Justifying the resources required to operate a Procurement Function effectively
The justification of the resources required for the Procurement Function to operate effectively and efficiently depends on a number of factors, Ronald Mlalazi (MCIPS), Ed ucation Manager at Commerce Edge Academy, tells SmartProcurement.
Posted by Editor at 5:10 AM | Comments (0)
Raising procurement's profile - two sides of the coin
Negotiate a lower price on a contract. Add $10 000 to the bottom-line.Get Procurement represented on the board. Add $-millions to the bottom-line.
Raise the profile of your profession, so that everyone can now see your lack of ethics. Priceless.
Posted by Editor at 5:00 AM | Comments (0)
Strategic sourcing - stretching a limited financial kitty - Part 1
Urgent collective action is required to remedy how public sector and corporate organisations in emerging economies strategically acquire products and services and deal with selected suppliers, says Dr Douglas Boateng, SmartProcurement Editorial Board member and President of both the Institute of Operations management Africa and West African Institute for Supply chain Leadership.
Posted by Editor at 6:55 AM | Comments (0)
AMR report - Supply Chain is making it to the board
Responsibility for the supply chain is moving to board level, a report by AMR Research has noted. “Twenty years ago, a typical product company had the supply chain reporting to manufacturing, with responsibility mainly for inbound materials management and outbound shipping.”
Posted by Editor at 12:06 AM | Comments (0)
BEE - a system that could end 'lazy' purchasing
Great intelligence is required to create possibilities to optimise supply chains within the rules of black economic empowerment (BEE), Gerd Kerkhoff, CEO of purchasing consultancy Kerkhoff Consulting, told SmartProcurement.
Posted by Editor at 12:05 AM | Comments (0)
EU economic crisis: SA to increase southern sourcing ties
South African organisations could soon be sourcing more goods from southern hemisphere countries, taking advantage of the south’s trade possibilities during Europe’s economic crisis.
Posted by Editor at 12:04 AM | Comments (0)
Understanding the Purchasing Environment
Procurement practitioners will only add sustainable value to an organisation’s bottom-line if they understand the environment in which they operate, Ronald Mlalazi (MCIPS), Edu cation Manager at Commerce Edge Academy, tells SmartProcurement.
Posted by Editor at 12:02 AM | Comments (0)
Aligning the Procurement Strategy to the Corporate Strategy
Strategic Supply Chain Management (SCM) is designed to strategically equip Chief Purchasing Officers (CPOs) or Heads of Supply Chain to adequately deliver and ensure that their organisations realise maximum value. Properly positioned, CPOs can fully contribute to organisational profitability by realigning the procurement strategy and objectives to the corporate strategy and objectives, Ronald Mlalazi (MCIPS), of Commerce Edge Academy, tells SmartProcurement.
Posted by Editor at 7:20 AM | Comments (0)
After the World Cup, purchasing must carry on
The run-up to the 2010 Fifa World Cup has been a challenging time for the African supply chain and operations profession, but what happens after the event, when the hype has died down?
Posted by Editor at 6:00 AM | Comments (0)
Who should own procurement of the print commodity?
Is there value in Print Management Centres? Corporations expend considerable time and effort managing and maximising investment in areas such as Information Technology, Human Resources (HR), Facilities and other direct expenditure areas. However, they typically overlook a huge but hidden commodity – Print, Christian Bell, Sales and Marketing Manager at local Print Management company POINT, tells SmartProcurement.
Posted by Editor at 10:00 AM | Comments (0)
Stores Optimisation - Hidden Costs of Holding Spares
All too often companies have no idea of the value of spares in their stores. This problem lies not only with small businesses; some of the largest companies in South Africa have little idea of the value and content of their stores, as the stores stock has been built up over a number of years. The reality is that the internal customer has a requirement to keep their business running, and tends to concentrate on ensuring business continuity, as opposed to reducing cost of holding spares, Craig Webber of Volition Consulting Services tells SmartProcurement.
Posted by StaffWriter at 8:50 AM | Comments (0)
Negotiating for the 'best fit'
Several questions arise when it comes to negotiating. As one goes into a negotiation, there is one striking question that one needs to ask oneself: “Is the price the only subject for negotiation?”
Posted by Editor at 5:25 AM | Comments (0)
Cost-cutting measures at the expense of strategic goals
How informed is your organisation about supply chain risks?Why should Procurement professionals only implement cost-cutting measures once they fully understand the ‘big picture’ aspects associated with supply chain risks?
This is the third article in SmartProcurement’s World-Class Procurement Practice series, penned by Ronald Mlalazi (MCIPS), Commerce Edge Academy’s Edu cation Manager. This month's article is based on CIPS Level 5, Unit 2, ‘Risk Management and Supply Chain Vulnability’. The series is based on Chartered Institute of Purchasing & Supply (CIPS) unit content and on recent research done by Commerce Edge Academy.
