OBS898_Article_Pretorius_D_Publication Edited

- FINAL RESEARCH ARTICLE -
BARRIERS HAMPERING SUPPLY CHAIN MANAGEMENT
IMPLEMENTATION IN THE GAUTENG PUBLIC HEALTH SECTOR:
EXPLORING DISTRIBUTOR’S VIEWS
By
Mr. D. Pretorius 14364337
082 950 7975
darupretorius@hotmail.com
Submitted in partial fulfilment of the requirements for the degree
MPhil in Business Management
Option: Supply Chain Management
in the
FACULTY OF ECONOMIC AND MANAGEMENT SCIENCES
at the
UNIVERSITY OF PRETORIA
Subject:
Research Methodology (NME 804)
Study leader:
Mr. W. Niemann
Date of submission:
2015-11-02

DEPARTMENT OF BUSINESS MANAGEMENT
MINI-DISSERTATION (OBS 898)
FINAL RESEARCH ARTICLE
EVALUATION FORM
Mr. D. Pretorius 14364337
ASPECT TO BE EVALUATED Weight
Mark
allocated
Technical care (Title page, other technical care aspects, referencing) 10
Title, abstract and keywords
(Previously also assessed in the final research proposal)
5
Introduction (Section 1)
10
Literature review (Section 2)
10
Methodology (Section 3)
- Research design 5
- Sampling 5
- Data collection 5
- Data analysis 5
- Trustworthiness and methodological considerations 5
Findings (Section 4) 25
Conclusion
- Summary of findings & theoretical implications 5
- Managerial implications 5
- Limitations and recommendations for future research 5
Sub-total 100
Possible deductions:
Late submission (-15% per day or part thereof)
-15% per day
or part thereof
Declaration regarding plagiarism not included, completed or signed -10%
Turnitin Originality Report not included in Appendix A or Similarity
Index Percentage not clearly indicated.
-10%
Appendices B to D not included, completed or signed where required
-10% per
appendix
Total: 100 100
See your supervisor’s comments in the document.
25
5
15
5

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Student number: 14364337
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Daru Pretorius
Signature: Student 1

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TABLE OF CONTENTS
1 INTRODUCTION................................................................................................ 2
2 LITERATURE REVIEW...................................................................................... 5
2.1 THE EVOLUTION OF SUPPLY CHAIN MANAGEMENT PRACTICES ....... 5
2.3 THE HEALTHCARE SUPPLY CHAIN.......................................................... 8
2.4 THE SOUTH AFRICAN HEALTHCARE SUPPLY CHAIN.......................... 10
2.4.1 Healthcare supply chain barriers......................................................... 11
2.4.2 Healthcare supply chain practices....................................................... 13
3 METHODOLOGY............................................................................................. 13
3.1 RESEARCH DESIGN................................................................................. 13
3.2 SAMPLING................................................................................................. 14
3.3 DATA COLLECTION .................................................................................. 15
3.4 DATA ANALYSIS ....................................................................................... 15
3.5 TRUSTWORTHINESS ............................................................................... 16
3.6 ETHICAL CONSIDERATIONS ................................................................... 16
4 FINDINGS ........................................................................................................ 17
4.1 ORGANISATIONAL BARRIERS AND BARRIER CREATORS .................. 18
4.2 SUPPLY CHAIN MANAGEMENT ACTIVITIES .......................................... 21
5 CONCLUSION ................................................................................................. 25
5.1 SUMMARY OF FINDINGS AND THEORETICAL IMPLICATIONS ............ 25
5.2 MANAGERIAL IMPLICATIONS.................................................................. 26
5.3 LIMITATIONS AND DIRECTIONS FOR FUTURE RESEARCH................. 26
6 LIST OF REFERENCES .................................................................................. 28
APPENDICES
APPENDIX A: TURNITIN ORIGINALITY REPORT..................................................... 34
APPENDIX B: INFORMED CONSENT FORM AND DISCUSSION GUIDE................ 36
APPENDIX C: TABLE LINKING CODES TO FINAL THEMES AND SUB-THEMES... 42
APPENDIX D: TECHNICAL CARE CHECKLIST......................................................... 46

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LIST OF FIGURES
Figure 1: Fragmented logistics activities in early firms.............................................. 6
Figure 2: Evolution of supply chain management ..................................................... 7
Figure 3: The SCOR model....................................................................................... 9
Figure 4: The medication supply chain...................................................................... 9
LIST OF TABLES
Table 1: Healthcare supply chain barriers.............................................................. 11
Table 2: Top ten supply chain barrier over the next five to ten years..................... 12
Table 3: Top ten supply chain practices identified as key objectives over the next five
to ten years .............................................................................................. 13
Table 4: Interview participants ............................................................................... 14
Table 5: Data analysis key concepts...................................................................... 16
Table 6: Identified organisational barriers.............................................................. 17
Table 7: Identified supply chain management activities......................................... 21
Table 8: The link between the codes, sub-themes, and main themes identified in this
study ........................................................................................................ 43

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BARRIERS HAMPERING SUPPLY CHAIN MANAGEMENT
IMPLEMENTATION IN THE GAUTENG PUBLIC HEALTH SECTOR:
EXPLORING DISTRIBUTOR’S VIEWS
ABSTRACT
Very little is known about the organisational barriers (OB) that exist within the public health
sector and the supply chain management activities that they hamper. The purpose of this
research is to investigate the organisational barriers hampering supply chain management
implementation in the Gauteng public health sector from a pharmaceutical distributor’s point
of view. A basic qualitative research study was conducted through the use of semi-structured
interviews conducted during August and September 2015 with ten participants from five
different organisations. The study identified nine OBs hampering nine supply chain
management activities, of which systems and process barriers where the most common.
Nowhere is the impact of the OBs felt harder than on the warehousing operations conducted
by the respective participating organisations. The findings suggest that managers should
focus on improving the level of systems integration achieved within their supply chain as
well as strive to incorporate lean and efficient processes into their operations. By addressing
the OBs hampering warehouse operations, managers can tackle the most affected supply
chain management activity first. With the existing body of knowledge revealing very little
regarding the investigated phenomenon, it comes as no surprise that even less knowledge
exits regarding this phenomenon in a South African context. The findings contributes to the
field of study by identifying the OBs that exist and their effect on supply chain management
in South Africa.
Keywords: Healthcare supply chain, organisational barriers, supply chain management
activities, qualitative, Gauteng.

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1 INTRODUCTION
The academic literature is filled with examples of organisations realising competitive
advantage and cost reductions because of the implementation of supply chain management
(SCM) practices (Barloworld Logistics, 2009:1; McKone-Sweet, Hamilton & Willis, 2005:4;
Rangel, de Oliveira & Leite, 2014:1). The Supply Chain Foresight report (Barloworld
Logistics, 2015:15-16) listed relationship management, systems integration, and strategic
collaboration as three of the top ten supply chain practices identified by South African supply
chain practitioners as key objectives for the next five to ten years. Despite the abundance
of certified SCM models and theories, the healthcare industry has been slow in their
implementation (Rivard-Royer, Landry & Beaulieu, 2002:413). A lack of a clear
organisational strategy, limited information, and poor training are only a few of the
organisational barriers (OBs) hindering SCM implementation (Burns, DeGraaff, Danzon,
Kimberly, Kissick & Pauly, 2002:14-16; McKone-Sweet et al., 2005:1; Privett & Gonsalvez,
2014:227; Storey, Emberson, Godsell & Harrison, 2006:761-769). It is no secret that global
economies have experienced an increase in volatility over the last few years. The same
applies to the field of supply chain management, even more so, because of the vast
expansion this industry has seen in the past century (Cao & Zhang, 2011:165; Marley, Ward
& Hill, 2014:142, Liao-Troth, Thomas & Fawcett, 2012:4).
Regardless of its growth, it is often forgotten that the concept of supply chain management
is relatively new. It first grabbed the attention of academics and practitioners in the early
1970’s (Crum, Christopher & Holweg, 2011:63; McKone-Sweet et al., 2005:4). Thereafter it
was moulded to reflect the existing body of knowledge gained through the experience of
implementation. Despite this expansion of knowledge, there still remains vast opportunities
for system-wide SCM improvements within the healthcare industry (Crum et al., 2011:63;
McKone-Sweet et al., 2005:4). Access to medicine is a basic human right and thus the
supply of medicine is a top priority for pharmaceutical supply chains (Jaberidoost, Nikfar,
Abdollahiasl & Dinarvand, 2013). Throughout most of the twentieth century, South Africa
was a global leader in the development and conceptualisation of the primary healthcare
initiatives, with achievements such as the dispersion of community-orientated primary
healthcare and the development of the Primary Health Care movement. Unfortunately, these

