Procurement maturity

By: Mmatshepo Rasebopye

Is SA's public procurement mature enough to grow the country's SMMEs?

It is not surprising that today many believe that public sector supply chain management is a new thing and that its advent has brought about challenges. While it is true that the world of supply chain management has evolved a great deal, 1994 was not a quantum leap that brought about the new South African procurement regime; procurement has always been there and we have been either personally or business-wise subconsciously practising it. And it has always experienced challenges.

But has procurement matured?

Are the South African government's procurement strategies, tools and solutions sufficiently mature to build supply chain management capability? Are we able to derive value for money, leverage efficiencies of procurement, promote small companies and manage the risk of a high mortality rate experienced by small companies and SMMEs?

Would we say we are mature enough if the service delivery solutions and/or systems that we implement do not harness the ability of SMMEs to create jobs and address the challenges the country faces - inequality, unemployment and poverty?

South Africa's small companies would argue it has not matured.

They are not happy and have lost trust in the system, but still they do not voice their dissatisfaction nor demand an audience to do so, mainly because they are afraid of being victimised by departments.

The 30-day payment rule and tendering process are typical examples. As government, we take long to award tenders, on average a department would take six to eight months to award a tender, a process after which the company awarded may have suffered a loss in terms of capital to service the contract and then when they finally find their way with funding, payment is delayed resulting in the mortality of the company and a laying-off of employees.

We cannot avoid the fact that red tape is a challenge in procurement and whilst departments would apply the "no interest would be paid" rule, most companies suffer at the mercy of government departments whose employees believe that until the prescribed 30 days there will be no payments unless the company makes noise.

In most cases procurement strategies are reactive. And when solutions are implemented to close the reactive way of doing things, proper consultation is not done - people on the ground, who face the various challenges, are not consulted but are expected to implement the so-called best solution.

Is this a mature approach? I do not believe so. However, I strongly believe that we have skilled people in the supply chain management environment and if we stop treating supply chain as a dumping site for whoever does not perform elsewhere, then it will be able to capitalise on the supply chain management intellectual capital scattered across government. We need to be strategically focused to reach a procurement maturity level that will derive value for money, innovation and have an outside-in mentality.

More importantly, if we achieve these objectives in SCM first, then we can begin to harness the potential that government procurement and targeted procurement hold for development and expansion of our SMMEs.

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