University students aim to clean up govt procurement

 

Kriterion.jpg

Four University of Johannesburg students, thinking that government's Central Supplier Database (CSD) is not the only answer to the problem of tender fraud, have designed a system that aims to curb tender corruption in the state’s procurement system.

Recognising tender fraud ias a real problem in African governments, the students, calling themselves “Kriterion”, developed the project with the South African tender process in mind.

Too many suppliers, so little time...

 

Thumbnail image for challenges.pngDoes this sound like you or one of your colleagues?

“The problem is that there are so many suppliers, compounded by many procurement professionals being spread thin. Often, initially procurement has less specialist knowledge about a market than do their stakeholders. The consequence is procurement only being engaged late in the process, then spending their time completing RFIs, RFPs, negotiating and contracting (all processes) – ostensibly playing draw level on the knowledge held by your stakeholders. Procurement then has to move onto the next supplier or category, and is not able to stay abreast of the market.”

It probably is you, not because you don’t know what you’re doing, but because it seems to be a universally encountered challenge in procurement.

Suppliers financing customers - responsible, sustainable?

 

BillMichels.jpgIn April Rio Tinto announced that it would reverse a decision to extend payment terms for suppliers. One of the world's biggest miners, it had planned to double its payment terms in a move that would have forced its suppliers to wait up to 90 days to be paid.

Rio Tinto is not alone in (wanting to) extend payment terms.

Extending terms is a great example of “leveraging suppliers” who, themselves, have invested in facilities, employees and inventories in the most corners of the globe just to support the customer.

But it’s not sustainable, says Bill Michels, CEO and founder of Aripart Consulting.

Smart Procurement World debuts in KZN

 

20160609_085026.jpgThe inaugural Smart Procurement World KwaZulu-Natal conference saw more than 467 attendees, 41 exhibitors, 223 SMMEs and 169 delegates hosted at the conference.

Leadership Profile: Sibongile Shongwe of ACSA

 

Thumbnail image for SibongileShongwe.jpgThis month SmartProcurement profiles Sibongile Shongwe from: Airports Company of South Africa.

Lack of skills might NOT be hampering SA's supply chains - survey

 

supply-chain-management-139.jpgA lack of supply chain skills has not hampered performance of South African organisations, found Barloworld Logistics’ Supplychainforesight Survey 2016. However, this is contrary to perceptions in previous years’ surveys where skills were identified as a major inhibitor to growth and sustainability.

The disparity in results may be attributed to skills development initiatives whose full impact or value is not yet being realised. Skills development in supply chain logistics was among the areas that survey respondents indicated had a high adoption rate, but full impact or value thereof is not yet being realised.

Wasteful spending at metros balloons

 

municipality.jpgMOST of the country’s big cities have increased their "fruitless and wasteful" spending in the last financial year, despite some of them receiving kudos from international rating agencies.

Nelson Mandela Bay metro was the worst offender, according to auditor-general Kimi Makwetu’s 2014-15 local government audit report, released on Wednesday.
Managerial capacity at the country’s metros is expected to be vastly better than that of local and district municipalities, as they have larger budgets and were likely to attract skilled managers to oversee their finances.

SA procurement should share the US's concern about interest rate risks

 

SmartProcurement.jpgTalk of interest rate hikes in the United States has got some of that country’s procurement professionals worried. However, if figures like 25 basis points are keeping them awake at night, should South African procurement be proportionately more worried to the tune of 200-300 basis points?

SA rates have increased 125 points in the past year, with another increase of 25 to 50 basis points forecast for July or September. Even with further increases, rates are still below SA’s historical averages. Can your supply chain absorb the effects that an increased interest rate will have on procurement activity and supply chain financing?

Thieves using 3D printers to disguise cargo security breaches

 

3Dprinting.jpgSouth Africa’s import- and transport-heavy supply chains could be at increased risk of theft as thieves have learned to use 3D printers to replicate the security devices used to seal cargo containers, according to global security organisation G4S.

3-D scanners allow thieves to make counterfeit copies of devices such as ISO 17712 high-security cargo seals and locks or padlocks in as little as 10 minutes, allowing them to hide signs of tampering. Such scanners cost only a few hundred pounds.

PMI recovers to realistic level after April's "overstated high"

 

Falling-sales-graph-e1431345307788.jpg

The Purchasing Managers’ Index (PMI) lost some of the ground it gained in April, falling back to 51.9 index points in May - a decrease of 3 index points from April’s 54.9 index points.

Despite the drop, the headline PMI managed to remain above the neutral 50-point mark for a third straight month. As indicated last month, the size of the relative increase in the headline PMI in April may have overstated actual production growth. The current level is, therefore, likely to be more indicative of conditions in the sector, noted the Economic Research.

Focus on value, not cost, to beat odds

 

BillMichels.jpgChief Procurement Officers (CPOs) have a very short window of time in which to make their mark at a company (the average tenure of a CPO is less than five years), and the terms of engagement are brutal: corporate mandates to reduce costs in the supply chain set up procurement officers for failure since costs can’t be reduced year over year indefinitely without a breakthrough change, which is hard to achieve, said Bill Michels, CEO and founder of Aripart Consulting.

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