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achievements remained limited and fragmented, partly because of shortages in healthcare
worker availability and inadequate resource distribution (Kautzky & Tollman, 2008:17).
Furthermore, the pressure of an emerging market gave rise to a number of issues influencing
pharmaceutical supply chains. The geographical dispersion of society groups, management
of supply and demand, and the willingness to share information are only a few of the issues
influencing South African supply chains (Barloworld Logistics, 2012:4-6; Blecher, Kollipara,
DeJager & Zulu, 2011:29). Blecher et al. (2011:1) reported that despite South Africa
havening spent 8.6 percent of its Gross Domestic Product (GDP) on healthcare, the majority
of South African healthcare outcomes remained inadequate. The average hospital
expenditure within South Africa had increased by 15 percent per annum, while global
hospital spending made up 47 percent of the overall 7.2 percent increase in healthcare costs
since the early 2000’s (Blecher et al., 2011:29; McKone-Sweet et al., 2005:4). Economic
growth and equity development are direct causes of a country’s investment in healthcare
(Blecher et al., 2011:29). Considering that the cost of supply chain activities contribute
between 20 and 40 percent of hospital operating costs, the critical importance of effective
SCM practices become evident (Bhakoo, Singh & Sohal, 2012b:217; Haavik, 2000:56;
Mustaffa & Potter, 2009:235).
Precision management of supply chain elements such as partner relationships have proven
to provide considerable benefits, resulting in the reduction of operating costs of between two
and eight percent, thus it is clear that managing the pharmaceutical supply chain is of critical
importance (Haavik, 2000:56; Khan & Burnes, 2007:197; Privett & Gonsalvez, 2014:226,
Simatupang, Wright & Sridharan, 2004:57). Despite this fact, little academic research has
been conducted regarding healthcare supply chains and the OBs that impede them (Dixon,
Jayamaha & Grigg, 2014:1; McKone-Sweet et al., 2005:4; Privett & Gonsalvez, 2014:226).
The barriers that hinder the implementation of SCM practices within South African
healthcare supply chains are not well represented within existing literature (Barloworld
Logistics, 2015:15-16).
The purpose of this paper is to replicate a study by McKone-Sweet et al. (2005:4-16) by
investigating the organisational barriers that hinder the implementation of supply chain

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management practices within the Gauteng healthcare industry from a distributor’s
perspective.
This article answers the following research questions: What organisational barriers hamper
the implementation of supply chain management practices between distributors and public
healthcare sector?
 What conditions give rise to the organisational barriers that hamper the implementation
of supply chain practices between distributors and public healthcare sector?
 What supply chain management practices are hampered by the organisational barriers
that exist between distributors and public healthcare sector?
This study considers the strategies and objectives set forth by pharmaceutical distributors
for SCM implementation. Supply chain role-players such as logistics, inventory, and
procurement managers are also included in this study. A comparison is made between the
detailed responses of the subject matter experts at both an operational and executive level
of the organisation in order to draw a conclusion regarding the effectiveness of supply chain
management practices within their supply chains. This study has contributed to the
understanding of the OBs that impede the implementation of supply chain practices for
pharmaceutical distributors within the South African healthcare sector.
Based on a review of existing literature and semi-structured interviews with industry
professionals and healthcare supply chain experts, this study investigated what OBs exist
and provides recommendations for overcoming these OBs. Healthcare supply chain
professionals and policy makers are the primary beneficiaries of this research while also
adding value to academics within the industry. This article starts with an introduction of the
phenomenon being investigated and lists the research questions of interest. It continues
with a review of the literature investigating the OBs that exist within South African healthcare
supply chains. A description of the qualitative research methodology used is provided and
followed with a discussion on the findings of the research. This article concludes with a
description of the managerial implications of the research; the limitations of the research,
and provides recommendations for future research opportunities.

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2 LITERATURE REVIEW
This article is based on research conducted by McKone-Sweet et al. (2005:4-16) who
investigated the environmental, organisational and operational barriers hindering the
implementation of supply chain management practices within the healthcare sector. This
study identifies the OBs hindering supply chain management practices execution within a
South African context and attempts to bridge the gap between what is documented in
literature and the real world practices executed by practitioners by making recommendations
for future improvements.
2.1 THE EVOLUTION OF SUPPLY CHAIN MANAGEMENT PRACTICES
Ballou (2006:376) states that, before the 1950’s, logistics was the collective term used by
the military for functions such as procurement, transportation, human resources,
maintenance, and material handling. At the time, there was a hand full of authors who
recognised the benefits of trading off one cost against another, for example the cost of
holding inventory versus transportation costs. Early authors realised that there was value in
delivering the right product, to the right place, at the right time (Ballou, 2006:376). Until the
1970’s, logistics activities performed by firms were fragmented by nature (Ballou, 2006:376;
Crum et al., 2011:63; McKone-Sweet et al., 2005:5). Figure 1 represents the logistics-
related objectives and responsibilities one would have found in typical firms of the era. This
fragmentation caused disruptions and conflict amongst logistics role players, which, in turn,
resulted in negative effects on both customer service and costs.
Hindsight shows that the benefits of defragmentation include the following: (1) it encourages
trade-offs that improve total cost; (2) it provides the structure required for a controlling
environment; and (3) it focuses efforts on an important area as defined by top management.
The educational courses that were taught during the first half of the twentieth century lacked
focus in the areas of logistics and distribution and mainly drilled down on individual activities
such as purchasing and transport (Ballou, 2006:376-377). McKone-Sweet et al. (2005:5)
state that early efforts were focused on the supplier’s inputs in terms of service and materials
and their impact on the organisation’s ability to meet customer needs. Minimal attempts were
made to integrate and stabilise these practises that later became known as logistics

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activities. Hence, there was little opportunity for the logistics managers of the time to broaden
their knowledge and understanding of the logistics field (Ballou, 2006:377).
As depicted in Figure 1, the past twenty years have seen the scope of supply chain
management evolve and develop considerably (Craighead & Blackhurst, 2007:132; New,
1997:18). Organisations have learned the importance of managing the supply chain as a
whole. The focus is placed on overall profitability which requires effective management of
all supply chain practices – from the sourcing of raw materials to the sale of final products
to end customers (Bhakoo et al., 2012:217; McKone-Sweet et al., 2005:5).
Figure 1: Fragmented logistics activities in early firms
Source: Ballou (2006:376).
Both Cooper and Ellram (1993:15) and Sezhiyan, Page and Iskanius (2011:31) describe the
list of supply chain characteristics as including a focus on inventory management, total cost,
and time, mutual information monitoring and sharing, cross-channel coordination,
collaborative planning, forecasting and replenishment, aligning to corporate strategy, having
a broad supplier base, channel relationship management, risk and reward sharing, and the
speed of material and information flow.
President
Marketing Finance Production
Responsibilities
Distribution Channels Cost of Capital Supply alternatives and
supply costs
Customer service ROI Raw materials warehousing
Field inventories Inventroy carrying costs Purchasing
Revenue Transportation
Objectives
More inventory Less inventory
Frequent & short production runs Long production runs
Fast order processing Cheap order processing
Fast delivery lowest cost routing
Field warehousing Less warehousing Plant warehousing

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McKone-Sweet et al. (2005:5) continues by summarising the characteristics of a successful
supply chain as follows: supply chain management is seen as a top priority by executive
management; activities are guided and measured against industry benchmarks; the
existence of a strong organisational culture; supply chain role-players view the supply chain
as a whole; best practices are institutionalised. Stock, Greis, Kasarda, Enterprise, Uni and
Hill (2000:535) as well as Renko and Ficko (2010:217) define logistics practices as the
organisational activities that coordinate the flow of materials from the supplier to the final
customer throughout the value stream and describe supply chain management as the act of
managing the relationships between suppliers and customers that exist within the supply
chain. Ballou (2006:379) contributes by stating that supply chain management practices as
they are known today evolved from the logistics activities practiced in the twentieth century.
Figure 2 represents the evolution of supply chain management and provides a list of general
logistics and supply chain practices.
Figure 2: Evolution of supply chain management
Source: Ballou (2006:379).
Figure 2 reflects how supply chain management activities were fragmented prior to the
1960’s. Ballou (2006:379) stats that between 1960 and 2000 there was a 40 year period
which saw activities such as demand forecasting, purchasing, requirements planning,
production planning, and manufacturing inventory all merge into one activity known as
Activity fragmentation to 1960 Activity Integration 1960to 2000 2000+
Demand forecasting
Purchasing
Requirements planning Purchasing/
Production planning Materials
Manufacturing inventory Management
Warehousing
Material handling Logistics
Packaging
Finished goods inventory Supply Chain
Distribution planning Physical Management
Order processing Distribution
Transportation
Customer service
Strategic planning
Information services
Marketing/sales
Finances

