Strategic leveraging of public procurement critical to success of industrial policy
The latest Industrial Policy Action Plan (IPAP) has slated current public procurement for “not delivering adequately on either value-for-money or key industrial objectives.”
Posted by Editor at 6:00 AM
Challenges in the permanent recruitment procurement process
At the dawning of the next decade and as the recession in South Africa begins to gradually fade away, many organizations may tentatively consider appointing more staff. The recruitment market changed from a scarcity of skills on the open market in early 2008 into a relative glut during 2009, with many people sitting tight in their current jobs waiting for an improvement in the economy. Alan Low of Purchasing Index (PI) discusses the challenges the permanent recruitment procurement process faces in this month's SmartProcurement.
Posted by Editor at 9:40 AM
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
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
What will your supply chains resemble in ten years' time? Part 2
If an organisation wants to be competitive in the next decade, let alone a significant market participant, then its supply chains had better evolve.
Posted by Editor at 12:00 AM
Timing of vehicle replacement essential to control a fleet's TCO
The timing of vehicle replacement can have a massive impact on an organisation’s fleet costs and ultimately the total cost of ownership (TCO) of the fleet, Ashleigh Young, General Manager at FleetCube tells SmartProcurement.
Posted by Editor at 9:35 AM
Banks are just another supplier
An organisation’s banking partner should be dealt with like any strategic supplier, Julian Curtiss, MD of Transaction Technology Solutions, tells SmartProcurement.
Posted by Editor at 9:15 AM
Strategic sourcing offers the public sector a guiding hand
Strategic sourcing has become best practice in procurement management and makes good business sense for meeting the State’s ongoing commitment to taxpayers, Estelle van Rooyen, Director of Compliance, Contract Management in Specialist Functions for National Treasury, told SmartProcurement.
Posted by Editor at 2:30 PM
Does single source supply give customers leverage?
During the Apartheid era, organisations often grew by purchasing or amalgamating with their competitors. As a result, in the 1990s, when organisations had access to the world stage, South Africa had and still has many industries that are controlled by monopolies or duopolies.
Posted by StaffWriter at 3:23 PM
Zuma tender solution will hamper service delivery. Accountability the answer
In response to ANC President Jacob Zuma’s statement that the government tendering process should return to the old tender board system, SmartProcurement and independent experts are clear that this move will hamper service delivery, negate progress made in public sector procurement and still not be a foolproof mechanism to prevent fraud. Individual accountability within the current context offers a better solution.
Posted by Editor at 1:09 PM
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
Collaborative cost management with key suppliers
It has been said that in organisation within a world-class procurement framework it is difficult to find a clear-cut distinction between the organisational drive for continuous improvement viz-a-viz value release from actively managing Total Cost of Ownership (TCO). "In fact, these objectives represent the two sides of the same coin and trying to determine which side is more important is irrelevant", Nic Badenhorst, an independent procurement consultant, told SmartProcurement.
Posted by Editor at 12:00 PM
Why organisations fail to implement strategic sourcing effectively...
“The drive to become world-class has seen many organisations implementing Strategic Sourcing philosophy and Supply Chain Management practices within their companies with various levels of success. So why do some organisations still fail, whilst others excel?”, Heleen Liebenberg, a Senior Sourcing Specialist at Volition Consulting Services, asked SmartProcurement.
Posted by StaffWriter at 9:00 AM
Report back on SmartSourcing Conference 2008
SmartProcurement hosted its 2nd annual SmartSourcing Conference on the 7th and 8th of October 2008 at the Irene Country Lodge in Centurion, Pretoria. This two-day event, sponsored by Purchasing Index, Tech-Pro Personnel, Commerce Edge Procurement Training, Volition, IPSA, BEESA Boxsmart and EES-Siyakha, attracted more than 100 local and international delegates from all corners of Procurement and Supply Chain Management (SCM) in both the private and public sectors.
Posted by Editor at 3:03 PM
Taming Project Procurement: Better the Devil you Know than the One you Don't...
In South Africa large amounts of money are presently being spent through the public sector, especially on commodities such as infrastructure. “Procurement for these projects is a key function, the integrity of which can mean the difference between millions saved or wasted, time commitments met or missed, and social development requirement compliance or non-compliance. Traditionally, these projects are handled inefficiently since procurement usually buys commodities based on price, therefore removing all advantage by buying too much ‘just-in-case’ and ignoring the value of the integration of activities”, Rob Stuart, a Procurement Specialist at Volition Consulting Services, told SmartProcurement.
