Legal / Contract

Procurement's value will be judged on its alignment with the organisation's strategy

 

ShirazSarang.jpgIs your procurement division a purchasing or a procurement function? More importantly, into which category does your CEO and other key executives place your function? Shiraz Sarang, CPO at Nedbank discusses how procurement professionals can elevate the importance of the procurement function within an organisation, in this month’s SmartProcurement.

Vetting suppliers: avoid introducing risk into your supply chains

Takata.jpgMany Japanese car makers have recalled whole fleets of models owing to faulty airbag modules

Profit is the ultimate objective of every business operation. However, there are several threats to revenue, including market competition, internal fraud, poor leadership, high expenditure, regulatory obligations and weak links in supply chains, particularly concerning suppliers.

“Working with the wrong supplier could cost you money and a customer’s trust,” Rudi Kruger, general manager of Risk Solutions at LexisNexis Data Services, told SmartProcurement. “Simply put, businesses that receive goods or services from untrustworthy sources run a great risk of failing to meet their own obligations to customers.”

BEE: look beyond regulation to be effective in supply chain

 

Parliament.jpgBlack Economic Empowerment (BEE) is one of the most highly regulated aspects of the South African business landscape today. The most recent changes to the regulations have both large corporate businesses and smaller businesses returning to the scorecard drawing board. Louis Coetzee - General Manager of the Ecsponent Development Fund (part of JSE-listed African financial services company Ecsponent Limited) - told SmartProcurement that this has contributed to inhibiting economic growth, and the stunting of competitiveness in the industry.

Protect the procurement process from conflict of interest

RudiKruger_2017.jpgProcurement practitioners are responsible for ensuring a fair and transparent procurement process that is free from any conflicts of interest. Despite frameworks like the Public Finance Management Act, Municipal Finance Management Act and the King IV Report on Corporate Governance, there have been numerous incidents in which procurement professionals were found guilty of allowing their personal lives to interfere with their professional responsibilities and duties.

Rudi Kruger, General Manager of LexisNexis Risk Management, points out typical types of conflict of interest that procurement professionals could potentially benefit from, in SmartProcurement.

Procurement benefits most from supply chain digitisation

RudiKruger.jpg
The age of 1s and 0s has revolutionised the way we consume and share information. In the commercial environment, there is hardly a business function that does not make use of technology to perform even the simplest of tasks. Supply chain has been one of the departments to embrace technology the slowest. However, the SC Digest Supply Chain Digitization Benchmark Survey 2016 revealed a shift in mind-set, with about 80 per cent of respondents identifying digitisation as a key focus area.

Rudi Kruger, general manager at LexisNexis Risk Solutions discusses the key advantages of the IT shift for supply chain, which include enhanced safety, reliability, reduced carbon footprint and cost saving.

Identifying and mitigating global sourcing risks

SanetShepperson.jpg

Before you start, ensure that you have the best global sourcing and product experts that you can afford, says Sanet Shepperson (MCIPS) in this month’s SmartProcurement.

Cost-cutting drive has pitted Treasury against government departments

 

Ralph_Mathekga_.jpgTreasury’s cost-cutting drive has pitted it against other government departments.

Chief Procurement Officer Kenneth Brown has drawn criticism from politicians who are unhappy with his investigations of procurement, said Ralph Mathekga, a political analyst at the Johannesburg-based research group, the Mapungubwe Institute of Strategic Reflection.

In September the Treasury said it rejected a request from Home Affairs Minister Malusi Gigaba for his staff to fly in business-class seats and it turned down appeals from state power utility Eskom for company credit cards.

Open tender process shines light on procurement

 

tenders.jpgThe Gauteng provincial government (GPG) hosted its first open tender seminar showcasing the progress the province has made in rolling out its open tender project over the past two years. The event was also aimed at encouraging other provincial governments and municipalities to adopt the process.

 “We took the decision in 2014 that it was imperative to find ways to restore confidence in the public procurement process,” said finance MEC Barbara Creecy, who was the programme director for the day.

It is vital that citizens see how their money is being spent, said finance minister Pravin Gordhan, delivering the keynote speech at the seminar.

"We need to ensure that we get value for money from the taxes of the public and the borrowings we make on that money. I congratulate GPG on its determination to make procurement more transparent. The greater the spotlight that shines on procurement, the better.”

BEE Commission notes 96 complaints - Fronting claimed

 

Complains.jpgSince the Broad-Based Black Economic Empowerment Commission, which investigates fronting and other abuses, was established in April 2016, some 96 complaints have been lodged.

However, it is still too early to draw any conclusions from the complaints, said commissioner Zodwa Ntuli.

“We will only be able to give judgment after we have investigated each of the complaints,” she says.

Trading portal links small suppliers with procurement functions

 

PetraRees1.jpgOnline trading platfrom, the Business World, is listing more than 100 business contracts a day.

Aimed at developing small suppliers and linking them with business opportunities, Business World has vetted and registered more than 10 000 companies.

“Registrer on the portal at no cost until the end of 2016,” says Petra Rees, Managing Director of Lean Enterprise Acceleration Programmes (LEAP), which owns and manages the portal.

G20 Summit: supply chains disrupted for clear blue skies

 

SupplyChainSummit.jpgIn preparation for the upcoming G20 summit in China this September, the Shanghai Environmental Protection Bureau (SEPB) issued an order for an estimated 1 000 factories within a 300-km radius of Shanghai to cut down production.

This measure was enacted to reduce pollution before world leaders arrive for the event. So how will this affect global supply chains?

This year, China hosts its first-ever G20 summit in Hangzhou, a city situated 240 kilometres south-west of Shanghai, where significant industrial, construction and residential emissions affect the air quality of its neighbouring cities.

SA's economic pressures require increased procurement controls

 

JannieRossouw_400x640.JPGThe continued pressure on South Africa’s economic landscape requires procurement professionals to keep tight control on procurement processes.


“There is a danger of taking shortcuts, even in procurement”, said Professor Jannie Rossouw of Wits University.


There is pressure at all levels, said Rossouw, speaking at the Smart Procurement World Western Cape Conference. Owed to the pressure on government, community, financial and business spheres there will be increased instances of policies and procedures being disregarded, he explained.

Inefficient procurement cost Africa $31.5-billion - KPMG survey

 

ValueLeakage.pngIneffective procurement, expressed as value leakage, is estimated to have cost the African continent $31.5-billion, revealed KPMG in a recent report. Sub-Saharan Africa contributed $24.9-billion to that amount.


While the report noted that the role of procurement in organisations was becoming increasingly strategic, 73% of C-level executives polled during KPMG’s Power of Procurement 2.0 Survey did not believe that procurement added real value.

No bite behind government's spend-cutting bark

 

Tim_Harris.jpgThe budget’s steps to curb government spending fail to address re-course for non-compliance, said Democratic Alliance finance spokesman Tim Harris.


“Cost containment measures were welcome, but there was nothing about what would happen if ministers did not meet those measures,” said Harris.


He was responding to the four steps to contain government spending that Finance Minister Pravin Gordhan announced in his budget speech in February.

Fraud after contract award 6 times as frequent as fraud pre-contract award

 

ColinCram.jpgA strong, expert contracting and contracts management group is essential to combat fraud, CIPS Fellow and UK procurement consultant Colin Cram told delegates at Smart Procurement World in September.

The scale of SA's procurement fraud

 

ColinCram.jpg“Fraud prevention systems don’t work because people are the ones that commit fraud and not systems.”


Smart Procurement World recently sat down with international innovation, procurement and sustainability expert Colin Cram.
 


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