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purchasing/materials management. Finished goods inventory, distribution planning,
transportation, order processing, and customer service were consolidated under the term
physical distribution. Warehousing, material handling, and packaging formed part of
collective terminologies. In the late 20th century purchasing/material management and
physical distribution were combined to form what is today known as logistics activities. Post-
2000 logistics were combined with strategic planning, information services, marketing &
sales, and finance to form one collective term in the form of supply chain management
(Ballou, 2006:379).
By mastering the supply chain management practices and overcoming the organisational
hurdles lodged within the supply chain, organisations have succeeded in achieving
sustainable market share and competitive advantage over their competitors (Cooper &
Ellram, 1993:14; Rangel et al., 2014:1; Simatupang et al., 2004:57). Whether competitive
advantage is gained or lost is often determined by an organisation’s ability to effectively
manage the dynamic relationships throughout the chain of suppliers, distributers and
strategic partners (McKone-Sweet et al., 2005:5; Rosenzweig, Roth & Dean, 2003:438).
2.3 THE HEALTHCARE SUPPLY CHAIN
The healthcare supply chain is complex by nature and tends to be slow and very
unresponsive (Schwarz & Zhao, 2011:362; Shah, 2004:939). How well the healthcare supply
chain is prepared to respond to emergencies is a concern for many governments. Extreme
care has to be given in answering questions such as where to manufacture, where to hold
inventory, and in what quantities. The question of how well the healthcare supply chain will
measure up in the event of an emergency is one that has been receiving a considerable
amount of attention lately (Shah, 2004:939). Figure 3 shows how these medical products
move through a five tier supply chain.

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Figure 3: The SCOR model
Source: Supply Chain Council (2009)
There are five basic processes that form the foundation of every supply chain, namely: plan,
source, make, deliver, and return (Muller, Popke, Urbat, Zeier & Plattner, 2009:45;
Stephens, 2001). The healthcare supply chain follows the exact same processes with the
exception of returns. Medical products are destroyed once they have reached their
calculated expiry date, whereas products in other industries generally are returned. Figure
4 depicts the medication manufacturing supply chain originating at the manufacturer, and
concluding at the retailer/hospital after having moved through two separate sets of
distributers (Cullen & Taylor, 2009:1169; Muller et al., 2009:45). The figure depicts how is it
possible for some medication manufacturing supply chains to skip the pharmaceutical
wholesaler. Products are packed into a box and, where necessary, consolidated onto a
pallet. Finally the hospitals will receive shipments of boxes and dispense the medical
products to patients, item for item (Muller et al., 2009:45). One of the major issues within
healthcare supply chains is the ineffective management of inventory levels and, therefore,
increased inventory costs (Bhakoo et al., 2012:218-220; Privett & Gonsalvez, 2014:226).
Figure 4: The medication supply chain
Source: Cullen and Taylor (2009:1169).
Basic chemical
manufacture
Distributionand
re-packaging
Pharmacautical
manufacture
Distributionandre-packaging
inc.Pharmacautical wholsalers
Healthcare,
chemists/retailersinc.
NHS healthcare services

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Schwarz and Zhao (2011:362) state that it would be a mistake to assume that healthcare
product supply chains are similar to other consumer or industrial product supply chains.
Healthcare supply chains tend to be quite complex, both in terms of the organisations they
involve, such as distributers and hospitals, as well as the business processes executed
within their parameters. Healthcare supply chains are particularly complex in terms of
manufacturing and distribution; in other words, supply chain inputs (manufacturing) and
outputs (distribution). The manufacturing processes tend to have extremely long setup times
and are subject to considerable quality control regulations and policies. The steps that make
up the manufacturing process are often fragmented and performed within the boundaries of
different countries, generally in order to reduce manufacturing costs (Schwarz & Zhao,
2011:362).
The topic of healthcare supply chain distribution is one that has received considerable
attention of late (Schwarz & Zhao, 2011:363). Iacocca, Zhao and Fein (2013:388) state that
some manufacturers have started exploring the possibility of managing their own inventory
and distribution instead of using external pharmaceutical distribution service providers.
2.4 THE SOUTH AFRICAN HEALTHCARE SUPPLY CHAIN
During the twentieth century, South Africa emerged as a global player in the development
and implementation of primary public healthcare. Shortly after the 1994 elections, the public
sector received a stream of pro-equity policies and development programmes. One of these
initiatives was the revealing of the National Health Plan to the South African public with the
goal of restructuring the national health system. The goal of the National Health Plan was,
firstly, to eliminate fragmentation and remove all duplication of services by integrating all
health services under one Ministry of Health. Secondly, the goal was to decentralise
healthcare organisations and their management with a coordinated district health system.
Thirdly, the plan aimed to make comprehensive, local-based healthcare services easily
available to all South Africans by establishing primary healthcare centres (Kautzky &
Tollman, 2008:23).
The literature indicates that effective SCM methodologies and practices can reduce the
operating cost of a hospital supply chain by up to eight percent (Haavik, 2000:56; Khan &

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Burnes, 2007:197; Simatupang et al., 2004:57). The effective management of this supply
chain results in the reduction of total operation costs as well as the improvement of service
delivery to patients (Bhakoo et al., 2012:217; Haavik, 2000:56; Mustaffa & Potter, 2009:235).
Despite this, there has been little academic research conducted regarding healthcare supply
chains and the OBs that impede them (Dixon et al., 2014:1; McKone-Sweet et al., 2005:4;
Privett & Gonsalvez, 2014:226). Although there is some literature that describes the barriers
to South African supply chains, the barriers that hinder SCM practice implementation within
South African healthcare supply chains are not currently well represented within existing
literature (Barloworld Logistics, 2015:19).
2.4.1 Healthcare supply chain barriers
A number of authors have validated the importance of strategic supply chain management
(McKone-Sweet et al., 2005:5; Privett & Gonsalvez, 2014:226). Unfortunately, very little
academic research has been conducted aimed at addressing the unique issues hindering
the healthcare supply chain. The healthcare supply chain is home to a number of different
services that could have devastating consequences if they fail. The hospital healthcare
sector provides a unique and challenging service operation environment (Bhakoo & Choi,
2013:433; McKone-Sweet et al., 2005:5). Burns et al (2002:14-17), McKone-Sweet et al.
(2005:5) and Mustaffa and Potter (2009:235-236) agree that a number of barriers exist within
the healthcare supply chain (See Table 1):
Table 1: Healthcare supply chain barriers
Ever-evolving technologies Lack of capital to fund SCM efforts
Short product life cycles Lack of appropriate information technology (IT)
Physician preference for high cost items Fragmented decision making
Forecasting patient/product requirements Lacking executive commitment
Low level of supply chain education Poor IT resources
Source: Burns et al (2002:14-17), McKone-Sweet et al. (2005:5) and Mustaffa and Potter (2009:235-236)
From a South African perspective, emerging market pressures have given rise to an array
of healthcare supply chain management issues. South African public healthcare supply
chains have to compete while overcoming issues such as the geographical dispersion of

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society groups, perfect order fulfilment pressures, supply and demand management,
working with under-skilled supply chain role players, information sharing and ensuring
optimal transport management (Barloworld Logistics, 2012:4-6; Blecher et al., 2011:29).
Barloworld Logistics (2015:7) documented the top ten South African supply chain
management objective and barriers in their annual Supply Chain Foresight report. The
respondents include top supply chain executives and practitioners from more than ten South
African industries, including the chemical, professional service, and public sectors. Every
year, the supply chain foresight report tracks the strategic supply chain goals and obstacles
as experienced by South African organisations. This provides valuable insight into what
market conditions, challenges and opportunities can be expected in the future. A perspective
as to how aligned South African supply chain management activities are with the strategic
business goals of their role players is also represented in this report. Table 2 presents the
top ten supply chain barriers over the next five to ten years are as follows (Barloworld
Logistics, 2015:19):
Table 2: Top ten supply chain barrier over the next five to ten years
Willingness to change processes and partnerships Minimal initiation / intuition
Lack of information and intelligence Fragile relationships with supply chain partners
Lack of a cross-silo mentality No clear supply chain strategy
Labour unrest Inadequate availability if finances
Inefficient national borders, ports and harbours Environmental impact reduction pressures
Sub-standard supply chain skills Extremely limited transportation options
Inadequate systems, people and processes
Source: Barloworld Logistics (2015:19).
Based on the literature it is now possible to conclude that a number of organisational supply
chain barriers that exist within international healthcare supply chains are also present within
South African supply chains. The overlapping supply chain barriers that hinder the
implementation of supply chain practices are (1) a lack of supply chain information
accompanied by the inability to intelligently act on such information, (2) inadequate supply
chain management education, training and skills, (3) non-optimal supply chain management
systems, processes and personnel, (4) the lack of a clear supply chain strategy, and, finally,
(5) the lack of adequate finances. The question is whether these OBs exist within South
African healthcare supply chains as well?

