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2013

2013

SmartProcurement

World Class Procurement in your Hands

Time For A Remuneration Rethink Make or Buy? Thinking About Outsourcing Tricky Ethical Questions Answered SmartProcurement

What Next After Strategic Sourcing? Top Procurement Performers are Innovative Reducing Red Tape: Public Sector Case Studies

inside Ethics

Global

Outsourcing

Supply management

Enterprise development

Human capital

Public procurement

Technology

Future and trends

Legislation

Risk management

Thought leadership

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SmartProcurement

SmartProcurement Review is published annually by SmartProcurement. SmartProcurement is a news and knowledge provider with media channels spanning print, online, conferencing and exhibitions. SmartProcurement focuses on the niche segment of Procurement and Supply Management: Our audience comprises more than 15 000 readers in medium to large organisations in the private and public sectors, most of whom make or influence procurement and purchasing decisions. SmartProcurement is certified as a Level 3 BEE Contributor. Call us: Email us: Surf us:

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0861 334 326 review@smartprocurement.co.za www.smartprocurement.co.za

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EDITORIAL Editor in Chief: Managing Editor: Sub Editor: Journalist:

Bernie van niekerk Debbie Tagg Davy Ivins and Liam Morrison Elaine Porteous

EDITORIAL BOARD Bernie van niekerk Professor Douglas Boateng Ronald Mlalazi FCIPS Dr Ernst van Biljon Advocate Helen Venter

PAGE

ARTICLE

5

Editor’s note

7

Supply chain at the speed of trust

Ethics

8

Time for a remuneration rethink

Future & Trends

10

Q&A - five Tricky Ethical Questions

Ethics

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Managing Global Supply and Risk. Essential Strategies and Best Practices

Global

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The future for South Africa - Implications from a supply chain perspective

Future & Trends

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Low cost sourcing from China

Global

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Make or Buy. Thinking about outsourcing

Outsourcing

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Supply management techniques for improved supply chain design

Supply management

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Thought leadership on innovation in business

Thought leadership

COnTRIBuTORS Short biographies of authors and contributors are provided with each article. For detailed biographies visit smartprocurement.co.za/spr

SECTIOn

PRODuCTIOn AssociationWorks Manager: Traffic: Design Firm: Designer: Printing:

www.associationworks.co.za Davy Ivins Anna-Marie West Vision IMC (www.vision-imc.com) Sean Kreusch CTP Printers, Cape Town

ADvERTISInG review@smartprocurement.co.za

Copyright SmartProcurement 2013. All due care has been taken with material submitted, but the magazine and publishers cannot be held responsible for inadvertent errors, loss or damage. SmartProcurement assumes no responsibility to respond to or return unsolicited editorial, and all material submitted will be treated as unconditionally assigned for publication and copyright purposes. The editor reserves the right to edit and comment editorially. SmartProcurement Review is fully protected by copyright and nothing may be printed in whole or part without written permission from the publisher. While reasonable precautions have been taken to ensure the accuracy of the content and advice given to readers the editor and publisher cannot accept responsibility for any damages or inconvenience that may arise therefrom. The views expressed in SmartProcurement Review are not necessarily those of the publisher, editor or editorial panel, and publication of articles does not imply any endorsement or warranty.

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WHAT’S InSIDE 68

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58 74

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Where do we go from strategic sourcing

Future & Trends

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Advancing from strategic sourcing to supplier development

Enterprise development

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Procurement’s role in Africa’s development

Future & Trends

70

Can we improve the sustainability of small businesses?

Enterprise development

42

The role of a probity officer in the public sector supply chain

Public procurement

72

Enterprise development mindset unlocks the potential of supply chains

Enterprise development

45

Public Procurement in SA

Public procurement

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Collaborate to win. Creating competitive advantage in a networked economy

Technology

46

Ethics in Procurement

Ethics

76

Procurement technologies to support strategic objectives. A Primer

Technology

48

Are you ready for the new BEE Codes of Good Practice

Legislation

80

Alibaba.com. An Open Sesame for Africa?

Technology

52

The legislation governing public sector SCM

Legislation

84

The urgency for competence in the procurement and supply chain space

Human capital

54

Walk in. Waltz out. A case study on reducing government red tape

Case Study

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Who is to blame for Procurement’s poor representation at executive level?

Human capital

58

Successful implementation of a Case Study municipal preferential procurement policy

90

Supply management. CPO to CEO

Human capital

61

forecasting making way for customer engagement

Supply management

92

Top procurement performers are influential and innovative.

Human capital

64

Enterprise risk management

Risk management

94

Business Directory

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Are salary levels potentially a determinant of ethical behavior in the procurement environment? I’d encourage you to take a long, hard look at an incisive, but provocative, piece written by one of Africa’s eminent Supply Chain thought leaders Professor Douglas Boateng, and to make up your own mind.

By having a copy of SmartProcurement Review in your hands, the chances are very good that you’re already a regular reader of our sister publication www.smartprocurement.co.za, an online platform with about 15000 regular readers, that saw its first articles published in 2004. The challenge many publishers face nowadays is moving from printed publications to the online world. Paradoxically, the SmartProcurement Review, published annually, is a printed response to our online readers needing a

weLcome Many other interesting questions posed and answered in this 2013 issue of the SmartProcurement Review include: Who is to blame for Procurement’s poor representation at executive level? What direction is Government’s new Chief Procurement Officer taking with public sector procurement? Is sourcing from China still worth the risk? Is your organisation ready for the new BBBEE codes of good practice? Should your organisation “Make or Buy”, goods or services being reviewed? How do you deal with cost savings ideas from suppliers in an ethical and transparent manner? The 2013 SmartProcurement Review deals with professional matters, ethics, technology, trends, career development, enterprise development, strategic sourcing, legislative updates and contains a useful directory for finding supplies and specifically enterprise development/BBBEE suppliers. Be sure to read our interview with Dr John Gattorna, the renowned international Supply Chain guru on Supply Management techniques for improved Supply Chain Performance. For our public sector readers we offer case studies of Public Sector entities’ moves towards World Class procurement edited by Advocate Helen Venter.

reference work that captures thought leadership, articulates strategy and investigates trends in a more comprehensive format. The SmartProcurement Review provides a platform for peers to publish in the context of continued professional development. So here you have it dear reader: “World Class Procurement in your hands”. I’d like to extend a special word of thanks to our editorial board members, for the fantastic support provided by The Chartered Institute of Purchasing and Supply Management (CIPS), esteemed contributors and our excellent production team under the leadership of Debbie Tagg and Davy Ivins who put in long hours to deliver this comprehensive publication “On time, and in full”. To your continued success!

Bernie van niekerk CEO & EDITOR

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ETHICS

SUppLy chAin

At the Speed oF tRUSt how ethiCAL ProCUrement wiLL trAnSform AfriCA

ABOuT THE AuTHOR André Coetzee Managing Director: Chartered Institute of Purchasing and Supply, Africa 012 345 6177 www.cips.org/en-za/ A member of the CIPS International leadership team, André has over 26 years of experience in South African financial markets and related industries. He is the Gauteng spokesperson for the Kagiso Purchasing Managers Index and has in-depth knowledge of the local and international economy and the South African political landscape. For a full biography visit smartprocurement.co.za/spr.

Most large organisations and associations have a Code of Conduct that informs and guides the behaviour and actions of their employees in the workplace. The Chartered Institute of Purchasing and Supply (CIPS) is no exception. Leading the way in embracing and promoting ethical procurement is a very worthy pursuit; however, our words need to turn into actions in the Africa Region. It seems that adherence to ethical guidelines and a code of conduct is generally patchy, both in the Government and nGO sectors and in private and public companies. Academics and market watchers regularly publish papers and articles on how to overcome some of the challenges, but with very little real effect. CIPS has identified the need to work with procurement professionals in Africa to promote good governance and reinforce best practice through education and sharing of knowledge. What constitutes ethical behaviour in procurement people? • H aving and displaying integrity. This means being honest and truthful, both with suppliers and stakeholders. Do what you say you will do. • A ct responsibly and visibly. Carry out your job responsibilities professionally and in a transparent way. • A void any confl ict of interest or inappropriate actions that could be misunderstood. • B e impartial and fair. Follow your organisation’s rules and procedures to ensure lack of bias and favouritism in supplier relationships. • Respect confi dentiality. The United nations (Un) is a major purchaser of goods and services in Africa and is a leader in promoting the way forward. “It is the main role of each UN procurement officer to execute their procurement function according to the highest standards

of professionalism and in the respect of the values, objectives and interests of the organisation. This implies the procurement officer must adhere to the principles of fairness, impartiality, transparency, stewardship, to avoid conflict of interest and any impropriety, and to respect and apply the organisation’s relevant policies, rules and procedures.” If all procurement professionals in Africa were to adopt these behaviours, we would be well on the way to eradicating fraud and corruption, reducing business risk and, above all, adding economic value to our organisations. The procurement function would be seen to be trustworthy and one that is actively working to eliminate corruptive practices. What does ethical procurement look like? Organisations that regularly monitor and track their performance against their guidelines and report issues and failures to top management are actively improving their ethical landscape. Those leaders that use this information to improve their behaviours and reinforce good practice are ahead of the game. Procurement ethics is not limited to a narrow view that is only concerned with receiving gifts and hospitality, although this is one real concern that never goes away. We must apply fairness and impartiality in transacting with suppliers and act in a transparent way. In our tender evaluation criteria, besides the basics such as price, quality, service and support issues, we should be considering: • S ustainability: This means minimising environmental impact in the whole supply chain, it is not just about reducing waste and “going green”. • L abour: Avoiding suppliers using child labour and those that exploit workers is vital for both business risk and humanitarian reasons. Investment in time in working with suppliers to improve conditions results in better staff motivation and productivity. Ethical procurement does not have to cost more; in fact, it makes good business sense. Increasing awareness and supporting best practice is a key objective of CIPS. n www.smartprocurement.co.za

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fuTuRE AnD TREnDS

time FoR A mAJoR RemUneRAtion

Rethink by goveRnment And indUStRy LeAdeRS Since 2007, there has been a positive shift in the way the procurement aspect of supply chain management is perceived by executive board committee members and government policy makers. Unfortunately, the rhetoric from both government and captains of industry, advocating the need to accept value-driven procurement executives (increasingly via the chief supply chain offer) into the “c-suite chamber”, has not been matched by real corrective structural adjustments within their respective organisations.

Today, most listed companies on the stock exchanges of the United Kingdom, South Africa, the United States, nigeria, Ghana, Kenya and many more still have “the value-adding procurement professional” receiving lesser recognition and comparatively lower remuneration than their counterparts in functional areas like information systems, marketing, law, finance etc. Within public and private sector entities in Africa and the emerging world this disparity is even greater.

RECOGnITIOn AnD ASSOCIATED BEnEfITS ATTRACT TALEnT numerous local and international studies have clearly demonstrated that low remuneration is not the only incentive for individuals to act unethically. However, it is an accepted fact that official recognition, coupled with competitive compensation, can play a key role in attracting the talented, value-adding skilled professional to an organisation. In a measured move to curtail waste and increasing unethical behavioural practices, it was recently reported that a department within an African government had appointed an executive to oversee billions of annual public procurement spend. To fit the role into existing government structures, the salary for the role was pegged at an associate (deputy) director level. The big question is whether a deputy director ranking (and the associated package) is the right level for someone tasked to: 1. Make strategic procurement decisions associated with billions of Rands or USD spend. 2. Initiate supplier development programmes that will result in the creation of future indigenous multi-millionaires. 3. Promote SMME growth and enterprise development. 4. Create long-term wealth for others, whilst getting no recognition and associated benefits. 5. Make decisions in support of local industrialisation and value add. 6. Foster local value-chain innovation. Interestingly, the same challenges are prevalent in the private sector where various appointments are pegged at a relatively junior level,

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By 2040, Africa will be home to one in every five of the planet’s young people and will have the world’s largest working-age population. - Lions on the move: The progress and potential of African economies

Numerous local and international studies have clearly demonstrated that low remuneration is not the only incentive for individuals to act unethically. However, it is an accepted fact that official recognition, coupled with competitive compensation, can play a key role in attracting the talented, value-adding skilled professional to an organisation.

reporting into other executive board committees

practitioners “strategically” accept any supply

who may not have a real understanding of the

chain management role and associated

strategic importance of supply chain management

remuneration, knowing perfectly well that

within and beyond organisational boundaries.

through their deceitful means, they will

AvOIDAnCE Of THIS ORGAnISATIOnAL COnunDRuM IS CAuSInG LOnG-TERM HARM Skirting around issues creates more complicated challenges for employers, employees, industry and society at large. 1. Firstly, demoralised and unethical actions often thrive in an environment where policies,

make up for any perceived shortfall. 5. Fifthly, it is currently an accepted fact that a number of practitioners both in government and the private sector are really not professionals, but wily personalities who have taken up positions for short-term vested interests. 6. Finally, the unfortunate end result of all the above is that true public and private sector professionals get caught up in this unfortunate quagmire.

processes, recognition, incentive schemes, have not kept pace with required structural changes, organisational and societal demands. 2. Secondly, dishonest conduct is largely driven by, among other things, cupidity, short-term gains and a lack of professional pride and recognition. With comparatively lesser remuneration for procurement and a lack of real authority and recognition, the chance of an individual being tempted to engage in fraudulent deeds with potential suppliers, other high ranking officials/executives or politically connected individuals and later resigning to enjoy their dishonourable returns, is on the increase. 3. Thirdly, it is an accepted fact in personal and in business life, that one usually gets what one is prepared to pay for. The same applies to the sourcing of skilled human capital. Today the comparatively low salaries for procurement and supply chain management experts have resulted in governments and the private sector not attracting the right valueadding professionals, but rather opportunistic individuals, with their own and sometimes unethical self-serving short-term agendas. 4. Fourthly, the on-going confusion between purchasing, procurement and supply chain management, coupled with the lack of a recognised statutory regulatory body, has enabled many practitioners to masquerade as professionals. These opportunistic

InHERITED ORGAnISATIOnAL STRuCTuRAL AnOMALIES MuST BE CORRECTED SOOnER RATHER THAn LATER The time has come for industry leaders and government policy makers to objectively address these inherited and outdated policies and structural anomalies that continually fail to accept or recognise the added value of a true procurement and supply chain professional, and consequently cause more harm than good to businesses, government and society as a whole. In so doing various institutions, public or private, will be able to define the appropriate strategicfunctional and associated remuneration levels that will help to avoid opportunistic individuals. Such a move will assist in attracting the right value adding professionals to contribute quantifiably to the much needed medium-to-long term:

ABOuT THE AuTHOR Professor Douglas Boateng founder: PanAvest skill development partnership 011 469 3860 dboateng@panavest.com www.panavest.com Prof. Boateng is Professor Extraordinarius, Supply and Value Chain Management at UNISA Graduate School of Business Leadership; Independent Distinguished Extraordinary Chair in Operations and Supply Chain Management at the Institute of Operations Management Africa; Chair of the CIPS Africa Strategic Advisory Board; and Founding Chair of the West African Institute for Supply Chain Leadership. For a full biography visit smartprocurement.co.za/spr

1. Organisational bottom line peformance requirements. 2. Government service delivery programmes and waste minimisation initiatives. 3. Shareholder wealth creation and protection. 4. Local economic development. 5. Reduction in unethical, self serving behaviours. 6. Extension of market reach. 7. Responsible corporate citizenry. 8. Home grown supplier and enterprise development projects. 9. Various local economic development and industrialisation programmes. n

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ETHICS

FIVE Tricky ethical questions and answers By Ernie Claassen Presenter and Course Developer: Commerce Edge SA

“Treat people as if they were what they ought to be and you help them to become what they are.” Johann Wolfgang von Goethe

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Aberdeen research shows that each new Dollar of spend brought under management can yield 5 to 20 per cent of total cost savings. - 2012 transforming procurement organisation case study. KPMG

Unethical behaviour begins with free choice. But, once begun it is a downhill slide on a slippery slope. Some professionals justify their behaviour by judging themselves against their intentions rather than against their actions. However, the ultimate litmus test is whether you would feel comfortable if the press spoke to your suppliers about your relationship with them. Below are solutions to a few tricky situations in which procurement professionals will likely find themselves at some point in their careers.

Q1

WHAT CAN I DO WHEN A BIDDER SUGGESTS A COST SAVINGS IDEA?

you can say: “Thank you for your idea. However, to have a fair and ethical bidding process, I cannot accept a bid whose specification does not follow the same rules for everyone. Therefore, we have two options: i. We can stick with our original specifications; or ii. We can amend the request for proposal and give all suppliers a fair and equal opportunity to bid on the revised specifications. However, because the specification revision is your idea, I will not share it with other suppliers without your permission. Which option can we agree upon?”

Q2

HOW DO I STRUCTURE A REQUEST FOR PRICE (RFP) IN A CLEAR AND ETHICAL MANNER?

Structure your RFPs so that suppliers are encouraged to submit cost savings ideas. Include a disclaimer that reserves your right to accept a price proposal that contains a beneficial suggestion, even if that suggestion involves an acceptable change to the specifications.

Q3

WHAT ARE THE SIGNS OF A TRULY ETHICAL AND COMPETITIVE BIDDING PROCESS?

However, it is challenging for an organisation with thousands of employees to find a prospective supplier in which none of its employees have a friend or spouse, etc. Therefore, adopt an approach known as Disclose, Recuse & Document (DRD): a three-step method to ensure that decisions are made without unethical influence. Disclose: Advise management of a relationship that may appear to be a conflict of interest. Recuse: Remove yourself from participation in a decision in order to avoid a conflict of interest. When you disclose the relationship to management, advise them that you want no involvement in the decision owing to the potential for real or perceived personal gain. Document : Produce and retain written correspondence about your disclosure: good documentation can prove that a decision was reached ethically. Ethical accusations often arise months or years after a decision is made, by which time it can be difficult to remember the steps taken to maintain the integrity of the decision-making process, and “forgotten” details will only strengthen the appearance of impropriety.

Q5

• The basic duty of a Procurement professional is to achieve the objective set by the company. One must always recognise that all acts carried out as a company representative must be for the benefit of the company and not for personal gain.

• Ethical awareness as an employee: Being unaware of ethical practice may cause side effects that are more serious than the mistake itself.

• Healthy and rational procurement activity: Do not engage in, permit or support unfair practice that goes against accepted practices.

• Role as a market monitor:

• Specifi cations are not based on a single supplier’s capabilities. • O bjective supplier selection criteria are determined before issuing the solicitation.

WHAT ARE MY RESPONSIBILITIES AS A COMPANY REPRESENTATIVE?

• The selection criteria are shared with all bidders.

• P rocurement activities must be legal and ethical. A Procurement professional must act with high integrity and engage only in fair transactions. • Activities that cause personal confl icts of interest and deliberate slander will significantly lower procurement’s competitiveness and image within the business and will impede advances in the procurement area. • Listen to suggestions from suppliers with an open heart and make an effort to carry out a frank and amicable exchange of opinions. • Keep your promises. • Create a friendly and open atmosphere that promotes a free exchange of opinions, discussions, questions and answers.

• A reasonable timeframe in which all capable bidders can respond has been set.

• D uring the bidding process, no gifts, nor any other type of contribution from any competing bidder, are accepted. Such acceptance may appear to influence the decision.

• A ll suppliers’ questions regarding the bid are listed anonymously on one email or letter sent to all suppliers.

• Role as a window: To the personnel of supplier companies

• A n extension of the bidding deadline is granted to all suppliers, at the same time. • R equests for information about other suppliers’ bids (including the monetary or percentage differential between one bidder and the lowest bidder) are refused.

Q4

HOW CAN YOU AVOID A PROCUREMENT ETHICS SCANDAL?

Use the DRD principal and stay clean. It is unethical for a Procurement professional to award an order to a supplier with whom he or she has a personal or financial relationship.

procurement is a window and the face of an organisation – your acts are being evaluated. Therefore, act with pride and integrity as you strive to be a leader in the procurement area. Remember that your acts are being evaluated by internal customers.

• Role as a leader: Procurement professionals must be aware that company development and personal growth cannot be separated. In order to create results for the department one must trust and co-operate with fellow workers and begin a new project not with fear of failure, but with a progressive attitude to learn from the experience. For answers on further ethical questions contact Liam Morrison at liam@smartprocurement.net n www.smartprocurement.co.za

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GLOBAL

mAnAging gLobAL SUppLy And RiSk: eSSentiAL StRAtegieS And beSt pRActiceS ABOuT THE AuTHOR Llewellyn Roberts President: L. Roberts & Associates robertsasc@aol.com (419) 861-2563 (USA) Lew Roberts’ 25-year consulting and management development career has included working with blue chips such as UPS, Coca-Cola, SAPPI, De Beers, and Mercedes Benz. An accomplished business executive, author and lecturer Lew currently teaches on the MBA programme in Operations and Supply Chain Management at the Gordon Institute of Business Science. He is coauthor of “Managing Global Supply and Risk: Best Practices, Concepts and Strategies”. Visit smartprocurement.co.za/spr for a full biography.

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The organisations that will emerge stronger from today’s uncertainty are those that develop more flexible, cost efficient business operating models that allow for a variety of different outcomes, from being able to operate effectively in new, growth markets to being able to survive rapid reductions in consumer demand in a core market. - Strategic Visions on the Sourcing Market 2013: KPMG

Although the world is trying to work itself out of a global recession, global business activity continues to increase. Businesses continue to look to foreign countries as sources of services and products, at lower labour costs, and also as potential markets for finished goods, with supply chains tying together worldwide sources and markets. However, as trade barriers fall and global competition increases, global supply chains require increased risk management in order to ensure continuity of supply. Demographics combined with economic forces and changing geo-political events are changing the global market. Offering great potential, other geographies are looking to compete with Asia as a source of supply including, for example, countries in Africa and South America. Africa provides a bountiful supply of labour at competitive rates as well as other needed resources. In addition, Africa’s advantage becomes obvious when examining supply chain length from Asia: with ocean transport taking several weeks from port to port, Egypt, Tunisia, Kenya and South Africa have access to shorter supply routes on waterways leading to the European Union and the United States. African nations are already hard at work building the infrastructure to take advantage of the global market. Leading companies throughout the world are looking to formulate integrated supply strategies on both a local-geographical and a global basis. This includes strategically sourcing materials and components

worldwide and selecting global locations for key supply and distribution centres. This growth in global trade will continue to have a significant impact on supply chains and will require increased risk management in order to help ensure continuity of supply. For the foreseeable future the global trends will continue to affect global supply. Competitive pressures and ever more demanding and savvy customers will continue to drive the need for low-cost country sourcing. Businesses will continue to restructure themselves to operate on a global basis to take advantage of low-cost country sourcing, but will need to assess the perceived or apparent risks in a low-cost country, such as labour sustainability, labour demographics and quality issues, as well as any perceptions of exploitation held by operating unions. There are several concerns that companies experience when operating globally, including economic, political, socio-economic (developing local industries or boosting employment levels), logistical, contractual/ legal, competitive, cultural, environmental, sustainability and infrastructure concerns. The following constitute some of the key trends and future areas of focus in risk management as we see them. Worldview Approach. Current and fairly recent events (for example Swine Flu and the SARS epidemic, and more recently, the Japan Tsunami and hurricanes Rita and Katrina) have demonstrated that an event affecting one part of the supply chain may interrupt the operations of other supply chain members both upstream and downstream. Hence, now and in the future, it is and will be important to review the entire supply chain, across all countries, and across all tiers of supply (end-to-end supply chain visibility and planning) when selecting and implementing

risk management strategies rather than only focusing on one country or geography or only on first and second tier suppliers. The world is going to continue to become more and more interconnected with global supply increasing and the need for risk management also continuing to increase. Geo-Political Events. The world continues to experience major upheavals including politically. Several parts of the world, while seemingly attractive from a low-cost country sourcing perspective, pose a risk to continuity of supply. Political factors such as instability of governments and lack of law and order have implications for supply risk. Companies that are sourcing globally have had to adjust their strategies, and will need to continue to adjust their strategies because of this. For example, several years ago, a major U.S. firm elected to have raw materials for some of its products manufactured in China and then shipped to Somalia for finishing. They then decided to switch finishing of products to Egypt because of the unstable government, at the time, in the Somali region of Africa. Of course Egypt has also recently experienced its own series of political upheavals and now the U.S. firm is thinking of “nearshoring” the manufacturing and finishing of these products, potentially to a country like Mexico, not only because of geo-political risks, but also from the point of view of looking to reduce overall supply chain costs (of course Mexico is not without its share of risks!). Geo-political events will continue to have a great impact on supply risk. Companies now and in the future will need to be more attuned to these changes as they select potential sources of supply. They may need to either reconsider using these sources of supply or establish necessary risk mitigation and best practice strategies including, for example, dual-country sourcing, additional inventory in the supply chain, building adaptability

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GLOBAL

and flexibility into the supply chain, or a capability to switch relatively quickly to alternate sources of supply. Transfer of Information and the Agile Organisation. Information is and will continue to be the currency of the supply chain. In the future, information on areas like fluctuations in national currencies and varying inflation rates among industrialised and developing countries; and an organisation structure capable of swiftly and accurately transferring knowledge and skills on a global basis will be essential elements of maintaining competitive advantage and key to managing risk. In order to accomplish this, supply organisations will need to master a complex set of relationships and have supply leadership in place with the capability of managing logistical and informational flows to support global supply strategies. Advancements in Technology. Technology continues to change and evolve at a rapid rate. It is this technology that underpins and enables global supply. Supply managers will need to keep abreast of changing technology and ensure that they are able to leverage this technology as a means of enabling global supply and mitigating risk. As supply managers cast their nets ever wider in search of new sources of low-cost supply they will need to continue to evaluate the technology capabilities of potential suppliers in order to ensure that these companies have the necessary technologies in place to link with and support existing technologies within other elements/entities in the supply chain. Where these technologies do not exist, or are outdated, supply managers will need to understand the risks to supply continuity or effectiveness that this poses and implement risk mitigation strategies accordingly. Protection of the Environment. Risks to the environment, from poor supplier practices, will continue to be a major source of concern for supply managers. The trend by governments, institutions and companies to look to protect the environment and ensure that environmentally safe practices are in place is expected to continue and gain momentum; supply managers will need to be attuned to this and have the necessary controls in place with suppliers to mitigate potential risk to the environment from poor supplier practices in this area. Ensuring that a corporate social responsibility

(CSR) programme strikes a balance between profitability and sustainability must be matched by clear communication of the CSR programme’s requirements. Contractual and Legal Risk. As supply managers continue to expand their supply networks they will need to be keenly aware of the social and legal ramifications involved in production of poor quality goods by foreign suppliers, which may pose a serious health risk to humans and/or animals. These types of risks can be catastrophic if they eventuate and probably represent the greatest threat to continuity of supply and to company reputation (think of the damage Toyota’s reputation incurred despite its swift global rollout of corrective action in response to customers’ claims of their vehicles’ uncontrolled acceleration and poor braking).

Horror stories abound concerning supply from foreign countries and recall scares, from lead in children’s toys, tainted baby milk formula, to poisoned pet food. Supply managers will need to ensure they have stringent risk mitigation strategies in place with current and new foreign suppliers to help ensure quality of supply here.

ConcluSION The whole area of global supply continues to expand and to provide both opportunities and threats to modern supply managers. While the above areas constitute some of the key trends and best practice areas in supply and risk management they by no means represent all of these trends or best practice areas. The job of the modern global supply manager encompasses risk management and risk mitigation: global supply inherently carries more risk. Some of these risks are well known - other new threats will continue to arise as global supply sources continue to grow and expand. It is essential for supply managers to continually monitor and manage risk on a local, regional and global basis taking the above trends and best practices into account in order to be successful in global sourcing initiatives. n

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Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip. Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip.

ReAd SoFt

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fuTuRE AnD TREnDS

the FUtURe FoR SoUth AFRicA IMPLICATIOnS fROM A SuPPLy CHAIn PERSPECTIvE Written by: Dr Ernst van Biljon Clem Sunter Chairman: Anglo American Chairman’s fund Clem Sunter is the former CEO and Chairman of Anglo American’s Gold and Uranium Division and an acclaimed authority on management strategy and planning, and corporate social responsibility. Well known for his scenario planning expertise he is the author of over a dozen acclaimed business books, covering areas including leadership, crisis management, planning and strategy. Clem serves as Chairman of the Anglo American Chairman’s Fund, and works to mobilise private sector support for the fight against HIV/Aids.

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a

Mobile phone technology has exploded in Africa. Clem Sunter points out that 70% of Africa’s Internet access is via mobile phones. This level of connectivity holds very specific opportunities for companies and will assist them to: (1) promote their products and services in Africa via mobile and smart phones allowing them to “talk to their customers” more directly in a way that has not been done on this continent as yet; (2) receive instant market feedback and intelligence, thereby improving supply chain efficiency; (3) improve speed to market and develop an ability to adapt quickly to market changes; and (4) use the connectivity associated with mobile and data technology for improved management of supply chain infrastructure (including transportation resources). Africa is set to experience a technology explosion in a space of time that no other continent has experienced in contemporary times. This will also grow the opportunity for technology- and innovation-based products. The key here is to think future technology, within an African-user context. Banks are already doing it all over Africa via very innovative payment and trading systems.

