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Better understanding of supply chain management would make the South African wine industry more competitive, according to research.
The study Wine Supply Chain Survey 2012 - Findings and Challenges was carried out by academics at Stellenbosch University.
It concluded that most South African wine cellars lack skills and experience in the supply chain.
“Many cellars don’t yet recognise the existence of supply chains in their organisation; therefore they don’t have accurate quantitative supply chain information available. Very few of the cellars engaged in the field of supply chain management, and most are thus in the very early stages of supply chain maturity.”
The benchmarking study collected supply chain information from the country’s Breedekloof, Robertson, and Worcester wine regions, which make up 41.5 per cent of South African wine production.
The report said skills and experience to handle logistics activities such as packaging, storage, transport and support service were lacking in many cellars.
The wine industry contributed R26.2 billion ($2.6 billion) or 2.2 per cent of South Africa’s gross domestic product in 2008, with more than half coming from the Western Cape region. The country was responsible for 3.6 per cent of the world’s wine production in 2011.
Many cellars used a “mixed bag” of performance attributes and focused on cost reduction and asset use rather than improving reliability, responsiveness and flexibility, which could help boost exports, especially in the premium sector which could boost gross margins.
The report said that reducing costs and increasing efficiency in the supply chains could help cellars to survive and stay competitive in difficult economic times.
Understanding supply chains better could also improve the competitiveness of South African Wine industry globally over time, the findings concluded.