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2.4.2 Healthcare supply chain practices
Fawcett and Magnan (2001) argue that supply chain management practices that occur at
the operational level of the hospital, such as material purchasing and inventory
management, could be influenced by the strategies and practices of the larger umbrella
corporation or hospital within which it operates. McKone-Sweet et al. (2005:6) add that
supply chain management practices can either be enabled or impeded by the organisation
within which they are conducted or implemented. Barloworld Logistics (2015:17) identified
the top ten supply chain practices required in order for South African supply chains to
achieve their strategic supply chain objectives as seen in Table 3. Given the list of
organisational supply chain barriers that exist within South African supply chains, it is clear
to see that they will have a considerable impact on supply chain practices such as (1)
technology integration, (2) information sharing, and (3) supply chain monitoring and
measuring.
Table 3: Top ten supply chain practices identified as key objectives over the next five to ten years
Customer relationship management Transportation optimisation
Technology integration Warehouse and distribution optimisation
Information sharing Supplier relationship management
Supply chain monitoring and measuring Environmental impact management
Cross-silo inventory management Outsourcing of logistics functions
Source: Barloworld Logistics (2015:17).
3 METHODOLOGY
3.1 RESEARCH DESIGN
To empirically investigate the underlying OBs and the supply chain practices they impact, a
generic qualitative study was conducted (Maxwell, 2012:102-104). The primary goal of basic
research is to create new knowledge or theoretical understanding of a specific phenomenon.
A qualitative research approach is designed to cater for a wide variety of research
techniques and strives to translate, describe, decode or in any other way explain the
meaning behind the natural phenomenon that occurs within the social world. The qualitative

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research techniques are practiced during both the data collection and analysis stage of the
research process (Cooper & Schindler, 2014:144). The study employed a cross-sectional
study focus where participants were interviewed at a specific point in time. This is in contrast
with a longitudinal study where observations are made over extended periods of time
(Cooper & Schindler, 2014:128).
3.2 SAMPLING
The unit of analysis in this study are the individual participants that participated in the study.
Ten participants from five Gauteng-based pharmaceutical distribution organisations, were
interviewed. Maximal variation sampling, a method of purposeful sampling, was used to
ensure a diverse range of perspectives from participants (Plano Clark & Creswell,
2015:334). As seen in Table 4, middle and senior managers, and industry consultants
employed by pharmaceutical distributors that service the Gauteng public healthcare sector,
were selected because of their unique industry knowledge and experience in order to gain
a greater understanding of the investigated phenomenon (Patton, 1990:169). This sample
size corresponds with sample sizes used in similar studies conducted within the healthcare
sector (Guest, Bunce & Johnson, 2006:61; McKone-Sweet et al., 2005:6; Privett &
Gonsalvez, 2014:226).
Table 4: Interview participants
Participant Position Organisation Interview duration - minutes
Participant 1 Consultant Company 5 20
Participant 2 Senior manager Company 1 44
Participant 6 Middle manager Company 3 58
Participant 9 Middle manager Company 2 18
Average 39

- 15 -
3.3 DATA COLLECTION
Ten semi-structured interviews were conducted during the period of August to September
2015 at the offices of the respective participants. As this is a replication study, the research
instrument, included in Appendix B, is a modified version of the research instrument used in
the original study of McKone-Sweet et al. (2005:16) and was pilot tested before the
commencement of primary data collection. An hour long interview was conduction with an
industry expert working in the pharmaceutical distribution and warehousing industry.
Additional prompting questions were added to the discussion guide as a result of the pilot
test. For the purpose of data collection, open-ended questions were asked after a brief
background description regarding the research was provided. Terminology definitions were
provided when required and participants were prompted to provide more details where it
was deemed necessary. All interviews were audio recorded, transcribed and lasted an
average of 39 minutes. Transcription took place within 48 hours after the interview, by
making use of a transcriptionist. All transcripts were read while listening to the audio
recordings to ensure adequate quality. After the tenth interview, data analysis illustrated that
no new theme could be identified, at which point saturation was researched, as shown in
Table 6 and Table 7.
3.4 DATA ANALYSIS
Content analysis on both the literature and interview transcripts were conducted to identify
themes replicating the thematic coding technique for extracting meaning from interview data
used by Bhakoo, Singh and Sohal (2012:220-222) and Rowley (2012:267-269). The coding
process highlighted three themes across all interviews namely: (1) organisational barriers,
(2) barrier creators, and (3) supply chain activities. Quotes illustrating these themes the best
were elevated to illustrate key points. Thematic matrices where developed in order to draw
comparisons across the data and elevate emerging themes. Table 5 defines the key terms
associated with the data analysis process. Table 8, included in Appendix C, links each of
the main themes identified throughout the analysis process to the codes used to segment
the raw data extracts from the interview transcripts.

- 16 -
Table 5: Data analysis key concepts
Source: Creswell (2012:236-250).
3.5 TRUSTWORTHINESS
In order to ensure the quality and trustworthiness of the research, the criteria of credibility,
transferability, dependency, and confirmability were applied. Triangulation of participant
responses is the main method of ensuring credibility that was used for this study.
Triangulation is a process whereby a variety of statements are corroborated from multiple
data sources (e.g. interviews and documentation) or by corroborating multiple participant
opinions to assess the truth of a statement or research findings. The research drew samples
from multiple participants while ensuring all participants fit a similar profile. (Bhakoo et al.,
2012a:220; Shenton, 2004:64). Transferability of the findings was ensured by providing a
detailed description of the phenomenon investigated and the research methodology applied,
otherwise known as a thick description (Guba & Lincoln, 1994:14). The findings were cross
checked by two of my fellow master’s students to ensure the analysis is robust and
consistent in accordance with methods employed by Guba and Lincoln (1994:114) and
Shenton (2004:71). Data triangulation through member checking ensured the confirmability
of the findings in accordance with methods represented by Shenton (2004:64). Member
checking incorporated a process whereby my fellow master’s students replicated the data
analysis process and confirmed that they concluded similar findings as those originally
identified.
3.6 ETHICAL CONSIDERATIONS
The study was approved by the Research Ethics Committee of the Faculty of Economics
and Management Sciences at the University of Pretoria on 12 August 2015. All participants
were required to read through and sign the informed consent form in Appendix B before
being interviewed. The consent form provided the participant with the purpose of the study,
accentuated that participation is on a voluntary basis and that participants can withdraw at
Key Concept Definition
Coding The process of segmenting and labeling text to form descriptions and broad themes in the data.
Code Labels use to describe a section of text.
Theme Similar codes arranged together to form a major idea within the database.

- 17 -
any point in time. The consent form also assured participants of anonymity and
confidentiality. This information was also communicated to the participant verbally before
the start of the interview. The pseudonyms listed in Table 1 are used to protect the identities
of all the research participants. The names of the participating companies were also
anonymised to ensure their confidentiality and to encourage honest responses from
participants. One of the participating companies required that a formal non-disclosure
agreement to be signed before they were willing to participate. The required non-disclosure
agreements were signed by representatives of the University of Pretoria before
commencement of data collection.
4 FINDINGS
This research identifies nine organisational barriers (OBs) and the conditions that give rise
to them (see Table 6). In addition, Table 7 identifies ten supply chain management activities
(SCA) that are seen as key SCM practices performed by pharmaceutical distributors, of
which nine were identified as being directly affected by the underlying OBs. Each of these
themes and sub-themes is reviewed in the following section. In each case, the theme and
sub-theme is identified and defined as per the researchers’ definition. Evidence resulting
from participant interviews is provided. Participant inputs are also linked back to the literature
at the end of each sub-theme.
Table 6: Identified organisational barriers
Co. 5 Co. 1 Co. 4 Co. 3 Co. 1 Co. 3 Co. 2 Co. 2 Co. 2 Co. 1
Code Organisational barriers P 1 P 2 P 3 P 4 P 5 P 6 P 7 P 8 P 9 P 10
OB_1 Training barrier x x x x x x x x
OB_2 Systems barrier x x x x x x x x x
OB_3 Process barrier x x x x x x x x x
OB_4 People mentality barrier x x x x x x x
OB_5 Strategy barrier x x x x x
OB_6 Finances barrier x x
OB_7 Resource barrier x x x x
OB_8 Relationship barrier x x x x x x x
OB_9
Information sharing &
communications barrier
x x x x x x x

