Risk Management

4 reasons to get your whole business to do procurement

BorisShiklo_100.jpgHow do you achieve effective procurement − by affording all departments the opportunity to purchase directly? What are the risks of such an approach and how can you reduce such?

Most mid-sized and big businesses already have a dedicated department responsible for providing the company with everything from paper to spare parts for production-line repairs. So, why would you offer to involve other employees in the procurement process?

Boris Shiklo, CTO, ScienceSoft, explains how you may benefit from such an approach, what the risks are and how they can be mitigated.

Is not spending, a saving?

MiraRistovich_100.jpgBy Mira Ristovich, Founder of MRC, a consulting firm that assists with various end-to-end projects, and Senior Associate at Bespoke Group Africa, an organisation dedicated to the strategic procurement outsourcing of projects.

Two decades after I began my work in procurement (I was involved in business performance management and measurement prior to joining the procurement family), I can still remember how surprised I was to find that many business owners believed that not using an allocated budget meant that they were saving money.

Unfortunately, this kind of thinking still exists.

Free State welcomes Smart Procurement World

SPW_FS_100.jpgSmart Procurement World is bringing its regional conference to the Free State.

Partnering with the Free State Department of Economic, Small Business Development, Tourism and Environmental Affairs (DESTEA) has enabled Smart Procurement World to take its procurement and supply chain indaba into its fourth South African province.

Since beginning in Gauteng in 2009, Smart Procurement World has extended into the Western Cape, KwaZulu-Natal and, on 19 March 2019, into the Free State.

Vendor database optimisation: Are you doing it right?

Schalk_vdMerwe_100.jpgOne of the primary components of any procurement function's strategy is, or should be, to ensure that the company has an optimised vendor base. This is aimed at achieving a more cost effective and high-quality supply chain.

Most companies therefore go through a vendor rationalisation process at some stage and continually review vendor categories to ensure that the selected set of vendors remains the best fit for the respective services or products they deliver to the business.

Optimising the vendor base is normally done by assessing various elements such as pricing, service delivery, contractual terms, internal stakeholder sentiment etc., which are, of course, all very important elements to consider. However, the important elements most often overlooked are the non-contextual ones, says Schalk van der Merwe, Executive Head: Supply Chain Governance at data powered risk solutions provider Inoxico.

6 steps to maintain a successful vendor selection process

RudiKruger.jpgIt is important to do business with the right vendors if you want you want to stay on the right side of the law while ensuring that the business' needs are met. With hundreds of suppliers offering relevant products and services, the vendor selection process can appear strenuous and time consuming. However, if done the correct way and in line with the business' best interests, the supplier selection process can be achieved with ease and peace of mind.

Rudi Kruger, General Manager at screening solutions provider LexisNexis Data Services, says that vendor selection can be successful if you have a handle on important aspects of the process.

High-performance procurement risk management

PerSegerberg_100.jpgWhat 'procurement masters' are doing and how they are benefitting

An Accenture study involving more than 125 chief procurement officers observed a profile of how high performers in risk management operate.

The study identified "procurement masters" in organisations that save at least ten times as much as it costs them to operate their procurement organisations. Organisations operating at a lower level save about four times as much.

Accenture identified 22% of the survey population as masters.

Taking this profile forward, Accenture sought to learn how masters' practices differ. Per Segerberg, Partner at Qvartz, a management consultancy in Supply Chain Management, Procurement Transformation and Global Sourcing, takes a look at the findings in five key areas of procurement.

Vendor data and risk management: the next big question in the digitalisation of procurement

Schalk_vdMerwe_100.jpgIn order to optimise vendor ecosystems, companies consider various types of vendor-related information to determine which vendors are best suited to their supply chains. Companies, typically, limit this to information that is directly linked to quality, performance and price KPIs.

"However, an often-neglected, yet very important, element in the optimisation 'equation' is vendor company risk", says Schalk van der Merwe, Executive Head: Supply Chain Governance at data powered risk solutions provider Inoxico, in this month's SmartProcurement.

Fix the weak links in the supply chain with vetting

RudiKruger.jpgSuppliers play a huge role in the operational capacity of a business. With a mutually healthy relationship, trusted suppliers can help a business satisfy customer needs, even in a pinch. However, businesses that source goods or services from questionable suppliers run a great risk of failing to meet their own obligations to customers. Such weak links in the supply chain either present prominent or underlying risk and, while the one is evident, it is underlying risk that can only be identified through investigation.