Ten months ago well known scenario planner Clem Sunter alerted supply chain professionals to a significant shift in the probability of outcome for three key future scenarios - a crystal ball model that he and his business associate, Chantell Illbury, have developed to great and worldwide acclaim. Let’s quickly highlight these scenarios, which act as signposts for the future: • P  remier League Country: According to this scenario, South Africa will remain in the premier league of successful nations and continue to make an impact globally at both political and economic level; • S econd Division Country: In terms of this scenario, South Africa struggles to make headway at both domestic and global level and is relegated to the second division of nations. It is not a premier league player anymore; • F ailed State Country: The failed state scenario represents the most harmful and undesirable position for South Africa as the country becomes ungovernable in many respects and is bogged down by a negative spiral of domestic unrest. It is a scenario where the “Arab Spring Uprising” begins to play out in South Africa. Whereas Sunter and Illbury have always attached a much higher probability to the Premier League scenario than the other two, they have now set the Premier League at a 50% probability level, with Second Division at 25% and the Failed State coming in at a 25% - for the first time - probability of occurring. As supply chain professionals, the question we face is: How do these scenarios affect us and how can we contribute to reinforcing and building on Premier League status for our companies, organisations, our country and our continent? The opportunities are numerous for South African companies and African organisations and are driven by a demand for products and services on an unparalleled scale. Let’s assess some of the drivers for growth in Africa and the potential they hold for your company or organisation.

The investment in development corridors in Africa is opening up new opportunities for agriculture and infrastructure. Africa has always had the ability to be the “bread basket” of the world, with the natural resources to produce crops all year round. Agri-SCM will drive supply chain and logistics infrastructure development in Africa and is already working in tandem with mining operations to achieve this. How can you firstly, contribute to it and secondly, benefit from it? A common market is emerging in Africa and is being driven by regional dynamics for more open trade. Regional markets are likely to act as the catalyst for a bigger common market over time. The question is whether Africa will look towards South Africa as one of the political and economic leaders accelerating the common market idea or increasingly look elsewhere (perhaps towards Asia) to the disadvantage of South Africa. Think of how your company can be a key player in this common market and hold the advantage for South Africa?

In essence, we are at a 50/50 cross roads between finding ourselves amongst successful growing nations versus a country where the “miracle” of the early 1990’s fades away and leads to unimaginable and even disastrous outcomes. With increased growth and prosperity in Africa, there will be a much higher demand for energy, more specifically for sustainable energy solutions. Therefore, involvement in Africa calls for responsible resource management. Be part of the solution when you do business in Africa and contribute to making the continent more sustainable. The opportunities in Africa are not just for outbound logistics and this is where procurement professionals need to be smart and identify sourcing opportunities from low-cost producers in Africa. Although the prospects for sourcing manufactured goods from Africa are still somewhat limited, it may pose interesting supplier development possibilities for the creative procurement professional. The stronger positioning that the Chartered Institute of Purchasing and Supply (CIPS) now enjoys in Africa only augurs well for local and regional supplier development. In conclusion, we are still sitting on a 50% probability for South Africa to remain in the Premier League. Supply chain management can tip the scales toward South Africa and Africa not only participating in the premier league, but also winning it! n

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GLOBAL

Low cost sourcing from China. is it worth the risk? There is clear evidence that it is possible to have a successful experience when sourcing products and equipment from China, despite negative reports and the bad press that Chinese manufacturers and exporters seem to receive on a regular basis. Many companies acquiring capital goods and electrical engineering components have enjoyed cost savings of around 25% for products of an international standard. Let’s look at why and how...

been particularly successful in procuring

The “how”

heavy machinery, vehicles and tyres, electrical

Conventional wisdom says, “test the waters”. Start slowly, source some products on a trial basis and set up your own internal processes, especially if this is the first experience of lowcost-country sourcing. Identifying, evaluating and selecting Chinese suppliers require a systematic and focused approach far beyond the normal process used to source locally.

products, boilers and materials handling

The “Why”

equipment. Besides capital equipment, China

The “why” question is easily answered. Several

is also a leader in manufacturing and exporting

factors contribute to its attractiveness: a well-

apparel, high-tech components, electronic toys

developed infrastructure, a low price/quality

and games. Despite some slowdown in growth

ratio and lower labour costs.

in early 2013, its dominance is obvious and

Various other factors contribute to its position

likely to continue.

of strength: economies of scale, a diversified

However, it is a complex society with an

supply base and many widespread industrial

unfamiliar economic and political environment.

clusters.

China is a very large country with many

China is currently the world’s largest and

challenges in transportation and logistics.

fastest-growing exporter, taking over from

Manufacturing activity is spread across many

Germany in 2009. Our mining and power

provinces in industry groupings, some cities

generation industries in South Africa have

have more than five clusters.

Buying from distant locations like China has a long list of risks: longer lead times, sea and air transport and logistics, quality control, payment and cash flow, cultural and language challenges.

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As global businesses re-think their strategies, and finance functions transform themselves to adapt to new business models and circumstances, compliance functions need to get ahead of the curve. - Strategic Visions on the Sourcing Market 2013: KPMG

Written by: SmartProcurement Review Staff Writer

The possible methods of managing the process of outsourcing include using a Chinese locallybased procurement or trade agent, fly-in and fly-out yourself, use an established global procurement consultancy or even set up your own local office in China.

KEy RISKS One of the main risks is poor communication between the supplier and the buyer. Both written and verbal communications are potential problem areas, often there are many departments and divisions involved in both parties, especially in government agencies and large state-owned enterprises. Contract documentation is also an issue, technical specifications are not always clear and detailed enough and often the finer points are literally lost in translation. In some cases, manufacturers may “adjust” specifications in order to cut costs and increase profit. Inconsistent and variable quality is a real concern. Sales agents earn commissions from the manufacturers so do not always concern themselves with the buyer’s problems and are often notably absent when there are claims or product rejects or returns. Using web-based Business-to-Business (B2B) marketplaces can also be challenging as they really act only as matchmakers: developing the trading relationship is up to you. Dirk Kotze, Director and General Manager of Beijing Axis, a specialist consultancy in China procurement, says that there are two simple requirements.

“Poor or inconsistent quality is not a concern if the correct process is followed. Most low-cost countries have a small number of reputable and cost- competitive suppliers, followed by a larger number of mediocre players and a very long ‘tail’ of low-grade suppliers that are best avoided. The challenge is thus to identify the most suitable suppliers and to have representatives on the ground who can look after your interests.” Lack of after-sales service is often cited as a failing of even the most reliable of Chinese exporters. While companies are quite capable of manufacturing to international standards they lag behind other countries in providing responsive feedback and handling of buyers’ complaints relating to the procure-to-pay process, logistics, packaging and on-time deliveries. South Africa buyers are cautious about leaping into low-cost-country sourcing, and rightly so, even with China where the path is welltrodden. Jeremy Barnett, Managing Director of China Confidential (Pty) Ltd, a subsidiary of an Australian consultancy, observes that “many South African businesses are naturally reluctant to leave their procurement outcomes to chance, and often resort to flying staff back-and-forth to China. In this case, the extra cost and disruption, combined with reduced effectiveness in China due to lack of crosscultural skills, can still mean that promised savings disappear.”

MAnAGInG AnD MITIGATInG RISKS Gathering market intelligence and doing the necessary due diligence on new suppliers would rank highly. Another crucial step to insure against disappointment is to provide and demand as many details as possible about their internal processes, not forgetting quality control. Design changes after placing an order can create delays and increase costs: this is an area where projected savings can disappear quickly. Cultural customs and conventions are a significant informer of business practices in China and it can be difficult for outsiders to respond appropriately. There is a case for engaging the services of an intermediary, who is not a sales agent, to help bridge the language gap and provide the face-toface contact needed for negotiations and problem-solving. There is a growing market for outsource consultancy services and for Chinese procurement specialists who can relieve most of the stress of doing business in such an unfamiliar environment.

TRuST As early as 2007, a study by the Boston Consulting Group concluded that “there is no substitute for having people on the ground in China, qualifying and developing suppliers: integrating them into product development requires specific technical skills and

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GLOBAL

experience.” Most medium size companies do not have the capacity to open their own support facilities within country. However, having direct access to the manufacturer using in-country project managers and contracted-in procurement specialists can result in lower prices, better quality and shorter lead times. If specifications and instructions are provided in a format that Chinese suppliers will understand using your trusted intermediary, suppliers will feel comfortable contacting them to discuss

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concerns or questions as they arise. The buying organisation, at home, can have confidence that their interests are being protected.

Conclusion China sits at the top of the pile in low-costcountry sourcing opportunities and so global organisations under pressure to save costs cannot ignore the opportunities it offers. Despite the risks, it is possible to manage the process if armed with enough information, great advisors, a good strategy and the energy and skills to follow through. n

References Global Sourcing of Capital Equipment – Extracting value and managing the risks. Slide presentation by The Beijing Axis to SmartProcurement World - November 2012. www.thebeijingaxis.com Missing Manufacturing’s Big Opportunity – How to get it right when outsourcing to China. China Confidential (Pty) Ltd. www.cconfidential.com

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OuTSOuRCInG

mAke oR bUy? Thinking about outsourcing Outsourcing is not merely the transfer of an organisation’s internal activity to a third party that provides the business need via a procured service - it is an emotive word. It implies that maybe the internal operations are not very good, or that we are making a subjective call that suppliers are better than we are. In truth, the emotions are always underpinned by a concern that many of the individuals involved may lose their jobs and a fear of what the process will involve. So, when faced with this myriad of decisions (and emotions) take a step back and understand the pressures that circulate around an outsourcing decision.

An environment that supports outsourcing… A focus on shareholder value has led companies to pursue aggressive cost-reduction efforts to influence the bottom line. Outsourcing is one of them. It leans on the Core Competency Theory, which argues that companies should focus their resources on leveraging their core competencies - their embedded knowledge, skills and processes that create differentiating customer value. The theory was developed and promulgated by Hamel & Prahalad in “The Core Competence of the Corporation”, which continues to be one of the most frequently reprinted articles published by the Harvard Business Review. Contemporary outsourcing involves divesting, outsourcing and/ or reducing non-core activities, such as business lines or value chain functions. The business case is enhanced by new technologies that enable companies to physically consolidate information technology assets without degrading end-user performance. Adding cheap, ubiquitous data transfer capabilities to the mix means that data processing does not need to be physically co-located with the presentation or output of data. As a result, outsourcing vendors can consolidate their own data centres to create mega-service centres, and

collapsing 20 or 30 facilities into four or five mega-centres drives down the price of data processing and storage. Further bolstering the outsourcing business case is the rapid pace of technological change that has created skill gaps and increased the risk of obsolescence, challenges which vendors are often better prepared to handle.

…versus the pressures not to outsource The dynamic business environment in large companies often distracts management’s attention from outsourcing initiatives that in reality require significant executive leadership and attention. A pre-requisite for sustained outsourcing success is a clear link into top level corporate strategy. However, management must also accept the potential loss of control of activities when transitioning to an outsourced model. Psychologically, traditional control methods such as hierarchical power and direct action are no longer immediately available. Problems can no longer be resolved through the tools of direct control (raw power, politics, walking down the hall, etc.). Operationally, management’s focus must change from “controlling how” to “defining what”: the customer defines the outcomes and the vendor controls execution and delivery processes. The new procedures required to get things done mean that everyone who interacts with the outsourced function will have to do things differently, which may highlight in-house business behaviours that were dysfunctional. Furthermore, speed and flexibility are sometimes casualties of outsourcing as there is an extra layer of management between the business and the outsourced function. Then there is the risk that the vendor will not be able to perform as required: vendor-delivery of services is rarely as seamless, smooth and trouble free as promised, and few vendors deliver all services equally well. Consider that the vendor’s sales team and operations team will have little overlap, which can create incentives for overselling of the

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Four groups of consumer-facing and infrastructure-related industries will, together, be worth $2.6-trillion in annual revenue by 2020: Retail; Communication and Banking; Agriculture; and Resources.” - Lions on the move: The progress and potential of African economies

vendor solution. Successful outsourcing relationships mitigate this risk with a strong, capable management team on both the vendor and customer side. Meanwhile, even when done properly, outsourcing creates human resource issues. It usually assumes the transfer of assets and/or people from the internal organisation to the third party, which affects entry into and exit from a potential outsource contract. Transferring work (and thus jobs) to the vendor is a source of substantial anxiety for employees (the terms of the deal may or may not require vendors to employ affected employees) and union-member employees may move to block the outsourcing initiative or disrupt its implementation. However, even if the terms of the deal do require the vendor to employ affected employees, trying to sell them on the prestige, opportunities, remuneration package and job security offered by the vendor is a battle of perceptions, especially if the vendor’s facility is located in a different region requiring transferred employees to relocate.

The truth is that the pressures are finely balanced When considering different sourcing options, bear in mind that there are a number of ways in which operations can be sourced. In fact, there is no ‘right answer’ for positioning - one size definitely does not fit all.

ABOuT THE AuTHOR Ian Russell Head, Procurement: South African Breweries Ian.Russell@za.sabmiller.com

Dependence

Higher

Interdependence

Ian Russell is a Fellow of the Chartered Institute of Purchasing and Supply and was voted as one of the Top 20 Leading Lights of the procurement world by Supply Chain Management magazine. He holds a BSc (Hons) in Economics and an MBA (Distinction) in Strategic Procurement. Visit smartprocurement.co.za/spr for a full biography.

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OUTSOURCING

The influences to consider include an organisation’s maturity, core value proposition and the maturity of the market within which it operates – it may be appropriate to outsource a simple processing activity, but retain the key intellectual property-related capability. Refer to the table for a rough guide to choosing a suitable outsourcing model. On-site

In-house operation

Shared ownership

Outsourced operation

In-country

Off-shore

• Process is world-class. • Direct customer contact. • Process is not mature. • Brand impact. • Intellectual property right is proprietary.

• No one else offshored. • Enough scale internally. • Frequent changes. • Business criticality high. • Complex/tight linkage.

• Access to scarce skills. • Long-term viability. • Stable, mature processes. • In country experience/ operations. • Direct control required.

• Complex/tight linkage. • Business transformation. • Less defined/unstable. • Control exercised through shareholding.

• Complex/tight linkage • Business transformation • Less defined/unstable.

• Access to scarce skills. • Long-term viability. • Stable, mature processes. • Complex/tight linkage. • Control exercised through shareholding.

• Frequent changes. • Complex/tight linkage. • Client contact important.

• Frequent changes. • Access to scarce skills. • Stable, mature processes. • Long-term viability • Scale accessed only • Scale accessed only through market. through market. • ‘Lift & drop’ activities.

A final word of warning: making outsourcing pay is not always easy. On average, to provide a better cost base to the customer, the vendor needs to deliver less than 65% of the old cost base, for the customer will be faced with costs associated with the outsource, such as switching and adapter costs (as much as 3 and 7 per cent, respectively, of the original cost of hosting the process in-house).

Original total cost base of the outsourced activity - 100%

Outsourcing Definitions Business Process Outsourcing (BPO) refers to the outsourcing of paper- or voice-based, mid- and back-office processing activities (such as account servicing, cheque processing or call centres). Information Technology Outsourcing (ITO) refers to the outsourcing of IT support functions and/or the development of applications and associated software. Offshoring refers to the delivery of that service by a supplier from outside the organisation’s home country. Lift & Drop Outsourcing refers to the outsourcing of a mature, steady-state operation, where the transfer of asset and people is often part of the deal. Lift & drop outsourcing is rarely profitable, unless: • a supplier can access significantly greater scale than we can; • h  as invested in ‘leapfrog’ technology that changes the cost base; or • c an access labour rates offshore much lower than ours. Transformational Outsourcing is the development of a process or capability to service the business requirement. Therefore, Transformational Outsourcing is likely to offer higher yields, but greater risk.

NEW COST - 65%

Switching Cost

3%

Adapter Cost

7%

VAT (on new cost and profit)

13%

Gross Profit

12%

Therefore, to ensure the outsourcing initiative adds to the bottom line, organisations must exert maximum leverage in the market place, and look at changing the way in which the task is done and who could do it in the market. n

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Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip. Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip.

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SuPPLy MAnAGEMEnT

SUppLy mAnAgement techniQUeS FoR IMPROVED SUppLy chAin deSign I argue that supply chains are driven by people and their behaviour, all along the supply chain, rather than just the hard assets and technology that most people seem to think is the case. “Don’t even try to argue with Dr. John Gattorna that supply chains really just boil down to a system of distribution centres, procurement processes, technology tools, and transaction routes. You won’t win,” says the respected supply chain thought-leaders’ website. Dr. Gattorna spoke to SmartProcurement Review about viewing supply chains as ‘living ecosystems’ whose behavioural aspects we need to better understand in order to select suppliers. “We must analyse our supply base from a behavioural perspective, in the same way that we analyse our customers in order to understand their preferences. This is the way forward because understanding supplier preferences enables us to choose different suppliers for different supply situations.” This is necessary, says Dr. Gattorna, because the movement towards global procurement over the last decade has “been a bit of a disaster, unleashing procurement people at the back-end of an organisation who are

driven by KPIs that have nothing to do with the front-end of the business.” They have been trying to reduce spend in certain categories, using segmentation methods that “are completely out of date”, for instance, by whether they are buying a commodity or a strategic/key/standard item, and then looking for suppliers who can provide these at a generally lower cost. Dr. Gattorna argues that one must examine this process from the other direction by looking back into one’s supply base and categorising one’s suppliers based on their preferences vs. what the supply situation requires: collaborative value, a transactional approach, an opportunistic response or an innovative solution. Suppliers who offer collaborative value are those who want a genuinely close working relationship with team work and information sharing; who prefer a long-term partnership with regular business. “This is the type of supplier you will rely on as a stable source of supply for many products, be they commodity, key or strategic,” says Dr. Gattorna. Suppliers with a transactional mind set do not exhibit the same type of selling

expectations as collaborative-value suppliers. Transactional suppliers tend to have less of a relationship mind set: they do not wish to share information and can at times be quite adversarial. However, they are driven by standard processes and the risk of loss, so they want tight contracts and regular orders. “This is the type of supplier you go to when you have a large order with a long lead time and you will get a low cost from them, mainly because they offer greater volume at the lower cost,” explains Dr. Gattorna. Another group of suppliers Dr. Gattorna names opportunists. This type of supplier has the capability to respond rapidly or might have extra capacity to meet volatile demands. “They are useful when we need a quick follow-up order for products previously bought from a transactional supplier, but which we cannot get from the transactional supplier because it may require a smaller product run, or the transactional supplier may not have the capacity.” The opportunist offers only their capacity in response to urgent demands; they look to results, do not worry too much about processes and are very commercial, for which you pay a premium – but that might be

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African governments are forging new types of economic partnerships in which buyers from these countries provide up-front payments, make infrastructure investments, and share management skills and technology. - Lions on the move: The progress and potential of African economies

Global procurement over the last decade has been a disaster quite acceptable to us in the given situation. Opportunists do not want a relationship. “UK retailer Marks & Spencer (M&S) applied this very successfully in the UK over the years; they had many domestic suppliers to satisfy orders, but if they needed a quick top-up order because items had sold better than expected there were suppliers in that same domestic market that could respond quickly and supply the item.” However, when M&S moved all their procurement off-shore to China and India “it was a disaster”. M&S no longer had the opportunity to quickly go back to the suppliers to get top-ups, and lead times became so long that it could be a year from placing the order to receiving the garments, by which time consumer preferences (and the season’s fashionable colours) could have changed. “For ‘trendy’ products with short lifecycles you want to procure from a closer-to-home supplier base. For products that are less seasonal or trendy, that have a longer lifecycle, you can go further afield.” Lastly, Dr. Gattorna’s innovative solutions type buying behaviour: This type of supplier, probably not one of the previous types, puts greater emphasis on creativity and innovation. “When you have a particular problem – perhaps a technical problem with your product or it may require amendment – you approach this type of supplier for a new design or prototype. your goal is to solve the problem for your customer downstream so price is of little concern, if a concern at all.” Looking at your supply base in the way Dr. Gattorna has described above differs from “the typical procurement mind set of trying to squeeze price (except for the transactional type). Procurement people seem to automatically assume that their raison d’être is to chop the budget and reduce spend. My argument is that understanding the preferences of the players in our supply base enables us to decide which supplier is best suited to a supply situation.” Behavioural segmentation is one of the next developments within supply chain thinking that will improve overall business and network performance, says Dr. Gattorna.

“At the customer/demand end, we need to adopt behavioural segmentation methods to inform supply chain design. Similarly, at the supply end we need to use techniques to better understand suppliers’ expectations, and feed this into the network design as well.” “In the middle, we must overcome the complexity of global logistic networks by using network optimisation modelling to identify the best pathways for specific product categories to move through the network, from supply-side to customer-side. It is a matter of joining all the dots, even if it involves interdisciplinary thinking, because that is the new reality of business.” “In effect, multiple supply chains (or pathways) run through the enterprise, and taken in aggregate represent the business overall.” n

Dr John Gattorna was interviewed by Dr Ernst van Biljon.

ABOuT DR ERnST vAn BILJOn Strategic Projects: Commerce Edge Academy 0861 33 4326 ernstvb@commerce-edge.com www.commerce-edge.com Ernst holds a doctorate in Business Management specialising in supply chain management, and is a former Professor of Logistics Management at Nelson Mandela Metropolitan University. Over the past decade Ernst has worked on supply chain development projects in Africa as well as on the commercialisation of high-impact technologies in South Africa and abroad.

ABOuT DR JOHn GATTORnA Dr John Gattorna B.E. (Melb); MBA (Monash); PhD (Cranfield); Executive Chairman: Gattorna Alignment Adjunct Professor, university of Technology, Sydney (uTS) john@gattornaalignment.com www.gattornaalignment.com John Gattorna is one of the most influential contemporary thought leaders in the supply chain domain. In the late ‘80s, disenchanted with the lack of predictive power of logistics theories and practices, he set out to develop a new business model that would better inform the design and operation of enterprise supply chains. He found it in ‘dynamic alignment’, and has worked on the model with global blue chip corporations for over two decades. Many of the best global companies have begun to adopt the dynamic alignment model with significant positive results: a doubling of margins; big increases in sales revenue and lower cost-to-serve. Dr Gattorna’s three most recent books have been seminal: Living Supply Chains (FT Prentice Hall, Harlow, 2006); Dynamic Supply Chain Alignment, Gower Publishing, Farnham, 2009); and Dynamic Supply Chains (FT Prentice Hall, Harlow, 2010). Visit smartprocurement.co.za/spr for a full biography.

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THOUGHT LEADERSHIP

Thought leadership

on innovation in business

Internationally the drive for innovation in the private sector is increasingly supported by governments and innovation has become the key driver of the 21st century economy.

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The environment external to organisations is undergoing dramatic and rapid changes within the global, social, political, technological, environmental and legislative arenas. Radical industrial transformation has taken place over the last decade and will continue in future. Deregulation, global competition and the emergence of trading blocks are all exerting pressure for the radical rethinking of industry dynamics. The competitive space is also altering dramatically. In view of the above, organisations and people in organisations need to find innovative ways to adapt to the drastic changes in the external environment and other pressures that impact on organisational growth and development. This article focuses on the need for innovation and ways to build innovation capability within organisations.

The need for innovation Traditional boundaries are being destroyed as different market spaces become more accessible. Organisations producing quality goods are being forced to investigate innovative processes in order to meet the new quality criteria demanded by consumers, commodity chains as well as decisionand policy-makers. Supply chain professionals must identify suppliers that can support these demand pressures. If procurement continues to deal with suppliers that operate on a traditional, “just-in-case” philosophy, it will find itself caught in a spider’s web. Such suppliers will not support innovative ideas (depriving the buyer of competitive edge); are associated with carrying huge inventories; and are inclined to use aggressive selling or advertising strategies to push their products to the customer. Significant sustainable, innovative solutions reside in dealing with suppliers that are based on either lean or flexible supply philosophies. Such suppliers react

Technology is transforming customer needs, behaviour, expectations and choice (Drotskie & Viljoen, 2011). The impact of technology has also manifested with astonishing speed and thoroughness within the world of work, and has created unlimited opportunities for employees. Organisations have evolved into new entities and markets are more competitive and customers have become increasingly more powerful. The intensity of competition in world economies has escalated as business becomes globalised at every level and industrial capacity increases accordingly (Hyter & Turnock, 2005). The demands on leadership within a system include interpersonal dynamics, political gamesmanship, team interactions, diversity, leadership challenges, motivation, interdepartmental struggles for resources and personal development. The revolution represented by the ‘New Economy’ means that organisations have not only to develop and introduce fundamentally different strategies in order to remain competitive, but also to transform structures and systems radically through the optimal enablement of resources, which include, for example, effective management of talent and organisational culture (Viljoen, 2008). In this context, re-positioning procurement and supply chain early in new product development initiatives is at the heart of providing competitiveness and innovation in the supply chain.

The intent of innovation is to find new ways of solving problems that impact systemically. The notion that innovation drives a country’s economic growth cannot be disputed (Greenstone, 2011), and the organisations that will enjoy that growth are the ones able to continually introduce new products to the market ahead of their competitors. Treasy (2004) points out that every innovation carries two risks: (1) a technology risk (“will it work?”) and (2) a marketplace risk (“will people buy it?”). Demand for the innovative commodity will be affected if the price is too high to potential customers or because the market is not ready for the innovation.

patterns globally (Global Employment Trend Model, 2005) and this is still evident in organisations.

market leadership.

and support the buying organisation’s strategies of being global market leaders. Organisations are increasingly exploring cheaper delivery options in foreign countries. In this regard the meteoric rise of knowledge-intensive firms and the information revolution have altered employment

Dr Rica Viljoen Managing Director Mandala Consulting Group 011 782 3754 info@mandalaconsulting.co.za www.mandalaconsulting.co.za Dr Rica Viljoen is an organisational design practitioner and specialist consultant in sustainable organisational transformation, strategy formulation and leadership optimisation. With more than 16 years experience nationally and internationally, her expertise lies in organisational culture changes, cultural integration during mergers and acquisitions, and strategy translation. Visit smartprocurement.co.za/spr for a full biography.

Innovation should be at the heart of an organisation, society and country’s developmental agenda.

Procurement plays a pivotal role in ‘staying ahead of the pack’ by identifying alternative sources of supply, substitute materials and lead times. Therefore, concepts like early supplier involvement (ESI) and early purchasing involvement (EPI) support product innovation by transforming technical ideas, market needs and opportunities into new products or services. According to Lysons and Farrington (2012), there is strong evidence that speed to market creates enhanced market share and a reputation for

much quicker to ever changing customer demands

ABOUT THE AUTHOR

ABOUT THE AUTHOR Professor Bennie Anderson CEO: Da Vinci Institute for Technology Management 011 608 1331 www.davinci.ac.za Prof. Anderson has extensive global experience in learning design and accreditation, encompassing engagements with the United Nations, Global Leadership Forum and numerous international companies and learning institutions. He is a member of the Council for Higher Education HEQC Audit Committee. Visit smartprocurement.co.za/spr for a full biography.

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THOUGHT LEADERSHIP

survive and/or grow under increasing external pressures.

In the new world of work it is the task of leadership to create a climate that is conducive to different ways of thinking in order to release the benefits of such diversity.

Innovation conceptualised

Leadership needs to recognise that it is the mindset of people within an

Internationally the drive for innovation in the private sector is also increasingly supported by governments and in this regard innovation has become the key driver of the 21st century economy. Organisations without an ongoing commitment to innovation will have difficulty to

Innovation is synonymous with change, alteration, revolution, upheaval,

organisation that lies at the heart of innovation and growth. Innovation

transformation, breakthrough or metamorphosis. As organisations

begins with allowing differences and creative ideas, whereas creativity

undergo a metamorphosis, a complex network of transformations

begins with diverse people (Pedley, 2007).

takes place, both internally and externally. The internal transformations

Creative methods, such as co-creating an organisational strategy map

must be congruent within so that the organisation is capable of functioning in an efficient and effective manner externally.

and using Lego in strategy, appreciative inquiry processes, world café methodology, open space technology and organisational story-telling

A culture of innovation should be established and aligned to the

are implemented nowadays with considerable long-lasting impact

strategic architecture of the organisation. This should guarantee a

on releasing organisational energy that manifests in innovation and

behavioural framework for groups and individuals in organisational

productivity improvements.

groups to be innovative and creative. Systems need to build the innate capability to innovate in an increasingly complex environment.

Companies that outsource part of their supply chains (an innovative approach in itself), release more innovative potential by sharing best

Innovation as an adaptation to increasing complexity

practices through centres of excellence and by ensuring that the

Kahane in Senge (2003) identified three types of increased complexity. These are:

(Nothinghill, 2013). In supply chain management innovation is viewed

• dynamic, cause and effect, distant in time and space; • social, diverse stakeholders with different agendas and worldviews; and • generative, emergent realities in which solutions from the past no longer fit.

different aspects of the supply chain can focus on what they do best as a critical accelerator of the process. Internal leadership development programmes and learning institutes should assist organisations in developing leaders with thinking patterns that are informed by paradigm-breaking discoveries in diverse multi-disciplinary fields such as quantum physics, systems thinking,

In the face of such complexity the very concept of innovation

behavioural sciences, sociology, philanthropy and even spirituality. The

may constitute an impediment. Any thoughts of trying only to fix

impact of quantum physics alone challenges current thought processes

something that is broken no longer apply. Senge (2003) states that

with concepts such as uncertainty, disorder, probability, chaos,

this approach could lead to the imposition of solutions from the past

complexity and self-organising theory (Kurtz and Snowden, 2003;

and to the perception of reality as the adversary rather than as the ally.

Senge, 1993; Wheatly, 2005; Viljoen, 2012). New thinking patterns will

However, if leadership is able to view innovative problem-solving and

lead to new results for old problems (Laubscher, 2013). Innovation in

organisational decision-making as part of a larger process of creating

thought processes and thinking patterns, therefore, seems to become

what is desired then new thinking patterns may emerge. Although the

imperative in moving forward.

realisation of desired results within any context requires both learning and leadership, it mostly involves collective creating or self-organising innovation.