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4.1 ORGANISATIONAL BARRIERS AND BARRIER CREATORS
For the purpose of this study, an OB can be defined as any singular or set of rules,
regulations, policies and strategies internally developed by a supply chain participating
organisation that impedes the implementation of supply chain management practices. An
OB creator is seen as any situation that would give rise to an OB.
A training barrier can be described as the inability to execute SCAs optimally because of a
lack of industry knowledge and staff training. The lack of proper training was identified as an
existing OB by 80% of the study participants and is seen as the second most prominent OB
impeding SCM practices. The barrier is created by either a complete lack of staff training or
an inadequate level of training. This observation was made across all participating
companies:
“The people that need to ensure the patients get medication, are not educated enough
to actually make sure that medication gets through to the people that need
it.“ (Participant 6, Middle Manager)
Burns et al (2002:14-17) agree that a low level of supply chain education among
intermediaries is one of top OBs healthcare supply chain organisations face today.
Systems barriers are defined as the inability to execute SCAs optimally because of a lack of
proper IT systems or systems integration. The lack of existing IT integration or the inability
to execute SCAs because of a lack of system functionality gives rise to this OB. Alongside
process barriers, this OB is mentioned by 90% of the study participants as the most common
organisation barrier in the healthcare supply chain as illustrated by one of the participants:
“Unfortunately the big thing is how to work an Excel spreadsheet because none of the
Department of Health depots have the systems. Systems just do not exist.” (Participant
1, Supply chain consultant)
The lack of proper information technology is a major OB faced within the healthcare industry
(McKone-Sweet et al., 2005:5).
Process barriers can exist when an organisation fails to implement SCAs due to a lack of
proper processes. This is caused by ill-defined processes or a lack of proper process

- 19 -
execution. As mentioned before, 90% of the study participants identified process barriers as
the top OB faced by pharmaceutical distributors. The lack of proper process is evident not
only on the distributor side, but in the public health sector as well:
“And on the state’s side one of the biggest things is processes that are not standardised.”
(Participant 5, Senior Manager)
Barloworld Logistics (2015:19) supports this study finding in their 2015 Supply chain
foresight report.
The mentality of people as an OB is defined as being unable to perform SCAs activities
efficiently because of a specific attitude or perspective held by organisational staff. The
unwillingness of supply chain members and partners to change operational procedures
because of a pre-existing perspectives is what creates the people mentality barrier and was
highlighted by 70% of the participants. This barrier was referred to as the silo mentality by
one of the study participants:
“Yes, silos and there is people that do not like to cross their borders and help other
departments …” (Participant 9, Middle Manager)
A lack of cross silo mentality is one of the top ten OBs that exist within South African supply
chains today (Barloworld Logistics, 2015:19).
Strategy barriers hinder the execution of SCAs when there is a lack of support and direction
from top level organisation managers. These barriers come to life when an organisation
implements strategies that limit the organisation’s operational abilities or forces an
organisation to operate in a particular manner. Five out of the ten participants mentioned the
lack of a proper strategy as a challenge they face within their organisations:
“… policies is a huge problem, and those policies tend to allow the creation of silo’s,
because they promote silos and that in itself is a problem because it creates conflict.”
Mustaffa and Potter (2009:235-236) state that a lack of executive commitment hampers an
organisation’s ability to execute against benchmarked supply chain practices’ lack of funding
gives rise to the financial barrier and is identified as an OB by 20% of the study respondents.
Financial barriers hinder the implementation of SCAs when either no funding for resources
exist, or when an organisation has insufficient cash flow levels. In certain conditions a

- 20 -
financial barrier is created because of a cost saving requirement as indicated by Participant
9 (Middle Manager):
“I think at that stage it was a cost thing you know. It was because we have been going
through difficult times and had to reduce costs…”
The 2015 Supply chain foresight report (Barloworld Logistics, 2015:19) listed the
unavailability of financial resources as one of the top ten OBs to look out for over the next
five to ten years.
Resource barriers are defined as the inability to execute SCAs because of the unavailability
of operating resources. Resource barriers can be created when there is an insufficient
number of resources available or when the specifically required resource is lacking as
illustrated in the participant quotation below:
“…you can have all the policies and procedures that you want, even the IT to actually
support your policies and procedures. If you do not have the right people it is not going
to work.” (Participant 6, Middle Manager)
A lack of appropriate resources is identified as an organizational barrier by 40% of the study
participants. Barloworld Logistics (2015:19) highlighted inadequate systems, people and
processes as a major challenge within the South African healthcare industry.
The inability to perform SCM procedures due to inadequate relationships is defined as a
relationship barrier. The inability to develop and maintain long term relationships with supply
chain partners is what creates this barrier. Seven of the ten study participants indicated
relationship barriers as an OB. The lack of relationships between pharmaceutical distributors
and the Department of Health is summarised in the following response from one of the
participants:
“I think the biggest issues around public sector and Company 1 was their inability to
engage with the public sector …” (Participant 2, Senior Manager)
Fragile relationships with suppliers, service providers and customers is not only a threat to
South African healthcare supply chains, but is a common OB across all industries
(Barloworld Logistics, 2015:19).
Failing to implement SCM practices because of inadequate information sharing and the
nonexistence of proper communication channels, describes the final OB, information sharing
and communications barrier. The unwillingness or inability to share information due to a lack

- 21 -
of proper channels or systems, is what creates this barrier. Poor information sharing and
communication channels is mentioned by 70% of the participants as a challenge they deal
with in their respective supply chains:
“It is a question of all too often the supply chain manager at hospital level does not even
know the contents of the tender and who is on tender.” (Participant 4, Senior Manager)
According to Barloworld Logistics (2015:19), the lack of information and intelligence within
the supply chain is one of the ten major challenges that South African supply chain
organisations will battle with over the next five to ten years.
4.2 SUPPLY CHAIN MANAGEMENT ACTIVITIES
For the purpose of this study, I have defined supply chain management activities as any and
all practices performed by supply chain role players, required in order to deliver their
respective products or services. Table 7 illustrates the ten SCM activities mentioned by the
study participants. SCAs hampered by an OB is indicated by the X symbol whereas other
SCAs performed by the respective pharmaceutical distributors are indicated by the x symbol.
Technology integration is defined as the integration of IT systems and databases between
two or more supply chain partners for the purpose of sharing information upfront. Five of the
ten study participants identified technology integration as an SCA undertaken by their
organisation, but only two participants indicated this SCA as one being hindered by existing
OBs. This is supported by statements at a direct supplier level:
Table 7: Identified supply chain management activities
Co. 5 Co. 1 Co. 4 Co. 3 Co. 1 Co. 3 Co. 2 Co. 2 Co. 2 Co. 1
Code Supply chain activity/practice P 1 P 2 P 3 P 4 P 5 P 6 P 7 P 8 P 9 P 10
SCA_1 Technology integration X x x x X x
SCA_2 Information sharing X X x x x X X
SCA_3
SC monitoring, measuring &
forecasting.
X x X x X X x x x x
SCA_4 Distribution x x X X X x X x X
SCA_5 Warehousing X x X x X X X x x X
SCA_6 Outsourcing x x x x x x x
SCA_7
Partner & people relationship
management
x x x X X X x x
SCA_8 Perfect order fulfilment x x X X X X x x x
SCA_9 Financial management x x X x x X x x x x
SCA_10 Sales & marketing x x x x X x x x

