Purchasing cards can work in government

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TshipiAlexander2.jpgGovernment's renewed vigour in fighting wasteful expenditure, highlighted in Minister Nene's budget speech, has received more limelight recently as commentators have discussed government's plans around its centralised supplier database and eTender systems.


A well-implemented purchasing card (P-Card) programme can help achieve government’s objective of utilising public funds more efficiently because it can reduce costs, curb wasteful expenditure and reduce the misappropriation of funds, Tshipi Alexander, Head of Corporate Issuing at Nedbank, told SmartProcurement Review.


When it comes to strategic sourcing activities, the Kraljic Model is one of the most widely used models to prioritise the items a company needs to procure.
 

When looking at the model it is clear that low-value high-volume purchases would fall into the non-critical items quadrant: purchases are ad-hoc; limited to one supplier; and are low value (meaning they do not have a significant impact on profit as compared with leverage or strategic items. The purchasing strategy for items falling into the non-critical quadrant is to reduce the amount of time and money spent during the purchasing process through efficient processing.
 

It is these non-critical quadrant purchases for which the P-Card is intended.
 

Continue reading on SmartProcurement Review.

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