Conclusion It is a time of exploding choices and unpredictable change in which

Building innovation capability in organisations Co-creating an environment that is conducive for innovation requires

companies are faced with the cessation of loyalty – in both the world of the customer and that of the employee (Viljoen, 2008).

leaders to create a space where diverse employees can share conflicting

Leadership cannot continue in the same way as it has in the

ideas that have not been tested before. Mistakes should be tolerated so

past. One third of the world’s population is living in poverty and

that learning can occur.

leadership attention should move from mere regulatory compliance

Where there are groups of people there will always be diversity,

and incremental process improvements to real innovation and

even if these individuals are from the same race and/or gender.

environmentally intelligent products and services that need to be

Some people value diversity of thought, while others dislike it.

developed and marketed in responsible ways.

Organisations are challenged to try and find a balance between increased productivity and innovation on the one hand, and the costs

There is no single, univocal reality. The new world of work requires

of conflict and dissatisfaction on the other. An environment that

narrative complexity, paradox thinking, self-organising theory, quantum

values and encourages differences of opinion may result in a true

theory and alternative systems thinking approaches resulting in an

learning organisation where human capacity can perform, resulting

integral approach towards organisational decision-making. This will

in innovation, improved business results and sustainable development

manifest in innovation capability, business results and ultimately

(Viljoen, 2008).

business sustainability. n SmartProcurement Review

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fuTuRE AnD TREnDS

wheRe do we go FRom StRAtegic SoURcing? Procurement officials are their own worst enemy as they do not understand their true value and underestimate their contribution to the organisation’s success.

ABOuT THE AuTHOR Dr Myles Wakeham Senior lecturer and researcher: Graduate Centre of Management, Cape Peninsula university of Technology 084 506 5544 wakehamm@cput.ac.za Dr Wakeham’s extensive academic resumé encompasses Business Administration, Project Management, Marketing Management and Strategic Marketing, in addition to an MBA and PhD. His passion is Supply Chain Management: he teaches at CPUT and UNISA and is developing an online SCM programme for UCT. He is CIPS Deputy Chair (Western Cape) and consultant to local and international organisations. For a full biography visit smartprocurement.co.za/spr

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While sourcing strategies have been the catalyst for removing silos and creating better ways of working within functions, there is little more that can be achieved without changing the fundamentals of the model. - Strategic Visions on the Sourcing Market 2013: KPMG

Like marketing, which has undergone various metamorphic stages in its lifecycle to be transformed from bartering into what it has become today, a strategic necessity, so too has procurement developed from a reactive transactional activity into a strategic function that not only provides value-add to an organisation, but has a profound impact on organisational profitability and sustainability. It was in 1985 that Michael Porter developed his well known Value Chain Model in which he asserted that procurement was a support activity - an exercise that aided inbound and outbound logistics, operations, marketing and the provision of services to generate profit for an enterprise. Although the model has relevance today, it is Wakeham’s opinion (and that of other academics) that procurement has come a long way since the rather simple reciprocal reaction of ‘buying’. It has, indeed, migrated to strategic sourcing because of the dictates of market forces and the natural progression that most organisational activities and functional areas undergo as a result of the shift of organisational focus to customer centrism. Therefore, the buying (‘procurement’) that Michael Porter referred to in his Value Chain Model has progressed post-1985 to purchasing, then to procurement and now to strategic sourcing…certainly not a support function as argued by Porter during the 1980s. The question to ask in the contemporary context is then, where does strategic sourcing journey to from here and, even more importantly, what challenges lie ahead for this vital strategic, value-adding and profit generating function?

fROM

5. Thinking and acting locally, regionally and nationally

More internationally and globally aware of what is transpiring in international trade and sourcing

6. Avoiding problems

Maximisation of opportunities for the benefit of all organisational stakeholders

7. Withholding information

Information sharing and deeper supply relationship nurturing and development

8. Late supplier involvement

Early supplier involvement (for more effective product and process design, etc.)

9. Procurement official responsibility

Cross-functional involvement

10. Avoiding procurementefficient technology

The acceptance and adoption thereof as well as the equalising of technological knowledge throughout the procurement team. Many organisations try to integrate new technology in their midst and normally have a strategy, a timeline and a project implementation plan to get all employees involved with the technology. However, they tend to forget the psychological resistance that some team members may have towards adopting and adapting to the new technology. Therefore, emphasis must be placed on ‘selling’ technology downwards in the organisation as an efficiency tool and not as an employee replacement mechanism.

fIvE CHALLEnGES Strategic sourcing’s primary challenge lies in the mindset of procurement officials, says Wakeham: the belief that they and their function have a lack of importance (an inferiority complex if you will) as they are still convinced that strategic sourcing/procurement is a second-order activity and not a primary, integrated strategic process. Therefore, the challenge lies in positioning the activity in the collective minds of procurement professionals/officers, other functional area managers and employees, senior management and external stakeholders, as one that is strategic in nature and thus deserves to be placed higher in the hierarchy of an organisation. For that reason, the importance of procurement/strategic sourcing needs to be ‘marketed’ towards the top of the organisational structure and, equally important, to the inside and outside of the organisation and its supply chain. Procurement officials are their own worst enemy as they do not understand their true value and underestimate their contribution to the organisation’s success.

THE SECOnD CHALLEnGE The second challenge, notes Wakeham, is the required shift from being internally focused (a cost/profit fixation) to that of being internally and externally customer-centred. Here we refer to moving from: fROM

TO

1. Focused on acquisition costs

Total cost of ownership

2. Specification-driven

Solution-focused

3. Short-term centred

Long-term directed

4. Practically orientated

Strategic in purpose

TO

THIRD CHALLEnGE The third challenge lies in the up-skilling of procurement officials and retaining their services. See the side bar on the survey findings that have informed Wakeham’s second doctoral thesis, which has focused on supplier selection criteria for small, medium and large organisations.

THE fOuRTH CHALLEnGE The fourth challenge Wakeham has noted is the challenge of legislation (particularly in a South African context) and its impact on cost and quality in the short- to medium-terms. Here we refer to the following: 1. Legislation and ‘gentlemen’s agreements’ regarding sustainable procurement. In this context end-to-end sustainable SCM should be the key focus. In other words, the focal point should not be that of an isolated organisation thinking and acting ‘green’, but rather a collective and synergistic effort by all linkages in the supply chain. 2. Legislation regarding waste management (hazardous and inorganic materials) and investment recovery.

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FUTURE AND TRENDS

Wakeham’s second doctoral thesis has focused on supplier selection criteria for small, medium and large organisations. The comprehensive research study, which consists of 120 questions (mainly ranking scales) has unearthed a dire need for the following:

3. The B-BBEE ‘window of opportunity’ that should be re-addressed so that the best quality and prices may be assured for the end users of an organisation’s offerings. In other words, emphasis should be placed on appeasing the needs of customers and not on producers, because of the imbalance of opportunities for previously disadvantaged business people. Sadly the intended beneficiaries of such legislation (the proverbial man on the street) are experiencing rank unemployment and poverty at the expense of a new breed of capitalist who once fought against the unfair distribution of wealth.

The fifth and final challenge Least important, the fifth challenge relates to the containment of costs. Here we are referring to cost reduction or containment without compromising on product or service quality. The question is: how does one contain or reduce costs in an environment rife with increasing fuel and energy prices, rapidly escalating transportation costs, increasing costs of raw materials and components, and the ‘threat’ of green procurement that should save costs over the medium- to long–terms, but will increase costs in the short-term? Moreover, as prices for end products increase, there is a domino effect as the disposable income of consumers will likewise decrease. This will, in turn, reduce buying with the resultant impact on economy-of-scale production. Sadly, an increase in the price of products has a negative impact on product substitutes as the increase in demand for such offerings creates scarcity and drives up prices even further. What can be done to avoid or lessen the impact of the aforementioned challenges? Possibly the solution lies in exploring the need to move from a transactional way of thinking to conducting business in a rational and relational mindset in order to move the organisation from being complacent about the future to starting to challenge its thinking in order to move forward. In other words, perhaps the secret lies not in looking at old models to solve future problems, but rather in inventing or even reinventing new business models and ways of thinking in order to meet such challenges in a proactive way. Procurement has a vital role to play in this regard as one Rand saved equates to one Rand clear profit, unlike sales where the cost of sales needs to be deducted in order to compute profit. Procurement professionals, therefore, need to continually educate and develop themselves and, like a chameleon, react as the micro, market, industry and macro environments change. Failing to do so will, over the short- to long-terms, influence organisational profitability, increase costs and prices and, most importantly, sustain the backroom image that so many people have of the profession. n

1. A training programme to teach procurement professionals how to formulate, implement and control a procurement strategy. Wakeham’s research has uncovered that while most organisations have procurement procedures, fewer have procurement policies, and fewer still have well-articulated procurement strategies that are aligned to and integrated with other functional areas’ strategies and organisational grand and generic strategies. A significant challenge in this regard is the alignment of procurement teams and individuals to focus on innovation and growth as often only a scattering of people are clear about what strategy is and how they as groups and individuals contribute toward organisational growth and profitability. Essentially what needs to happen is for the organisation, and particularly procurement team members, to move forward by having a unified vision of how best to use procurement in order to provide customer and stakeholder value. 2. A wide-ranging course on finance for procurement officials. 3. A detailed course on business ethics, particularly in the procurement environment. 4. A comprehensive and practical course on risk management that focuses on application rather than the regurgitation of academic knowledge. 5. An ongoing programme on how to adapt to the changing environment. A key challenge that organisations face today is how to change in an environment that is continually morphing. Change is accelerating rapidly and organisations need to act faster in order to deal with changing opportunities and threats. Think of the changes that have taken place during the last millennium in computing power, biotechnology, micro-processing and the Internet, to mention but a few, and to what extent such changes have influenced organisational behaviour and, as importantly, procurement. The days of the company buyer are behind us and there is thus a dire need to train, educate and develop a new breed of procurement professionals that can understand such changes and how best to react to them. This will naturally create an even greater challenge, namely how an organisation will attract and retain valuable resources/people. The answer could lie in how to build a procurement division that inspires extraordinary accomplishment as many employees throughout the world are not fully engaged in their jobs. Procurement divisions need employees who regard their jobs as the way to bring out their passion and the key task of management should, therefore, be to build a sense of purpose that inspires and rewards initiative and innovation in today’s hypercompetitive marketplace.

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FUTURE AND TRENDS

PROCUREMENT’S ROLE IN AFRICA’S

DEVELOPMENT A view from the CIPS Pan African Conference 2013 in Ghana

ABOUT THE AUTHOR Ronald Mlalazi Head: Commerce Edge Academy 0861 33 4326 ronaldm@commerce-edge.com www.commerce-edge.com Ronald Mlalazi is an accomplished procurement professional, lecturer and author. Active within CIPS Africa, he achieved the coveted CIPS UK Fellowship status as a result of his outstanding contributions. He serves on the Advisory Board of the Tshwane University of Technology Department of Marketing (Supply Chain and Sport Management). Visit smartprocurement.co.za/spr for a full biography.

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Organisations typically anticipate savings of 10 – 15% on their cost base when adopting enterprise services transformation – potentially more if the sourcing model is less mature at the start of the transformation programme. - Strategic Visions on the Sourcing Market 2013: KPMG

In May 2013 an estimated 600 delegates graced the CIPS Pan African Conference in Ghana. The event was a convergence of procurement and supply chain thought leaders and upcoming professionals from Africa and the global fraternity. The conference theme centred on professional procurement’s strategic role in the development of Africa. The speakers were indeed captivating and mind stretching and took to the national Theatre’s podium to deliver topical issues ranging from procurement’s role in delivering value, to the strategic role of professional procurement in the development of Africa. The conference sub-theme of procurement adding value to organisations was palpable among the speakers and delegates, with a discussion on the difference between procurement and purchasing receiving a great deal of attention. In their presentation Kenneth Lysons and Brian Farrington noted a difference between procurement and purchasing, despite a history of the two being used interchangeably. The thrust of the conference and the CIPS approach is to advance Procurement, which has broader, strategic and far reaching outcomes, as opposed to a short-term, transactional approach that is purchasing.

PROCuREMEnT, OR MERELy PuRCHASInG?

ensuring supply chain objectives integrate with corporate objectives; having the ability to articulate the vision of the integrated supply chain to other stakeholders; motivating, managing and leading a diverse team; nurturing competences and talent; fostering a culture of continual learning; and displaying high levels of integrity. 3. Value beyond savings. According to Gildert, procurement professionals must look for value beyond savings, which is a daunting task considering one may be required to consistently achieve a 10% saving every financial year. Lysons and Farrington refer to this from a value management perspective, which entails a style of management aimed at instilling a culture of best value throughout the organisation. Best value implies a product or service that meets or surpasses customers’ expectations at a competitive price. This can be achieved by identifying and eliminating all the nonvalue adding activities; making sustainability, supplier development and collaboration key to unlocking value beyond savings.

CREATInG An EnABLInG PLATfORM In order to execute the above, the procurement professional will need an enabling platform. Edward Siwela, an executive director from the Institute of Directors Zimbabwe (IODZ), highlighted the attributes that a procurement professional must possess if they aspire to influence an organisation at board level. In addition to possessing the necessary qualifications, a procurement professional must be:

Conference delegates defined purchasing as a reactive, rather than proactive, activity of satisfying the needs of the customer by buying the goods or services that merely achieve the five rights of purchasing. They added that purchasing is synonymous with transactional (as opposed to relational) and tactical (as opposed to strategic) acquisition.

1. Competent and knowledgeable, not only in procurement, but in the organisation as a whole.

In contrast, delegates defined procurement as the process of acquiring goods or services using various options such as make-or-buy decisions and cradle-to-grave analysis, with emphasis on the lowest total cost of ownership. In their consensus delegates implied that a procurement professional must think and act strategically, which will be necessary if procurement is to play a catalyst role in the development of Africa.

3. Highly intelligent in order to guide the organisation and direct the supply chain with diligence, risk management, corporate governance and ethical practice.

THREE PILLARS fOR A BETTER AfRICA CIPS President, Paula Gildert’s insight into placing Africa on the right developmental path to be a “Better Africa” centred on three pillars: 1. Raising the profile and recognition of a procurement professional. With the right skills and qualifications, the procurement professional can make a difference in the community and more so to African children, leaving a lasting legacy. 2. Leadership of the profession. This entails leading and influencing at the right levels: engaging with organisations’ top management;

2. Of good moral standing. The role of a director demands high levels of integrity and trust.

4. Someone who: a. understands social cohesion; b. possesses interpersonal and people management skills; c. communicates effectively; d. positions strategically (at the heart of the control mechanism); and e. takes advantage of networking functions. Once procurement has positioned itself appropriately, it will be easier to implement strategic sourcing, which according to Prof. Douglas Boateng, should be used as a vehicle to secure Africa’s long-term economic development and job-creation goals. Indeed, if a procurement professional plays her role properly, strategic sourcing is one of the procurement strategies that can bring about sustainability. www.smartprocurement.co.za

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FUTURE AND TRENDS

Buying cheap can become the most expensive purchase in the long run. Strategic sourcing, in the context of strategic procurement, has four main elements: 1. Demand management. 2. Supplier development and supplier management. 3. Total cost of ownership. 4. Sustainability through competence and skills development.

Key tools for strategic procurement Considering that we need to understand strategic sourcing in the context of strategic procurement it is critical that we identify the key tools for achieving strategic procurement. CIPS defines strategic procurement as a process that aligns with and helps develop an organisation’s vision, strategic goals and competitive strategy; while strategic sourcing focuses on sourcing actions that will realise results over a relatively long time period.

The key tools for strategic procurement focus on: 1. Aggregating spend by making purchasing decisions that reduce the number of purchases placed at a time, by using, for example, framework agreements or bulk purchases. 2. C  ategorising and category management. By classifying organisational requirements, the organisation is in a better position to understand the supply market and make informed decisions that will also encourage innovation. 3.  Outsourcing and insourcing. Key decisions are made in order to fully optimise the organisation’s resources, either through third party engagement or internal resource optimisation. 4.  Managing relationships, and collaborating with and developing suppliers. The process will facilitate the appropriate supplier relationship and communication. 5.  Standardising processes, policies and procedures is vital if procurement is to deliver sustainable value to the organisation.

Assisting the African Child through strategic sourcing 1.  Demand management. Procurement must take responsibility for supply market knowledge in order to make informed sourcing decisions. The quality of sourcing decisions is determined by the quality of the available demand and supply data. For example, Africa is rich in natural resources that can drive the continent’s economies and create sustainable employment - “Buy from Africa”. 2. S  upplier development and supplier management. Africa buys from abroad because developed countries have put in place attitudes and processes that capacitate their organisations. Today’s challenge for the procurement professional in Africa is fostering a mentality of developing local suppliers within the country or the continent. For example, the “Proudly South African” brand promotes the development of local industries with the view of boosting employment and helping the African Child. 3. T  otal cost of ownership. This is an end-to-end and cradle-to-grave process. Buying cheap can become the most expensive purchase in the long run. Procurement activities handled by departments other than procurement tend to focus on the purchase price and not the total cost of ownership. Strategic sourcing entails making procurement decisions that consider more than price such as operational and disposal costs. For example, consider the implications of using sub-standard road surfacing material? A greater number of pot holes can increase the cost of maintaining vehicles owing to more frequent tyre changes, and could possibly lead to more road accidents. This series of events was caused by an absence of a strategic sourcing decision. Lining the streets of most African countries are a number of incomplete buildings; it begs the question of whether the procurement involved was professional? 4. Sustainability. The term sustainability has always been used in a very narrow sense. However, its use must be broadened to include competence: achieving supply chain sustainability requires competent procurement professionals making informed decisions. Strategic sourcing is enhanced by the sustainable development of suppliers and procurement professionals, through professionalising procurement’s activities and skill set, and building capacity. In conclusion, if procurement professionals are to play a pivotal role in Africa’s advancement, it is time that the profession is regarded among and afforded a place within the critical and strategic echelons of organisations. While the question: “can the current procurement professional deliver?” remains to be answered, it is clear that with the right mentality, skills set and positioning, professional procurement can be used as a vehicle to address the challenges facing the African continent. Procurement plays a critical role in developing an African child. n

REFERENCES Purchasing and Supply Chain Management 8th edition by Kenneth Lysons and Brian Farrington, CIPS Pan African Conference 2013 presenters, The Supply Management Guide to Strategic Sourcing.

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PUBLIC PROCUREMENT

The role of a Probity Officer in the public sector supply chain

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Change management challenges often pose some of the biggest risks to the successful implementation of sourcing transformation. - Strategic Visions on the Sourcing Market 2013: KPMG

Probity Officers do not transfer risk away from the institution - management is still accountable for this. Appointing a Probity Officer is an integral function of the procurement process, aimed at minimising the risk of possible fraud, corruption and/or litigation owed to non-compliances. The term probity means a moral and honest way of behaving - it is the evidence of ethical behaviour in a particular process. Regardless of the procurement value, the highest standards of ethical behaviour must always be exercised to ensure probity of the procurement process. However, maintaining probity involves more than simply avoiding corrupt or dishonest conduct. It involves applying institutional values such as impartiality, accountability and transparency. The broad objectives of probity in procurement are to: • provide accountability and maintain integrity; • ensure compliance with processes; • e nsure that all offers will be evaluated against the same criteria; • p reserve public and supplier confi dence in the procurement processes; • m inimise potential confl icts of interest and the potential for litigation; • e nsure the procurement activity provides for the best outcome; and • a void the potential for misconduct, fraud and corruption. Many probity mechanisms exist and must be explored before one is selected for adoption, taking into account the legislative frameworks, circumstances and market dynamics in which an institution operates. In the case of a Probity Officer, the primary concern is the integrity of the procedures and processes adopted. A Probity Officer is engaged at an early stage to assist with project establishment and avert as much as possible the development of any serious procurement integrity issues. A Probity Officer fills three main roles. Firstly,

he or she would be able to provide advice during a procurement process on probity-related issues, in order to establish procedures that meet recognised probity standards and ensure that any problems or questions are dealt with satisfactorily. Secondly, a Probity Officer would provide independent scrutiny of the procurement process to ensure that prescribed processes are actually adhered to. Finally, he or she would be responsible for providing a report at the end of the procurement process that records an independent professional view of the way in which the procurement process was managed, from a probity perspective.

WHAT DOES PROBITy ADvICE ACHIEvE? At this point it is important to differentiate between the probity advisory function and the internal auditing function: the advisory function places emphasis on how a process complies (or can be made to comply) with a particular set of criteria, standards or principles. The auditing aspect of the role focuses on whether a completed process has in fact complied with the set criteria, standards or principles. The immediate task of the probity officer is to assess whether the procurement/project team runs an open and fair process, specifically whether the project team: • c omplied with legislation, policies and agency procedures on probity; • a dopted a sound set of processes enshrined in the probity plan; • fulfi lled the requirements of the probity plan; and • a cted within the limitations of prescribed procurement policies, rules and guidelines. A Probity Officer cannot comment on the commercial effectiveness of the project team in its negotiations with bidders; nor rescue a procurement process / remedy an already tainted process by stepping-in part way through the process. Post assessment the Probity Officer may confirm that the process is fair and nothing more needs to be done; advise when any errors or omissions occur; or,

ABOuT THE AuTHOR Sonja Parsons Senior Manager, forensics: SizwentsalubaGobodo 011 718 8600 sonjap@sng.za.com www.sng.za.com Sonja has a wealth of international experience in risk management and fraud prevention, with a specialty is organised crime. Passionate about breaking the chain of endemic corruption, she is committed to prevention rather than detection. Sonja holds a Doctorate in Business Administration and an MBA, and is completing her second PhD. For a full biography visit smartprocurement.co.za/spr

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PuBLIC PROCuREMEnT

as a last resort, recommend that the procurement process be terminated and rerun.

This relationship can create the appearance of divided loyalties, real or otherwise.

Importantly, engaging a Probity Officer does not replace procurement rules that are clear, open, well-understood and applied equally to all parties in the process. In fact, a Probity Officer complements existing best-practice procurement procedures that reduce the occurrence of risk situations and limit potential adverse consequences.

Selecting officers by rotation from a suitably prequalified panel can help to remove any perceptions of bias.

Even the best probity processes do not guarantee that a project or activity will be immune to problems or criticism. Mistakes, delays and disputes can still arise despite the best efforts to ensure good management of probity risks. Furthermore, Probity Officers do not transfer risk away from the institution - management is still accountable for this.

PROBITy AT InSTITuTIOnAL AnD EMPLOyEE LEvEL Probity considerations ought to form an integral part of any procurement process and not be a last-minute concern. However, when dealing with matters involving commercial confidentiality it is important to note that opening an activity to scrutiny involves scrutinising the process and not necessarily the specific contents of documentation. Key areas of an institution’s supply chain systems, policies and procedures in which probity must be incorporated include: • the procurement planning process; • internal organisation and decision-making processes; • security and confi dentiality arrangements; • communication with suppliers; and • offer evaluation and selection. Probity at employee level is important. Government personnel involved in procurement are likely to be confronted with situations posing an ethical dilemma, for they are exposed to a number of risks when dealing with suppliers whose business practices may differ from those of the public sector. These situations can occur in any procurement exercise, but may have greater impact, significance or be subject to greater scrutiny in procurement activities that are high value, high risk and/or contentious. However, regardless of the procurement value, the highest standards of ethical behaviour must always be exercised to ensure probity of the procurement process.

The underlying principle is to ensure that probity officers and advisors are appropriately qualified and independent and that the same people or organisations are not used repeatedly. The Public Finance Management Act (PFMA), Act no. 1 of 1999, promotes economy, efficiency, effectiveness and transparency in the use of state resources and one of its key objectives is to eliminate waste and corruption in the use of public assets. The appointment of a Probity officer is an integral function of the procurement process in that it: • i dentifi es the risks and weaknesses facing institutions’ supply chain management environments; • p rovides immediate advice to remedy any non-compliance matters arising during the process; • m inimises the risk of retrospective investigations into corruptionrelated supply chain management practices and allegations of such; • a ssists the institution in carrying out verifi cation and background checks to a more detailed level than is currently the practice; and • a ims at minimising the risk of possible fraud, corruption and/or litigation.

ETHICS In PROCuREMEnT Ethics are the moral principles or values that guide officials in all aspects of their work. Ethical behaviour encompasses the concepts of honesty, integrity, probity, diligence, fairness, trust and respect. Ethical behaviour includes avoiding conflicts of interest and not improperly using an individual’s position; supports openness and accountability in procurement (encouraging suppliers and service providers to confidently participate in the government marketplace); can reduce the cost of managing risks; and enhances trust in public administration. The standards of employee conduct consistent with the above ethics obligations are outlined in institutional Codes of Conduct. Supply chain staff must be familiar with these standards and comply with them. n

SuPPLIER PROBITy A focus on internal probity issues should not overshadow the importance of external probity issues related to the business practices, past conduct and performance of successful bidders. Regardless of how well the procurement process is conducted, a contract should not be awarded to a firm that has a record of illegal or unethical activity. Probity itself must be transparent Probity officers are generally paid for their services by the institution which employs them.

The underlying principle is to ensure that probity officers and advisors are appropriately qualified and independent and that the same people or organisations are not used repeatedly.

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Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip. Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip.

pUbLic pRocURement in SoUth AFRicA The National Treasury introduced the supply chain management (SCM) legislative framework to more optimally achieve its constitutional objectives of establishing a public procurement system that is fair, equitable, transparent, competitive and cost-effective. Reflecting on the nine years that have passed since the framework’s introduction and assessing whether SCM policy objectives have been achieved, a bleak picture of implementation weakness arises from public oversight reports that highlight operational flaws in the way SCM operations have been structured and managed. Some of the major operational weaknesses identified in the decentralized SCM system under the authority of accounting officers include policy contraventions such as: • Departmental budget proposals without procurement business cases; • Invitation to tender without approved operational budgets; • Tender evaluation decision-making done in contradiction to the predetermined, advertised evaluation criteria requirements; • Acceptance of sub-quality products; • Services at inflated prices; • Slow and poor quality service delivery; • Inefficiencies and wasteful expenditure; and • Corruption At local government level where accountability is much more dispersed across regional boundaries, public procurement contravention becomes even more acute: a report on the consolidated audit outcomes of local

government for the financial year 2010 – 2011 indicated that 98% of all irregular expenditure, amounting to R6.7-billion, was a result of contravening supply chain management regulations. These public oversight and audit reports indicate that implementing SCM in government institutions is but one dimension, while institutionalising SCM is another. Whereas implementation is concerned with operational activities, institutionalisation is the value proposition, principles and the culture within which operational activities are undertaken, and is integral to the sustainability of the organisation. Combining the identified SCM implementation and institutionalisation weaknesses into a reform agenda would require a new institutional governance system to ensure achievement of the efficacy beneficiation envisaged through SCM in the public sector. This SCM turnaround strategy must include the design of an overall SCM policy and operational architecture with strong integrated planning, monitoring, enforcement and performance management support actions. Furthermore, the strategy requires a data management framework integrated across government to enable the effectiveness of SCM’s essential service delivery role, which is to contribute to an efficient, effective and development-orientated public service. new SCM governance reforms are required to remedy the identified implementation and institutionalisation weaknesses in attaining the constitutional principles of ‘value for money’ across government institutions and throughout all levels of government more efficiently and effectively, providing the required sustainable supply chain system for government.

Firstly, political support from the executive leadership in government will be essential to secure the administrative efficiency of the public procurement function and ensure its accompanying professionalisation as a soughtafter civil servant career in government. This includes creating a more ethical culture within the public procurement system; as it is the public as private citizens that participates in the public procurement system to offer goods, services and works needed for service delivery. Consequently, the second success factor on which the public procurement reform will be reliant is this ‘public-private’ collaboration, for the public as private citizens will be required to exercise their public interest rights as morally responsible individuals to ensure that their interactions within the public procurement system uphold its constitutional provisions of being fair, transparent, equitable, cost effective and competitive. n

ABOuT THE AuTHOR Paul Arendse Senior Researcher, Office of the Chief Procurement Officer: national Treasury paul.arendse@treasury.gov.za http://ssrn.com/author= 1298324 Paul holds a Master in Public Administration from the University of Western Cape. He joined the National Treasury in 2004 as a researcher in public procurement and his research interests include issues of public policy and governance. You can access his papers on the Social Science Research Network website above. This article was written in the author’s personal capacity.

However, a public procurement reform agenda cannot be delivered alone.

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ETHICS

The recent construction cartel saga has left a bitter taste instead of the legacy of South Africa successfully hosting the FIFA 2010 World Cup.

ETHICS IN PROCUREMENT The word ‘ethics’ originates from the Greek “thikos”, ethical, from “thos”, character. It goes beyond what is legal, to the essence of one’s character and morality: ethics is about doing what is right. Procurement is a hotbed of ethical challenges because the decisions and choices made in procurement affect the entire corporation. One only has to think of the recent horsemeat scandal as an example of the effect of procurement and supply chain.

ABOUT THE AUTHOR Carin Stoltz-Urban Head of Professional Development and Education: CIPS Africa 012 345 6177 www.cips.org Prior to joining CIPS, Carin was Deputy Director in the Executive Office of SAQA. She is currently chairperson of the Independent Professional Body Forum of South Africa, representing some 40 professional bodies. Her academic qualifications are in the field of Public Management and she is studying towards a Masters Degree in Public Management. Visit smartprocurement.co.za/spr for a full biography.