- 22 -
“What the customers are now asking for more and more is that they want to control
order pacing … Then we need to integrate with our system, put it into our warehouse,
execute, and get it out again.” (Participant 2, Senior Manager)
Barloworld Logistics (2015:17) identified the top ten supply chain practices required in order
for South African supply chains to achieve their strategic supply chain objectives in their
2015 supply chain foresight report and included technology integration on the list.
Sharing company specific information between two or more supply chain partners describes
the SCA of information sharing. Of all the participants, 70% identified information sharing as
an active supply chain practice performed by their organisation, while 30% of the participants
identified information sharing as being hampered by their OBs:
“… in my opinion supply chain management is actually information management…I think
it is a big problem in supply chain management at the moment…” (Participant 10, Senior
Manager)
Information sharing as a SCA is a challenge faced across multiple supply chain industries
in South Africa and has been identified as an area of improvement for South African supply
chains (Barloworld Logistics, 2015:17-19).
In this study, supply chain monitoring, measuring and forecasting are described, as the
tracking of supply chain performance on a continuous basis, while measuring results against
predefined metrics, in order to forecast for future requirements and events. All participants
mentioned monitoring, measuring and forecasting as a SCA performed within their
organisation, with 40% of participants indicating that this SCA is directly hampered by the
OBs present within their organisation. This is illustrated in the quotation below from a
participant, upon answering whether their customers conduct any form of internal
performance metric measuring as part of their daily operations:
“Not at all. And the thing I do not understand is that they have an internal ordering
system.” (Participant 6, Middle Manager)
Burns et al (2002:14-17) states that forecasting patient and product requirements is one of
the most prominent challenges occurring within the healthcare supply chain.
The process of continuously improving and conducting the planned and actual distribution
activities performed by the company, defines the SCA of distribution. Distribution is

- 23 -
mentioned by 90% of the participants as an activity they perform, with 50% of participants
stating that they are directly hampered by their OBs:
“I would say that transportation could be a big problem, in a sense that you need to have
transport that is reliable and at the correct temperature.” (Participant 7, Senior Manager)
Barloworld Logistics (2015:17) state that transport optimisation is one of the key objectives
for South African supply chain over the next ten years.
Warehousing is described as the process of continuously improving and conducting the
planned and actual warehousing activities performed by the company. All participants
identified warehousing as a SCA conducted within their business, with 60% of participants
stating that it is directly affected by their organisation barriers. This makes warehousing the
most hampered SCA, as indicated by the quote below from a participant on the warehousing
practices performed by the public health sector depots:
“… we have heard stories of them destroying piles of stock, so you have got patients
without stock and stock being destroyed and that is because their warehouse
management systems are not good …” (Participant 3, Senior Management)
Warehousing optimisation is another key objective earmarked as an area of improvement
for South African supply chains over the next ten years (Barloworld Logistics, 2015:17).
Outsourcing is an instance whereby a third party logistics service provider performs supply
chain management activities on behalf of a client. Seven of the participants mention
outsourcing as a SCA their respective companies perform. Surprisingly none of the
participants indicated that outsourcing is hampered by the OBs they face:
“… but we are a 3PL. So in terms of inventory itself right we do not own this inventory
… We are mainly custodians of the stock, the manufacturers they own the stock right.”
Barloworld Logistics (2015:17) listed outsourcing of logistics functions as another one of the
top ten supply chain activities identified as a key objective by South African supply chains.
The process of continuously managing and improving the relationships with both upstream
and downstream supply chain partners describes the SCA of partner and relationship
management. Eighty percent of the study participants indicated partner and relationship
management as a SCA activity they undertake. Three of the ten participants identified

- 24 -
relationship management as a SCA being hindered by the OBs within their organisations,
as supported by the quote below:
“… previously we would not have any interaction with the hospitals directly, but what we
are doing now is actually going out and interfacing directly with the hospitals …”
Barloworld Logistics (2015:17) includes customer relationship management as one of the
key focus areas to develop over the next five to ten years within South African supply chains.
The SCA perfect order fulfilment is defined as the process of fulfilling an order from order
placement through to final delivery at the end customer, including the management of all
documentation. Nine of the ten participants highlighted order fulfilment as a daily supply
chain activity performed by their organisation, with three of them mentioning order fulfilment
as being hampered by their OBs. This is supported by the quote below from a participant
mentioning the use of spreadsheets instead of proper systems in order to conduct order
fulfilment:
“… I have spoken earlier about the spreadsheet documentation for order demand, order
fill, outstanding, overdue, part delivered …” (Participant 4, Senior Manager)
One of the major problems experienced within healthcare supply directly affecting the ability
of supply chains to achieve perfect order fulfilment, is the short life cycle of products.
According to McKone-Sweet et al. (2005:5) short product life cycles is a major organisational
barrier within healthcare supply chains.
Financial management is described as the management of all financial requirements related
to the making, collection, receiving, and transferring of payments. All of the participants
mentioned financial management as a SCA conducted within their business. Two of the
participants earmarked this SCA as being hindered by the OBs they face. This is supported
by one participant’s comment regarding a situation where they delivered an order short:
“… And the thing behind it is we are forced, and that also impacts our payment, because
they refuse to pay us …” (Participant 6, Middle Manager)
Mustaffa and Potter (2009:235-236) states that the lack of capital to fund SCM activities is
a growing concern within the healthcare supply chain.
In his study, the sales and marketing SCA is defined as the management of all sales and
marketing functions related to the company’s products and services. Eight of the ten

- 25 -
participants mentioned sales and marketing as a SCA undertaken by their organisations.
Only one participant indicated that sales and marketing is a function hindered by the OBs
present within the particular organisation as illustrated below:
“… the ones that we market is forty three line items but we have in total seventy one
molecules registered. Not all of them are marketed, because the market in some of them
are so small …” (Participant 7, Middle Manager)
The Supply chain foresight report for 2015 (Barloworld Logistics, 2015:17) interestingly does
not list sales and marketing as a supply chain activity that is seen as a key objective for
South African supply chains over the next ten years. Based on the finding of this study, sales
and marketing could possibly be an area of improvement in the future.
5 CONCLUSION
5.1 SUMMARY OF FINDINGS AND THEORETICAL IMPLICATIONS
The aim of the study was to investigate the organisational barriers that hamper supply chain
management implementation in the Gauteng public health sector from a pharmaceutical
distributor’s perspective. Three research questions were posed, namely: (1) What are the
OBs hampering the implementation of supply chain management practices? (2) What
conditions give rise to these OBs? (3) What are the supply chain management practices
hampered by these OBs? The findings indicated that there are nine OBs to consider,
namely: (1) training barriers, caused by a lack of proper training; (2) system barriers, caused
by a lack of systems integrations; (3) process barriers, caused by a lack of well-established
operational processes; (4) people mentality barriers, caused by a reluctance to change; (5)
strategy barriers, caused by internal organisational policies and a lack of executive direction;
(6) financial barriers, caused by a lack of financial funding; (7) resource barriers, caused by
a lack of required operational resources; (8) relationship barriers, caused the nonexistence
of long term supply chain partner relationships; and finally, (9) information sharing and
communication barriers, caused by inadequate communication channels and a silo mentality
business environment. The findings also identified ten supply chain management activities,
of which nine were mentioned to be directly hampered by the OBs that exist within the
respective organisations of the study participants. The nine supply chain activities that are
hampered by OBs within the Gauteng public healthcare supply chains are: (1) technology
integration, (2) information sharing, (3) supply chain monitoring, measuring and forecasting,

- 26 -
(4) distribution, (5) warehousing, (6) partner and relationship management, (7) perfect order
fulfilment, (8) financial management, (9) and, finally, sales and marketing.
The existing body of knowledge provides very little research on the investigated topic
(Bhakoo & Choi, 2013:433; McKone-Sweet et al., 2005:5). No evidence could be found of
prior research conducted on this particular topic from a South African perspective. Barriers
affecting South African supply chains in general, have been identified previously (Barloworld
Logistics, 2015:17-19). The findings of this research contributes to the existing body of
knowledge by identifying the OBs that are unique to the South African Gauteng public
healthcare supply chains and highlights the supply chain activities that they hamper.
5.2 MANAGERIAL IMPLICATIONS
Two recommendations to managers can be made that are grounded in the findings of this
research. Firstly, the two most common OBs identified were systems and process barriers.
Managers should focus on improving the level of systems integration achieved by their
organisations in order to gain greater supply chain visibility within the supply chain.
Managers should also focus on eliminating all process barriers from their supply chains and
strive to adapt a lean process flow. Both of these OBs are earmarked as strategic objectives
by supply chain organisations across multiple industries (Barloworld Logistics, 2015:17).
Secondly, supply chain managers should focus on removing all OBs hindering their
warehouse management operations, as warehousing was mentioned to be the most
commonly hampered supply chain management activity hindered by the identified OBs. Six
of the ten study participants contributed to this finding.
5.3 LIMITATIONS AND DIRECTIONS FOR FUTURE RESEARCH
There are three main limitations particular to this research study. Each of these limitations
are discussed briefly and linked to a recommendation for future research. This research only
included pharmaceutical distributors servicing the Gauteng public healthcare sector. This
identifies two possible avenues for future research: (1) The geographical focus area within
which the research has been conducted can be expanded or shifted to either a different
province or to include the entire country. (2) The research only focused on the OBs

- 27 -
hampering the implementation of supply chain activities in the public healthcare sector.
Future research can replicate this study and purely focus on identifying the OBs hampering
the implantation of supply chain management practices in the private sector. Finally, this
research only included participants from the pharmaceutical distributors sector and did not
include any inputs from a public health sector perspective. Future research can include
participants from public hospitals and the Department of Health, so as to increase the validity
of the conducted research.