Posted by Editor at 11:43 AM
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
Rigorous Process Focus Required for Effective Strategic Sourcing
Many procurement organisations have embarked on Strategic Sourcing in recent years, with mixed successes. "A lack of focus on the integration of the overall value chain has allowed sceptics to minimise the value of new generation procurement approaches. Cobus Rossouw, Managing Director of Volition Consulting Services, told SmartProcurement."The way forward requires appropriate focus... Posted by Editor at 11:00 AM
The Procurement of HR and Skills in the Spotlight
The past decade of unprecedented economic growth has firmly put the spotlight on the world economy's most important asset, namely Human Resources (HR). This has brought about massive globalisation which has tempted many of our talented professionals to greener pastures, and this, in turn, has highlighted the value of recruitment agencies.
Posted by Editor at 7:30 AM
Outsourcing Management of Print can lead to 30% cost savings
"The world-wide trend in commodity spend management is to either appoint speciality managers internally, or to outsource the spend to a credible third party service provider", Gary Davies, Managing Director of Print Outsource International (POINT), told SmartProcurement in a recent interview. In the industry, this specialist outsourced service is neatly captioned "Print Management". Furthermore, it is necessary to make the distinction that these services are normally engaged in managing the organisation's 'external' print requirements, i.e. where you send the jobs out and do not process it internally, using your own resources.
Posted by StaffWriter at 11:45 AM
Facilities Management Services: a holistic approach enables cost containment and better management
The commodity group, generically termed "Facilities Management Services" (FMS) represents a high total cost of ownership (TCO) for most organisations. This commodity group has even been defined as 'a mainstream tool for improving performance and increasing productivity over the entire period of an alliance'.Posted by Editor at 12:55 PM
Specialised below the line (BTL) Sourcing Service launched
A specialised service for sourcing "hard to find" below-the-line (BTL) commodities has been launched by local sourcing specialist Procurement Zone.Posted by Editor at 1:38 PM
Savings for Corporate Domestic Air Travel vs published prices on downward slide
Are travel management companies causing increased travel costs? One of the measures used for benchmarking Corporate Air travel is the average savings achieved against the published fares and, while organisations recognise that this savings methodology is not necessarily the best, it has been applied consistently and is useful to track savings over time.
Posted by StaffWriter at 8:58 AM
Pan African Procurement - A view from the Flight Tower
"Many large companies consider the continent of Africa (excluding South Africa) as an enigma. Historically, these organisations have resigned to the fact that operating in Africa will be relatively inefficient in terms of their procurement, and sometimes other activities." Greg Buckley of Volition tells Smart Procurement that "The justification for this has traditionally been the combination of small market share, challenging logistics, uncertain politics, inconsistent trade protocol, fragile currencies and unsophisticated administration."Posted by StaffWriter at 2:25 PM
New Web technology speeds up and simplifies sourcing of MRO requirements
RS Components South Africa, a well-known global distributor of industrial products have successfully undertaken the task of upgrading their e-Procurement website to streamline the sourcing process for more than 300 000 MRO items. New technological advancements enable users to quickly find the product searched for and take advantage of price competitive product promotions.Posted by StaffWriter at 7:44 AM
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
Taking control of Professional Services Spend... even Dog Handling!
There are several interpretations of the Professional Services commodity group. Greg Buckley a sourcing expert with Volition tells Smart Procurement: "Normally I consider it to be 'the provision of services, by a 3rd party vendor, most often on an ad-hoc basis.' His article claims that, although perhaps not the easiest category of procurement spend to manage, it is certainly possible to take control of the category and to find value in terms of cost and efficiency. This takes initial effort and intent, but the requirement is often less than is generally expected.Posted by StaffWriter at 6:07 AM
"Open Book Costing" and "Cost Plus" can hamper Outsourced Logistics contracts.
The commercial agreement between the principal buyer and the service provider of outsourced logistics has far reaching, long term consequences for both parties. Cobus Rossouw of Volition shares some practical insights with Smart Procurement on how to extract the maximum value from your service provider....Posted by StaffWriter at 1:05 PM
Does aggregation really lead to lower prices?
The idea that greater purchasing power delivers lower prices may be accepted wisdom in procurement circles, but it doesn’t always add up writes Alan Low, MD of Purchasing Index. The simple fact is that the “Viking” (volume is king) model, applied ad infinitum to B2B and B2G Purchasing, has not delivered consistently better prices than those being achieved by less volume-intensive purchasing organisations.