It comes down to this, a procurement team should display strong ethical leadership – starting at the head of the function, to insure that it never waivers in its mission to be the most ethical part of the organisation. According to the Chartered Institute of Purchasing and Supply (CIPS), “ethics” in purchasing and supply management can relate to a wide range of issues, including doubts about supplier’s business procedures and practices and their attitudes to corruption. Where there is a corrupt person, there is also a corruptor. Ethics and ethical trading covers a wide spectrum of the business which ranges from impartiality, openness and disclosures, confidentiality, due diligence, competency, exercising the duty of care, social contract, fidelity to professional standing to avoiding conflict of interest. The issues of ethics reflect the ethos of the organisation and compromise the corporate brand with far reaching consequential losses. The recent 2010 World Cup stadia construction cartel saga has left a bitter taste. Instead of the legacy of South Africa successfully hosting the FIFA event our reputation has been tainted by the R48 billion (according to corruptionwatch.org. za) corruption scandal. The procurement function needs to have processes in place that ensure fair and objective decisions are made with respect to every transaction. It needs to protect itself from rogue spending, reciprocal awards, conflicts of interest, and pressure from higher up in the organisation to extract short term savings. It needs to follow best practices of full disclosure before, during, and after every major award, and force its suppliers to do the same. It needs to be the model organisation.

If Africa is to develop, there is a great need to change the way we do things. Ethics have always been viewed with a narrow perspective, limited only to only business gifts and hospitality. Business executives and procurement professionals are at the fore in fostering good practice, thereby embracing good corporate governance and providing their organisations a competitive edge. 1.  Corporate Social Responsibility principles are paramount to ethics, such as environmental responsibility, as every organisation must owe it to the environment and community in which they operate. It is high time that organisations strike a good balance between economic, social and environmental aspects. 2. Corporate governance processes, underhand dealings through flowed tender processes, specifications designed around a single supplier, and deliberate non-compliance with regulations, such as the BEE and Enterprise Development targets. Consider the importance of tender de-briefing sessions, as a way of enhancing your corporate brand value and your reputation as an individual professional. It’s all about “perceived value, made tangible”. 3. Human rights and developing local suppliers. A lot of damage has been allowed in pursuit of profits, including buying from low-cost-countries. If Africa is to grow and unleash its potential it is time that Africa buys from Africa. Can we continue buying from suppliers who abuse their own staff? Can we continue buying from suppliers with poor health and safety practices or who gain competitive advantage through underpaying their employees? 4.  How about paying the suppliers on time. Many a times, procurement professionals give their suppliers their backs when it comes to expediting payments. Many SME’s with low turnovers will never recover from late payment setbacks. Some of these small-to-mediumenterprises will never recover from such a late payment setback. 5. Sustainable development versus sustainable procurement factors. As corporates pursue their financial and profitability objectives, it is important that procurement professionals set the

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pace in ensuring that future generations can also have life, as life may be dependent on the natural resources.

According to CIPS, the best and most successful organisations recognise that they will only prosper in the long-term if they satisfy the aspirations

A number of companies have procurement policies with clearly defined CSR policies that are rarely adhered to.

of their stakeholders, including customers,

The position of CIPS is to encourage procurement professionals, globally, to demonstrate that the supply chains they manage take ethical and social responsibility issues into consideration. If Africa is to move forward with development, everyone involved in purchasing and supply management in an organisation should be aware of the organisation’s ethical policy and be actively encouraged to embrace its principles.

groups.

“Ethics are not bottom-up in the enterprise. They are determined by the actions from the top leadership on down. If bending the rules results in accolades because of increased short-term revenue or other perceived benefit, many in the business will rightly believe that ethics don’t matter, performance does - that is, of course, until the story appears on the front page of the paper, which is when the organisational navel-gazing commences.” As noted by Patricia J. Moser-Stern. Executives who refuse to tolerate misconduct among their peers and who actively seek to model high standards of honesty, transparency and trustworthiness can best demonstrate the commitment to ethical conduct. Ethics and ethical trading policies must be top-bottom, anchored with a “do as I do” attitude. According to the United Nations Procurement Policy, “Organisations and professionals often seek to address standards of conduct through the adoption of codes of conduct. Professional codes of conduct generally are written in broad conceptual terms rather than in specific situational or descriptive terms. They leave room for interpretation and often may seem ambiguous. Procurement professionals cannot abide merely by the letter of the law or the specific words in any code, but rather, they are guided by the spirit of the law or the broader concept that the code is intended to express.” Because of the tainted image, how can we regain the trust and goodwill of stakeholders?

suppliers, employees, local communities, investors, governments, public interest and environmental

Further, it has a Personal Ethical Code with which members undertake to comply. This code sets out principles of: 1. Integrity 2. Professionalism 3. High standards 4. Optimal use of resources 5. Compliance with legal and other obligations Codes of conduct need to be actual living documents encouraged and valued at the highest levels. Board members and senior executives have to set an example for the type of conduct they expect from others. Ethical lapses at the upper echelons of management tend to be perceived as tacit permission to choose the “path of least resistance” at lower levels. Senior management needs to hold itself to the highest standards of conduct before it can demand similar integrity from those at lower levels. Publicly restate your corporate Code of Ethics as soon as possible and agree to publish the Code every year in your corporation’s annual report. Talk about it often. And most importantly, live it. The example (tone) at the top is the most essential element in achieving ethical excellence. n

References Ethical Business Practices in Purchasing and Supply Management (Chartered Institute of Purchasing and Supply), United Nations Procurement Practitioner’s Handbook, Patrick J. Moser-Stern, Kenneth Lysons and Brian Farrington, and the Corruption Watch SA.

ABOUT THE AUTHOR Ronald Mlalazi Head: Commerce Edge Academy 0861 33 4326 ronaldm@commerce-edge. com www.commerce-edge.com Ronald Mlalazi is an accomplished procurement professional, lecturer and author. Active within CIPS Africa, he achieved the coveted CIPS UK Fellowship status as a result of his outstanding contributions. He serves on the Advisory Board of the Tshwane University of Technology Department of Marketing (Supply Chain and Sport Management). Visit smartprocurement.co.za/spr for a full biography.

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LEGISLATION

Are you ready for the new bEE Codes of Good Practice?

The BEE codes define the targets to be achieved by companies measuring their black economic empowerment contributions and have become a critical factor in doing business in South Africa.

ABOUT THE AUTHOR Wade van Rooyen Managing Director, Verification Services: Grant Thornton 041 374 3222 wade.vanrooyen@za.gt.com www.gt.co.za Wade van Rooyen has extensive executive experience in the BEE industry and served as a director of the Association of BEE Verification Agencies. His educational qualifications include a BCom (Law) and a MBA in Strategic Financial Management. Wade is a specialist in government intervention, Broad-Based Black Economic Empowerment and Industrial Incentives. Visit smartprocurement.co.za/spr for a full biography.

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African consumers demand quality products and are brand conscious... innovative product and business-model strategies are required to meet the needs of highly value-conscious consumers. - Rise of the African Consumer: McKinsey Africa’s Consumer Insights

The revised BEE Codes of Good Practice contain some significant amendments that will have far reaching implications. How will the revisions affect your company? Today all companies are affected by the measurement of B-BBEE. In determining whether BEE certification is important to your business, consider: 1. Are you relying on government to purchase your goods or services? 2. Do your other customers require a BEE certificate when purchasing from your company? 3. Is your business dependant on a license or a quota that may be withheld without a minimum BEE level?

ownership; skills development; and enterprise and supplier development have been designated priority elements: failure to achieve a minimum of 40% of the targets for any of these priority elements will result in a penalty being applied to the scorecard. The penalty is a drop of two levels, so an entity that achieved a Level 4 before the penalty will drop to a Level 6 by virtue of the penalty. The number of points at which a company becomes a Level 4 has increased from 65 to 80 points in a taxation derived ‘bracket creep’ adjustment. Changes to all the levels mean an instant reduction of B-BBEE levels upon introduction.

B-BBEE STATUS

QUALIFICATIOn

B-BBEE RECOGnITIOn LEVEL

Level 1 Contributor

>=100 Points on the Generic Scorecard

135%

Level 2 Contributor

>=95 but <100 points on the Generic Scorecard

125%

Below is a summary of some proposed key amendments to the codes, as published for public comment.

Level 3 Contributor

>=90 but <95 points on the Generic Scorecard

110%

GEnERAL

Level 4 Contributor

>=80 but <90 points on the Generic Scorecard

100%

Level 5 Contributor

>=75 but <80 points on the Generic Scorecard

80%

Level 6 Contributor

>=70 but <75 points on the Generic Scorecard

60%

Level 7 Contributor

>=55 but <70 points on the Generic Scorecard

50%

Level 8 Contributor

>=40 but <55 points on the Generic Scorecard

10%

non Compliant Contributor

<40 points on the Generic Scorecard

0%

To those companies that have made strides in advancing their B-BBEE status to access the economic benefits, the proposed amendments to the codes of good practice, which outline new targets and indicators for measurement of B-BBEE, are a concern.

The codes contain structured scorecards for large companies (Generic) and small companies (QSE). Companies with an annual turnover below R5-million and start-up companies are exempt from compliance and receive exemption certificates (EMEs). The thresholds for these categories have been amended (see table), exempting more companies from compliance and shifting the burden of compliance towards larger companies. CATEGORy

AnnUAL TURnOVER THRESHOLD Old

new

EME

R5 000 000

R10 000 000

QSE

R35 000 000

R50 000 000

GEnERIC

none

none

OWnERSHIP

Meanwhile, the seven elements against which targets where measured under the old Codes have been consolidated into five elements under the new Codes and the weightings have been adjusted. OLD CODES

EMEs and start-ups that are 50% black-owned previously automatically qualified for a Level 3 status. They now qualify for a Level 2 status, and if 100% black owned they qualify for a Level 1.

nEW CODES

The weight attributed to voting rights and economic interest has been equalised. Calculations previously allocated towards bonus points now form part of the requirements, i.e. failure to achieve them will now influence the overall status. The point attributed for ownership fulfilment once a share is free of all third-party rights has been removed and added to the overall net value requirement measuring the repayment period of debt on black shares. A sub-minimum penalty is applied to 40% of the net value targets.

Element

Weighting

Element

Weighting

Ownership

20

Ownership

25

Management Control

15 15

Management Control

15

Employment Equity Skills Development

15

Skills Development

20

Preferential Procurement

20

Enterprise and Supplier Development

40

The use of adjusted recognition for gender calculations has been replaced with separate targets for male and female.

Socio Economic Development

5

The commensurate penalty on middle managers resulting from the gender adjustment has been removed, while the board of directors and senior management retain the need to have male and female balance. The targets for junior management have been eliminated.

Enterprise Development

15

Socio Economic Development

2

The modified flow-through principle may now not be used in conjunction with exclusion principle, i.e. a company that is excluding mandated investments from its scorecard may not apply the modified flow-through principle elsewhere.

MAnAGEMEnT COnTROL AnD EMPLOyMEnT EQuITy

Up to now, a well executed BEE strategy could result in high BEE levels without having black ownership. However, under the new codes

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LEGISLATION

Although not expressly listed in the target, there is a requirement that each target be broken down into sub-targets determined by the ‘overall demographic representation of black people’; in other words separate employment targets for Africans, Coloureds and Indians – all determined by a moving employment equity act. If the historical application of employment equity targets in bonus points is anything to go by, then this requirement poses a serious measurement challenge, to say nothing of the implied requirement to re-structure entire company workforces on the basis of racial representation. Previously, the Employment Equity Act required a company to prove submission of its employment equity returns in order to receive any employment equity recognition. Now, it is required that the data submitted in the return is used in the calculation at the time of measurement, which creates a timing variance in which a company that has improved its demographic representation will only obtain recognition in the following period after it has submitted its Employment Equity return.

SKILLS DEVELOPMENT The target for skills development expenditure derived from the salaries and wages paid has increased to 6% of the levied amount. The number of training programmes against which skills development expenditure may be counted now excludes Category F and G and all training that is not formal and occupationally directed; only institutionally based (theoretical or practical), registered workplace learning and formally assessed occupationally directed learning qualifies for recognition. Training spend must also be apportioned between the overall demographic representation of black people as per employment equity. In addition, “a measured entity must achieve a minimum of 40% of the target set out in the skills development scorecard in order to avoid discounting of its overall scorecard.” Adjusted recognition for gender adjustments has been removed. To encourage the progression into formal employment of employees trained on learnerships, five bonus points have been added for achieving a labour absorption target.

ENTERPRISE AND SUPPLIER DEVELOPMENT This element combines preferential procurement and enterprise development and the combined weighting increases from 35 to 40 points. The focus has shifted from a random development of black-owned enterprises and purchasing from other B-BBEE contributors to deliberate and meaningful development of suppliers that have a high labour component. The target has increased from 70% to 80%, while the type of suppliers that may be included in the measurement has reduced to include only value-added suppliers. Previously, to qualify for procurement recognition a company had to purchase from a supplier issued with a B-BBEE certificate. There is now a requirement that only suppliers

who are designated as value-adding suppliers may contribute towards the procurement targets of their customers. A value-adding supplier is one whose salaries and wages added to its net profit is greater than 25% of its turnover, i.e. the company adds a high degree of value to a raw material, or has a significant labour content to its overall output. Furthermore,“an entity must achieve a minimum of 40% of the [each] of the targets” set out for procurement in order to avoid overall discounting of its scorecard.

Enterprise development (ED) target Firstly, ED is now measured annually and may no longer be measured cumulatively. The ED targets have been separated into two calculations. 10 points are allocated for achieving a contribution of 2% of NPAT for enterprise development contributions to suppliers, i.e. there are now targeted beneficiaries within the supply chain, and no longer recognition for random contributions to qualifying black-owned companies. Five points are allocated for achieving a contribution of 1% of NPAT for general ED contributions and sector specific programmes. There is also a requirement to develop an enterprise and supplier development plan for qualifying beneficiaries, which includes clear objectives, priority interventions, key performance indicators and a concise implementation plan with clearly articulated milestones. Failure to implement this plan will disqualify all points on the enterprise and supplier development scorecard. Contributions that do not reach the final beneficiary within the measurement period are excluded. A multiplier of recognition is provided for companies that grant three-year contracts to suppliers. Further multipliers are granted for start-up enterprises. There is clearly an intention to stimulate enterprises through provision of opportunity to sell, and assistance through supplier development. Meanwhile, the ability to exclude imported procurement from total measured procurement spend has been removed. Further, a limitation has been applied to contributions made in the form of shorter payment periods to suppliers. The invoice value is multiplied by 15% (an approximation of the cost of capital) and then multiplied by the applicable benefit percentage based on the number of days from invoice to payment.

SOCIO ECONOMIC DEVELOPMENT Targets, qualifying beneficiaries and weighting points remain unchanged, except that 100% of the value of benefit must reach black beneficiaries (previously 75%). Socio economic development is now measured annually and may no longer be measured cumulatively. The method of calculation of deemed profit margin in instances where the company has made a loss has been removed and not replaced for ED and SED, leaving a void of instruction where companies have made losses. n

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Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip. Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip.

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LEGISLATIOn

the LegiSLAtion gOVERNINg pUbLic SectoR Scm ABOuT THE AuTHOR Advocate Helen Venter Director: Brasika Consulting hventer@brasika.co.za www.brasika.co.za An accomplished public sector legal expert, Helen has more than 25 years experience in supply chain management and government finance. In 2012 she was appointed as a European Union SCM Specialist. Helen believes in the value government organisations add to citizen’s lives and is driven to act as a change agent to help government officials believe the same. Visit smartprocurement.co.za/ spr for a full biography.

Being a democracy ruled by law our country has a host of legislation governing the actions of all organs of state. This means that the public sector’s procurement of goods and services is governed by legislation. This being the case, it is important for the public and private sectors to have cognisance of the legislative framework within which supply chain management (SCM) operates, as well as awareness of recent and up-coming amendments to the legislative environment. There is quite a variety and diversity of legislation affecting SCM in the public sector, which is illustrated at a high level in the figure below.

SCM LEGISLATIvE EnvIROnMEnT

It is common cause that legislation prescribes the ‘what’ aspect of administrative actions, while the ‘how’ is left to administrators or officials to determine. In determining the ‘how’, the Public Sector embarks on various processes to augment the legislation by issuing inter alia frameworks, guidelines, directives, rules, practices, codes of conduct and operating procedures, collectively referred to as norms. SmartProcurement Review

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norms, by virtue of their nature augment legislation and are issued within a specific geographic area or for a specific period of time. Dependent on the law to which they apply, and how they have been defined, norms do not have the same power as law. However, norms do have the power of persuasion and can, therefore, not be disregarded when executing an administrative action. An administrator who disregards issued norms must show good cause for such disregard. Courts also play a role. The South African system of law applies (1) the common law rules of interpretation and (2) the Rule of Precedent. (1) means that public servants must apply the rules of interpretation when interpreting and applying legislation and (2) means that all public sector actions prescribed by legislation are open to review and interpretation through the Judiciary/courts. Therefore, court judgements are applied in the future application of the relevant SCM legislation that was interpreted or reviewed. Recent and up-coming legislative amendments (i) Construction Industry Development Amendment Regulations, 2013 (Gazetted on 2/07/2013, GG no. 36629) – inter alia reducing the annual turn-over of construction companies, reviewing tender value limits, improving joint venture calculations and reducing track record requirements. Effective date: 1 August 2013. (ii) Public Finance Management Act, 1999 – nEW SCM Regulations (Gazetted on 30/11/2012, GG no. 35939) – inter alia providing a specific public sector SCM System inclusive of infrastructure and construction prescripts as well as the provision of Standard Operating Procedures to be issued by the relevant Treasuries. Estimated effective date: August 2013. (iii) Municipal Finance Management Act, 2003 – national Treasury Circular 69 of 2013 – Instruction notes on the stipulated minimum threshold for local product and content for the following designated sectors with the effective date being 22 May 2013:

• • • • • • • •

Textile, clothing, leather and footwear Buses Steel power pylons Canned/processes vegetables Rail rolling stock Set top boxes Furniture Electrical and telecom cable products.

For a full list of Supply Chain Management Legislation visit smartprocurement.co.za/spr. n

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CASE STUDY

Written by: Adv Helen Venter

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Outsourced service providers need to share their client’s ambition to maintain high service-delivery performance levels, while adapting to rapid change. - Strategic Visions on the Sourcing Market 2013: KPMG

As part of the Western Cape government’s commitment to reducing red tape, the Department of Transport and Public Works has opened a newly refurbished Walk-In Centre to improve service delivery in the areas of government construction tenders and motor vehicle registration. The initiative is part of the Western Cape Government’s ‘Red Tape to Red Carpet Programme’, which aims to cut burdensome and unnecessary bureaucratic procedures in order to create a more enabling environment in which business can grow. Driven primarily through the Red Tape Reduction Work Group (a task team consisting of various members of provincial government economic sector departments, the South African Local Government Association, the City of Cape Town and Business Western Cape), the programme aims to improve the efficiency of business-facing facilities.

A case study on reducing government red tape

The group undertook to improve the service delivery of the 9 Dorp Street Walk-In Centre of the Department of Transport and Public Works. The centre is responsible for processing tender applications related to government construction works, motor vehicle licence renewals and vehicle registrations. The newly refurbished centre, with its LCD screens, electronic queuing system and upgraded service desks is a far cry from the old help centre that was the embodiment of burdensome red tape. The change is welcome, considering that research indicates that red tape cost South Africans R79-billion in 2004 (SBP – Counting the Cost of Red Tape, 2004); the equivalent of 6,5% of the 2004 GDP; 16,5% of the total 2003 wage bill; and 28% of SARS’ revenue in 2002-3.

CHAMBER Of COMMERCE COMMISSIOnED STuDy Within the Cape Town city-region, the Cape Chamber of Commerce commissioned a study, Red Tape: A Study of the Cost of Doing Business in the Western Cape, the results of which indicate that red tape represents a significant business constraint in the region and suggest that reforms to tendering processes and procedures in the city-region are urgently required. Businesses in the city-region face significant burdens (in terms of time and actual monetary costs) when bidding for government tenders, complying with labour regulations and legislation and obtaining permits and licenses. Consequently, and in consultation with local government and the various Chambers, the Provincial Government of the Western Cape’s Department of Economic Development and Tourism adopted a ‘Red Tape to Red Carpet Strategy’ that took a two-pronged approach: (i) Systems: including administration, processing time, procedures and processes and reporting. (ii) Statutory: including legislation, regulations, permits, licenses, standards, etc. While the renovated facility in Dorp Street is part of the systems improvement process (along with a business helpline), an improvement in the SCM appeals process in local government has been suggested for the statutory improvements.

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CASE STuDy

THE BEFORE PICTuRE…

SCM APPEALS In LOCAL GOvERnMEnT SCM related appeals, objections, disputes, complaints and queries in the local government environment are governed by the Constitution of the RSA, the Municipal Finance Management Act (MFMA) through its SCM TR and the Municipal Systems Act (MSA) . However a discrepancy between the two pieces of legislation is created when interpreting and applying section 62 of the MSA and SCM TR 21(e), 49 and 50, which refer to determining the designated appeal authority in terms of any decision related to SCM. The contradiction between the MSA and MFMA, simplistically, necessitates that a matter is firstly classified as an appeal, complaint, objection, dispute or query. Thereafter, an expensive and protracted court process follows. The result is confusion, delays, costly legal representation and, ultimately, bidders who are aggrieved by a Municipal decision or action relating to SCM matters. The processing of SCM-related appeals is not as efficient as it could be, owing to the absence of a clear internal process for the administration and processing of appeals, nor is there a clear allocation of the related roles and responsibilities between the Appeal Authority and the administration responsible for a specific SCM decision. The result is confusion and frustration among the stakeholders, delayed development and growth and extensive financial implications owing to formal court proceedings. Therefore, in an attempt to mitigate confusion, reduce red tape and ease congestion in court roles whilst at the same time ensuring costeffective administrative justice, as envisaged in the Promotion of Administrative Justice Act, 2000, it has been recommended that a uniform and standardised administrative system is established

for managing SCM related appeals, objections, disputes, complaints and queries, collectively referred to as appeals, in local government. A by-law has been drafted for adoption by Municipal Councils who choose to accept this protocol. Ultimately, reducing red tape and reforming regulatory practices in SCM can potentially produce highly beneficial outcomes for the economy in terms of boosting domestic business activity, new firm creation, economic growth and job creation. n

ReFeRenCeS DEDAT red tape reduction in the procurement process: The case of the Western Cape, PWC – 2011 SA Business Growth choked by rules and red tape, Edward West, 25/01/2012 Red Tape To Red Carpet Strategy, 2011- 2015, JP Peters, 2012 Red Tape: A Study of the Cost of Doing Business in the Western Cape Third Draft Final Report, October 2011, Neil Balchin – Mthenthe Municipal Finance Management Act, 2003 (Act 56 of 2003) Municipal Systems Act, 2000 (Act 32 of 2000) CC Groenewald v M5 Developments (283/09) [2010] ZASCA 47 [31 March 2010]; Loghdey v Advanced Parking Solutions CC Unreported, Case No. 20766/2008 (W) [25 February 2009]; Lohan Civil-Tebogo Joint Venture v Mangaung Plaaslike Munisipaliteit Unreported, Case No. 508/2009 (O) [27 February 2009] Sizabonke Civils CC vs Zululand District Municipality, KZN, 2009

On any given day the Public Works building on the corner of Dorp and Bree Street is teeming with contractors, car dealers, and drivers enquiring about open tenders, vehicle registrations or driver’s licences. Before renovations, service desks were split over multiple floors in the building and customers were forced to transact in various parts of the building, making the process longer, more frustrating and less effective. Contractors applying for tenders submitted their bid documents on the 7th floor, paid the cashier on the ground floor and returned to the 7th floor to show proof of payment. When bids on tenders were opened contractors again marched to the 7th floor to hear which bids had been received. The long queues and trips up and down the building were even more frustrating for disabled customers. .

AnD AFTER In november 2012, Minister of Transport and Public Works, Robert Carlisle, opened the new Walk-in Centre, which now boasts a vastly improved work-flow process. Processing of tender applications has been reduced to approximately 30 minutes. • A ll service desks, cashiers and the bid room are located on the ground floor, enabling the public to transact all necessary work in one, easy-tonavigate area. • A n electronic queuing system ensures that customers are directed to the correct desk. • E lectronic screens in the waiting area display the latest tender information. • A service desk for disabled customers has been installed. • A customer service charter is displayed, confirming the department’s commitment to delivering a professional service. • T he Tenders service desks no longer have to receive payments for quotation documents, which frees up the service agents to deal with other queries.

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CASE STUDY

CASE STUDY

THE SUCCESSFUL ADOPTION AND IMPLEMENTATION OF A MUNICIPAL PREFERENTIAL PROCUREMENT POLICY BACKGROUND During 2010 the Cape Agulhas Municipal Council expressed concern that irrespective of the fact that the Cape Agulhas Municipality (CAM) is fully compliant with the Preferential Procurement Policy Framework Act, 2000 (Act 5 of 2000) (PPPFA), their constituents and the CAM community as a whole was not experiencing actual black economic empowerment within the municipal area. Understanding that the Council may not interfere with the procurement activities of the municipality, it was concerned that it would not be able to adhere to its Constitutional mandate to promote and undertake economic and socio-economic development of the municipality. By using its executive powers to issue policies , the Council took a decision to develop and implement a Preferential Procurement Policy as allowed per Section 2 of the PPPFA. In the development of this policy the Council reviewed CAM’s socio-economic profile and compared it with the procurement spend and practices of the municipality, which then informed certain policy decisions to direct procurement spend in CAM to the benefit of its constituents.

SOCIO-ECONOMIC REVIEW Having reviewed CAM’s socio-economic study the Council found that the skills composition of Cape Agulhas’ labour force comprises 17% low-skilled workers, 44% skilled workers and 19% high-skilled workers. Only 1,8% of the population has a matriculation- or higher-level education, but only 22,5% of that group is 20-years of age or older. This means that the majority of the population has a low skill level and would either occupy jobs in low-skill sectors or must be provided with better education opportunities in order to improve their skills level (and simultaneously that of the area and their income level). However, a large percentage of the population is unemployed; the main reasons being students and scholars accounting for 50,1% and pensioners 20,1%

of the population. There also appears to be a large percentage of homemakers/housewives and seasonal workers.

MUNICIPAL EXPENDITURE TRENDS The Council then reviewed CAM’s expenditure on goods and services, categorised in terms of the relevant economic sectors, and analysed it to ascertain the relative roles of CAM procurement within the socioeconomy of the community compared with sector spend.

Table 1.1: CAM estimated procurement

SECTOR Agriculture Mining Manufacturing (water & waste)

SECTOR SPEND (R’000)

CAM AVERAGE ESTIMATED EXPENDITURE (R’000)

% OF TOTAL SECTOR SPEND

185, 211

-

0%

49

-

0%

80, 187

15, 570

19%

Electricity

35, 609

36, 634

100%

Construction

46, 938

31, 410

67%

Trade

165, 808

-

0%

Transport

75, 073

2, 055

2,7%

Finance

429, 41

12, 152

28%

Community Services

154, 653

5, 611

3,6%

Apparent in Table 1.1, CAM expenditure for goods and services significantly contributes to the Electricity, Construction and Manufacturing sectors. Furthermore, expenditure on goods and services and related employment in the Trade, Community Services, Finance and Transport sectors is notable.

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In 2020 Africa will boast 128-million consumer households, up from 90-million in 2011. - MGI: Africa at work

ABOuT THE AuTHOR Advocate Helen Venter Director: Brasika Consulting hventer@brasika.co.za www.brasika.co.za An accomplished public sector legal expert, Helen has more than 25 years experience in supply chain management and government finance. In 2012 she was appointed as a European Union SCM Specialist. Helen believes in the value government organisations add to citizen’s lives and is driven to act as a change agent to help government officials believe the same. Visit smartprocurement.co.za/spr for a full biography.

The purpose of this case study is to advise organs of state of the benefits of adopting and implementing a Preferential Procurement Policy specific to their areas of responsibility.

SOCIO-ECOnOMIC PROfILE vS. PROCuREMEnT SPEnT

• Create new jobs or intensify labour absorption within the local area.

Comparing the estimated percentage of sector procurement spent for CAM with sector growth, it was revealed that CAM:

• P romote enterprises located within the CAM area for work to be done or services to be rendered.

• P rovided for higher than average procurement opportunities in water, waste water and waste management in the manufacturing sector. • S ignifi cantly provided for procurement in the construction sector to maintain its growth. • T hrough its budget offi ce and corporate services CAM was able to significantly improve procurement in the finance sector. Mindful of the high level of unemployment in the economically active population in CAM and their low skill basis, the Council deduced that it would serve no purpose to focus only on providing SMMEs and B-BBEE enterprises access to economic sectors through CAM procurement; it also required an approach to identify and capacitate citizens.

PREfEREnTIAL PROCuREMEnT POLICy, 2011 From the above realisation the Council then adopted its Preferential Procurement Policy, 2011, in order to achieve the following: • T argeted procurement, i.e. identify highly labour-dependent projects and encourage bidders to employ and train local labour. • S et progressive targets for SMME and B-BBEE enterprises’ involvement in CAM procurement spend per economic sector.

• P romote enterprises located in rural areas in and around the CAM area. • E mpower the work force by standardising the level of skill and knowledge of workers. • D evelop human resources, including assistance with tertiary and other advanced training programmes, in line with key indicators such as percentage of the wage bill spent on education and training and improving management skills. • U plift local communities through, but not limited to, housing, transport, schools, infrastructure donations and charity organisations – [Refer to the CAM Grant-in-Aid Policy and the Land Disposal Policy]. • E nsure that specifi c goals are measurable and quantifi able and that organs of state monitor the execution of the contract for compliance with such goals.

POLICy PRInCIPLES The principles adopted to underpin the above PPPFA goals, are: • S ound commercial principles will underlie all transactions. There will be no compromise on quality, service delivery or any other commercial aspects related to the delivery of business objectives.

• E ncourage the establishment of joint-ventures, co-operatives and consortiums to promote skills transfer.

• A ll preferential procurement processes will be transparent and subjected to audit in accordance with sound business principles and practices.

