access to service providers and greater costs. Integrated SCM electronic systems to support ambitious reforms are often lacking.

Conclusion: Supply chain management processes pursue too many other objectives simultaneously (such as local content, broad-based black empowerment, etc.), which can undermine value-for-money and municipal service delivery.

Contribution: Understanding the nature of administrative burdens facilitates streamlining onerous regulation while retaining sound SCM controls.