Supply Chain Leadership in a Developing Economy for Sustainable Innovation and Competitiveness: The Case of Johannesburg Stock Exchange-Listed Companies

Supply chain management (SCM) mainly focuses on, amongst other things, the optimisation of customer satisfaction. Neglecting the most significant aspects of SCM could therefore be damaging to any type of business for which SCM is possibly a competitive differentiator [1,2]. However, the value of SCM is reflected in how firms have used their supply chains strategically to gain an advantage over peers, as their competencies influence growth through sustainable innovation and competitiveness [3]. To implement and capitalise on the latest and sustainable innovations, companies require talent, skills, and experience, as well as in-depth business and supply chain knowledge to apply the latest tools and methods [4]. Most sustainable innovations in SCM, however, have built on existing achievements and the reconfiguration of familiar methods and technologies rather than inventing new ones [5]. Proponents of SCM therefore recognise that a shift in processes and organisational approaches is necessary to compete in the market, specifically in managing and analysing the flow of goods and materials [6]. While firms in a global setting are generally motivated to accelerate performance to gain competitiveness through their supply chains [7], political changes, unstable economies, a lack of basic infrastructure, and the inadequate application of business administration knowledge are prevalent in developing countries [8]. In this regard, Brown and Murray [9] suggest the approach of a continuous improvement through sustainable innovation and competitiveness as a panacea that is critical for the success of a company.

As the current business environment is very competitive, firms with inimitable resources have more opportunities to attain a superior performance [10]. Brem and Viardot [11] posit that sustainable innovation is one of the key drivers of performance and growth and ought to play a central role in organisations’ approach to leadership [12]. A key purpose of sustainable innovation is to differentiate firms’ products for competitiveness in the market [13]. However, emerging economies can present ineffective channels of circulation that do not reach consumers consistently or reliably [14], to the extent that survival in a competitive emerging economy will require the approach of supply chain flexibility from supply chain leaders who can cope with elements of uncertainty [15]. In essence, thoughtful supply chain planning should consider elements concerning the future not just as being critical to success, but also as a requirement for survival [16]. In addition, supply chain leaders should keep in touch with other aspects of culture, history, and politics, as these factors could have an effect to the detriment of the company and its stakeholders at any time [17].

Businesses in developing economies have seen a shift towards becoming more sophisticated than had previously been the case. Tatham, Wu, Kovács, and Butcher [18] allude to an increase in the perception that the basic structures of businesses may need to be revisited, considering emerging changes in the global business environment. Even routine SCM issues have become complex, given the breadth of intertwined issues that must be considered [19]. For example, the various challenges eminent in developing economies pose a challenge to how consumers access goods and services, whereas a different situation prevails in developed economies, in which there are large retailers in the supply chain that are accessible to consumers [14]. A smart supply chain also requires sustainable innovation in products or services, and the processes behind the actions should be developed intelligently [20].

Due to globalisation and the spread of customers and suppliers across the globe, two questions raised by [21] become prominent. (1) How are companies from developing economies in which there are no proper and orderly supply chains in various industries likely to respond to change? (2) What would be the impact on supply chains when the market growth for various products is driven primarily by developing economies? These questions put the spotlight on the scantiness of research that focuses on supply chain leadership (SCL) from a developing economy perspective for sustainable innovation and competitiveness. Although studies on developing economies are gradually gaining momentum [22], not many of these studies have been conducted at the supply chain level, and few studies have focused on supply chain procedures in developing countries [21]. Similarly, there seems to be insufficient knowledge and awareness of the strategic actions to be performed for SCL from emerging market perspectives that focus on the issues of sustainable innovation and competitiveness. This is an issue of great significance to the discipline of SCM, because it is deemed necessary that firms that strive to create a competitive advantage enhance their strategic actions in terms of sustainable innovation and competitiveness.

The rest of this article progresses as follows. Section 2 delves into the literature review; Section 3 sets out the research methodology; Section 4 presents the empirical results of the study; Section 5 discusses the results; Section 6 offers the significance of the study; Section 7 draws conclusions and makes recommendations; and Section 8 describes the limitations of the study and possibilities for future studies.

The research question asked what SCL strategic actions should be undertaken by companies that are operating in developing economies regarding sustainable innovation and competitiveness. In general, companies must strengthen their capabilities for SCL, irrespective of their circumstances, and must continually seek to achieve sustainable innovation and competitiveness. Top supply chain companies need to apply appropriate forms (product, service, or process) and types (incremental, modular, architectural, or radical) of innovation to be competitive in the market. Such companies are usually determined to implement supply chains with the greatest level of agility while considering the general management of supply chain operations as a major factor for their level of competitiveness [87]. Competitiveness includes the production of correct products of quality within the desired period and to customers that are in need of the products. In addition, training of employees will ensure that the correct form and type of innovation is chosen to maximise customer satisfaction. In other words, to achieve sustainable innovation and competitiveness capabilities for the company, the training and development of employees should be prioritised within a company for SCL.

Undeniably, supply chains have increased greatly in complexity in many circumstances and settings, with an increasing perception that the basic structures of SCM may need reassessing in the light of changes in the global business environment [18]. Therefore, due to factors such as globalisation, training and development for sustainable innovation and competitiveness is crucial in narrowing the gap between developing economies and developed economies. In addition, companies use innovation to develop new values through solutions that meet new conditions and existing needs in a better way [20]. Generally, the best supply chain companies in a developing economy are flexible in their SCM activities, have a strategic vision, and apply tactical approaches while benchmarking on long-term planning for sustainable innovation and competitiveness.

The primary purpose of this study was to identify the SCL strategic actions to be undertaken by companies in a developing economy regarding sustainable innovation and competitiveness. The value of SCL for sustainable innovation and competitiveness in a developing economy cannot be underestimated. Indeed, given 4IR, there is a renewed energy in the field that focuses on sustainable innovation and competitiveness. Due to ongoing changes in the world regarding technology, regulations, and politics, developing economies need to be better equipped to handle these challenges. JSE-listed companies, as well as the South African economy and other developing economies, are challenged to perform against their developed counterparts. In this context, the fundamentals of sustainable innovation and competitiveness are necessary to develop seamless supply chains both individually and jointly. The aspects addressed in this study provide a clear foundation for this renewed drive that could form the foundation for SCL in the challenges of developing economies. It is concluded that, in order for supply chains to be understood in relation to JSE-listed companies and in the context of developing economies, all important factors for SCL stated in Figure 1 ought to be implemented and managed: increased profitability, improved customer satisfaction, improved quality assurance, cost reduction within organisation, reducing bureaucracy or paperwork, improved product management, increased revenue growth, increased market competitiveness and increased capacity for decision-making. Also, the issue of sustainability remains a key aspect of companies’ quest to remain relevant and competitive in the long term through production planning for clients, inventory decisions for suppliers, and sharing of information. Thus, sustainable innovation and competitiveness can drive the overall strategic operations of companies towards SCL in developing economies. Companies should therefore embrace innovation in the provision of products and services and must consider the contribution of sustainable innovation competitiveness towards SCL. Furthermore, it is critical that companies decide on the type of SCL strategic actions to implement. Due to limited resources and capacity, it is recommended that companies embark only on strategic actions that have a direct link with SCM while ensuring that peripheral strategic actions are replaced. This will enable these companies to focus on what they do best and avoid the ineffective utilisation of resources. In instances where strategic actions are not clear, perhaps companies need to start by determining or establishing effective strategic actions before contemplating the competitive journey of SCL.