• G ive proper explanations to B-BBEE enterprises and SMMEs as to why their tenders were unsuccessful.

• C AM will only conduct business with service providers that comply with legal requirements (registered with SARS etc.)

• P repare uniform and user-friendly tender documentation with notes to assist completion.

• T he CAM supply chain management policy and system is fair, equitable, transparent, competitive and cost-effective.

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CASE STUDY

SUCCESSES Since its adoption, the Council together with CAM achieved some significant successes: (i) The development and implementation of a detailed SCM policy and system. (ii) Various construction-related tenders have been issued with a condition that bidders will only be considered responsive if a determined percentage of the work and profit is to be shared with local labour and local service providers. (iii) Integration of municipal services to cross-pollinate spend and economic development of the local industry, e.g. merging waste, waste-water and electricity distribution services and, as a spin-off of the planned development and implementation of a piggery, an advanced commercial agricultural value-chain that incorporates small-scale as well as commercial farmers.

(iv) The use of term-contracts rather than short-term quotes, which promoted sustainability in the various industries. (v) Procurement for goods and services, where practical and feasible, through unbundling, by: • o  bligating large contractors to engage small businesses in the performance of their contracts; • r equiring joint venture formation between large businesses and small businesses; • r equiring the formation of cooperatives; and • p  roviding third-party management support to enterprises which are not capable of operating as prime contractors. (vi) The payment of invoices, where possible, within 15 days for SMMEs in order to promote their cash flow position.

CONCLUSION The Council found that applying only the preference point system, without a specific Preferential Procurement policy, did not realise socio-economic development within the CAM area. However, since adopting its policy, CAM ultimately provided a springboard to encourage redistribution and reduce economic concentration, which, in-turn, fostered improved competition and promoted effective and appropriate resource allocation. It is conclusively proven that a Preferential Procurement Policy written for a specific geographic area will improve the socioeconomic profile of the municipal area, the quality of life of all its citizens and free the potential of each person, whilst at the same time promoting the achievement of the Municipal Council’s vision of a united, democratic and prosperous Cape Agulhas. The municipal policies can be found on its website: www.capeagulhas.gov.za. n

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SUPPLY MANAGEMENT

Written by SmartProcurement Staff Writer

FORECASTING MAKING WAY FOR CUSTOMER ENGAGEMENT Supply chain strategy and business strategy have become

‘Increased flexibility, agility and responsiveness’ was cited as the

Improving visibility in the supply chain was identified as the next objective, followed closely by improving the flow of information between buyers, suppliers and customers, which suggests a maturing of the long-held mantra of the supply chain: collaboration.

top medium-term business objective by respondents to the 2013

…and where is it hampered?

more closely aligned over the last few years.

SupplyChainForesight survey. Close second they chose ‘using the supply chain as a more competitive advantage’, suggesting that the business and supply chain objectives are closely interlinked. “The objective for business to adapt flexibly and quickly to variable customer demand in a tight and volatile market is something of a breakthrough,” noted the report. The current focus on responsiveness marks a welcome shift to more engagement with actual customer demand and market conditions, rather than product and manufacturing schedules. Previously, efforts to make the supply chain more competitive focused on planning and forecasting, but accurate forecasting remained a constant challenge in past research surveys. How can supply chain strategy support the business..? In terms of supply chain objectives, strong emphasis on cost management remained, however, it is accompanied by a realisation that

Constraints identified in the report remain familiar. The cost of transport features as the greatest supply chain constraint, for almost every industry sector. “South Africa’s high logistics costs, and the imbalance between road and rail, have been well-documented. [However,] this has been exacerbated lately with the imminent imposition of tolling and carbon tax fees,” says the report. However, there is a great deal of value to be had through businesses constantly re-examining their transport strategies and thinking laterally about them. “Companies do need to ask themselves hard questions about reducing these costs - are they moving their goods in the most cost-effective way possible? Is each industry considering innovative ways of moving their goods differently – through co-operation with other industry sectors, for example?” Also repeating its appearance is the second identified constraint: finding skills to enhance supply chain management.

must still be achieved at the lowest possible cost, as the objective of

However, surprising in its presence as a constraint, ‘reducing the environmental impact of the supply chain’ has made its first appearance in the top five, said the report. “The increasing pressure to reduce carbon footprint and to hold suppliers accountable, set by legislation and tax regimes, undoubtedly accounts for this constraint becoming prominent. The pressure on corporations to ‘go green’ is thus now affecting the bottom line.”

lowering procurement costs and decreasing lead times came in second,

The SupplyChainForesight survey is published on the Barloworld Logistics website

said the report.

– www.barloworld-logistics.com. n

partnership is essential to the use of the supply chain as a competitive advantage. Therefore, increasing service levels to customers remained the number one supply chain objective, as it has in previous years. But this objective

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RISK MANAGEMENT

Enterprise risk management a strategic imperative In today’s competitive and dynamic business environment it is becoming increasingly difficult for organisations, both privately owned or in the public sector, to achieve their goals and manage risks effectively without developing sound enterprise risk management (ERM) principles and practices. Globalisation, scarce resources, a volatile business environment and increased competition expose entities to great risks and potential losses. Therefore, in order to manage risks effectively it is essential that an entity develops a risk management framework that encompasses all the structures, processes, systems, methodologies and resources it uses. While risks will need to be identified at strategic, operational and project levels, the types of risks against which an entity must mitigate will vary according to the nature of the business, the risks inherent in the business and business priorities.

IT risks Information technology risks are generally underrated and, consequently, are insufficiently provided for. IT risks such as cyber risks, fraud risks and ethics

and governance risks have evolved into potentially significant legal and financial impacts for organisations. It is essential that sufficient measures are taken to ensure the appropriate mitigation of these risks. Common cyber risks include human error, data theft, phishing and cyber-extortion, among others. A favoured technique used by cyber-perpetrators is social engineering, which involves personal interaction with employees towards enabling such attacks; thus, it is essential that all employees are knowledgeable as to the real nature of such risks, to a level sufficient to ensure an understanding of high-risk behaviours. IT fraud risks include unauthorised usage of systems, false records and unauthorised updates. The holistic assessment of an organisation’s control environment, inclusive of manual and automated controls, is an essential element in identifying potential means and methods to reduce or eliminate fraud in this area. While ethics risks are often difficult to assess there are a number of tools currently on offer that can assist organisations in identifying and managing these associated risks. Common in this area is vendor favouritism, making it highrisk and vitally important to mitigate against. IT governance is most often best achieved by employing a robust framework. It

requires, among others, appropriate risk identification and assurance; steps to promote ethical behaviour; and a security strategy and system. IT governance frameworks in particular have resulted in most organisations employing simple policies that have often proven to be the best means of identifying inside perpetrators. Ultimately, a comprehensive risk strategy would incorporate employee education; integrated risk management; application of the latest tools; ensuring compliance to frameworks; and sufficient strategic focus. Fortunately technological developments continue to provide efficient tools to mitigate against high risks in the IT arena. Employees’ comings and goings can be recorded via camera surveillance or access control logs. Details of telephonic conversations can be recorded and retained, as can computer keystrokes via formal computer applications. Login credentials, emails and internet searches can also be stored. Consequently, there is often a readily and easy accessible record for later reference. Records together with innovative and evolving IT tools make analysing information in this arena completely viable.

Fraud risks When risk managers plan fraud risk management strategies, it would be pertinent to remember that ‘fraud prevention’ implies the total elimination of the risk. Realistically,

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The development of a procurement organisation should not be seen as a one-time series of independent efforts, but as a co-ordinated set of interdependent initiatives. - Strategic Visions on the Sourcing Market 2013: KPMG

risk can never be completely eliminated because the imposition of additional internal controls has prohibitive costs and often degrades process functioning.

form of the omission of transactions, balances or disclosures from the financial statements; or the misapplication of financial reporting standards.

The most prevalent types of fraud risks include corruption, asset misappropriation and financial statement fraud.

Practically speaking organisations should strive to instil a culture of integrity and establish a set of ethics that will function as the moral principles or values that guide employees in all aspects of their work. Examples of ethical values include honesty, integrity, probity, diligence, fairness, trust and respect.

Conflicts of interest, bribery and extortion are all considered types of corruption. A conflict of interest occurs when the fraudster exerts influence to achieve a personal gain, to the detriment of the organisation. Bribery occurs when money (or something else of value) is offered in order to influence a situation, while extortion occurs when money (or again value) is demanded in order to secure a specific result.

When attempting to establish if a decision is ethical employees should be encouraged to ask themselves the following questions:

Importantly, the probity advisory function differs from the internal auditing function: the advisory function places emphasis on how a process complies (or can be made to comply) with a particular set of criteria, standards or principles. The auditing aspect of the role focuses on whether a process has in fact complied with the set criteria, standards or principles.

• Is the action legal? • Is the action consistent with institutional policy?

Different types of fraud fall under the category of asset misappropriation; however, the most common by far is the theft of assets from the company. This type of fraud includes theft of cash, fraudulent disbursements, and payments to fictitious suppliers or to fictitious employees.

• I s the action in line with my institution’s goals and code of conduct?

Also known as fraudulent financial reporting, financial statement fraud causes a material misstatement in the financial records. This is often carried out with the intention of presenting the financial statements with a particular bias, for example, concealing liabilities in order to improve any analysis of liquidity. However, it can also take the

• Can I justify doing it?

a procurement process on probity-related issues, in order to establish procedures that meet recognised probity standards and ensure that any problems or questions are dealt with satisfactorily. Secondly, a Probity Officer would provide independent scrutiny of the procurement process to ensure that prescribed processes are actually adhered to. Finally, he would be responsible for providing a report at the end of the procurement process that records an independent professional view of the way in which the procurement process was managed, from a probity perspective.

• Do I think it is the right thing to do? • W hat will the outcomes be for: my institution, my colleagues, other parties and myself? • W hat would happen if the action was publicly scrutinised? A practical solution to deter corruption in the procurement process is to appoint a Probity Officer, who would fill three main roles. Firstly, she would be able to provide advice during

When it comes to fraudulent behaviour, at best Risk Managers must strive to provide mechanisms to remove the pivotal factors inherent in fraudulent activity. These are best described in the ‘Fraud Triangle’ coined by Donald R. Cressey for which a triangle is used to describe the three factors present in every situation of fraud, namely perceived motive (or pressure), rationalisation and opportunity. Consistently implementing measures to remove or reduce instances of these fraud

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RISK MANAGEMENT

factors can ultimately have a significant impact on fraud within individual organisations.

Conclusion For ERM to be effective in any organisation, the application should be periodically reviewed for adequacy. This entails making an assessment of whether the risk management framework is adequately implemented. There should be adequate measures in place to ensure that sufficient resources are allocated; policies are enforced; risk response plans are implemented; communication is effective; and that there is on-going risk monitoring. As part of assessing the effectiveness of risk management processes an internal audit is required to provide independent assurance.

In addition, organisations should have personnel in place with sufficient experience to drive and support risk management. It is important that these personnel should have an appropriate range and depth of knowledge, skills, and competencies, as well as a positive attitude. They should also be allocated sufficient resources for training and personal development. In closing it must be said that management within an organisation can never completely eliminate risks, which necessitates developing an appropriate balance between the need to limit risks that could harm the organisation and taking on appropriate risks in order for the organisation to grow and meet its objectives. n

ABOUT THE AUTHOR

ABOUT THE AUTHOR

ABOUT THE AUTHOR

Lawrence Moepi Director, Forensic Services: SizweNtsalubaGobodo

Samuel Kubushi Director, CGS: SizweNtsalubaGobodo

Benjamin Martins Director, ICT Advisory: SizweNtsaluba Gobodo

011 718 8720 www.sng.za.com

011 718 8720 www.sng.za.com

011 718 8720 www.sng.za.com

Lawrence Moepi (CA) SA is a Partner at SizweNtsalubaGobodo and serves on the Policy Committee of the firm. A Director at the Institute of Commercial Forensics Practitioners (ICFP), he has worked closely with the Commercial Crime Unit of the South African Police Services and has extensive experience in fraud investigations.

Sam Kubushi has over 19 years extensive experience in Risk Management, Corporate Governance and Internal Audit. As a Director at SizweNtsalubaGobodo Sam is responsible for risk management, corporate governance and internal audit service delivery with clients in both the public and private sectors. Sam is a member of the Institute of Internal Auditors (SA).

With experience across Europe and Africa Benjamin is responsible at SizweNtsalubaGobodo for the strategic roll out of Information Systems Audit Techniques and Methodology. Benjaminâ&#x20AC;&#x2122;s academic achievements include a combined honours degree in Computer Science with Economics, and a Masters degree in Computer Science.

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EnTERPRISE DEvELOPMEnT

AdvAncing FRom StRAtegic

SoURcing

to SUppLieR deveLopment ABOuT THE AuTHOR Femida Mahomed Chief Director: Department of Public Enterprises Femida.Mahomed@dpe.gov.za www.dpe.gov.za Femida Mahomed is an economist with extensive experience in industrial policy and sector strategy design, SOC governance, investment promotion and project management. She oversees the DPEâ&#x20AC;&#x2122;s Competitive Supplier Development Programme, strategic relationships between State Owned Companies and their core suppliers, and the development of competitiveness forums involving SOC and their customers from prioritised sectors.

The commercial enterprise is the key institution driving the development of productive capabilities in the contemporary global capitalist economy. It allocates investment in plant, skills and technology to build the productive base as well as drive processes to enhance the productivity of economic assets. Through ownership of the commercial enterprise, the State can drive investments to achieve strategic economic and developmental objectives. The overwhelming objective of a private shareholder is to maximise enterprise value through reducing risk and maximising profits. The role of the State as a shareholder manager requires that a balance is struck between ensuring that State-Owned Companies (SOCs) are financially sound and sustainable on the one hand, whilst delivering on governmentâ&#x20AC;&#x2122;s strategic objectives on the other. Consequently, SOCs are subject to the disciplines of the market, whilst also pursuing a broader government-driven developmental agenda. SOCs in the infrastructure sector, like Transnet and Eskom, are in a unique position to unlock growth through the potential impact of their investment programmes on their customer and supplier communities. This requires that SOCs are appropriately skilled and capacitated in order to be able to procure in a manner that optimises both the enterprise value and their contribution to the national economy. SmartProcurement Review

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“The challenge is to be one of the companies that ‘refuse to waste a good recession’.” - Strategic Visions on the Sourcing Market 2013: KPMG

The essence of a supplier development and localisation programme is creating a coherent demand platform against which suppliers can invest. It requires consistent and predictable procurement spend to enable a change in the nature of the relationship between the SOC and its supplier – shifting from a transactional (once-off) to a strategic (long-term) partnership. A supplier development programme will enforce the technological upgrading of the supplier as a key element of the partnership. It is noteworthy that the benefits of a strategic long-term relationship with suppliers are not limited to the public sector. Professor Peter nolan, Director for Centre of Development Studies at the University of Cambridge, has researched, written and taught extensively on economic development and globalisation issues. According to Prof. nolan, during the three decades of capitalist globalisation, industrial concentration has taken place in almost every sector, including high-technology products, branded consumer goods and financial services. Alongside a significant increase in global output, the number of leading firms in most industrial sectors has shrunk and the degree of global industrial concentration has increased greatly. As they consolidated their leading positions, these firms with enormous procurement expenditure have consolidated their supply chains to provide each supplier in the value chain with sufficient scale and scope to compete and invest in new technologies. It should also be noted that there are significant advantages for large enterprises having a dynamic local supplier cluster: a reduction of inventory and lead times; managing quality of output; and the leverage to ensure responsive suppliers. Furthermore, a range of industries are recognising benefits to their “license to operate” by being embedded in the national economies in which they operate. Put simply, there is significant enterprise value that can be unlocked through integrating a strategic sourcing process with a supplier development programme and leveraging the benefits of the resulting strategic partnership. As a government shareholder, the Department of Public Enterprises (DPE) has played a key role in championing a change-management and co-ordination process in respect of strategic sourcing, supplier development and localisation in the SOC within its portfolio. The DPE established a Competitive Supplier Development Programme four years ago and there has been significant learnings in the interim. • F irstly and very importantly, supplier development and localisation requires a holistic approach to a procurement re-engineering programme. As illustrated in the diagram below, the process: a) begins with the enterprise systematically planning and setting targets for a range of enterprise and national objectives; b) then moves to addressing whether the enterprise has the necessary policies, processes and systems in place to enable and drive implementation; and c) then determines and ensures that the enterprise has the necessary capabilities and skills in place to implement the programme.

e) The final link in the chain is monitoring and evaluation.

PLAnnInG AnD TARGET SETTInG

IMPLEMEnTATIOn, MOnITORInG AnD EvALuATIOn

MInISTERIAL LEADERSHIP

COMMunICATIOn AnD COORDInATIOn

SOC POLICy PROCESS AnD SySTEM REDESIGn

CuLTuRE

The State has an intrinsic interest in the development and localisation of SOC supply chains as this ultimately grows and diversifies the economy and expands the tax base. Consequently, any incentive or premium the State provides to enhance and accelerate localisation and industrialisation is returned to the State through a multiplier effect, resulting in greater economic activity and greater taxes.

d) Thereafter, it is critical to put in place a communication platform for internal and external stakeholders and to ensure that coordination takes place at all levels.

CuLTuRE

Enterprise value relates to value that accrues to the enterprise through minimising total lifecycle cost and optimising total lifecycle revenue associated with an acquisition. national economic and socio-economic value relates to the value that is created through expanding national productive capabilities and capacity - increasing GDP; creating jobs; and creating a more inclusive economy, particularly through the involvement of historically marginalised sectors.

CAPABILITy AnD SKILLS DEvELOPMEnT

EnABLInG POLICy EnvIROnMEnT

• S econdly, the shareholder must give the enterprise a clear mandate to implement a programme, whilst carrying the responsibility of providing targeted support and facilitating the building of an enabling policy environment. This requires a continual dialogue with management about challenges faced by the programme and how the process can be enhanced. The shareholder has to help management build a bridge between the shareholder’s developmental aspirations and the reality of enterprise capability. This involves providing targeted practical support whilst also demanding accountability. • T hirdly, there is no simple text-book methodology for leveraging procurement to develop suppliers - it is a continual “learning-bydoing” improvement process. Learning-by-doing entails finding something that works operationally, rather than what sounds strategically elegant. However, building new sourcing capabilities to implement new operational methodologies is not a big bang – it is a step-by-step process. As the enterprise learns and develops new capabilities, it can take on more and more ambitious objectives with associated greater complexity and risks. What is clear is that both public and private enterprises have an intrinsic interest in enhancing their sourcing and supplier development capabilities to drive dynamism, skills and technology development in their relevant supply chains. To achieve this closer collaboration and stronger partnership between government, SOC and the private sector is necessary. The DPE is consequently leading a collaborative process with key sectors and stakeholders in the economy to explore the possibilities of building partnerships to enhance the enterprise sourcing capabilities and, consequently, deliver increased scale to the respective demand platforms. These initiatives will not only contribute towards growing and increasing the technological sophistication of the South African economy, but will also add to the competitiveness of all the enterprises involved in the process. n

ReFeRenCeS Nolan, P., Jin, Z., & LIU, C. (2003). Globalisation and China’s Large Firms. Peking: China Industrial Development Research Centre, Peking University. www.smartprocurement.co.za

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ENTERPRISE DEVELOPMENT

ABOUT THE AUTHOR Catherine Young Partner: Solver Consulting 083 462 8857 catherine@solverconsult.com www.solverconsult.com Catherine Young is an entrepreneur, writer, and business professional with 15 years of procurement and supplier development experience. She manages SME development projects for various organisations from conceptualisation to operational delivery, and is passionate about growing SMEs through initiatives across the public and private sectors. Visit smartprocurement.co.za/spr for a full biography.

It is estimated that approximately 68 per cent of South African workers are employed by the countryâ&#x20AC;&#x2122;s small and medium sized organisations. Furthermore, at least 71 per cent of new, small businesses close their doors within the first year of operation. Combined with an official unemployment rate of 25 per cent for South Africa, it becomes very clear that small businesses have a critical role to play in creating jobs and reducing poverty in the country. Various reasons can be cited for the high failure rates experienced by small businesses: a lack of funds; lack of business opportunities; lack of financial management; poor operational business management; or a lack of infrastructure. Furthermore, the skills gap of the founders of these small businesses is often named as a possible reason for these Small and Medium Enterprises (SMEs) not achieving the level of success they could. Differing opinions abound on how to address the identified skills gaps. Public and private sector organisations alike have introduced various initiatives aiming to bridge the divide between unsuccessful and successful SMEs. The varying level of success is alarming considering the urgent need for SMEs to be successful and the vast amounts of money being spent to develop small enterprises towards success. Without taking away from the good work that has already been done by an array of SME development programmes,

the state of affairs reminds us of all the hard work that lies ahead with regard to the successful implementation of SME development programmes over a sustained period of time. SME development is a hotly debated topic, and depending on which side of the fence you find yourself, it could be viewed as doing too little or doing too much (referring to developing small businesses without the required sustained results). The development of SMEs into fully-fledged operational businesses requires not only funding and mentoring from organisations committing their required enterprise development funds, but a long-term, shared view of the required future by both the benefactor and beneficiary and a real willingness by both parties to make it work. Dedicated focus and commitment from both parties means including SME development in the core strategies of the organisation, backed by sufficient resources to get the job done. To fully reach the next level of SME development there is a need for the various benefactors to combine their SME development efforts in a consolidated way. This will ensure SMEs gain the value of a programmatic approach across public and private organisations, rather than haphazard individualised programmes run by individual benefactors for sincere reasons. It makes sense that industry should take a combined view of an SME in an area, and pool resources to aid the SMEâ&#x20AC;&#x2122;s growth to the next level as there is a dire need to develop SMEs in various areas of business. An all-inclusive approach to SMEs, shared by public and private sector alike, rather than independent programmes running simultaneously across the same suppliers in the same geographies, is sorely needed. This way SMEs have access to a development path

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By 2020 Africa will add 122-million workers to the workforce, more than any other region. - MGI - Africa at work

cAn we impRove the

SUStAinAbiLity oF SmALL bUSineSSeS

supported by an array of their benefactors that will drive towards key shared outcomes. Obvious benefits include saving time and costs as the SME is able to focus on a specific development programme, rather than having to split their focus across various initiatives. A shared view will result in a sustainable outcome based on commitment, hard work and dedication endured over a period of time, from all sides. This implies the implementation of programmes that are practical, measurable and attainable. Looking at lessons learnt across a number of SME development initiatives, three key barriers to the successful practical implementation of SME development are listed below:

TRAInInG IS SEEn AS THE SILvER BuLLET Training certainly goes a long way in ensuring SMEs grow their skills and knowledge, but a training programme without the necessary pre- and post-assessment, monitoring and evaluation processes in place becomes a checklist exercise without the necessary impact. SMEs are busy, and if training is not provided in a practical way, linked to clear objectives that the SME wants to achieve for the benefit of his/her business, it becomes a case of a certificate of completion filed in a dark cupboard.

OPERATIOnALISInG THEIR nEW SKILLS AnD KnOWLEDGE IS LEfT TO THE SME ALOnE It is imperative that SMEs take ownership of their own growth and that of their businesses, however, the practical implementation of freshly acquired skills and knowledge soon falls by the wayside owing to the

basic needs of keeping a business afloat. Therefore, SME development programmes should consider an intense three- to six-month criticalcare period upon completion of a developmental intervention, during which time resources are placed on the ground, assisting SMEs to operationalise what they have learnt. An SME development initiative should not end after the last training session.

SME DEvELOPMEnT IS SEEn AS A funCTIOn TO BE PERfORMED By OnE DEPARTMEnT WITHIn THE ORGAnISATIOn, RATHER THAn A STRATEGIC APPROACH OWnED By ALL SME development is not the responsibility of Procurement or Supply Chain, nor only the department allocated the work. It is the responsibility of the organisation as a whole, and should be seen as an opportunity to make a real impact in the lives of the SMEs that will bring value to the benefactor in the long-term. SME development needs to be part of the strategic objectives of any South African organisation in the next ten years. This will enable the next level of SME development as they receive exposure and support of the whole organisation. We have definitely covered good ground in the last decade toward developing SMEs, however, the time is right to take a consolidated view of how to implement SME development programmes that are practical, have operational value to SMEs and aid the overall growth of SMEs to positively influence job creation and poverty alleviation in our country. The true value of SMEs is waiting to be unlocked. n

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ENTERPRISE DEVELOPMENT

Enterprise development mindset unlocks supply chain potential

Place bankability at the centre of your enterprise development initiatives

ABOUT THE AUTHOR Shawn Theunissen Head of Corporate Social Responsibility: Growthpoint Properties and Property Point 011 944 6163 stheunissen@growthpoint.co.za www.propertypoint.org.za www.growthpoint.co.za In addition to his role as Head of CSR at Growthpoint, Shawn is the founder and manager of Property Point, Growthpoint’s enterprise development programme. Property Point focuses on the holistic development of small, medium and micro enterprises and the creation of market linkages within the private sector. For a full biography visit smartprocurement.co.za/spr.

In the face of changing BEE codes, enterprise development programmes are a means of removing barriers to market entry and creating sustainable jobs. However, this necessitates that organisations change their view of procurement as an opportunity holder and link it, with supplier diversity programmes, directly into their enterprise development initiatives. Supply chain management (SCM) cuts costs and improves efficiency; however, procurement departments are now considering SCM in the context of the new BEE codes, amendments to which will change how organisations select suppliers. Consequently, enterprise development programmes are coming under increased scrutiny as organisations begin to review the real impact – and value – of ED investment.

How to unlock and enable transformation Programmes should unlock opportunities within organisations and enable transformation beyond compliance; however, very few seem to be meeting these objectives or developing the next generation of small business suppliers in a meaningful way. It is critical to ask why this is not the case, and what needs to be done

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Private consumption in Africa is higher than in India or Russia; it rose by $568-billion from 2000 to 2010. From 2012 to 2020, consumerfacing industries are expected to grow a further $410-billion. - Rise of the African Consumer: McKinsey Africa’s Consumer Insights

by corporates to unlock opportunities in order for small to medium enterprises (SMEs) to thrive and become legitimate suppliers of choice. Perhaps the most important insight is that unless procurement and supplier diversity programmes are actively integrated into enterprise development initiatives, companies run the risk of creating a disconnect between the corporate and the SME, for the SME usually does not understand the opportunity-holder or business – often at a very basic level. This lack of understanding subsequently manifests as an inability to compete effectively with more established suppliers and/or secure contracts from the organisation, beginning at RFP level in many cases. needless to say, this has implications for both parties.

RESTRuCTuRE fOR LOnG TERM vALuE While some corporates have chosen to address this inability to compete by assisting non-core small businesses, a more viable long-term alternative is to structure one’s enterprise development model to create an integrated support practice. In this way, one can improve individual SME competitiveness and facilitate implementation of their respective growth strategies, as well as encourage sustainability. By incubating SMEs directly in an opportunity-holder environment, companies can facilitate the relationship between their procurement departments and entrepreneurs. In this way, companies can ensure that SMEs can become ‘procurement ready’.

WHAT DOES THIS REQuIRE In PRACTICE? At Property Point, Growthpoint Property’s enterprise development programme, the programme becomes the enabling connection between the two parties: SMEs and the procurement team. At the start of the programme SMEs are exposed to key individuals within the procurement department, who then work one-on-one with each SME. In this way the opportunity holder facilitates access to market by aligning incubated businesses with its own supply chain’s needs and requirements, whilst at the same streamlining these requirements to ensure they do not create barriers to entry for SMEs. Businesses on Property Point’s programme tap into the thinking of the company’s front-end decision-makers on a regular basis. However, providing this type of access to markets through direct business linkages is not enough on its own: it must be combined with specialist business support tailored to address the specific issues that inhibit the SME. Property Point partners with each business to ensure its bankability. As a result, the needs of the entrepreneur and Growthpoint’s procurement division are addressed simultaneously. In understanding procurement-readiness in the context of SMEs, and appreciating that it’s not just about being compliant, but also about being compatible with your company, companies will be able to adapt their enterprise development initiative accordingly. In this way you will enable meaningful transformation within your company and the SMEs on your programme to access real market opportunities. n

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TECHNOLOGY

COLLABORATE TO WIN creating competitive advantage in a networked economy

In today’s business world, it’s not what you know, but how you connect with what others know. We are experiencing a step change in IT-generated productivity. Owing to significant shifts in how technology is delivered, accessed, and used, we are now more connected. We are now more enabled to share. We are now more enabled to shop. We are now more enabled to make moreinformed decisions than ever before. Think about what’s happening in your personal lives. The magic of Facebook is not its clean interface or its News Feed feature; the magic of Facebook is that it has created the world’s largest network of personal connections. The beauty of Amazon is not that it offers the best prices on books. It’s that it offers the world’s largest and most convenient network for personal shopping. This is not just a consumer phenomenon; it’s an enterprise one. More and more businesses are looking beyond the four walls of the enterprise to extend their processes and systems to connect and collaborate more efficiently with customers, suppliers, and other trading partners across the street and around the globe.

