Short-term SCM investment for long-term savings

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IanNeilson.jpgThe City of Cape Town has leveraged its supply chain management policy to grow its economy, procure sustainably and create jobs. And save money, of course.

Opening the Smart Procurement World Western Cape Conference, the city’s Executive Deputy Mayor, Alderman Ian Neilson gave delegates an insight into the City’s supply chain efforts to create employment for Cape Town’s people, promote resource efficiency, reduce negative environmental effects, and promote the competitiveness of local businesses.


"Sustainable procurement can reduce costs"

The city has saved over R110-million and 75 000 tons of CO2 since it turned to making energy efficient decisions and rolled out a dedicated behaviour change programme.

“This demonstrates how sustainable procurement decisions can have significant positive impacts, both on the environment and reducing costs,” said Neilson.

The city is a member of the Global Lead City Network on Sustainable Procurement and has drafted a sustainable procurement action plan setting out clear steps for greening the city’s supply chain.

The city’s environmental resource management department is leading the sustainable procurement approach in conjunction with the supply chain management department.

Its policies allow for more environmentally sensitive procurement to take place. To that end, a set of green procurement guidelines provides staff with information on how to include sustainability criteria when compiling specifications and tender documents, explained Neilson.

The city has implemented projects and programmes that incorporate aspects of sustainable procurement, such as the ongoing roll out of energy efficient street lighting; LEDs in traffic lights across the city; and retrofitting municipal buildings with energy efficient lighting, desktops and computer monitors.

“An increasing number of housing developments are incorporating green elements to promote resource efficiency and a quality of life for the occupants,” noted Neilson.

Enterprise development

In the latest completed financial year, 2971 black economic empowerment service providers conducted business with the city, which is 84% of the overall number of service providers used, said Neilson.

Some 219 000 POs were issued to BEE vendors, which is 94% of the total. The spend came to just under R14-billion, 92% of the total spend for the period.

Furthermore, the city’s supplier database promotes opportunities targeted at small businesses and partners with support organisations to develop suppliers.

“We are helping [suppliers] to meet entry and contractual obligations for city procurement opportunities. We are also urging businesses that secure large contracts to form joint ventures with small businesses in order to support value chain linkages and ensure business growth,” commented Neilson.

Community-based suppliers often experience financial strain when trying to comply with mandatory legislative requirements. To address this, the city's policy makes provision for the director of supply chain management to request quotations directly from community-based vendors in a specific area or for a specific community for the procurement of goods and services less than R30 000.

In order to facilitate this the city has drafted a standard operating procedure providing a step-by-step guide on how small businesses can access such opportunities. It includes what they need to do to ensure that they are compliant with the city’s supply chain management policy.

Partnering with Smart Procurement World

The city hosted the Smart Supplier Development programme, an initiative of Smart Procurement World aimed at helping micro, small and medium enterprises to gain access to new markets.

The small businesses attended supplier boot camps that addressed the challenges that many suppliers encounter on a daily basis, such as industry changes, legal requirements and managing the red tape of tendering. They also learned how to expand their businesses to new areas and how to partner with larger suppliers.

Conference success

Smart Procurement World’s Western Cape Conference hosted 10% more attendees in 2017 - 1 240 passed through the CTICC’s doors.

Some 433 visitors, 174 SMMEs and 92 exhibitors enjoyed the co-located Enterprise Development Expo that support ED in the region.

“Being a forthcoming entrepreneur, I really enjoyed the conference. It’s a must-attend for buyers, sellers and upcoming entrepreneurs: the business networking, the supply solutions and life-changing workshops,” said Phillemon Zidya from Bloemendal Wine Estate.

“The whole experience was brand new to me, it has helped me identify areas within our business where we are lacking and areas in which our organisation can improve on. The tools that we received during the conference will definitely be implemented into our organisation as that will help us achieve our future goals,” said Grace Cable of CG Plastics.

“Smart Procurement 2017 was an incredible experience for Darling Sweet. Our brand received huge exposure to big corporates, the event also allowed us the opportunity to network amongst other SMMEs and exchange experiences and contacts. We were also afforded the opportunity to make contact with agencies that facilitate funding and development opportunities for SMMEs. The talks presented over the two days were insightful - we will definitely participate again,” said Darling Sweet’s Hentie Van Der Merwe.

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