Posted by Editor at 9:15 AM | Comments (0)
Procurement's image problem
The Procurement profession has a serious image problem. Most South African organisations, whether corporate or government, still do not see the profession as a strategically important function...
Posted by Editor at 12:00 AM | Comments (0)
Procurement professionals update breakfast series 2009 concludes
Commerce Edge, SmartProcurement and Purchasing Index teamed up to present the last leg in this year's “Procurement Professionals Update Breakfast Series” at the Astro-tech Conference Facility in Parktown, Johannesburg. Over 60 delegates registered to hear Bernie van Niekerk, CEO of the Commerce Edge Group, summarise the highly informative and relevant report published by the Centre for Advanced Purchasing Studies (CAPS), the American P & SM Research Centre, in conjunction with AT Kearney, the professional procurement consulting firm.
Posted by Editor at 12:00 AM | Comments (0)
Inclusive supply chains support poverty reduction
Procurement and Supply Chain Management have a role to play in a recently launched initiative for holistic poverty reduction.“Procurement that is ethical and value-based, that incorporates a community into its entire value chain” has a place in the Business for Development (B4D) Pathfinder Initiative, said Benjamin Mkapa, former Tanzanian President, at the initiative’s launch last month, attended by SmartProcurement.
Posted by Editor at 12:00 AM | Comments (0)
Managing the transition to Strategic Procurement
When an organisation elevates the strategic role of the Procurement function it is important that change management plays a pivotal role in aligning employees to new policies, processes and systems. In managing a transition it is important that an organisation‘s key asset people, drive the new strategy forward as its success or failure hinges on them, Thapelo Petje, Independent Supply Chain Consultant, tells SmartProcurement.
Posted by Editor at 12:00 AM | Comments (0)
Improving supply chain processes and activity steps through Process Mapping
This month, SmartProcurement editorial board member, Dr. Douglas Boateng (FIoD, FCILT, FCMI, FIBC, FIOM), CEO of PanAvest International, discusses the application of process mapping to improve the performance of supply chain processes.
Posted by Editor at 1:20 AM | Comments (0)
Gauteng Roadshow: The future drivers of South African Procurement
A diverse group of over 60 Procurement professionals and representatives of the supply-side were hosted by Commerce Edge in Centurion on September 22 for a breakfast session to network and exchange ideas on the latest thinking that is influencing the future trends in supply management.
Posted by Editor at 12:00 AM | Comments (0)
Managing risk in corporate and supply chain strategy
During uncertain times, directors’ focus must be on managing risk in corporate and supply chain strategy, Dr Douglas Boateng (FIoD, FCILT, FCMI, FIBC, FIOM), tells SmartProcurement.The last twelve months have seen unprecedented changes in the global economy never before witnessed in the modern era. For the first time in decades, some of the best managed companies’ bottom-line results have come under severe pressure. According to the UN annual economic report (Qtr4-08), 2009 world output will reach a meagre 1% in 2009, compared to 2.5% in 2008 and global growth rates of between 3.5% and 4% in the preceding four years, says Boateng, who will be speaking at the Public Sector Supply Chain Summit later this month.
Posted by Editor at 9:40 AM | Comments (0)
Feedback: Consulting service influential at SAPICS Conference
Supply chain process specialists, Volition Consulting Services, received marked interest at the Association for Operations Management of Southern Africa’s (SAPICS’) 2009 conference, Greg Buckley, Executive Volition Consulting Services, told SmartProcurement.
Posted by Editor at 9:10 AM | Comments (0)
Strategic agility in Supply Chains - risk and foxes
Strategic agility is the way forward, and South African organisations need to follow suit without delay, especially when gearing their supply chains, if they want to be around for the up turn, industry experts tell SmartProcurement.
“Supply chains interact with many elements of risk. Agility is linked to risk,” says Douglas Kent, President of eKNOWtion, a global supply chain consultancy, and newly elected chairman of the European Supply Chain Council’s Leadership group.
Posted by Editor at 9:05 AM | Comments (0)
Green Procurement: Material flows and logistics in 'cradle-to-cradle' approach essential
Discussion presented at the Environmental Trade Show and Conference.
Cradle-to-cradle thinking, which suggests that everything created by humankind can contribute positively to the environment and the economy, may be one of the next movements to influence the future of supply chain management (SCM).
Posted by Editor at 2:15 PM | Comments (0)
The year of the CPO! Report back on the IPSA / CIPS annual conference
Chief Procurement Officers (CPOs) have missed an opportunity to steer the global economy’s rescue boat, alluded Institute of Purchasing and Supply South Africa’s (IPSA’s) President, Karen van Vuuren, at the institute’s Annual Pan African Conference held at Emperor’s Palace in partnership with the Chartered institute of Purchasing and Supply (CIPS).