Adapted from a report entitled ‘Collaborate to Win: Creating Competitive Advantage in a Networked Economy’, prepared by CFO Research Services with Ariba, an SAP Company. “Collaborate to Win:” Available at http://www.ariba.com/resources/library/ collaborate-to-win

Essentially, we live in a networked world - one that connects us to communities that help us learn, share, and consume better. Welcome to the ‘Networked Economy’, in which businesses and their systems are connected to digital communities of existing and potential partners. It is a world where sellers can quickly find new business opportunities in a network of prospective customers that have a buying need; where buyers can efficiently discover and qualify new sources of supply, and track and coordinate orders across their supply chain, all

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Across all surveyed African markets, 56% of urban African consumers own Internet-capable mobile devices, and a third of them are using these on a daily basis to access the internet. - Rise of the African Consumer: McKinsey Africa’s Consumer Insights

in real-time; where any company can have

Many companies are also beginning to

approaches carry high costs and require heavy

transparency into payables and receivables

recognise that they can gain new insights and

lifting to enable and support, and exclude

status to make informed working-capital

enable new processes by being connected to

many partners from participating. Traditional

decisions.

a community of their partners and peers—

models prevent companies from gaining the

benefits that were unattainable with isolated,

transparency and capability they need to

on-premise applications and low-scale,

execute processes across the value chain -

point-to-point integration models.

from finding and serving new customers to

The move to this new, connected, interenterprise operating model is being enabled and accelerated by trends such as cloud computing, mobility, and the convergence of

Yet the key reason companies are speeding to

enterprise applications and social media, or

embrace the Networked Economy is simple:

collaboration through communities.

it’s good business. Evidence is mounting that

You can already see the impact of this convergence in our daily lives. Whether searching on Google, shopping on Amazon. com, downloading music from iTunes,

organising and managing supply to optimising cash flow - in the most efficient and costeffective way possible.

participating in the Networked Economy will

Open business networks are paving the

be vital to future growth, profitability, and

way for companies to drive a new wave

differentiation:

of productivity. Much like their social

• The findings of McKinsey & Co.’s annual

counterparts, business networks provide:

or engaging on Facebook or Twitter, the

report on the use of social technologies

networks we use to run our personal lives

in the enterprise were published in The

organisations sharing a business process

share three components:

Rise of the Networked Enterprise: Web

to share the underlying technology

2.0 finds its Payday. The results showed

infrastructure that enables the process.

that companies that adopted collaborative

This shared cloud infrastructure ensures

1. They are all built on a shared cloud-based technology infrastructure. There’s no need to download software or worry about upgrades; you need only a web-enabled device to access a shared experience from anywhere in the world. 2. They all have a powerful community of peers, merchants, financial institutions, and experts with whom you can efficiently

• Cloud-based applications that allow

tools performed better financially. These

that all parties are collaborating around the

fully-extended enterprises were able to

same information and coordinating process

gain market share and boost operating margins, and they also correlated positively with market leadership - demonstrating

the process from any device, whenever and

transitory trend.

wherever required.

• A CFO magazine study of 200 global

• A community or network of partners

finance executives found that they viewed

don’t need to worry about connecting

using technologies - such as the cloud and

to individual merchants or banks. All the

business networks - to better discover,

integration work is done for you in a single

connect, and collaborate with their

integrated community.

customers, suppliers, banks, and other

form of best practices (such as Amazon’s one-click shopping), expert advice (such as Apple’s Genius recommendation service), and community intelligence (such as peer reviews on any of these services). These same network dynamics are now being embraced by the business world. Why? Because businesses today are more dependent on their external partners. Businesses cannot meet their cost, revenue, and cash-flow goals without being able to efficiently engage and collaborate with their supply chains. They have leaned-out inventories; reduced costly infrastructure; outsourced processes; and stretched their

because there’s no hardware or software to install or maintain, parties can engage in

that social technologies are more than a

discover, connect, and engage. You

3. They all offer unique capabilities in the

execution on a common platform. And,

through which companies can quickly discover, qualify, connect, and collaborate with trading partners to share and execute a process. The most advanced

trading partners as a top priority for agility and growth.

business networks are truly open, enabling businesses to extend any of their existing systems to their community of partners.

• A CIO Magazine study found that IT

• Capabilities in the form of best practices,

executives are also prioritising investments

community-derived intelligence, and

to improve external collaboration.

other unique features or services, which

• A research series from Harvard Business School points to inter-enterprise

are available only to members of the

collaboration as a key competitive

community, such as unique analytics,

competence going forward.

preferred financing, or group discounts.

At its core, the Networked Economy is all

Companies today are moving beyond their

about relevant connections and efficient

traditionally inside-out view of the world and

collaboration. It is the glue that links and

IT infrastructure and are no longer focused on

coordinates a virtual “extraprise” of partners

features and functionality when it comes to

into a shared community executing improved

technology. What they want is access to the

and coordinated processes in a more informed

people, processes and tools they need to make

way than in the past.

their businesses grow. They want to be able to buy, sell, and manage their cash as easily

supply chains around the globe. These factors

Traditional operating models, old-school

require businesses to depend more on their

enterprise applications, and proprietary

external partners, which makes sharing

point-to-point or hub-and-spoke integration

information and coordinating processes with

strategies are too rigid to enable transparency

Yes, business has officially become networked.

these partners more critical than ever before.

and efficiency across the value chain. These

And there’s no turning back. ■

in their business lives as they do on the home front. They want business networks.

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TECHNOLOGY

ABOUT THE AUTHOR Kathleen Kopp Procurement Consultant: resolve kkopp@volition.co.za www.resolvesp.com

Procurement technologies have been rapidly emerging owing to dynamic and constantly changing markets that ultimately require companies to increase productivity and manage costs effectively. Purchasing systems and other technologies in purchasing can provide huge benefits especially if implemented as part of an overall strategic plan such as: • cost reduction; • accurate, instantaneous information flows throughout the supply chain;

A PRIMER

PROCUREMENT TECHNOLOGIeS TO SUPPORT STRATEGIC OBJECTIVES The procurement organisation’s level of maturity is a key driver in determining the most appropriate sourcing and procurement technologies to use.

• improved visibility into spend data; • improved process efficiencies; • improved control over procurement processes; • collaborative working with suppliers, which can improve performance, product and costs; • improvements in supplier/sourcing strategies; and • fraud reduction. The procurement organisation’s level of maturity is a key driver in determining the most appropriate sourcing and procurement technologies to use. Maturity depends on which strategy is in place and how well-implemented and followed are the supporting processes and procedures. Technology only facilitates the development and delivery of those processes and procedures. Key steps in implementing new technologies are to establish the user requirement; consider alternative technology and build the case for change; and plan for the delivery of benefits. Along with selecting the right technology, it is also important to remember that change management is a significant dependency for the success of the technology implementation. e-Procurement systems can be stand-alone with an interface into back-office systems or they can be fully integrated into back-office systems. Traditionally, e-Procurement was used to describe the e-enabling of the purchase(or requisition-) to-pay processes. Over the years, additional procurement processes have become e-enabled, including strategic sourcing, tendering, auctioning, contract management and procurement reporting.

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e-Sourcing tools Spend analysis tools. Spend analysis tools enable a procurement function to identify exactly what is being spent, by whom, with whom, when, where and how often. Online spend analysis tools provide easy analysis based on ERP data, and report generation from this tool enables management reporting and strategy formulation. The benefits of using an integrated spend analysis tool include: • gaining full spend visibility; • automating data capturing from ERP systems; • increasing the amount of spend under management; • rapidly identifying savings opportunities; • pro-actively monitoring contract compliance; and • reducing supplier risk. Spend under management is often defined as spend that is identified, sourced and managed by a centralised, or centre-led, team using a variety of e-sourcing technologies. In addition to identifying cost savings opportunities, capturing more spend under management enables better efficiency, productivity and predictability within sourcing and procurement activities. Tender processes. Various online tools enable departments to run various tender processes; be it a simple RFP, right through to a full tender. The interactive nature of the tool provides the following benefits: • a central database to store all supplier information; • rigid processes to enable buyers to ensure all steps are followed and completed; • access to a larger supply base; and • easy evaluation processes. Catalogues. An electronic catalogue, or e-catalogue, is a web resource that provides information on products and services offered by a supplier. Additionally, it supports on-line ordering and payment capabilities. Well-managed catalogues improve communication between buyers and suppliers. Contract Management. Many contracts are managed in paper-only formats; often buried away in filing cabinets within departmental business units across the organisation, which creates a lack of visibility and control, leading to increased business risk. Contract management systems offer effective solutions that not only enable compliance, through good practice, for the creation and renewal of contracts, but help identify greater value to be leveraged from existing and new contracts. Benefits include: • an ability to manage contracts ahead of time; • better relationship management; • the availability of contractual documentation; • increased compliance; and • reduced administrative overheads. Collaboration. The development of technology has enabled organisations to expand their ability to collaborate beyond the traditional supply chain and into collaborative planning, forecasting and replenishment. While the concept of collaboration is not new it has traditionally been in the form of clusters of related companies with strong, single leadership that offer each other privileged access to certain products, services and personnel. However, today’s business involves a far greater degree of collaboration to remain globally competitive, and technology has acted as an enabler in areas such as reducing communication costs and being able to create a competitive advantage. At an application level it can facilitate the integration of business processes. Most companies have basic procure-to-pay systems as part of their ERP systems. However, the real value-add procurement systems are often not given the attention they deserve in terms of consideration or implementation-support. Procurement organisations need to consider the variety of technologies available to them to support their daily functions and strategic objectives. n

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TECHNOLOGY

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Africa’s growth acceleration resulted from more than a resource boom: arguably more important were government actions to end political conflicts, improve macroeconomic conditions and create better business climates. - Lions on the move: The progress and potential of African economies

www.alibaba.com an Open Sesame for Africa? In the original children’s fairy tale, the hero, Ali Baba becomes the only person to know the secret of accessing the stolen treasure hidden in the cave. He knows that the magic phrase “Open Sesame” is the key and he helps himself to some of the treasure when the thieves have left. Maybe Jack Ma, the Chinese founder of Alibaba.com had a premonition to find treasure when he named his start-up company in 1999. He conceived it in his modest apartment in Hangzhou, aiming to first provide a local on-line marketplace for Chinese traders, and from there to create an international B2B marketplace. His timing was good, by year 2000 there were many Chinese manufacturers entering the export market and many buyers from around the world were keen to benefit from sourcing from a low-cost country.

WHAT IS ALIBABA? The business�to�business (B2B) model of Alibaba is very simple. Basically, this Chinese-based trading platform connects global buyers with suppliers, mostly from China, in an on-line meeting place. It can be described both as a global business-dating site and as an e-commerce search engine. It provides an English-speaking platform where sellers (suppliers and manufacturers) can meet buyers (outsourcers and wholesalers) on a global scale. Its customers are both the sellers and the buyers, who are able to load “storefronts” to advertise their products or needs. Its objective is to be the go-to English-language platform for all crossborder trade and it aims to help small businesses worldwide expand to overseas markets. “Alibaba B2B helps to solve the pain of global sourcing, providing a model where buyers use the site for free and sellers pay a fee.” Under Jack Ma’s leadership, the Alibaba B2B websites have attracted more than 17million registered members in 220 countries globally, with daily postings exceeding 35 million, making Alibaba.com the most active Internet marketplace and B2B community worldwide today.

GROWInG PAInS It hasn’t been all plain sailing. In order to succeed globally, Alibaba had to first succeed domestically. When they started to roll out their international operations they were not really ready, and as a result, nearly went bankrupt. Their painful underestimation of the impact of cultural differences and styles of doing business caused them to re-focus on their domestic market which helped them survive and later, prosper. A lot of energy was used to attract international buyers to their B2B website where different strategies were required for the different countries they targeted. Alibaba’s appointed US-based advisors struggled with their “let’s just jump in and do it” thinking, they favoured a more structured and process driven approach.

By 2013, the Alibaba group of 25 companies is on track to be the world’s first e-commerce platform to handle $1 trillion a year in transactions. Although Jack Ma is still Executive Chairman, yahoo owns 40% of the group.

A SOuTH AfRICAn ALIBABA? Can an Alibaba-style model work in South Africa to promote South African suppliers to overseas buyers? Some industry specialists believe it can, although there are quite a few concerns, not only relating to economic conditions but also how we can transact safely with buyers that we don’t already have a relationship with. Understanding the business culture, traditions and conventions is important when entering new markets, either as a buyer or as a seller. Other challenges we have in South Africa are internet connectivity and bandwidth issues as well as logistical limitations. There is some scope for an inter-African B2B marketplace to facilitate trade between African countries, we could develop our own AfriBaba!

MARKET MATuRITy Whether the South African commerce e-landscape is ready for such a solution right now is not clear. Although an Alibaba-type model could work, it would have to be tailored to suit local requirements and behaviours. It is estimated that we have more than 7 million internet users, but we don’t know how many of them are only using it to find information rather than transacting. In order to succeed internationally Alibaba first needed to succeed domestically. This would probably be true for our aspiring B2B entrepreneurs. The main issues identified by market watchers seem to be related to :

fRAuD AnD RISK Marc Emert, Sales and Marketing Executive of MyMarket, a B2B procurement solution in South Africa, says “The big factor in my opinion relates to perceived ‘risk’ i.e. the perceived risk of purchasing online far outweighs the benefit of the good or product. A company set up like Alibaba would need to fully understand this context and mitigate as much risk as possible. Risk can obviously cover a number of factors such as delivery, quality of product etc. However, in my opinion the largest risk factor is probably around the potential of fraudulent behaviour taking place. South African buyers remain cautious with online transactions. Suppliers and service providers need to ensure that the customer is fully engaged throughout the full process from both an ordering and logistics point of view.” Alibaba had a major setback a few years ago when some of their Gold suppliers (preferred and supposedly verified) were involved in fraudulent transactions. What was particularly jolting for the company was that the fraud it uncovered was among these “chosen” Gold Suppliers. What

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TECHNOLOGY

made it worse was they operated with the complicity of some Alibaba. com sales staff, who had a financial interest in boosting sales because they were paid commissions.

Cultural norms This may not be such a big factor in a country like ours that primarily does business in English and that follows many of the conventions of the Western world. However, Dawood Tagari, MD of MyMarket, notes that “culturally, providers need to be aware of the South African e-commerce Buyer mind-set. A major factor to consider is aspects like BBBEE Rating – critically important from a South African buyer’s point of view.” His concern is how such a system can accurately confirm BBBEE Status. He continues, “buyers also need to be convinced that a great product from an unknown supplier could be more beneficial than an average product from a reputable supplier”. South African buyers are somewhat brand-centric and distrustful and tend to source from well-known and established vendors. As easy as it seems at first glance, the road to success has been long and sometimes painful for Alibaba. Their six worthy values of • Customer First • Teamwork • Embrace Change

Conclusion According to members of the B2B community in South Africa, an Alibaba-type model could work here. The environment is very different so allowances would have to be made for technological, cultural and behavioural differences. New pressures on companies to adopt sustainable sourcing practices and support local manufacturers would also have to be taken into account. Tagari says “key requirements like local support, local development, and local logistics knowledge will play a strong role in determining the future of this landscape”. Both buyers and sellers may well perceive using such a platform as a high-risk endeavour so efforts would have to be made to give assurances that possibilities of fraud and misrepresentation would be eliminated. One of Alibaba’s regular users shared some words of wisdom for buyers wishing to source internationally. “Alibaba is neither good nor evil. It is a list of companies that make what you want to buy. That’s it. From there it is entirely up to you to make sure the company is legitimate, to make sure that you have a good agreement with that company, and to have a quality control program in place to make sure you are getting good products. I have used Alibaba for years as a first step, but no more.” The same advice could be given to users of any South African Alibaba look-alike. n

• Integrity • Passion • Commitment are not always easy to uphold. The impact of cultural differences between the Chinese management and so-called foreign experts and their US partners was greatly underestimated which, from the very beginning of the cooperation, resulted in friction and numerous conflicts.

Alibaba is neither good nor evil. It is a list of companies that make what you want to buy. That’s it. From there it is entirely up to you.

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Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip. Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip.

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HuMAn CAPITAL

the URgency FoR competence IN PROCUREMENT AND SUPPLY CHAIN Competence is a combination of qualifications, skills, knowledge and attributes (such as your attitude). However, when comparing an organisation and its work force, the everyday reality of being “competent” differs. At an individual level competence is the capability to apply or use the related knowledge, skills and abilities required to successfully perform tasks in a defined work setting. Organisationally, competence goes beyond specific skills and describes the fundamental motivation in an organisation’s supply chain teams. For organisations it is about engaging hearts, not just minds; igniting passion and excitement for the work, not just compliance. Building competence is connecting an individual’s activities not only to corporate goals, but also to a larger aspirational goal; “connecting the dots between the work people do every day and the contribution to the societies within which they live,” says Gartner Research in its Supply Chain Top 25 for 2013.

WHy IS COMPETEnCE nECESSARy In SuPPLy CHAInS? Firstly, because it makes supply chains sustainable, says Ronald Mlalazi, Head of the Commerce Edge Academy. While skills can be short-term and qualifications short- to medium-term, knowledge is long-term (though achieved through skills and qualifications). Knowledge breeds the desired attitude and attributes such as confidence in decisionmaking. “At that point competence has been delivered to the individual.” Secondly, competence considers more than functional expertise alone. A supply chain is affected by a broad array of performance measures, including flexibility, delivery

reliability, timeliness and quality standards, which must be considered holistically along with supply chain functions. Requiring competence calls for supply chain functional leaders that are experts not only at managing supply chain functions (such as transportation, warehousing, inventory management, and production planning), but also at co-ordinating the end-to-end supply chain process, even though he or she does not control it (the end-to-end supply chain process extends outside the organisation). Competence is process expertise, not simply functional capability, in individuals.

WHAT SHOuLD A COMPETEnCy ASSESSMEnT InvOLvE? Supply chain leaders need a thorough understanding of the key competencies required for supply chain management roles, specific job qualifications and methods for developing future talent and leaders, all within the context of adding value and enhancing competitiveness. Therefore, a competency an assessment must create effective competency profiles that represent an organisation’s core competencies, job-family competencies, as well as job-specific technical competencies. In fact, not only must a competency assessment identify ‘what’ employees have to do, but also the behaviours behind ‘how’ they are supposed to get it done, within the governance rules pertaining to procurement.

1. Productivity and efficiency gains: the required skills, traits and attributes for all positions are defined, making it possible to measure and correct for skill deficiencies. Desired organisational behaviours are documented, making it possible to communicate these standards. 2. Grow, retain, and attract the right talent: an organisation understands and can define the talent needed and available to accomplish the organisational mission; can define the organisational culture to hire for fit and attitude; and can objectively identify individuals the organisation must retain to maintain an optimal talent pool. Competency-based talent management enables an organisation to define a skills road map, which empowers individuals to manage and achieve their own development and creates living HR plans that move with business needs. 3. Improve performance: identify gaps between requirements and capabilities; define expectations for employees, in a way that is measurable, objective, and defensible; and set behavioural targets to encourage employees to go above and beyond expectations.

BEST-In-CLASS Organisations are investing time and resources into career progression planning specific

An assessment programme includes an efficient and effective needs analysis and consultation; as well as the design, development and costing of the proposed training programme.

to supply chain; supply chain certification

IMPACT AnD OuTCOMES In An ORGAnISATIOn

Furthermore, 2013’s supply chain leaders are promoting competence through inspiration-based talent management, concludes Gartner Research in its Supply Chain Top 25 for 2013. n

Competency plans enable organisations to integrate strategic HR and business plans into one seamless overarching strategy to develop people and optimise resource allocation.

programmes; multichannel learning options; rotational programmes; and supply chain leadership development.

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HUMAN CAPITAL

Who is to blame for Procurement’s

poor representation at executive level?

“In fact, the lack of CPO representation at executive committee level is startling”

CEOs, Government officials and policy makers are still sceptical about procurement’s formal representation on the executive and senior policy development committees. Professor Douglas Boateng, Fellow of Institute of Directors (UK and South Africa) and a CIPS Fellow, asks who is to blame for this? In 2011, Transparency International UK published a report entitled Corruption in the UK, which examined 23 sectors and institutions in the UK. It noted the following responses: • 71% of respondents think corruption is a major problem in the UK; • 64% think corruption is part of the UK’s business culture; • 5  3.4% believe that corruption has increased in the UK in the last three years; • 4  8.1% do not think the government is effective in tackling corruption. In February 2011, the Anti-corruption Resource Centre reported that in Ghana the sectors most affected by corruption include, amongst others, public financial management - with particular regard to public sector procurement. In March 2011, Transparency International reported that although China had signed the UN convention against corruption, critics had alleged that some of their institutions were not complying with good procurement standards, citing the case of a telecom transaction in the Philippines to affirm their assertion. In April 2012 South Africa’s Public Protector warned that if not decisively dealt with corruption had the potential to distort the economy and derail democracy. In September 2012, the SABC reported that both the Chief Financial Officer (CFO) and the Chief Procurement Officer (CPO) had been suspended.

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Africa’s future growth will be supported by external trends such as the global race for commodities, increased access to international capital, and new economic partnerships with foreign investors. - Lions on the move: The progress and potential of African economies

ABOuT THE AuTHOR Professor Douglas Boateng founder: PanAvest skill development partnership 011 469 3860 dboateng@panavest.com www.panavest.com Prof. Boateng is Professor Extraordinarius, Supply and Value Chain Management at UNISA Graduate School of Business Leadership; Independent Distinguished Extraordinary Chair in Operations and Supply Chain Management at the Institute of Operations Management Africa; Chair of the CIPS Africa Strategic Advisory Board; and Founding Chair of the West African Institute for Supply Chain Leadership. Visit smartprocurement.co.za/spr for a full biography.

Similar stories continue to be reported all over the world in both developed and developing countries. Consequently, Procurement and Supply Chain professionals need to ask themselves a few questions: 1. What would the responses be if, today, people in countries like China, the United States, South Africa, nigeria, the Philippines, France, Korea, Ghana, new Zealand, India, Canada, Brazil and Kenya, were asked to respond to the same survey questions used in the UK corruption study? 2. Whether CPOs, the practicing procurers, the CFO or even other very high level influences are to blame for these often procurementrelated debacles tarnishing the profession and afflicting business and society as a whole? 3. If collectively the entire professional procurement fraternity is to blame for our ongoing derision? During the last 25 years, Prof. Boateng has interacted with over 1 000 local, regional and global CEOs, senior executives, government ministers, Director-Generals and policy makers. “Based on responses to date from these decision makers, I believe that professional procurers carry the blame for their own continued misrepresentation and under representation on CEO, executive and senior policy making committees.” “Professional procurers continually fail to convince industry captains, ministers and global policy-makers that Procurement is about strategic effectiveness and must be treated as a separate key-executive, valueadding function in business and government.” In fact, the lack of CPO representation at executive committee level is startling: over a six-month period in 2011/2012, Prof. Boateng’s PanAvest Foundation conducted face-to-face, Internet and telephonic

interviews to determine if Procurement professionals, particularly Chief Procurement Officers, had made any significant headway onto the Executive Board within corporate structures. Almost all respondents (drawn from public-listed companies and state-owned or governmentcontrolled enterprises around the globe) indicated that their CPOs do not report directly to the CEO nor sit on the executive committees (see side bar on next page). A hurdle preventing us from convincing others of our strategic effectiveness is contract awarding fiascos and other corruptive practices associated with procurement, which in many instances are in fact not directly committed by the procurer, but are brought about by poor governance structures, says Prof. Boateng. “I believe that a conflict of interest exists where Procurement reports to Finance - a conflict that continually challenges governments, businesses and society, but which can be prevented if Procurement reports directly to the CEO.” For governments in particular, procurement must be more than a number-crunching exercise; in order to harness its economic developmental potential procurement must ideally not report to the Treasury. A colleague once told Prof. Boateng: “throw enough mud at the wall, some of it will stick”; if enough (perhaps false or reckless) accusations are made against a person (or organisation), his or her reputation will suffer, whether or not this is deserved. “Therefore, like other professions (Accountants, Lawyers, Information Officers, Doctors and Pharmacists), all procurement practitioners and overseers must have a license to practice and must strictly abide by a professional code of conduct. The current representatives and overseers of professional procurers on various CEO executive committees must continually go through an accredited, procurement related professional

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HUMAN CAPITAL

Poor CPO representation at Exco level is startling 1. Top 20 global banks - Zero have a CPO reporting directly to the CEO or sitting on their executive committees, despite a combined procurementrelated spend that exceeds billions of dollars.

Respondents from CITI Group, Royal Bank of Scotland Group, Industrial and Commercial Bank of China, Santander, HSBC, China Construction, JP Morgan Chase, Standard Chartered and Barclays.*

2. Top 20 global mining companies - No CPOs report directly to the CEO nor sit on the executive committee.

Respondents from BHP Billiton, Xstrata, Newmont, Barrick, Rio Tinto, Anglo American, Vale, Goldcorp Suncor and Teck.*

3. Top global accounting, audit, tax, consulting and advisory services - No CPOs on the executive committees, nor reporting directly to the CEO, despite a cumulative $100-million annual procurement spend.

development programme to acquaint themselves with, amongst others, the governance rules pertaining to procurement; and must be members of a recognised procurement professional body to represent the function at the executive committee level.â&#x20AC;? The poor representation of CPOs on executive committees begs the following questions: 1.  The fraternity rushed to coin the title of CPO too quickly. Has this led to demeaning the role in the eyes of the CEO? 2.  Has the title CPO been damaged by its inconsistent use by relatively lower-ranking procurement practitioners? When titles like Chief Procurement Officer or Chief Supply Chain Officer are applied incorrectly to a role (the roles are still not accompanied by the associated strategic responsibility, nor the correct job description - and in the worst cases the incumbent is not competent), the reputation of procurers takes a knock. 3.  Should the fraternity not discourage the use of the title CPO if an individual is not a member of an organisational executive committee? 4.  Is the current content of educational/training materials suitable to elevate procurement practitioners to the level of executive committee organisational leaders? n

Respondents from Ernst & Young, PWC, Deloitte, KPMG, Mckinsey, Accenture, Booz and Co, IBM Global solutions, Roland Berger, AT Kearney, Oliver Wyman.*

4. Global construction companies (incl. SA top 5) - None have CPOs reporting directly to CEOs, nor sitting on the executive committees.

Respondents from Grinaker, WBHO, Basil Reed, Group5, Murray and Roberts, Balfour Beatty U.K, Cscecc China, Bechtel U.S., Hochtief Germany, Skanska Sweden, Leighton Australia, Kajima Japan, Vinci France, Odebrecht Brazil, India CCC, PCL Canada, Enka Turkey, Orascom Egypt.*

5. Top global chemical companies - CPOs do not report directly to the CEO, nor are they on the executive committees. Noteworthy is that, during the survey period, within the Shell Chemical Group procurement fell under Projects and Technology.

Respondents from Shell, BP, ExxonMobil.*

6. International Telecommunications - No CPOs report to the CEO, nor do they sit on the executive committees, despite a combined expenditure of hundreds of billions of Rands.

Respondents from MTN, Vodacom, Vodafone, CellC, Telkom SA, AT&T, Airtel.*

7. South African Financial Services Providers - CPOs do not report to the CEO, nor do they sit on the executive committees.

Respondents from Absa, Standard Bank, Standard Chartered, Sanlam, Old Mutual, Alexander Forbes, and Ecobank.*

8. African mining, agriculture and chemical sectors - No CPO reports directly to the CEO, nor sits on executive committees, despite the view that procurement is a strategic weapon to stimulate SMME growth.

Respondents from AFGRI, SASOL, Anglo American, Pioneer Foods, Tiger Brands, Lonmin, Cocoa Board, Senwes.*

9. Many global state-owned enterprises - CPOs do not report directly to the CEO, nor do they sit on executive committees, despite several billions of dollars in annual procurement expenditure.

Respondents from Eskom, PetroSA, Transnet, South African Airways (South Africa), Nigerian Ports Authority, Nigeria National Petroleum Corporation, Philippines National Oil company, Canal and River Trust (United Kingdom), Landcorp (New Zealand), Via Rail (Canada), Ghana National Petroleum Corporation, Indian Oil Corporation, SNCB (Belgium), Areva (France), Petrobras (Brazil), CNOOC (China).*

10. World Bank, International Monetary Fund, International Finance Corporation, African Development Bank and Asian Development Bank - No CPOs sit directly on the senior executive management committees, yet all these organisations regularly pontificate the need to use procurement as a strategic tool for economic development.

* The circumstances at individual respondents may have changed since interviews were conducted in 2011 and 2012.

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HUMAN CAPITAL

“Qualifications mean nothing if you have them but everything if you don’t.”

For procurement to be a constructive force strategically and execute the business strategy, these professionals need to be able to engage and influence at an executive level and cross-functionally. Procurement specialists need to drive innovation and implement efficiency across multiple supply chains from point of source by demonstrating sharp business acumen, says People Shop MD, Chantal Kading. Steve Jobs, a CEO whom others aspire to emulate, prioritised the Procurement and Supply Chain Management function to enable the Apple vision. He appointed Tim Cook, his CPO (Head of Procurement, Supply Chain and Manufacturing) as the new CEO of Apple Inc. The question is why? Simply, he saw the value of Procurement and Supply Chain to Apple’s success. Jobs trusted Cook. They shared the same vision for Apple, but more importantly, they could interact at a strategic level and Cook was accountable, reliable and dependable to Jobs.

Supply management

CPO to CEO

CEO agenda The starting point to raise the strategic significance of procurement is connecting effectively at the executive level. The value proposition of the procurement professional has transformed in the last five years from an operational purchasing function to strategic sourcing function; from being the driver of bottom-line cost savings to the next wave of supplier relationship managers, which is based on transparent collaboration that drives business efficiency, value creation across multiple supply chains and economic upliftment through enterprise development.

ABOUT THE AUTHOR Chantal Kading Managing Director: The People Shop 072 020 3597 Chantal@peopleshop.co.za www.peopleshop.co.za Chantal started in the field of Supply Chain Recruitment in 2001 and has managed large talent acquisition and executive searches for blue chip companies. She is a registered psychometrist and holds a BSc (Hon) in Psychology. She serves on the CIPS Executive Committee for the Western Cape. Visit smartprocurement.co.za/spr for a full biography.