- 28 -
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APPENDIX A
- Turnitin Originality Report -

- 36 -
APPENDIX B
- Informed consent form and discussion guide -

- 37 -
Consent for participation in an academic research study
Dept. of Business Management
OBS HAMPERING SUPPLY CHAIN MANAGEMENT IMPLEMENTATION IN THE GAUTENG
PUBLIC HEALTH SECTOR: A DISTRIBUTORS VIEW
Research conducted by:
Mr. D. Pretorius (14364337)
Cell: 082 950 7975
Dear participant
You are invited to participate in an academic research study conducted by Daru Pretorius, a Master’s
student from the Department of Business Management at the University of Pretoria.
The purpose of this qualitative study is to investigate the OBs that hamper the implementation of
supply chain management practices between pharmaceutical distributors and public healthcare
sector in Gauteng.
Please note the following:
 This study involves a semi-structured personal interview. Neither your name, nor the name of
the company, will appear in the final research report and the answers you give during the
interview will be treated as strictly confidential. You cannot be identified in person based on
the answers you give.
 Your participation in this study is very important to me. You may, however, choose not to
participate and you may also stop participating at any time without any negative consequences.
 The interview will take about 1 hour of your time.
 The results of the study will be used for academic purposes only and may be published in an
academic journal. I will provide you with a summary of the findings on request.
 Please contact my study leader, Mr. W. Niemann on tel. + 27 12 420 4635, e-mail:
wesley.niemann@up.ac.za if you have any questions or comments regarding the study.
Please sign the form to indicate that:
 You have read and understand the information provided above.
 You give your consent to participate in the study on a voluntary basis.
 You give your consent that any company documentation given to the researcher, that is not
publicly available, may be analysed and that findings drawn from such documentation may be
published in the article conclusion.
___________________________ ___________________
Respondent’s signature Date

- 38 -
Interview Protocol
Exhibit 1
INTRODUCTION
Thank for taking the time to meet with me today, I really appreciate it. My name is Daru Pretorius
and I’m a master student at the University of Pretoria currently completing my MPhil Business
Management: Option Supply Management degree. I would like to start by explaining our
research project to you. My goal for today is to gather a deeper understand about the OBs that
hamper the implementation of supply chain management practices between pharmaceutical
distributors and public healthcare sector within Gauteng. I would like to have this interview with
you because I believe you are a subject matter expert within this field and I would like to learn
from your perspectives.
I would like for our interview to be open and informal. The interview will not take longer than
one hour and any information you disclose, as well as your identity, will remain completely
confidential. Please be aware that there are no right or wrong answers, as you are the expert
and I’m here to learn from you. In order to ensure that our conversation remains flowing, I would
like your permission to record the conversation as have our discussion. Is that OK with you?
Before we begin I would like to inform you that are more than welcome to contact me after we
have concluded this interview via email. My email address is darupretorius@hotmail.com. In
the event that I have any follow-up questions, or would like to clarify any statement after the
interview has concluded, I would like your permission to do so within a three week period
following the interview date? Please remember at all times that your participation in the interview
is completely voluntary and that under no circumstance do you have to answer any question
you are uncomfortable with answering.
May we start?

- 39 -
MAIN QUESTIONS
1. Please tell me what position you hold at (company name) and what your roles and
responsibilities are?
2. How long have you practiced in the industry?
3. What is your educational background?
4. What is your understanding of Supply chain management and how big a role does it play
in your day-to-day activities and responsibilities?
a. Simple supply chain management (SCM) Definition: The downstream and
upstream flow of materials, financials and information from your suppliers’ supplier
to your customers’ customer. (Explain to the participant how their company can
typically be part of a supply chain).
5. What is your understanding of supply chain management practices/activities?
6. What are the main supply chain management practices/activities undertaken by your
organisation?
a. That is interesting. Please elaborate.
b. Provide examples of supply chain practices if required (Make sure you don’t lead
the interview):
Purchasing Finances
Requirements planning Information services
Material handling Customer services
Inventory management Order processing
Distribution Strategic planning
Procurement Marketing / Sales
7. In your opinion what are the most crucial issues facing organisations managing
inventory in the healthcare sector?
8. Does your organisation have any strategies in place for managing inventory?
9. What skill set do you believe is required to manage these supply chain
practices/activities?

- 40 -
10.What are the key competencies required by healthcare supply chain management
professionals?
For pharmaceutical distributor executives/managers:
9. What is your business relationship like with the public hospitals that you service?
a. Can you please provide me with some more detail/background?
10.What supply chain management practices involves engaging with these public
hospitals?
a. Engaging refers to any action or decision taken where input from the
pharmaceutical distributor / wholesaler are required or considered.
11.What is your understanding of an OB?
12.Does your organisation have any rules, regulations, policies and strategies that regulate
the manner in which you conduct business and / or perform your day-to-day activities?
a. Please elaborate.
13.Do you believe your organisation has any OB?
14.Does your organisation have any rules, regulations, policies and strategies that regulate
the manner in which supply chain management practices are implemented?
a. Can you please tell me more about that?
OBs defined: The rules, regulations, policies and strategies developed by your
organisations that impede the implementation of supply chain management
practices.
15.What are the OBs that hamper the implementation of supply chain management
practices with these public hospitals?
a. That’s interesting – please elaborate.
16.How do these OBs affect the implementation of your supply chain management
practices?

- 41 -
Floating prompts:
 Can you please tell me more about that?
 That’s interesting – please elaborate.
 Can you give me an example?
 Can you please provide me with some more detail/background?
 What do you mean exactly?
 Please tell me what happened next?
 What was the outcome of that (situation)?
INTERVIEW CONCLUSION:
Once again I would like to thank you very much for the time you took to meet with me today.
Your inputs have been of tremendous value to me. If you wish I can mail you a copy of the
report once I’ve finished collecting and analysing data. Where would you like the report sent?
If you have any questions or think of anything you would like to add to our discussion please
don’t hesitate to contact me. I hope you have a wonderful day and safe journeys.

- 42 -
APPENDIX C
- Table linking codes to final themes and sub-themes -

- 43 -
Table 8: The link between the codes, sub-themes, and main themes identified in this study
Ref
code Themes Code term Transcript cut-out
OB_1 OBs Training Barrier
“…have healthcare workers that are being forced to
behave as supply chain people. There has been a believe
for many years of anybody that is touching product or
having anything to do with product has to be a
Pharmacist, and obviously that fails the entire time.”
OB_2 OBs Systems Barrier
Interviewer 1: “And then also to be held responsible if
something goes wrong but they’ve got to many roles and
responsibilities. What are the key competencies required
by hospitals supply chain management professionals.”
Participant 1: “Okay, unfortunately the big thing is how
to work an Excel spreadsheet because none of them have
the systems. Systems just don’t exist.”
OB_3 OBs Process Barrier
Interviewer 2: “So there’s no internal metrics measuring
performance.”
Participant 6: “Not at all. And the thing I don’t
understand is that they have an internal ordering system.
OB_4 OBs
People Mentality
Barrier
Participant 9: “Ja silos and there’s you know the people
don’t like to, to cross their border and help other
departments whereas everything eventually lands on the
warehouse, and from the bottom we have to try and sort
it out, but it’s not always you know possible.”
OB_5 OBs Strategy Barrier
For me the biggest uhm one of the biggest restrictions is
self-imposed policy decisions
OB_6 OBs Finances Barrier
Participant 9: “I think at that stage it was an, it was a cost
thing you know. It was uhm because we have been going
through difficult times, it was a cost thing to reduce
OB_7 OBs Resource Barrier
Interviewer 1: “In your opinion what is the relationship
between Company 2 and the public healthcare sector?”
Participant 9: “Uhm I don’t think it’s good at the
moment, due to our poor supply. Uhm but uh hopefully
within a couple of well within the next few months we
can sort out our problems and then the supply can get up
to date, and that will definitely get the relationships…”
OB_8 OBs
Relationship
Barrier
Participant 2: “I think the biggest issues around public
sector and Company 1 was their inability to engage with
the public sector
OB_9 OBs
Information
sharing &
Communications
Barrier
. It’s a question of all too often the supply chain manager
at hospital level doesn’t even know the contents of the
tender and whose on tender
BC_1 Barrier Creator
Inadequate
Training
The people that’s ensuring that they need to get
medication, is not educated enough to actually make sure
that medication actually gets through to the people that
needs the medication.
Lack of Systems
Integration
So I’d say technology massive challenge.