CIPS Director of International Development Chris Gallagher, CIPS President Dr Bola Afolabi, IPSA President Karen van Vuuren
Posted by Editor at 3:31 PM | Comments (0)
Sourcing and procurement operating models offer sustainable cost reductions
As the economy slides into the downturn cycle, organisations are switching focus from growth strategies to cost management and risk management to protect their bottom line. Many companies have exhausted short-term tactical cost reductions and are now looking for more radical and sustainable sourcing and procurement (S&P) operating models, Ged Mackell of Deloitte Consulting tells SmartProcurement.
Posted by Editor at 1:38 PM | Comments (0)
'Supplier enablement' is a key component for successful procurement processes in South Africa
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This article appeared in the May newsletter with certain technical inaccuracies. SmartProcurement apologises for the error and would like to thank Quadrem for bringing the mistake to our attention and permitting us to re-print the article with the necessary corrections.The outsourced management of suppliers is of special significance in South Africa as a component of a successful procurement / tender process in the market place, Catherine Hills, Quadrem’s Client Services Director, told SmartProcurement in a recent interview.
Posted by Editor at 6:42 AM | Comments (0)
Fraud prevention is better than cure
In many of our recent dealings with South African companies, there has been a common issue with abuse and fraud committed by employees on their company-issued credit cards. These cards are generally provided to employees on the understanding that they are to be used for business expenses only, and in most cases this is reinforced by either the company’s policies or a specific “cardholder use” agreement signed by the employee. How is it then that this fraud and abuse is so widespread?
Posted by StaffWriter at 3:04 PM | Comments (0)
Capex and Opex - It is not about price, it is about cost
When considering the procurement of capital goods it is important to take a step back and consider the context. “Capital goods generally have a long lifespan and thus it is necessary to consider this implication when acquiring them. Failure to do so could result in the cost of the goods removing the benefit of savings of procurement price. Further, an oversight in the management of cost over time, due to the initial procurement decision, can result in dramatic overspend over the lifecycle of the goods”, Annuska Bezuidenhout, a Senior Procurement Specialist at Volition Consulting Services, told SmartProcurement.
Posted by StaffWriter at 1:10 PM | Comments (0)
The toughening economic climate - A 'call-to-arms' for the procurement function
At present there seems to be two schools of thought regarding the impact that the global economic recession is having in South Africa. People are either sure it is real and are dramatic in their response, or they are pragmatic in a perception of resilience through non-exposure.
Posted by Editor at 11:57 AM | Comments (0)
An opportunity analysis process for sourcing initiatives
What is an Opportunity Analysis?
“An Opportunity Analysis is an initiative that attempts to identify ways to capture value through sourcing. These opportunities are identified after analysing organisational requirements, supplier spend, current sourcing processes and other data sources. An Opportunity Analysis initiative can differ in the number of categories in scope and type of outcome”, Andrew Hillman, Managing Director of Bespoke Sourcing Solutions, told SmartProcurement.
Posted by StaffWriter at 11:02 AM | Comments (0)
Procurement and SCM impact on organisations' bottom-line - A SA government perspective
In today’s environment, where globalisation is a reality, the role of purchasing and supply management has taken on an air of additional importance. “For organisations of all types (private or public sector), the challenge is to improve the quality of products and services whilst driving down costs."
Posted by Editor at 8:30 AM | Comments (0)
Why should Procurement organisations benchmark?
One of the first organisations to benchmark in the modern business world was Rank Xerox, who in the 1980s formed a dedicated team to find out how other organisations outside of the photocopying industry managed functions, such as transport. The results provided Xerox with invaluable insights into how to spend money more effectively and, in turn, save money.
Posted by Editor at 7:30 AM | Comments (0)
World Class Operational Procurement: Three-way matching vs. two-way matching
Part 7 of a ten-part series that examines key operational aspects of the so-called “Purchase to Pay” value chain
by Independent Contributor, Peter Alkema – Head: Purchase to Pay at ABSA
Paper, paper, paper - still remains one of the most pervasive raw materials of the modern day office, which has still not been eradicated by the advent of modern technologies and supposedly integrated systems.
Posted by Editor at 7:45 AM | Comments (0)
What are the South African scenarios in the current climate of economic turmoil?
In last month’s SmartProcurement Newsletter, we reported on the keynote address by internationally acclaimed scenario planner and popular motivational speaker, Clem Sunter, on the topic of “The China Game”. His address was delivered at the 2nd annual SmartProcurement Strategic Sourcing Conference that was held at the Irene Country Lodge in Centurion, Pretoria. This leg of Sunter’s talk dealt with specific scenarios for South Africa, and how these will probably affect the long-term health of our economy.