To date, the transformation was ignited through pressure on margins and the resulting drive by the CFO to save costs. At this point many new strategic sourcing divisions were established. The next wave in procurement will be fuelled by the constrained global economic market, which places a question mark around commercial competitiveness and business sustainability. In short, these goals are on the CEO’s agenda.

Changing competencies In future, negotiators who focus only on cost will be extinct, replaced by business leaders who innovate, influence and implement - and who drive total cost of ownership as Commodity Managers. Procurement leaders will be able to deal with ambiguity as they work cross-functionally to enable supply and operations to create business value, efficiency and competitive edge. The role of the traditional commodity manager has begun to transform, giving rise to the inclusion of supplier relationship management and procurement excellence covering risk, governance, compliance, business process and internal audit. Supplier relationship management enables thinking that goes beyond product and price to ‘helicopter vision’, which encompasses the effect of procurement on revenue generation. In South Africa, the BEE charter will influence how companies source, how they compete and sell in the marketplace and how their clients will prioritise enterprise development. When recruiting in this area we look for people able to build mutually beneficial relationships with suppliers.

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Middle and back office functions built to support revenues from the US or Europe are no longer appropriate for revenue streams from the growing emerging economies. - Strategic Visions on the Sourcing Market 2013: KPMG

QuALIfICATIOnS vALuE Qualifications mean nothing if you have them but everything if you don’t. The good news for professionals seeking to climb the procurement and supply chain ladder to the C-Suite is that the qualification paths are vast. A few of these qualifications will be advantageous. Multiple disciplinary educational routes are valuable within the field with the most common being commerce, engineering and legal, but the perspective that they bring to a diversified team is where the real value lies. As the discipline transforms, post-graduate degrees are essential at the Management level. The single qualification consistently requested is an MBA and the differentiator for a candidate will be the institution, academic results and research projects. The latest qualification of choice is the MCIPS, which is a further affiliation and standard measuring stick against which Procurement professionals are being measured.

PROfESSIOnAL PROCuREMEnT Over the past decade procurement professionals have held the highest potential in the negotiation of remuneration packages. The strategic value of these individuals has increased overhead cost, but the business value they have created has lowered the total cost of ownership. Salary ranges depend on many factors such as size of company, industry, supply chain maturity and economic

pressures. Commodity Managers and Supplier Relationship Managers’ remuneration packages range from R650 000 to R1.2-million. The role of Enterprise Development is a rare skill in the current market with salary ranges being between R950 000 and R1.3 million. Traditional Procurement Managers remain prevalent, but salaries for this role are often constrained, ranging between R750 000 to R1.1 million. The number of CPOs globally is growing, although the rate of adoption is still lower with a larger number of Supply Chain Directors whose salaries range between R1.2 million to R2 million. The bottom line is that procurement and Supply Chain can fuel and execute the business strategy. “Procurement has a voice that needs to be heard by the C-suite. To be heard and followed takes influence born in business acumen,” concludes Kading. In closing the short text version of Apple’s famous “Think Different” campaign. “Here’s to the crazy ones. The rebels. The troublemakers. The ones who see things differently. While some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do.” In conclusion, Steve Jobs saw procurement differently. Shouldn’t your CEO aspire to do the same? n

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HuMAn CAPITAL

top pRocURement peRFoRmeRS ARe

influential & innovative 2013 IBM CHIEf PROCuREMEnT OffICER STuDy It goes without saying that top-performing procurement organisations excel at traditional procurement capability; however it is the additional combination of two key attributes that entrench their topperformance: they enjoy influence in their organisations and they bring innovation into the enterprise. In its 2013 Chief Procurement Officer Study, the IBM Institute for Business Value (IBM IBV) found that while delivering traditional procurement capabilities is important, the hope of most CPOs is to influence and improve the way the business operates. In this regard, within the private sector, influence is a key element of procurement performance, but fewer procurement organisations seem to excel in this area. Only 33 per cent of respondents (377) said they enjoy significant influence over at least six of eight strategic organisational imperatives, such as delivering customer service, driving efficiency, introducing products and services more quickly and creating meaningful brands to drive price premiums (see Figure A). Over 50 per cent of respondents indicated they have robust procurement capabilities, yet only one-third reported significant influence, therefore, an obvious disconnect exists in communication; a significant number of companies must be struggling to convey the value they already contribute to the organisation. In fact, in face-to-face interviews, a large number of CPOs told IBM IBV that they face challenges in making the organisation understand the value procurement provides the organisation. In this regard procurement must not only excel at delivering value, but must also become proficient at promoting the value they deliver throughout the enterprise. One of the CPOs interviewed from north America emphasised this point: â&#x20AC;&#x153;I have only been in my position for a few years, but I was able to add a lot of value in a short time by simply connecting with executives in a way that put procurement achievements in the spotlight.â&#x20AC;? Meanwhile, while about one-half of procurement organisations are effective and a third are influential, even fewer are innovative. Of the 1 128 companies in the IBM study, only 27 per cent exhibited characteristics of innovative organisations (see Figure B). Those that qualified as innovative indicated that they look for innovation across a wide range of sources. These organisations said they rated either four or five on a five-point scale on at least five of the nine possible sources of innovation, such as crowd sourcing, collaborative product development, internal collaboration and customer interactions. As part of being innovative, these respondents also tended to use a wider array of technologies than other respondents (rating a four or five on a least three of the six possible technologies). Technology is a crucial component of innovation for procurement. Increasing automation, for example, enables procurement professionals to allocate less time on supporting transactions and more on innovating solutions. Regardless of the specific mission any CPO has carved out for his or her organisation, the primary mission is to reduce procurement costs. Advancing this cause depends on a core set of procurement capabilities that includes innovating within the processes and procedures that define the function and effective upward communication about performance success.

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In 2008 Africa’s combined consumer spending was $860-billion. BY 2020 it expected to exceed $1.4-trillion - Lions on the move: The progress and potential of African economies

“There are tens of millions of dollars at stake, and the IBM IBV CPO study reveals how and why high performing procurement leaders have significant impact on their organisation,” said Craig Hayman, general manager, IBM Industry Solutions. “As CPOs take a broader view of their role and embrace technology, they have an unprecedented opportunity to become even more instrumental in transforming their organisations by modelling themselves against the world’s most innovative and effective procurement organisations.”

fIGuRE A Creating a meaningful brand to drive price premiums Maintaining cost leadership

56% 56%

Serving unique segments with specific products and services

57%

Introducing innovative products/services more quickly and effectively

58%

Driving efficiency and performance

Delivering a best-in-class supplier network

59%

61%

Sustainable and environmentally responsible business operations

61%

Delivering superior service

61%

Only a third of procurement executives in the IBM IBV study say they have input into strategic imperatives. Source: 2013 Chief Procurement Officer Study, IBM Institute for Business Value.

87% 91% 95% 96%

Meanwhile, while about one-half of procurement organisations are effective and a third are influential, even fewer are innovative.

96%

95%

97%

All respondents Influential performers

96%

fIGuRE B Crowd sourcing (Internal and/or external) Value chain re-engineering

Raw material/component re-engineering Collaborative product development with suppliers Suggestion from employees

56%

56% 57% 58%

59%

Methods and tools that enable business compliance

61%

Collaboration with internal stakeholders/departments

61%

Best practice adoption among procurement team members

61%

Customer interactions

61%

Study responses indicate only 27 per cent of procurement organisations are innovative; those that innovate are generally more effective in their use of procurement technologies, and are more likely to leverage multiple sources of innovation. Source: 2013 Chief Procurement Officer Study, IBM Institute for Business Value.

87% 91%

95% 96%

96%

95%

97%

96%

96%

All respondents Innovative performers

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BUSINESS DIRECTORY

BEE certficates were reviewed by Grant Thornton.

INDEX Ariba, Inc.

95

Bambanani Occuptional Health

96

CPW Systems

96

Business Intelligent

96

CommerceZone

97

Ezee-Dex Industrial Procurement Services

98

Eikos Risk Application

99

Electronic Supply Chain & Procurement Enterprise (ESCAPE)

100

Hertz Rent a Car

101

Khipu Network

102

Market Square Supply Network

103

M2North

103

Mpowered Business Solutions

103

Nedbank Limited â&#x20AC;&#x201C; Corporate Card Solutions

104

SizweNtsalubaGobodo Advisory Services

105

SmartProcurement

106

Solver Consulting

106

Transcend Corporate Advisors

106

TraveluXion

107

TravelLinck

107

Tsebo Outsourcing Group

107

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1 MILLION+ COMPANIES

20,000

ARIBA - An SAP Company

$460 BILLION IN GOODS AND SERVICES

Ariba, an SAP company, is the world’s business commerce network. Ariba combines industry-leading, cloud-based applications with the world’s largest web-based trading community to help companies discover and collaborate with a global network of partners. Using the Ariba® Network, businesses of all sizes can connect to their trading partners anywhere, at any time from any application or device to buy, sell, and manage their cash more efficiently and effectively than ever before. Companies around the world use the Ariba Network to simplify inter-enterprise commerce and enhance the results that they deliver.

5,000,000 END USERS

The future of business has arrived, and it is quite different from the past. Competition no longer lies within the four walls of the enterprise. It’s taking place between networks of trading partners. Companies are no longer judged solely on how well they balance the books, but on how well they buy from external suppliers, sell and support customers, and manage cash flow across the entire value chain.

Ariba enables companies to extend their processes beyond the four walls of the organisation. Then, without installing any new software or hardware, companies can connect and collaborate with digital communities of partners, peers, and prospects from around the world to: • Quickly discover new sources of supply • Easily find new, purchase-ready customers • Make better working capital decisions • S hare best practices, expert advice, and community intelligence.

BEE LEVEL BLACK OWNED

5 51%

BRANCHES

3

OPERATES

INTERNATIONAL

Block C, Sunninghill Gate, The Crescent Office Park, 3 Eglin Road, Sunninghill, Johannesburg 2157 T: 011 304 9000 F: 011 388 1416 www.ariba.com

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BuSInESS DIRECTORy

BAMBAnAnI OCCuPATIOnAL HEALTH BAMBAnAnI OCCuPATIOnAL HEALTH

CPW SySTEMS

Occupational Health - Red Tickets, Medical Surveillance, Health Risk Assessments

Financial Services and Electronic Invoicing

We provide a fully integrated Occupational Health solution at our Site. Alternatively, we can come to yOUR site with our brand new Mobile Unit. Every ‘Red Ticket’ is stored in the ‘Cloud’ and is available on-line for your own private access – no more loss of information. you may re-print at any time without additional cost to your company. This has real value for yOU, the client. Our services include Medicals (Initial, Periodical and Exit), Medical Surveillance Programmes, Chronic Disease Management, DMR Annual Medical Reports, Health & Risk Assessments (including site visits, compliance recommendations, Disease Prevention Programmes, hearing loss, TB and Cholesterol).

BEE LEVEL

3

BLACK OWNED

100%

BRANCHES

1

OPERATES

REGIONAL/ PROVINCIAL

Bambanani Medical Centre, 186 Cowen ntuli Street, Middelburg, Mpumalanga, 1050 Sr. yvette Erasmus/Sr. Alta Richter T: 013 243 2811 F: 013 243 0328 E: ms@bmc.za.net http://industrialhealth.wozaonline. co.za/

CPW Systems offer secure cloud-based electronic invoicing solutions that increase Accounts Payable and Accounts Receivable efficiencies in any organisation. you can save up to 62%* and earn green points with our easy to use paperless invoicing service. *Billentis Invoices are delivered instantly to your customer for online processing. One-stop 24/7 access lets you log a query against any line item in any invoice. Free software, multi-connection options and simple registration for your customers makes it easy to connect to you. Instant visibility and traceability via real-time dashboards helps you manage duplicated, fraudulent and overdue invoices. Download our DHL case study from our website to learn more.

BEE LEVEL BLACK OWNED

4 0%

BRANCHES

1

OPERATES

AFRICA

32 Princess of Wales Ave, Sunnyside Office Park, Parktown, Johannesburg 2110 yoshni naidoo T: 082 555 0584 F: 011 484 0575 E: yoshni@cpwsystems.co.za www.cpwsystems.co.za

BuSInESSInTELLIGEnT Spend Analysis, Business Intelligence, Consulting BusinessIntelligent is a leading provider of business intelligence and application development solutions in South Africa. Our Value Proposition focuses on delivering solutions to customers that enable them to improve their competitiveness and enable their people to make better quality decisions faster. Companies can no longer afford to be reactive or allow their competitors to control the markets they play in, they need to be predictive, proactive and informed.

BEE LEVEL

3

BLACK OWNED

0%

BRANCHES

1

OPERATES

INTERNATIONAL

1st Floor Charlton House, Hampton Office Park, 20 Georgian Crescent, Bryanston 2152 T: 011 025 2300 www.businessintelligent.co.za

Our company focuses on empowering users by providing them with information about their business and leading them on a journey to improve. With specialized skills in business intelligence, application development, data management and business consulting, BusinessIntelligent is able to provide its clients with extensive expertise in the field of information management. Our Procurement Experts enable SA’s leading companies to make better decisions every day.

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COMMERCEZONE Leader in outsourced e-procurement solutions Through a formula that delivers Preferential Procurement, Strategic Supplier Sourcing, Business Travel Management and the application of powerful yet intuitive e-Procurement technology, CommerceZone has revolutionized the purchasing processes of their customers. CommerceZone is a leader in outsourced e-procurement solutions and has more than a decade of experience in delivering reliable, cost effective and high quality hosted procurement solutions to enterprise clients. CommerceZone offers a holistic procurement solution which ensures broad acceptance and application through ease of use. CommerceZone’s e-Procurement solution ensures absolute control over procurement expenditure before the fact, replacing cumbersome paper-based ordering systems with an efficient electronic solution. Our solution caters for all aspects of procurement from shopping carts, purchase orders, Goods / Services confirmations, PO Invoices and Sundry Invoices. Our solution can be integrated with your financial system to fully automate the Procure to Pay process. CommerceZone’s e-Procurement solution enables clients to reduce spend, streamline procurement process and enforce policy compliance. CZEasyBuy is our hosted e-procurement platform based on SAP SRM technology. CommerceZone applies leading business practices and world class information technology to unlock value in all areas of procurement: • Improved governance of spend • Improved compliance of spend • Improved visibility of spend • Process efficiencies • Preferential Procurement • Leverage combined spending power • Comprehensive audit trails • Availability 24/7/365 The CZEasyBuy solution is supported by a comprehensive reporting solution that includes Business warehouse, business intelligence and mobility reports.

BEE LEVEL BLACK OWNED

2 34.31%

BRANCHES

2

OPERATES

SOUTH AFRICA

256 Oak Avenue, Randburg, Johannesburg, Gauteng 2194 T: 011 369 7100 F: 011 886 3717 E: customersupport@ commercezone.co.za www.commercezone.co.za

www.smartprocurement.co.za

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BUSINESS DIRECTORY

Ezee-Dex Industrial Procurement Services (Pty) Ltd Procurement information and advertising of companies via printed media and internet.

BEE LEVEL

3

BLACK OWNED

0%

BRANCHES

3

OPERATES

AFRICA

1st Floor, Grosvenor Gate, Hyde Lane , Hyde Park, Johannesburg Cathrin Heath T: 011 446 3600 F: 011 446 3700 E: cathrin@edx.co.za www.edx.co.za

EZEE-DEX SUPPLIER DATABASE & PROCUREMENT SYSTEM • Generate Buying Enquiries • Reduce Purchasing Costs • Create Sales Leads • Manage Your Vendors • View B-BBEE Certificates • View Tax Clearance Certificates • Calculate your BEE spend in minutes THE POWER OF RESEARCHED INFORMATION • 58 000+ South African manufacturers & suppliers • 340 000 products, services & brand names • 200 000 contact names • B-BBEE information & certificates

Does your potential partner measure up?

Our FREE SmartProcurement BBBEE Scorecard Database offers you: Scorecard searches, scorecard sharing, reduced duplicate effort and convenient integration with https://smartprocurement.bbbeescorecards.co.za/

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EIKOS RISK APPLICATIOnS (PTy) LTD Marine Insurance Broking Eikos Risk Applications, established in 1999, is a leading South African specialist marine and transit risk insurance broker and risk manager that provides transportation insurance solutions to most leading South African clearing and forwarding agents, transporters and to companies who need to insure the movement of their cargo. Many of the over fifty specialists at Eikos have more than 30 years’ experience in marine insurance, providing tailored marine insurance packages to companies who ship goods domestically, into Africa and internationally by sea, air, train or truck. The Eikos approach is to understand the inextricable link between logistics, risk and the contracts governing trade and carriage within the supply chain. This allows Eikos to develop unique products that benefit the owner of cargo, the transporter of cargo and clearing and forwarding agents involved in the movement of cargo. The services offered by Eikos Risk Applications include: • S upply chain risk identifi cation and analysis, including the analysis of risks in the supply chain and the analysis of contracts of trade and carriage in order to identify exposures and liabilities • M arine insurance broking, accessing the leading South African and international specialist marine and liability insurance markets • M arine insurance claims management, representing your interests to insurers at all times • M arine insurance audits on existing policies to identify defi ciencies and gaps in cover. Using our powerful information system platform we can provide you with a detailed analysis of your marine exposures and premium and claim trends in order to guide your risk management initiatives and to minimise your financial exposures. Eikos Risk Applications (Pty) Ltd is part of the Eikos Group, a specialist insurance broking and risk finance consulting operation in Europe and South Africa with offices in London, Johannesburg, Durban and Cape Town. Eikos Risk Applications is a registered financial services provider (license number 481). 2

Suite 9, 2 Hood Avenue, Rosebank, Johannesburg

BRANCHES

4

OPERATES

INTERNATIONAL

Jason Freeman T: 011 771 5400 F: 011 771 5555 E: freemanj@eikos.co.za www.eikosriskapplications.com

BEE LEVEL BLACK OWNED

www.smartprocurement.co.za

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BUSINESS DIRECTORY

Electronic Supply Chain and Procurement Enterprise (Pty) Ltd Supply Chain Management and Procurement Solutions ESCAPE provides Supply Chain Management (SCM) and Procurement Services and Solutions that enable organisations to carry out SCM activities in an effective, accurate and proficient manner. ESCAPE has developed the Phi Series solution, which supports the entire Integrated SCM processes and procedures. Phi Series covers every aspect of Supply Chain Management, namely Demand Management, Acquisition Management, Logistics Management, Disposal Management, Performance Reporting and Management. Sigma Link: - Supplier Database & Acquisition Management (Procurement) Solution The Sigma Link component of Phi-Series is your complete Procurement Solution that caters for the full range of procedures and processes, namely: • Petty Cash • Request for Quotations (RFQ) • Request for Proposals (RFP) • Tenders • Contract Management • List of Approved Providers/Panel of Experts The solution is fully aligned to legislation and best practice, ensures good governance, mitigates risk and instils internal controls and auditability. Sigma Link extensively caters for the South African Public Sector environment and in line with: • P ublic Finance Management Act (PFMA)/Municipal Finance Management Act (MFMA); • N  ational Treasury Regulations, Practice Notes, Circulars and Guidelines; • Preferential Procurement Regulation; • BBBEE Act. Sigma Link’s Supplier Database uses comprehensively accredited vendors whose information and documents have been validated, quality assured, indexed and scanned. The key benefits includes: • A  Supplier Database with on-line vendor application submission and comprehensive real time automated accreditation of vendors. It includes Electronic Document Management that also ensures the continuous maintenance of the validity of documents (e.g. Tax Clearance Certificates’ expiry). • C  omplete automated, cost-effective and transparent management of procurement for all procedures and processes with workflow that includes BEE LEVEL

3

BLACK OWNED

100%

BRANCHES

1

OPERATES

SOUTH AFRICA

Crownwood Office Park, 100 Northern Parkway, Block D - Ground Floor, Ormonde

• Automated Sourcing

• Rotation that encourages supplier development

• Evaluation, adjudication and approval with delegation management

T: 0861 111 951 F: 086 603 9340 E: sales@phi-series.co.za www.phi-series.co.za

• Vendor performance flagging and monitoring capabilities

Escape provides proudly South African solutions for the South African environment solving South African SCM problems while incorporating world-class best practices.

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OB 12 111


OB 12 11102 Edubuyer ad 2013 repro.indd 1

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BUSINESS DIRECTORY

KHIPU NETWORKS Education Khipu Networks is an award winning Cyber Security provider who deliver network, wireless and security solutions, technologies and services across multiple sectors. Founded in 2005, Khipu’s focus has always been to work in partnership with our customers, to understand their environments and challenges so that we can provide ‘best of breed’ solutions that enable them to meet their strategic goals. As well as having a pro-active ethos to supporting and maintaining customer environments, this has enabled Khipu to be a market leader in providing network security solutions with exceptional customer references. Our secure and dynamic network solutions are made up of three main areas; Access

• Wireless and Remote Mobility,

• LAN Infrastructures

• Core Network Services Solutions

Visibility

• Device / User

• Content and Threat Identification

• Network Performance/Security

Control

• Network Access Control “Bring Your Own Device – BYOD”

• Next Generation Firewalls

• Mobile Device Management (MDM)

Khipu hold the highest accreditations with all of our technology partners as well as key ISO certifications such as ISO9001 (Quality Management), ISO27001 (Information Security Management) and ISO14001 (Environmental Management). Khipu’s support and maintenance service offering, ranges from 24x7x365 pro-active support to fully managed services across everything we provide and implement. Our technical operations team support environments over and beyond 50,000 users and devices, across the UK, Ireland, Europe, China and South Africa.

BEE LEVEL

3

BLACK OWNED

0%

BRANCHES

1

OPERATES

INTERNATIONAL

6th Floor, Office Block 1 The Cliffs, 3 Niagra Road Tyger Falls, Bellville Cape Town 7530 Matt Ashman T: 021 300 2247 E: matt.ashman@khipu-networks.com www.khipu-networks.com

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MARKETSQR SuPPLy nETWORK

M2nORTH

Online Supply Community, Procurement Driven Innovation

eProcurement, eCommerce, EDI service provider.

MarketSqr provides an Online Supply Community providing modern communication methods for procurement people to collaborate with their suppliers. This includes a verified Supplier network/Supplier Database; eSourcing (eRFQ); Tender notification and advertising.

M2north are a comprehensive procurement solution provider,

MarketSqrâ&#x20AC;&#x2122;s Open Innovation network gives procurement professionals a new and central role in their organisation by harnessing supplier knowledge and ideas for internal innovation. Lead the future with us.

specialising in the automation of transactions between parties. Significant cost savings are realised when implementing one of our solutions. A 12 year history of providing solutions to blue chip companies such as Lonmin, Plascon, Builders Warehouse & Shoprite amongst others, makes

CapGemini research predicts that current Procurement Departments will transform into Innovation Driven Groups. Such groups will find scarce sources of innovation capabilities and drive innovation projects end-toend through their excellence in supplier relationships.

M2north the provider of choice.

MarketSqr Supply network = Superb Supply Relationships

Supply Chain Simplified.

BEE LEVEL BLACK OWNED

4 0%

BRANCHES

1

OPERATES

AFRICA

Postnet Suite 317, Private Bag X06, Waterkloof, Pretoria 0145 T: 012 751 1445 F: 086 685 8487 E: info@marketsqr.com www.marketsqr.com

If you are looking for ways to operate your procurement division more efficiently and effectively, contact M2north.

BEE LEVEL

NC

BLACK OWNED

0%

BRANCHES

1

OPERATES

SOUTHERN AFRICA

5th Floor, Liberty Life Gardens, 10 South Boulevard, Bruma 2198 Brett Misselhorn T: 011 856 2000 F: 011 856 2001 E: brettm@m2north.com www.m2north.com

MPOWERED BuSInESS SOLuTIOnS (PTy) LTD BEE IT Systems Mpowered Business Solutions offers web-based BEE IT Systems to companies with both simple, and highly complex BEE measurement requirements. The Beetoolkit (www.beetoolkit.co.za) is used to manage the BEE process, and includes a scorecard calculator, target and scenario functions, project planning and verification preparation management tools.

BEE LEVEL BLACK OWNED

3 0%

BRANCHES

1

OPERATES

NATIONAL

1st Floor, ICH House, 57 Eastwood Rd, Dunkeld 2193 Bruce Rowe T: 011 447 2666 E: bruce@mpowered.co.za www.mpowered.co.za

The BEE scorecard database (www.bbbeescorecards.co.za) offers the public free access to thousands of valid and verified BEE certificates. Mpowered has partnered with some of the largest verification agencies that publish their certificates directly into the database, mitigating the risk of fraudulent BEE scorecards being loaded into the database. The Supplier Management System (www.suppliermanagement.co.za) is a system that automates the Preferential Procurement scorecard calculation and supplier engagement processes. It offers rich reporting functions, scenario planning, bulk e-mails, spend analysis and automatically pulls supplier BEE compliance information from our BEE certificate database. Our clients now engage in a paperless, automated PP verification preparation process.

www.smartprocurement.co.za

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BuSInESS DIRECTORy

nEDBAnK LIMITED – CORPORATE CARD SOLuTIOnS Financial Institution - Banking The nedbank Group vision is to build Africa’s most admired bank by our staff, clients, shareholders, regulators and communities. We aim to do this by gaining an understanding of our clients’ needs and providing them with the most suitable solution. nedbank Corporate Card aligns with this vision by partnering with client companies, the objective being to grow their businesses through various solutions and products that make payment processes simpler, quicker, more cost-effective and more flexible. nedbank Corporate Card has the perfect solution for all the travel, entertainment and purchasing needs of client companies. Corporate Card also provides more flexibility and control with regard to business expenses, and drives down daily expenses and operating costs. CARD PAyMEnT SOLuTIOnS Card payment solutions are based on four value pillars: Maximising control Control of company expenditure is maximised through effective billing and payment solutions that enable you to manage company spend actively and enhance compliance with company policies. Driving savings Substantial process and negotiated savings is achieved through the consolidation of spend. The comprehensive data available allows clients to improve supplier terms and increase process efficiencies. Benefiting employees Worldclass cardholder benefits and services give client company employees peace of mind and exceptional rewards and tools to help employees increase productivity

BEE LEVEL

2

BLACK OWNED

34.61%

BRANCHES

1

OPERATES

AFRICA

135 Rivonia Road, Sandown Johannesburg 2196 Anita Carolus T: 011 294 9613 F: 011 295 9613 E: AnitaCa@nedbank.co.za www.nedbank.co.za

Managing globally Client companies can leverage nedbank Corporate Card’s superior global expertise and excellent service to gain a consolidated view of transactional data and supplier spending around the world. nedbank Corporate Card offers three types of payment solutions with worldclass inclusive data solutions: • Business Travel Account (BTA) • Corporate Card Solutions • Procurement Solutions Our industry and product specialists are committed to knowing and understanding our clients and their business and, in so doing, guiding their choice of nedbank’s distinctive financial solutions to suit their needs. Through integrity, respect, accountability, and by pushing beyond boundaries and being people-centred, we at nedbank Make Things Happen.

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Sizwe Ntsaluba Gobodo Advisory Services (Pty) Ltd Audit Accounting & Consulting SizweNtsalubaGobodo is a leading innovative assurance and advisory partner of choice. We are the fifth largest firm in Southern Africa and South Africa’s largest black owned and managed firm. Formed through the successful merger of two leading black audit firms- SizweNtsaluba VSP and Gobodo Incorporated – we are well positioned to lead the way in changing the economic landscape of our country. Alignment with Protiviti As part of the growth and repositioning strategy for our Advisory business, SizweNtsalubaGobodo Advisory is the first African Member Firm of the global network of Protiviti firms, a group of independent consulting firms’ providing local knowledge and expertise to drive high quality finance, technology, operations, governance, risk and internal audit. Protiviti’s network includes more than 70 offices across 25 countries. A holistic approach SizweNtsalubaGobodo Advisory provides a broad range of advisory services to a diversified client base in both the public and private sectors. As a Protiviti Member Firm, we combine local knowledge and global expertise to deliver quality solutions in countries around the world. We do this by providing a holistic assessment of our clients’ business models and help make decisions that drive growth and innovation. Sought after talent and skills With a staff complement of 1000, including more than 50 Directors, and an extensive national footprint, the firm has capacity to deliver quality services to its clients. In addition, through the Protiviti network, we have access to talented and highly skilled team of 3,400 professionals who provide a host of consulting and internal audit solutions to over 35 percent of both the FORTUNE® 500 and Global 1000 corporations.

BEE LEVEL BLACK OWNED

2 76.74%

BRANCHES

11

OPERATES

AFRICA

41 West Street, Houghton 2041

Latest in Advisory Solutions • Corporate Governance Services (CGS) • Information Communication and Technology Advisory (ICTA) • Consulting Services • Forensic Services

Lawrence Moepi T: 011 718 8600 F: 011 718 8601 E: lawrencemo@sng.za.com www.sng.za.com

www.smartprocurement.co.za

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BUSINESS DIRECTORY

SmartProcurement SmartProcurement Content publisher SmartProcurement, part of SmartDevelopment since 2004 has focused on the supply chain and procurement professional, endeavouring to continually develop and inform them on the latest industry trends and events ensuring that awareness is high in both the public and private sectors. Individuals are kept au fait with the latest opportunities in the commercial environment and useful news and tips emanate from the industry thought leaders. With over twelve years’ experience dealing with the decision makers and leaders and sharing best practice ensures that the professional is continually at the forefront of current and upcoming developments. Ensure your continued professional development by subscribing now for receive our free monthly newsletter containing procurement news, jobs, tips , tactics and events. (www.smartprocurement.net). BEE LEVEL

3

BLACK OWNED

27.43%

BRANCHES

3

OPERATES

INTERNATIONAL

T: 0861 334 326 F: 088 012 665 5466 E: events@smartprocurement.co.za www.smartprocurement.co.za

Solver Consulting

Transcend Corporate Advisors

Consulting in Enterprise Development, Skills Development, Research

BBBEE Consulting and Training

At Solver Consulting we believe that we have a responsibility to be active in the process of transforming our world. We are the generation laying the building blocks for the future. We are passionate about Skills and Enterprise Development and embrace opportunities where we can assist with growing individuals and organisations to achieve their dreams. We get our hands dirty in assisting clients develop programmes that are sustainable and fresh. Some of the services we provide include: Skills Development; Enterprise Development and Mentoring; Tender Writing and Support to SMEs, underpinned by robust strategy formulation and research and evaluation methodology.