Posted by StaffWriter at 8:44 AM
SmartTelephony - The costs of business communications are in steady decline
The world of Business Communications has fast become the focal point of several converging technologies that are racing to fill the worldwide need for cost efficiency and higher productivity. Piet Henning, a communications expert told delegates at a recent Smart Procurement breakfast that: "South Africa is an anomaly in that it is required to serve a large third world region with first world infrastructure and it cannot do so cost effectively because of institutionalised inefficiency’s and hopelessly outdated legislation. And all of that comes at a price! We pay the most exorbitant rates for both our fixed line and mobile telephony."
Posted by StaffWriter at 7:48 AM
True cost of Staff Recruitment exposed
If you asked your Human Resources Department how much staff recruitment really costs your organisation the real cost can be much higher than imagined. Elaine Porteous, an Independent Procurement Consultant tells Smart Procurement that there are many costly “hassle factors” both internally and externally that are usually not accounted for.
Posted by Bernie at 11:50 AM
e-Procurement and Strategic Sourcing combine to deliver savings
Whilst e-Procurement solutions are improving the procurement practices of organisations by eliminating many paper-based and labour-intensive processes, increasing transparency and improving control it cannot deliver the depth of benefits expected by businesses investing in the technology. It must be supported by effective and transparent strategic sourcing.
Posted by Bernie at 11:37 AM
Telephony – new era technology saves company R20m in phone costs.
“The last few years’ benchmarks of the local business cell-phone market indicated high costs and a lack of substantial innovation. Now, however, technology is converging and the distinction between voice and data transmission are blurring. These new products promise substantial cost saving opportunities,” Alan Low, Managing Director of Purchasing Index, told Smart Procurement.
Posted by Bernie at 1:18 PM
Market Analysis: The South African Transport and Logistics Industry – An Industry in Turmoil
Most industries in South Africa face globalisation and transformation challenges but the South African Transport and Logistics industry faces its own peculiarities that impact on the country as a whole. Shaun Scott and Henry Carelse, Directors of Worldwide Integrated Logistics (WIL) provided Smart Procurement with an up to date market analysis of this core driver of cost and performance.
Posted by Bernie at 12:35 PM
Buy consultants and other professional services for up to 20% less
Professional services is a category of spend that is sometimes poorly understood and often not addressed when searching for cost saving opportunities, says Elaine Porteous, an independent procurement advisor. "If any area within the broad category of professional services has never been sourced or has not been addressed within the last three years, your company is paying 10% - 20% too much! "
Posted by Bernie at 7:46 AM
Update: New developments in the "Catering Services" marketplace.
"After benchmarking staff catering for a number of years some interesting changes have occured that are affecting this crucial support service," says Alan Low of Purchasing index. "At the turn of the century many organizations had outsourced staff catering usually to one of the better known service providers, e.g. Royal, KKS, Fedics, etc. who usually took over the existing in-house staff, and had free use of the organization’s infrastructure. "
Posted by Bernie at 7:20 AM
Are you getting the best prices in a "downward" cycle? PC market update.
In a cyclical market where prices are going up or down, how do you know when your organisation is getting a good deal from a supplier? The graph (click on the image to view it) shows what happened to one major UK organisation over a six and a half year period as the prices in this particular (major) spend category were going down.
Posted by Bernie at 12:08 PM
Innovative new tool for analysing uncategorised spend
Through strategic sourcing many procurement organisations have improved their management of raw materials purchases. The next level of savings opportunities lie in the products and services that have not been tracked through the material master or buyer catalogue. Up to now, it has been almost impossible to deal with this aspect of procurement because it is so difficult to analyse and consolidate...
Posted by Bernie at 2:00 PM
Consulting and professional Services under the Procurement Spotlight
As Procurement expands its influence across the organisation, many large expense categories come under a new commercial spotlight. ‘Consulting Services’, a spend category often covering an amalgam of services from strategic business consulting to IT consulting and even contract labour, poses new opportunities and challenges...
Posted by Bernie at 11:59 AM
Stationery Prices continue downward trend. Is there still scope to negotiate?
(To view the graph clearly, click on the image) During the last month the prices of paper and envelopes have echoed the trend since September 2005. As a result prices are almost 15% lower than this time last year. (Based on last year's prices.) But this is not the whole picture...
Posted by Bernie at 4:26 PM
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
"The Terminator" uses Strategic Sourcing for cost savings
Arnold Schwarzenegger is not exactly the first name one would associate with Strategic Sourcing... But in California, the first wave of their strategic sourcing initiative is producing savings of almost 20%... "total cost of ownership (TCO)being "Terminated....?"
Posted by Bernie at 4:05 PM