In this month's SmartProcurement, Rudi Kruger, General Manager: Data Services, LexisNexis South Africa, contends that supplier vetting is the surest way to see the whole picture. "Working with the wrong supplier could cost you money and your customers' trust but, by vetting suppliers, many underlying risks can be identified."

Municipal materials management may require a counter-intuitive purchasing approach

StephenBauld_100.jpgEnsuring that the right quality of an item is ordered and delivered may seem like a fairly obvious responsibility. However, doing so in practice requires a fairly sophisticated understanding of market conditions and user requirements, which, like many organisations, municipal departments do not possess.

"There is a higher probability of generating measurable savings if municipal purchasing departments play a pro-active role to assist client departments to identify needs before they arise", says government procurement expert Stephen Bauld, in this month's SmartProcurement. Bauld argues that successful municipal materials management may require a counter-intuitive approach towards purchasing.

Procurement in 7 memes

DistractedBoyfriend_small.jpgThey say a picture tells a thousand words. How about a procurement meme?

Okay, millennials. Strap yourselves in, because Hugo Britt, Content Manager at Procurious, is going to attempt to meme. Is meme even a verb? Perhaps not, but that isn't going to stop him.

For older readers who don't really know (or care) what memes are, don't worry - Britt's got you covered. Whether it's Bad Luck Brian, Kermit Sipping Tea, or King Leonidas screaming "SPARTA", Britt will attempt to add a bit of context around the meme before applying a Procurement gripe to each.

Join Britt at Smart Procurement World Gauteng in September, where he'll present procurement's "guide to blockchain technology and how it will change our world". He'll look at early applications of blockchain in supply chain, specifically automotive, freight and logistics.

When supplier-employee relationships cross the line

RudiKruger.jpgProcurement fraud can be committed by employees acting alone or in collusion with suppliers. Fraudulent activities between suppliers and employees create a host of challenges for the business if allowed to continue under the radar.

With this threat, the onus rests with organisations to create a culture where fraudulent activities are easily identified and dealt with.

In this month's SmartProcurement, Rudi Kruger, General Manager of Data Services, LexisNexis South Africa, explains some of the ways in which employees collude with vendors.

Rewards of digital supply chains obscure dangers

AbdulMahomed.jpgJust as digital supply chains bring rewards, they also bring dangers. Supply chain managers are always on the lookout for corruption, but in the digital age the clues are harder to spot, warns Dr Abdul Majid Mahomed, Head of Professional Body CIPS, SA.

What is the true cost of unethical conduct?

XavierGreyling.jpg'Procurement irregularities' has taken 3rd place on Corruption Watch SA's Corruption Report 2017 (CRW2017). Coming in at 12% of the reported types of corruption, procurement irregularities trails bribery as the most common form of reported corruption (27% of cases).

However, CRW2017 does not define 'procurement irregularities', which caused Xavier Greyling (MCIPS) to question if procurement irregularities do in fact account for only 12% of the reported cases, and, faced with the possibility of a far higher figure - what role does procurement play in what is lost to corruption every day?

Hope in the face of rampant corruption and fraud in Procurement

RudiKruger_2017.jpgRampant corruption and fraud in the public and private sectors have plagued South Africa for many years. However, a glimmer of hope appears to have followed the State of the Nation Address (SONA) in February, after President Cyril Ramaphosa reassured South Africans that corruption, fraud and collusion in the public and private sectors will be fought with purpose and intensity.

"While the country waits to see significant change in addition to the recent cabinet reshuffle, the President's overall commitment to purge corruption is commendable", says Rudi Kruger, General Manager, LexisNexis Data Services.

4 tips to manage supplier risk

RudiKruger_2017.jpgSuppliers can fail you in many ways. Supplying inferior quality goods and services, missing deadlines or data breaches can affect the bottom line and reputation of a business.

However, while risks are ever-present, some are more avoidable than others - including the effects of mistakes and failures by suppliers" says Rudi Kruger, General Manager of LexisNexis Data Services.

Whose services are your really procuring?

ToniJackson.jpgThe workforce is fundamentally changing and it's increasingly important that you can access the skills you need when, where and how you need them. But with the increase in corporate usage of external workers comes additional challenges and risks. Toni Jackson, Director of APAC at Fieldglass, an SAP company, in Sydney, unpacks the implications.

 

 

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