- 44 -
Ref
Inadequate
Processes
Participant 5: “And on the state’s side uh ja I mean as I
said, one of the biggest things is processes that aren’t
standardised.”
BC_4 Barrier Creator People Mentality
Participant 9: “That’s right ja, ja and at the moment, well
since I’ve been here there’s been like each department is
like a separate entity.”
BC_5 Barrier Creator Lack of Strategy
as I said policies is a huge problem, and those policies
tend to allow the creation of silo’s, because they promote
silo’s and that in itself is a problem because it creates
conflict
BC_6 Barrier Creator Lack of Funds
Interviewer 2: “Where most people will push it (Costs)
over to the customer not engaging, it’s actually the fact
that you guys have capacity constraints the fact that you
can’t engage for.”
Participant 9: “That’s right ja, ja and at the moment, well
since I’ve been here there’s been like each department is
like a separate entity.”
Lack of
Information &
Communication
Interviewer 2: “In your opinion what are the most crucial
issues facing organisations uhm managing inventory in
the healthcare sector?”
Participant 3: “The primary is getting a good feel on what
the requirement of the public sector are, what’s their
demand.”
Lack of
Relationships
Participant 1: “And also it’s the problem of engaging at
the wrong levels with the wrong people.”
Lack of
Resources
Participant 6: “They need to hire the right people going
back to that, because people make – you can have all the
policies and procedures that you want, even the IT to
actually support your policies and procedures. If you
don’t have the right people it’s not going to work.
SCA_
1
Supply Chain
Activity/Practice
Technology
Integration
What the customers are now asking for more and more is
to say, we want to control this, okay. So we will place the
order on our system because maybe we’ve got SAP,
maybe we’ve got whatever. Then we need to integrate
with our system, put it into our warehouse, execute, and
get it out again.”
SCA_
10
Supply Chain
Activity/Practice
Sales &
Marketing
Participant 7: “O okay, the ones that we market is forty
three line items but we have in total seventy one
molecules registered. Not all of them are marketed,
because the market in some of them are so small and the
batch sizes like you have six thousand that’s a batch and
you sell a hundred – what do you do with the rest of the
expired, you throw them away and then it becomes very
expensive. The ones that we that we have a decent
market for – those ones we promote strongly.”

- 45 -
Ref
SCA_
2
Supply Chain
Activity/Practice
Information
Sharing
“…in my opinion of supply chain management is actually
information management. Not just IT but everything else
uhm I think that’s a big, probably get into it – I think it’s a
big problem in supply chain management at the moment,
is the information side of it.”
SCA_
3
Supply Chain
Activity/Practice
SC Monitoring,
Measuring &
Forecasting.
Interviewer 2: “So there’s no internal metrics measuring
performance.”
Participant 6: “Not at all. And the thing I don’t
understand is that they have an internal ordering system.
So if you have an internal ordering system as in your
placing an order for ten Panado’s as an example,
SCA_
4
Supply Chain
Activity/Practice
Distribution
Participant 7: “I would say that uhm transportation could
be a big problem, in a sense that you need to have
transport that is reliable and at the correct temperature.
SCA_
5
Supply Chain
Activity/Practice
Warehousing
we’ve heard stories of them destroying piles of stock, so
you’ve got patients without stock and stock being
destroyed and that’s because their warehouse
management systems aren’t good
SCA_
6
Supply Chain
Activity/Practice
Outsourcing
“…but we’re a three PL. So in terms of inventory itself
right we don’t own this inventory. We’ve got six billion
Rand worth of stock sitting in this facility. We own zero.
We’re mainly custodians of the stock, the manufacturers
they own the stock right.”
SCA_
7
Supply Chain
Activity/Practice
Partner & People
Relationship
Management
Participant 8: “It is on the up okay, uhm previously we
wouldn’t have any interaction with them directly, but
what we’re doing now is our sales force are actually going
out and interfacing directly with the hospitals to see what
the consumer of the medicines needs, and how they feel.
SCA_
8
Supply Chain
Activity/Practice
Perfect Order
Fulfilment
– I’ve spoken earlier about the spreadsheet
documentation for order demand, order fill, outstanding,
overdue, part delivered – we are involved quite integral
with our suppliers at that level to give them the data
SCA_
9
Supply Chain
Activity/Practice
Financial
Management
Participant 6: “Ja, you understand what I’m saying? And
the thing behind it is we are forced, and that also impacts
our payment, because they refuse to pay us because
somebody audited them and somebody says, you missing
ten Panado’s, and they say the supplier didn’t send it
through to us, is that actually right, that not right you
know that type of thing.”

- 46 -
APPENDIX D
- Technical care checklist -

- 47 -
TECHNICAL CARE CHECKLIST  or 
1. Cover (title) page
Is the layout of and information supplied on the cover/title page correct? Check the
layout of the title cover/page against the examples available on clickUP.

The block of text on the cover page should be positioned so that the assignment title
is more or less in the middle of the page (from top to bottom) and the date of
submission is on the very last line of the page.

Use single line spacing on the whole cover/title page. 
The cover/title page should not have a page number. 
2. Evaluation form
Have you included and, if necessary changed, the evaluation form required for the
specific assignment?

Check that you have added the following to the evaluation form:
 The correct course name and course code
 Your title, initials, surname and student number
 The evaluation criteria and mark weights that apply to the assignment

3. Declaration regarding plagiarism
Have you completed and signed the declaration regarding plagiarism? 
Have you used single line spacing in the declaration regarding plagiarism? 
The declaration regarding plagiarism should not have a page number. 
4. Table of contents, list of figures and list of tables
Update the Table of Contents, List of Figures and List of Tables to include all the
headings and figure/table captions in the document.

The List of Figures and List of Tables should appear on a separate page after the
Table of Contents.

Are all entries in the Table of Contents, including references to appendices,
complete with the correct page numbers?

Are the entries in the List of Figures and the List of Tables complete with the correct
page numbers?

The pages containing the Table of Contents, List of Figures and List of Tables should
be numbered in Roman numerals: i, ii, iii, iv starting at i.

5. Page margins
Are the left and right margins of the whole document set to 2 cm? 
Are the top and bottom margins of the whole document set to 2.54 cm? 
6. Body text
6.1 Assignment title

- 48 -
TECHNICAL CARE CHECKLIST  or 
The assignment title should be typed on the cover page and at the top of the first
page of the main body following directly after the Table of Contents (i.e., page 1 with
the heading INTRODUCTION).
Check the following:
 The titles on the cover page and on p. 1 should have the exact same wording.
 Both titles should be typed in bold, UPPER CASE and should be centred
horizontally (from left to right) on the page.
 There should be no full stop at the end of the title.
 The title on the cover page should have single line spacing and the title on p. 1
should have 1.5 line spacing.

6.2 Page numbering
The pages containing the cover page, evaluation form and declaration regarding
plagiarism should not be numbered.

The pages containing the Table of Contents, List of Tables and List of Figures should
be numbered with Roman numerals (i, ii, and iii) starting at i.

All the pages in the main body of the assignment and in the appendices should be
numbered with Arabic numerals (1, 2, 3, etc.) starting at 1.

6.3 Headings
Are all headings formatted and numbered correctly?
 First-level headings should be in bold, UPPER CASE, 14 pt. font.
 Second-level headings should be in bold, UPPER CASE, 12 pt. font.
 Third-level headings should be in bold, sentence case, 12 point font and the
words of the heading (not the heading number) should be underlined.
 All headings, except the heading for the ABSTRACT, should be numbered.
 No heading numbers should be indented away from the left-hand page margin.
 All headings should be justified.
 No heading should have a full stop at the end.

Leave a blank line open before and after all headings.
However, when one heading follows directly after another (with no body text in-
between), there should not be a blank line open between the consecutive headings.
Leave a blank line open before the first and after the last heading.

Are all the headings concise, but still clearly descriptive of the content of their
respective sub-sections? (Avoid headings longer than two lines as well as single
word or very brief headings)

Are there any instances where headings appear on their own at the bottom of a page
(i.e., with no body text following directly after the heading)? Move such headings to
the top of the next page.

Do the wording and numbering of headings in the text correspond with the heading
wording and numbering in the Table of Contents?

6.4 Text and paragraph formatting
Have you consistently used Arial, 12 pt. font for the body text of your document? 
Have you consistently used 1.5 line spacing in the main body of the document,
except inside tables? Use single line spacing inside all tables.


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