Customer-focused SCM would boost municipal performance

Service delivery for the customer of the Republic of South Africa – the citizen – takes place through local government. Recent service delivery protests have strongly indicated that there is much scope for improvement in terms of how government is able to meet the basic needs of citizens through its local authorities. In his master’s thesis, Calvin Naidoo, who works in the Supply Chain Department of Ekurhuleni Metropolitan Municipality (EMM), has posited that many problems experienced in service delivery can be ascribed to a lack of customer focus.

Naidoo is studying under the guidance of SmartProcurement Editorial Board Member, Dr. Douglas Boateng who is project supervisor and an external examiner on Supply Chain Management at UNISA.

“Through the application of supply chain management [SCM] principles, local authorities can boost customer service and achieve substantially improved service delivery,” says Naidoo.

While his research focused on EMM, the findings can arguably be extrapolated and applied to any South African local authority.

His research indicated that:
• There is a general lack of satisfactory service delivery to customers within EMM.
• SCM is not understood by employees.
• There is an absence of customer focus within EMM.
• Customer focus needs to be aligned with SCM.
• Customer focus needs to be incorporated into SCM policy.
• Employees require training in SCM and customer relationship management (CRM).

“The research conducted among staff members brought to light some obvious problems and some less obvious ones. However, what is quite clear is that there are serious issues with service delivery, many of which can be solved through improvements in the supply chain,” says Naidoo.

Another apparent obstacle to service delivery is presented by cumbersome procurement processes, where the tender process is unnecessarily time consuming and complex, causing delays in service delivery.

From citizen to customer

At the heart of Naidoo’s study is a shift in perspective by government entities towards viewing the citizen as a customer. As an ethos, this is not new to government. The concept of ‘citizen centric government’ has long been embraced by the ANC-led administration. However, realisation of the notion is limited.

With 2,6-million citizens and more than 5 000 industrial enterprises as its customers base, the task of understanding its customers is a substantial one for EMM. However, says Naidoo, his work has found that the municipality’s SCM policy caters only for the supplier and, as a consequence, disregards the customer completely.

Customer service is often cited as a key objective of SCM.

“To achieve supply chain objectives, customer service activities must be strategic in nature and based on an understanding of the service levels important to critical customers. The quality of the customer interface is likely to influence the level of trust and openness of information exchange which will contribute to a better understanding of customer needs and improved performance of supply chain activities,” says Naidoo.

He adds that it is important to measure customer service outcomes as perceived by the customer for better performance outcomes at various levels in the supply chain.

Within EMM there are no relationships with customers and, therefore, no customer partnerships. “Seventeen service delivery centres in all districts of Ekurhuleni only deal with customers’ problems with various service delivery issues. They fail to address the vast pool of customer concerns outside of these. On further examination, these centres are not geared to deal with customer relationship management on a broader scale.”

Changed perceptions & elevated skills requirements

For continuous improvements and enhancement in delivery service, customer focus must be aligned to the SCM of EMM. As a consequence, Naidoo believes it is necessary to invest in skills training and development which combines SCM principles with those of CRM.

“Great emphasis should be placed on customer relationships. In-house training programmes and workshops must be held on a continuous basis for further development, while additional on-the-job training must be provided on all aspects of SCM and CRM,” he says.

This requirement is rooted in what Naidoo believes to be inadequate skills requirements, with general qualifications presently considered adequate for SCM-specific senior management. “The entire SCM department, from the Head right down to ordinary SCM employees, must be trained in SCM and related qualifications if a customer-centric supply chain is to be achieved, he notes.

He further believes a Customer Focus Platform should be created within the SCM department, supporting the alignment of customer focus with the supply chain and a Service Delivery Office created to monitor and control service delivery issues on a daily basis.

Additionally, given that procurement directly affects the ability of the municipality to serve its customers, Naidoo says the tender process should be reduced from a 13 week to a 6 week turnaround.

“Better service delivery is within reach at EMM through the enhancement of customer focus and proper training in the area of customer relationship management to improve the performance of the supply chain,” Naidoo concludes.

For more information please contact Douglas Boateng on dboateng@panavest.com