Legal / Contract

Small suppliers for big impact: optimising your supply chain in a turbulent economy

 

StuartTownshend.jpgIn our third consecutive quarter of negative growth, it’s becoming all too clear that South Africa is well and truly facing some tough economic times ahead, and businesses are already beginning to suffer.

According to Statistics South Africa, weak manufacturing and trade sectors led the recession, with falls of 3.7% and 5.9% respectively in the period of Q4 2016 and Q1 2017. More worrying is that over the last quarter, the tertiary sector (comprising government, trade, transport, personal services and finance) recorded its first quarter of decline since 2009.

Times are tough and money is tight. And while it can be tempting to put your big plans on hold until the worst has passed, you might be missing a golden opportunity to recession-proof your business by shaking things up in your supply chain and adding more SME suppliers to your database, says Stuart Townshend, Edge Growth Director, in this month’s SmartProcurement.

Set suppliers up for success and mitigate preferential procurement risks

 

Even if organisations are not doing business with organs of state, they may well form part of the supply chain of organisations to which the PPPFA directly applies. Therefore, they need to be aware of its scope and provisions.

Corporate businesses are actively seeking and supporting black-owned and black woman-owned Exempted Micro Enterprises (EMEs) and Qualifying Small Enterprises (QSEs) as suppliers to meet the stringent Preferential Procurement Policy Framework Act (PPPFA) regulations.

If successfully implemented, this approach could stimulate the desired growth and economic transformation as the B-BBEE Act intended from the start, by providing greater opportunities for small, medium and micro enterprises (SMMEs), particularly those owned by historically disadvantaged South Africans (HDSAs).

“However, while this is positive, merely complying with the PPPFA is not going to guarantee the success of SMMEs: there are factors outside the control of regulations and policies that need out-of-the-box solution,” Terence Gregory, CEO of Ecsponent Limited, told SmartProcurement.

Turning supplier information into procurement insight

 

RudiKruger_2017.jpgDecisions and consequences go hand-in-hand. This is why having adequate, relevant information at your fingertips is a critical aspect of any decision-making process - more so when these decisions affect the operation of business and company reputation.

In procurement, the optimal goal is to manage risks and costs within a company, making it an imperative department of business. Businesses spend a significant amount of time vetting potential suppliers before embarking on a partnership, and pertinent data provides them with the right tools to make informed decisions with information that is easily interpreted by management.

However, the vetting system should not end when an agreement is reached between a business and its supplier. Intensive research and vetting on future and current suppliers should be a continual safety requirement to ensure all procurement legislation is adhered to, says Rudi Kruger, General Manager of Risk Solutions at LexisNexis Data Services, in this month’s SmartProcurement.

Do SA business travellers toe the travel-policy line?

 

TravelPolicy.jpgTraveller non-compliance is an increasing area of concern among travel buyers and managers internationally, with great efforts made to persuade travellers of the benefits of compliance that extend beyond “because the company said so”.

A recent study conducted by FCM Travel Solutions and the African Business Travel Association (ABTA) revealed that the level of non-compliance among South African travellers is limited, however. At least 42% said that their travellers rarely or never booked out of policy, with a further 39% indicating that it didn’t happen often.

Integrity and competence a must in government procurement


Integrity in government procurement must be held to the highest standards on every RFP and tender issued

Stephen_Bauld.jpgStephen Bauld deals with so many issues related to the integrity of the request for proposal (RFP) process every week. As a government procurement expert, he is concerned about the way municipal procurement staff understand the policies and procedures they need to follow to issue documents to suppliers and contractors.

4 procurement vetting pitfalls to avoid

 

RudiKruger_2017.jpgMistakes in business come with the territory, but those made in procurement ought to be considered among the most detrimental to the success of an operation. Common procurement related risks include supplier issues such as delivery delays, increases in demand, quality problems and fraud. These issues are often the result of mistakes made in the procurement vetting process, Rudi Kruger, general manager of Risk Solutions at LexisNexis Data Services, told SmartProcurement.

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.


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