BEE

Influence of procurement departments on marketers

 

JohannaMcDowell.jpgAgencies working – or hoping to work – on major corporate accounts in the advertising, marketing and communications industry can no longer ignore or misunderstand procurement departments and their importance in winning both government and corporate clients.

Johanna McDowell, Independent Agency Search & Selection Company (IAS) managing director, warns that the B-BBEE Amended Codes of Good Practice released by the Minister of Trade and Industry in mid 2016 are designed to ensure that procurement is taken seriously by companies that intend to survive, in this month’s SmartProcurement.

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.

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.

Do current ESD practices work?


CHRISTI.jpg

The Enterprise and Supplier Development (ESD) element of the revised BBBEE Codes has made it clear that providing only financial and non-financial support to small suppliers and SMMEs is no longer sufficient.

Considering the imperative that the ESD element places on strategically engaging with suppliers, Christa Bonnet, founding member and Chief Executive Officer (CEO) of The Difference Makers, has found a worrying level of ‘missing’ knowledge among organisations and BEE specialists alike.

ZUMA - Major BEE procurement shake-up

 

JacobZuma.jpgThe government’s procurement policy will be overhauled in a bid to support black and small businesses, said President Jacob Zuma.

”The buying power of the state is a powerful economic tool. It can and must be used to advance black economic empowerment, ” said Zuma, speaking at a Black Business Council dinner in September.

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.

Public Preferential Procurement regulations being revised

 

schalkhuman.jpgThe Treasury is rethinking the draft preferential procurement regulations it published in June, and there is a possibility the revised version could claw back some of the more generous provisions for enhanced black economic empowerment.

“The latest revision of the regulations is expected to be submitted to Finance Minister Pravin Gordhan in September and could be ready for promulgation in October” said Schalk Human, Acting Chief Procurement Officer, National Treasury.

Understanding policies underpinning the creation of black industrialists

 

MsMaisela.jpgBlack industrialists have a responsibility to maintain black ownership of their businesses. Failure to do so can set back government’s transformation efforts.

As a black industrialist it means that one has to be involved in the running of the business on daily basis and according to the BEE act, a black industrialist cannot sell/resell shares to a white counterpart as that would be diluting those [black ownership] shares,” said Nomumelelo Maisela, Deputy Director: Black industrialist, Department of Trade and Industry (dti).

“That particular act regresses government and takes it back in terms of transformation,” said Maisela who was speaking at the Smart Procurement World conference in KwaZulu Natal in June.

How do we afford affirmative procurement?

 

Image.jpegWouldn’t it be great to lower the costs associated with preferential procurement? The unfortunate truth is however, that the total life costs associated with engaging historically disadvantaged suppliers are often unexpectedly higher than engaging in business as usual. With existing and looming charter obligations, preferential procurement has become a strategic imperative and organisations need to focus on reducing these costs.

In this month’s SmartProcurement, David Monkman, Chief Executive of the Business link (Aspire) Network, examines one methodology for co-ordinating and integrating the various processes associated with engaging in preferential procurement in order to reduce the ‘Total Cost of Ownership’ of conducting preferential procurement.

Purchasing commodities to achieve more than BEE compliance

 

LindelweKunene.jpgThe BEE Codes have been top of mind since the beginning of 2016, unfortunately it is for the wrong reasons. Recent headline-grabbing stories of unprecedented racial tension have revealed a greater need to intensify efforts to achieve real transformation in South Africa. Despite being seen as a complex technological commodity, the provision of printers and printing technology cannot be overlooked in achieving that transformation.


Traditionally viewed from a cost and total cost of ownership (TCO) perspective, it is essential for procurement to consider factors in addition to the costs of office output devices. Failing to observe the level to which a supplier is engaging in economic transformation, is overlooking the opportunity to move beyond mere BEE compliance and engage in economic transformation, says Lindelwe Kunene, Nashua’s Chief Human Resource Officer in this month’s SmartProcurement.

PPPFA : #80/20PrinciplesMustFall

 

Legislation_Panel_Discussion_969x768.JPGSouth Africa currently faces many problems and government must stop applying quick fixes and actually investigate the root of the problem and address it. This was the consensus at a Smart Procurement World Western Cape panel discussion.


“PPPFA must not fall, but the principles of 80/20 and 90/10 must fall, simply because the framework is wrong. This kind of framework is costing government a lot of money that it does not have” said Kamogelo Mampane, Chief Executive Officer, TK Global Experts.

4 areas you can focus on to immediately boost your BEE levels

 

BEE.jpgLast year was one of massive and sometimes controversial change, for broad based black economic empowerment (BBBEE). The amended BBBEE scorecard, gazetted in October 2013, came into effect in 2015 and will affect all companies who are being measured and verified based on a financial period ending after 30 April 2015.


“For some companies, this means you may still have one more financial period under which you can be measured for the Old Codes, however, many will need to ensure they have addressed the requirements of the Amended Codes, to avoid being non-compliant”, explains Jenni Lawrence, Managing Director of Grant Thornton Verification Services, in this month SmartProcurement.

Black empowerment groups call for change to preferential procurement law

 

PROC LAW.jpgLobbying organisations promoting black empowerment are calling for the Preferential Procurement Policy Framework Act (PPPFA) to be repealed because it places too much emphasis on price.


The Progressive Professionals Forum (PPF), which lobbies to address socio-economic disparities and promote broad-based black economic empowerment (B-BBEE), says the law prioritises competitiveness and cost-effectiveness.

dti on the New BEE Codes - "we are not the enemy"

 

liso.jpgMuch criticism has been levelled at dti over it New BEE Codes. Perceived by many as a legislator that has set an insurmountable bar, dti says its drive for economic-development has been lost in legislated translation. Liso Steto, Director at the dti, spoke to Smart Procurement Review about supporting small businesses and the perception of ‘legislation daydreams’.

SAA-BidAir Services debacle: Transformation through procurement has to be pursued within good governance practices

 

SAAtails.jpgTensions between SAA’s Board and its top officials around transformation vs operational requirements has seen the resignation of the carrier’s Chief Financial Officer, Wolf Meyer.


While details of his resignation are not clear, it is reported that his decision is linked to the SAA Board’s push to set aside 30% of a contract it holds with BidAir Services’ and transfer this 30% to a black-owned small business.

SMMEs need "risk taking skills"

 

smmes.jpgThrough developing and encouraging small businesses across the country, the Minister of Small Business Development Lindiwe Zulu urged SMMEs to develop and adopt a skill of risk taking and allow innovation as these could have positive outcomes for their businesses, said the Minister during the opening of Global Entrepreneurship Week in Johannesburg in November 2015.

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