Posted by Editor at 7:00 AM | Comments (0)
Effective & Efficient IT Procurement... more than hard bargaining.
"Organisations spend up to 90% of their Information Technology (IT) budgets on external providers, but sometimes fail to get true value for their spend. This scenario makes the procurement process a critical area in IT as it is essential for organisations to get consistent value for their spent monies”, Deon Basson, MD of 2interact, told SmartProcurement.
Posted by Editor at 11:20 AM | Comments (0)
Still Circumventing the Procurement Process?
Many companies have a Strategic Sourcing Department, however, many Business Units (BU’s) still try their best to circumvent the process by procuring products and services as they have done in the past. What is the reason for this and how do we change this mindset?
Posted by Editor at 11:37 AM | Comments (0)
Sustainable Procurement: What is it & why is it of crucial importance?
Sustainable procurement and the global impact that it has on supply chains worldwide was one of the primary themes at the recent IPSA / CIPS Pan African Conference that was held on May 20 - 21, 2008 at Emperors Palace in Johannesburg. The Conference, entitled "Procurement in the Global Marketplace - Opportunities and Challenges", was attended by more than 370 delegates from 12 countries. One of the esteemed keynote speakers was Professor Bola Afolabi (CIPS Vice President - UK) on the topic of "Envisioning revolutionary supply chain as an enabler of the prototypical organisation in a new millennium".Posted by Editor at 10:36 AM | Comments (0)
Further Beyond the Hype: The road ahead for Procurement
The recent international BrainNet/SAP survey shows that CPO's of leading procurement organisations are faced with three central procurement challenges. They are: 1. To create transparency; 2. To create value; and 3. To establish efficient risk management structures.
Posted by Editor at 11:51 AM | Comments (0)
Enterprise Development unlocks Preferential Procurement value
E
nterprise Development, along with Socio-Economic Development and Skills Development, should be a fundamental cornerstone of any well-structured South African BEE Procurement strategy. Andrew Bizzell, co-founder of the Institute for Enterprise Development and a BEESA consultant, told Smart Procurement how procurement organisations can make Enterprise Development (as a BEE strategy) work for them...Posted by StaffWriter at 11:31 AM | Comments (0)
Beyond the Hype: The International Importance and Evolution of Procurement
"Few corporate functions have undergone such dramatic changes in recent years as procurement. It is becoming increasingly clear that procurement can - and must - make a significant contribution at strategic level to an organisation's long-term overall success." These and other issues were recently placed under the spotlight through an international CPO survey, as conducted by BrainNet Management Consultants on behalf of SAP. Posted by StaffWriter at 11:02 AM | Comments (0)
A strategic approach to designing organisations that perform
Every company (and even departments such as Procurement), irrespective of size or type, needs an effective strategy to be competitive and successful in the marketplace. "The organisational strategy becomes a 'journey map' to guide the company towards clearly defined goals and objectives that will create value for all its stakeholders and entrench a way of thinking that is focused on creating long-term sustainability" Frank Sussini, a strategist at DayFive told Smart ProcurementPosted by StaffWriter at 9:03 AM | Comments (0)
Transforming procurement in a strong IT environment: Hardware, Software, Services and Telecomunications case studies
"How does the procurement function get its hands on the company's IT spend?" is a key question in many large organisations. It turns out that getting the mandate is only the start of the game. Getting a strong IT function to support and implement the proposed procurement strategies is a different kettle of fish. Here follows Ian Russel, Chief Procurement Officer, ABSA Group Sourcing, (a member of the BARCLAYS Group) thoughts on how he obtained a mandate for procurement intervention in IT spend and strategies that worked in their environment.
Posted by StaffWriter at 11:05 AM | Comments (0)
How to calculate the value that Procurement adds to the organisation
This online calculator helps determine the value that Procurement adds to the organisation.
What is the effect of your procurement savings on the company's operating profit? On earnings per share? What is the return on investment (ROI) on your proposed procurement transformation strategy?
Posted by Bernie at 10:06 AM | Comments (3)
How an old(er) lady got 10% of the savings! Incentives made easy?
Your company's new year's resolution - on your behalf - will be clear this year. Procurement needs to produce more savings than last year! More people will adopt sophisticated TCO (total cost of ownership) models to analyse, improve and measure costs. And if not now, you will be incentivised on reductions achieved. Being paid for savings achieved. Is that really such a good thing?
Posted by Bernie at 9:26 AM | Comments (0)
How one procurement manager's vision shook the auto-industry
By Bernie van Niekerk
March 1993. The New York Times reported that the Vice President for Worldwide Purchasing at the world’s largest Automotive Company was leaving. As a result General Motors (GM) lost 3.5% of its market value in one day!
Posted by Bernie at 8:31 PM | Comments (1)