Allow Transcend Corporate Advisors, SA’s leading transformation advisory, to assist you in developing a strategic solution for your B-BBEE scorecard that makes business sense and is aligned with your company’s strategy.

BEE LEVEL

4

BLACK OWNED

0%

BRANCHES

1

OPERATES

INTERNATIONAL

The Revised B-BBEE Codes and the impact on your business…

Postnet Suite 545, Private Bag X1, Melrose Arch, Johannesburg 2076 Catherine Young T: 083 462 8857 E: catherine@solverconsult.com www.solverconsult.com

We have assisted many of South Africa’s corporates and multinationals with transformation and economic empowerment solutions. Our solutions include Revised B-BBEE Codes strategy; Current state gap analysis; Enterprise Development Solutions; SETA Accredited B-BBEE Training for your BEE and EE Committee; Verification Preparation – Maximising your BEE Verification; and Ownership Advisory (finding the right solution for your company).

BEE LEVEL BLACK OWNED

1 41%

BRANCHES

1

OPERATES

SOUTH AFRICA

Grapnel House, 3 Glenhove Road, Melrose Estate, Gauteng 2186 Brian Hendrikz T: 011 442 2433 F: 086 509 5389 E: brian@transcend.co.za www.transcend.co.za

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TravelUXION

TravelLinck

Travel Spend Management

Travel Management

TraveluXion is unique in T&E (travel and expense) procurement technology.

TravelLinck is SA’s leading independent Online Travel and Expense Management Solution.

End to end procurement solution for Business Travel related expenditure. Developed as a multi – million Rand investment partnership between Amadeus and Fraxion and supported fully by the DTI as an approved National Industrial Participation Programme. Our solution ensures that complete visibility against budget is obtained over any potential costs that may arise in T&E. Our five modules ensure Total cost of trip is attained, from Request, post travel claims, settlements, credits and a M.I.C.E module. The solution caters for multiple TMC and ERP vendors. Our product features are extensive so please contact us for an in-depth view of our unique solution.

BEE LEVEL BLACK OWNED

3 100%

BRANCHES

1

OPERATES

SOUTHERN AFRICA

Amadeus House, Turnberry Office Park, 48 Grosvenor Road, Bryanston 2021 Tracey Shaw T: 011 548 7300 E: tracey.shaw@traveluxion.co.za www.traveluXion.co.za

TravelLinck’s innovative solution has many unrivalled benefits and is implemented at over 30 corporate and government clients ranging from National Treasury, SARB, Nedbank, Old Mutual and many more! TravelLinck empowers the procurement manager to take control of travel expenditure, from policy and requisition through to booking, payment, real-time reporting and reconciliation. Our clients benefit from streamlined processes, cost savings, accurate reporting and data visualization. We look forward to meeting you and demonstrating the power of our entire solution. TravelLinck’s reputability and reliability is unrivalled! Our satisfied client list speaks for itself.

BEE LEVEL BLACK OWNED

2 25%

BRANCHES

1

OPERATES

SOUTHERN AFRICA

3rd floor, Sandown Mews West, 88 Stella Street, Sandown, Johannesburg 2196 Marcelle Ross T: 010 001 8820 F: 011 263 5550 E: marcelle@travellinck.com www.travellinck.com

Tsebo Outsourcing Group Outsourced catering, cleaning and facilities management, infrastructure management , procurement, energy

BEE LEVEL BLACK OWNED

2 51%

BRANCHES

13

OPERATES

AFRICA

7 Arnold Road, Rosebank 2196 Royce van der Zwan T: 011 441 5300 F: 011 441 5667 E: info@tsebo.com www.tsebo.com

Tsebo Outsourcing Group is an African holding company with core operations in infrastructure and facilities solutions across Africa. The Group offer its clients outsourced solutions in contract catering, contract cleaning and hygiene services, facilities and infrastructure management, third-party procurement and energy management solutions. Through partnering with Tsebo Outsourcing Group, our clients enjoy tangible bottom line benefits in the form of reduced costs, improved service delivery and quality, enhanced operational efficiency, convenience of service and enhanced expertise. What makes Tsebo Outsourcing Group different is the unique ability to think and act ahead of the curve. Through its vast experience and a depth of knowledge that spans industries, geographies and cultures, Tsebo is unique in delivering business solutions that are designed not for today’s needs only, but to withstand and thrive on change.

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BUSINESS DIRECTORY

Selected Supply Chain Network directory listings provided by: Go to www.scnet.co.za for almost 20 000 listed companies.

INDEX Academic, Training

109

Management Consulting

116

Accounting, Auditing

109

Manufacturing

117

Banking, Financial Services

109

Media Production, Publishing

117

Building Trades

110

Medical & Healthcare

118

Chemical, Petrochemical

110

Motor Industry

118

Construction

110

Office Support

118

Energy

111

PR, Communications

119

Engineering

112

Professional Services

119

Facilities Management

113

Retail

119

Fitness, Health & Wellness

113

Safety & Security

119

Hotel, Catering & Hospitality

113

Sales & Marketing

120

Human Resources

114

Technical

120

ICT

114

Textiles, Clothing

120

Information Technology

114

Tools & Equipment

120

Logistics, Supply Chain

115

Travel, Tourism

120

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Directory information provided by www.scnet.co.za City Town

Region

Company Name

% Black Ownership % Black Women

BEE Level

belinda@fti.co.za www.fti.co.za

34.62 7.30

2

Email Website

Telephone

Academic, Training National

Paulshof

Faculty Training Institute

011 807 9478

National

Samrand

Commerce Edge

0861 334 326

registrar@commerce-edge.com www.commerce-edge.com

27.43 9.47

3

National

Samrand

SmartProcurement

0861 334 326

events@smartprocurement.co.za www.smartprocurement.co.za

27.43 9.47

3

National

Willows

Central Business Academy

051 447 5882

finances@cbacademy.co.za www.centralbusinessacademy.co.za

30 0

4

GP

Bedfordview

CBM Training

011 454 5505

jenna@cbm training.co.za www.cbmtraining.co.za

0 0

3

GP

Craighall Park

Dialogue Communications Training

011 442 6572

communicate@dialoguejhb.co.za www.dialogueworkshops.co.za

26 26

4

GP

Eastcliff

Futurevista Technology & Training Solutions

011 435 5427

lindsay@futurevista.co.za www.futurevista.co.za

0 0

4

GP

Fairland

Imsimbi Training

011 678 2443

tammy@imsimbi.co.za www.imsimbi.co.za

25 0

1

GP

Florida

Learnership Support Systems

011 472 4578

charlotte@lss4u.co.za www.learnershipsupport.co.za

0 0

4

GP

Johannesburg

VEB Cele and Associates

011 504 2129

info@vebgroup.co.za www.vebgroup.co.za

100 100

3

GP

Morningside

Simply Kidz Academy

082 900 0021

karryn@simplykidzacademy.co.za www.simplykidzacademy.co.za

31 31

4

GP

Norwood

College of People Management and Development

011 728 7225

reNationala@cpmd.co.za www.cpmd.co.za

0 0

4

GP

Persequor Park

The Business Skills for South Africa Foundation

012 349 1777

annora@mweb.co.za www.bssa.co.za

0 0

4

GP

Silverton Dale

Evolution Height Safety

012 804 0567

johan@evolutionsafety.co.za www.eheightsafety.co.za

0 0

4

GP

Technopark

SIMS Khula Training

012 665 4446

ilanas@simskhula.co.za www.simskhula.co.za

56 10.10

3

WC

Bellville

1st Solutions

021 914 7083

Lianne@1stsolutions.co.za www.1stsolutions.co.za

00

4

WC

Diaz Beach

Jesua Consultants

044 695 0003

info@JesuaC.co.za www.jesuac.co.za

25.10 25.10

4

Accounting, Auditing KZN

Berea

Entrepreneurs Survival Solutions

031 201 5816

Nationalhi@ess.co.za www.ess.co.za

26 0

2

KZN

Berea

Inkomba Verification Agency

031 201 8546

nokubonga@inkombandlela.co.za www.inkombava.co.za

100 30

1

National

Bruma

Q Ninetynite Project Management

086 122 2825

vuyani@qninetynine.co.za www.q99.co.za

100 60

3

GP

Constantia Park

Linhleko Marketing and Consulting

012 993 2875

refiloe@linhleko.co.za www.linhleko.co.za

100 100

3

GP

Montana Park

Wanderlust Communications

012 548 2024

info@wanderlustcommunications.co.za www.wanderlustcommunications.co.za

100 100

3

GP

Norkem Park

Mathews And Mathews Marketing

011 931 2647

nmathews@telkomsa.net www.mathewsmarketing.co.za

100 50

4

GP

Rosebank

Busi Ntuli Communications

011 447 7400

busi@bncommunications.co.za www.busintuli.co.za

100 100

1

GP

Villieria

Universal Design Studio

012 333 2206

info@unisigns.co.za www.unisigns.co.za

0 0

4

KZN

Pinetown

Lucygrace Trading and Services

031 701 4687

lucygrace@live.co.za

100 100

3

WC

Foreshore

Custom Graphics and Print

021 425 8670

customgraphics@mweb.co.za www.customgraphics.co.za

100 80

3

Sivatho Chuma Wealth Managers

081 305 1077

chuma.koyana@gmail.com

100 0

3

Banking, Financial Services EC

Vincent

www.smartprocurement.co.za

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BUSINESS DIRECTORY

City Town

Region

Company Name

Email Website

Telephone

% Black Ownership % Black Women

BEE Level

GP

Constantia Kloof

In Quest Investigations

011 475 0010

chantel@in quest.co.za www.in quest.co.za

26 26

4

GP

Fourways

Morongwa Maponya Consulting

011 469 4842

mmaponya@morongwaconsulting.co.za www.morongwaconsulting.co.za

100 40

4

GP

Midrand

MMCP

083 387 8810

nthabiseng.mokone@m mcp.com

100 100

3

Ashlea Gardens

John Dore Flooring Franchise

012 346 6714

insurance1@johndore.co.za www.johndore.co.za

0 0

1

GP

Glen Austin Ext 1

Ntombentle Investments

011 468 1980

lesego@ntombentle.co.za www.ntombentle.co.za

100 100

3

GP

Sebokeng

Bokamoso Bo Lesedi Investment

016 594 5654

tati@bblinvestment.co.za www.bblinvestment.co.za

50 50

4

Building Trades National

Chemical, Petrochemical GP

Centurion

Reddyfuels

012 664 1969

sid@reddyfuels.co.za www.reddyfuels.co.za

100 0

2

GP

Northcliff

Ukhukho General Trading

011 478 1888

vuyelwa@uaipetroleum.co.za www.uaipetroleum.co.za

100 100

3

LIM

Polokwane

Semady Consultancy

072 444 0677

michaelmkb@gmail.com www.fuelstore.co.za

100 0

3

WC

Rondebosch East

Nationalurally Good Traders

021 696 2156

info@Nationalurallygood.co.za www.Nationalurallygood.co.za

100 90

3

Construction National

Durban

Geosure

031 701 9732

nalisha@geosure.co.za www.geosure.co.za

100 0

1

National

Ferndale

Likhanyile Trading Enterprise

011 326 1353

likhanyile_trading@vodamail.co.za www.likhanyile.co.za

100 100

3

National

Kramerville

Tawana Business Projects

011 444 1098

monewa@tawana.biz www.tawana.biz

100 100

3

National

Pietermaritzburg

Oro Management Services

086 182 3823

info@oroprojects.co.za www.oroprojects.co.za

100 50

3

National

Rivonia

Enza Construction

011 803 7000

hugh@enzacon.co.za www.enzacon.co.za

93.27 10.04

2

National

Rivonia

Nonku Ntshona & Associates Quantity Surveyors

011 803 2291

info@nnaqs.co.za www.nnaqs.co.za

100 100

1

National

Rustenburg

Bashabi Construction & Projects

082 392 6658

bashabiresourses@gmail.com

100 0

3

EC

Gelvandale

Mr Sandless Port Elizabeth

041 457 1559

mrsandless@mweb.co.za www.mrsandless.za.com

100 0

3

EC

Southernwood

Seyola Contractors

082 668 2498

seyolacontractors@yahoo.com

100 0

3

FS

Thabong

Thiwe And Moses General Trading

072 218 5511

bino@webmail.co.za

100 60

3

GP

Bassonia

Platinum Concrete Solutions

011 682 1588

terniell@pcs za.co.za www.pcs za.co.za

100 0

3

GP

Centurion

Naxo Construction

012 661 2767

zee@naxocon.co.za

100 60

3

GP

City Deep

Sharka Interior Contractors

076 770 2994

sharka@mweb.co.za

0 0

4

GP

Germiston

Gunnite InterNationalional

011 873 2750

wayne@gunnite.co.za www.gunnite.co.za

0 0

3

GP

Germiston

Motsibore Trading Enterprise

011 903 3310

lizlet962@gmail.com

100 100

3

GP

Kagiso

Lebeloe Projects

011 410 5886

jlebeloe@gmail.com www.lebeloeprojects.co.za

100 100

3

GP

Kagiso 2

Danielsam Trading Enterprise

011 053 9644

danielsamconstruction@gmail.com

100 0

3

GP

Katlehong

D And V Simelane Construction And Projects

011 903 1257

dnvsimelane2008@gmail.com

100 50

4

SmartProcurement Review

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Directory information provided by www.scnet.co.za City Town

Region

Company Name

Email Website

Telephone

% Black Ownership % Black Women

BEE Level

GP

Kempton Park

Umfubu Electrical

011 394 0065

pworx@mweb.co.za www.umfubuelectrical.co.za

66 0

2

GP

Lombardy East

Ratehang Projects

011 443 7682

mmogodi@telkomsa.net

100 100

2

GP

Meredale

NRP Properties and Contractors

082 490 1391

puleng@nrpproperties.co.za www.nrpproperties.co.za

100 50

3

GP

Midrand

Thatha Majova Builders and Civil

083 320 9309

jaymajova@gmail.com

100 50.29

None

GP

Midrand

TPM Creations

082 446 5235

mathabo.nakene@tpmcreations.com www.tpmcreations.com

100 100

3

GP

Ormonde

Kingsway Civils

011 496 1754

aeysha@kingswaysa.co.za www.kingswaycivil.com

100 0

4

GP

Pretoria North

Reatha Acquisition and Management

012 702 2629

mary@reatha.co.za www.reatha.co.za

100 60

1

GP

Rockville

Thusao Trading Enterprise

011 986 2824

thusao3@gmail.com www.thusao@mweb.co.za

100 0

3

GP

Roseacres

ProquaTech Developers

083 280 7897

phiwo.mlotshwa@proquatech.co.za proquatechdevelopers.wozaonline.co.za

100 70

3

GP

Sandton

SEKO Construction

011 384 4016

goodwill@seko.co.za www.seko.co.za

100 33.33

3

GP

Sunnyside

Lolla Business Enterprises

012 341 4415

jmasedi@yahoo.com

100 0

3

KZN

Bluff

MPG Projects

031 466 4300

ayanda@mpgprojects.co.za www.mpgprojects.co.za

100 50

3

KZN

Durban

Amagwaba Construction

083 683 7110

cabuzela@mymtnmail.co.za

100 0

3

KZN

Mount Edgecombe

Serengeti Interiors

031 502 6121

Nationaltisha@serengetiprojects.co.za

100 0

2

KZN

Overport

Pan African Development

031 207 3923

kavethag@pandev.co.za www.pandev.co.za

100 40

2

MP

Kwaggafontein A

Impisi General Construction

076 418 2797

info@impisiconstruction.co.za www.impisiconstruction.co.za

100 100

3

NW

Doringkruin

Masedi Project Management

083 294 7820

masedipm@hotmail.co.za

100 20

3

NW

Rustenburg

Biziwe Labour Hire

014 594 0804

biziwe@imagenet.co.za www.biziwe.co.za

51 51

4

NW

Rustenburg

Bonco Enterprises

014 533 3690

bongi@bonco.co.za

100 100

3

NW

Rustenburg

JST Construction

014 592 6837

jstconstruction@telkomsa.net www.jstconstruction.co.za

100 0

5

NW

Rustenburg

Kopanomolefe Trading

014 592 2375

kopanomtrading@telkomsa.net

46 15

1

NW

Rustenburg

MN Nengovhela Projects Management

083 311 5573

nengovhelambulaheni@yahoo.com

100 0

3

WC

Brackenfell

HD Moller Plant Hire

021 801 2794

dawnrentals@neomail.co.za

0 0

4

WC

Gugulethu

Asanda Airconditioning

021 633 4481

siyoyot@telkomsa.net www.asandaaircons.co.za

100 0

3

WC

Kuilsriver

Shoop Sharp Construction Services

073 141 6099

shoopsharp@gmail.com www.shoopsharp.co.za

100 100

3

WC

Somerset West

Supertrax

021 852 6974

info@supertrax.co.za www.supertrax.co.za

0 0

4

WC

Welgemoed

RCiR Property Services

051 430 7933

fin.bfn@rcir.co.za

100 50

3

WC

Woodstock

Kinshella Nationalural Stone Projects

021 462 6396

cedric@knsp.co.za www.knsp.co.za

100 0

3

GP

Kramerville

Sakina Energy Solution

072 418 1284

sakina.energy@outlook.com

100 0

3

GP

Rockville

ZNAP

082 766 6826

tebogo@znap.co.za

100 0

3

Energy

www.smartprocurement.co.za

111

0408(SPW_ReviewPublication)Final_RFP.indd 111

2013/08/27 10:17 AM


BUSINESS DIRECTORY

City Town

Region

Company Name

Email Website

Telephone

% Black Ownership % Black Women

BEE Level

100 75

3

0 0

4

GP

Suideroord

Cassidy Solutions

011 433 0239

siphokazim@cassidysolutions.co.za www.cassidysolutions.co.za

KZN

Richards Bay

OTG Energy

078 156 3947

jbmartin81@gmail.com www.gsolar.co.za

NW

Ventersburg

Green Energy IT

074 453 1456

jslethuli@gmail.com

100 30

3

National

Benoni

Integrity Environmental Solutions

011 425 0897

sugen@integrityafrica.co.za www.integrityafrica.co.za

100 76

1

National

Marshalltown

Semane Consulting Engineers

011 891 1600

rkrohnert@semane.co.za www.semane.co.za

39 0

5

GP

Alrode

Reelin Bearings

011 900 1346

mervyn@reelin.co.za www.reelin.co.za

100 60

3

GP

Alrode

Twin Place Trading And Projects 264

011 864 2779

tptrading264@gmail.com

100 30

3

GP

Anderbolt

Tunnel Engineering

011 894 1303

vusi@tunnelengineering.co.za www.tunnelengineering.co.za

100 0

2

GP

Celtisdal

Math Engineering

083 229 5385

info@math engineering.co.za www.math engineering.co.za

100 0

3

GP

Dalpark Ext 11

TC Bearings Seals and Industrial Supplies

084 234 5640

tcbearings@telkomsa.net

100 25

3

GP

Duncanville

CC Engineering

016 455 1170

ccengineering@telkomsa.net

51 51

2

GP

Glen Marais Ext 1

Kreyatif Laser Worx

011 391 8316

denise@kreyatif.co.za www.kreyatif.co.za

0 0

4

GP

Heatherdale

Loadcell World Of Innovations

012 549 4726

alf@loadcellworld.co.za www.loadcellworld.co.za

0 0

4

GP

Jet Park

CERadvance Engineering Ceramics

011 397 8933

martin@ceradvance.co.za www.ceradvance.co.za

0 0

4

GP

Jet Park Ex 38

Ndzilo Fire Protection Engineers

011 397 6560

info@ndzilofire.co.za www.ndzilofire.co.za

100 0

3

GP

Karenpark

NERM Power Engineering Solutions

082 509 8145

khozah@nermengineering.co.za www.nermengineering.co.za

100 0

3

GP

Kelvin

LumaCon Airconditioning

011 656 4422

marketing@lumacon.co.za www.lumacon.co.za

100 60

2

GP

Kliptown

Strachan Engineering Service

011 947 3919

samuelstrachan1@gmail.com bco.wozaonline.co.za

100 50

3

GP

Kyalami

Roshqott

011 466 8355

jorge.marques@roshqott.co.za www.roshqott.co.za

10 10

6

GP

Liefde en Vrede

Sphiwe Seth J

076 418 5662

siphiwedzulu@gmail.com

100 0

3

GP

Midrand

Inkwali Project Management Services

011 024 4751

garrym@inkwali.co.za www.inkwali.co.za

100 0

3

GP

Modderfontein

Inkwali Fabrication & Maintenance

011 024 4751

thembaz@inkwali.co.za www.inkwali.co.za

90 0

3

GP

Ormonde Ext 35

Enzani Technologies

011 835 1880

info@enzani.co.za www.enzani.co.za

81.19 52.50

1

GP

Protea Glen Ext 26

3E Trading Enterprise

011 039 2937

operations@3Eelectrical.com

0 0

4

GP

Struisbuilt

Incapeace Trading and Project 69

011 363 3920

incapeace@vodamail.co.za

100 100

3

GP

Wierda Park

Gdec Power Services

012 654 8672

geoff.carter@mweb.co.za

0 0

4

GP

Winchester Hills

Lebo Ofentse Trading Projects

011 680 2857

dorothy.mokgadi@vodamail.co.za

100 100

3

GP

Windsor East

Perkridge Design Centre

011 678 5404

info@perkridge.co.za www.perkridge.co.za

100 25

4

KZN

Northdene

Red Mars 114 Trading

031 708 3887

svr.projects@hotmail.co.za

100 100

3

KZN

Queensburgh

Redfab Engineering

031 463 1673

thivi@redfab.co.za

100 50

1

Engineering

SmartProcurement Review

112

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Directory information provided by www.scnet.co.za City Town

Region

Company Name

Email Website

Telephone

% Black Ownership % Black Women

BEE Level

Alsu Ondernemings

021 872 1023

alsu@mweb.co.za www.alsu.co.za

0 0

2

Amandasig

Industrial Waste and Environmental Services

012 549 2925

info@iwesco.co.za www.iwesco.co.za

0 0

1

GP

Dawn Park Ext 36

Malusi Lebone Construction and Projects

083 328 0165

malusi.lebone@gmail.com www.mlebone.co.za

100 100

3

GP

Karen Park

Bhafani Ba Ntiro

012 751 0998

lindiwe@maid4u.co.za www.maid4u.co.za

100 90

3

GP

Meadowlands

Tshwara ka Thata Project and Developments

082 210 5852

queen.tenyane@standardbank.co.za

100 100

3

GP

Pretoria North

1 Microcomp Electronic Recyclers

012 546 9727

cduppie@vodamail.co.za www.microcompelectronicrecyclers.com

0 0

4

GP

Soweto

Gotshegoang Cleaning Services

082 851 5275

bongimojakes@vodamail.co.za

100 100

3

LIM

Polokwane

Gudani Consulting

015 291 3620

setenane@gudaniconsulting.co.za www.gudaniconsulting.co.za

100 0

3

WC

Bergvliet

MLR Maintenance

021 713 4455

liezel@mlrmaintenance.co.za www.mlrmaintenance.co.za

100 0

3

WC

Paarl

Facilities Management National

Fitness, Health & Wellness National

Plumstead

Shonaquip

021 797 8239

shona@shonaquip.co.za www.shonaquip.co.za

20.29 5.07

2

National

Strathavon

Proactive Health Solutions

011 282 2300

info@phs world.co.za

60.60 7.67

2

GP

Halfway House

EOH Abantu

011 554 1930

smason@eohhealth.co.za www.eohhealth.co.za

34.62 7.30

2

MP

Middelburg

Bambanani Medical Centre

013 282 5218

mstayob@telkomsa.net www.industrialhealth.wozaonline.co.za

100 51

3

General Trade & Hardware GP

Braamfontein

Maalkop Trading And Projects

079 714 3028

obakengmalope@yahoo.com

100 100

3

GP

Morehill

Mvelasa Trading and Projects 67

082 698 9406

mvelasaprojects@gmail.com

100 100

3

Rustenburg

Foodworx Catering Investments

014 594 2530

oupa@foodworx.net www.foodworx.net

30 0

3

GP

Brackendowns

Deejoy Construction Cleaning and Distribution

011 900 7016

deejoy@telkomsa.net

100 100

3

GP

Erasmuskloof

Mobile Bar

012 347 2795

info@mobilebar.co.za www.mobilebar.co.za

0 0

4

GP

Liefde en Vrede

Mabogo Athebana Railway Projects Corporative Limited

011 432 0935

nhlape@gmail.com

100 100

4

GP

Moletsane

Tinyeleti Conference Organisers

011 930 6327

aubreyk@tinyeleti.co.za

100 0

3

GP

Mondeor

Tiro Communications

011 941 3001

tshepo@tirocommunications.co.za

100 0

None

GP

New Muckleneuk

PinkVelvetCafe

082 052 1841

infopinkvelvetcafe@gmail.com www.wix.com/pinkvelvetcafe/pinkvelvetcafe

100 100

4

GP

Noordwyk

Kabasia Group Holding

073 889 9430

olorato@kabasia.co.za www.kabasia.co.za

100 100

3

GP

Parkmore

Layer Cake Events and Management Services

072 593 4376

lashphuti@gmail.com www.facebook.com/layercakeevents

100 100

3

GP

Pretoria

Lebo and Katli Trading Solutions

012 753 7646

leboandkatli@mtnloaded.co.za www.leboandkatli.co.za

100 70

3

GP

Siluma View

W4G Trading

076 943 6174

wfourgtrading@gmail.com

100 100

3

GP

Silverton

M and E Caterers

012 803 8944

elaine.matjila@gmail.com www.mandecaterers.co.za

100 100

3

Hotel, Catering & Hospitality National

www.smartprocurement.co.za

113

0408(SPW_ReviewPublication)Final_RFP.indd 113

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BUSINESS DIRECTORY

City Town

Region

Company Name

Email Website

Telephone

% Black Ownership % Black Women

BEE Level

GP

Silverton

Pretoria Wine & Spirit

012 804 5300

stanana@telkomsa.net www.pws.wozaonline.co.za

100 10

3

GP

Spruitview

Tsoelopele Catering And Florist Services

011 866 9037

ncube.thandi@gmail.com www.tsoelopelecatering.co.za

100 100

3

KZN

Westville

Big Five Bed and Breakfast

031 267 2537

big5bnb@telkomsa.net www.big5bnb.co.za

100 100

3

100 100

3

Human Resources National

Marshalltown

Mbonge Human Capital

078 215 4427

thami@Nationalhistaffing.co.za www.mbongehc.co.za

National

Pinetown

Express Employment Professionals

031 701 3586

Kogie.Govender@ExpressPros.co.za www.expresspros.co.za

26.10 26.10

2

National

Samrand

Commerce Edge

0861 334 326

registrar@commerce-edge.com www.commerce-edge.com

27.43 9.47

3

National

Samrand

SmartProcurement

0861 334 326

events@smartprocurement.co.za www.smartprocurement.co.za

27.43 9.47

3

GP

Clubview

Masterclass Events

012 656 1600

cindy@masterclassevents.co.za www.masterclassevents.co.za

0 0

4

GP

Douglasdale

Alchemy in Motion

011 704 7626

simone@alchemyinmotion.co.za www.alchemyinmotion.co.za

0 0

4

GP

Douglasdale

CR Squared People Catalysts

083 326 4776

gerda@crsquared.co.za www.crsquared.co.za

0 0

4

GP

Fourways

Aspigon Training Solutions

011 021 7117

siphokazi@aspigon5.co.za www.aspigon.co.za

100 100

None

GP

Fourways

Inner Coaching

083 730 2979

telana@innercoaching.co.za www.innercoaching.co.za

0 0

4

GP

Isando

COMETSA Human Capital Investments

011 974 9308

sam.tsima@cometsa.co.za www.cometsa.co.za

100 0

3

GP

Northcliff

Red Peg

011 476 5355

tim@redpeg.co.za www.redpeg.co.za

100 100

2

GP

Randburg

BEX Academy

086 112 4668

janine@beexchange.co.za www.bexacademy.co.za

51 25

3

GP

Silver Lakes

Kaya Consulting ZA

012 809 4073

heidi@kayaconsulting.co.za www.kayaconsulting.co.za

0 0

4

KZN

Morningside

Igugu Lesizwe Consultants

031 303 6220

igugu@telkomsa.net www.igugulesizweconsultants.co.za

100 100

3

KZN

Sherwood

Catalyx Consulting

086 188 8985

info@catalyx.biz www.catalyx.biz

60 10

3

National

Midrand

Hezeki Contracting

011 314 8519

Janine@hezeki.co.za www.hezeki.co.za

95 40

2

National

Zwartkop Ext 8

Sive Infrastructure Services

086 160 6000

sonwabo@sive.co.za www.sive.co.za

100 39.17

2

GP

Benoni

Rudi And Johan Telecom

011 849 7580

johan@ruantel.co.za www.ruantel.co.za

0 0

3

GP

Boksburg

Bambolunye Technologies

011 914 9880

lawrencen@bambolunye.co.za www.bambolunye.co.za

100 0

3

GP

Midrand

Terabyte Telecomms

011 312 2143

mitchell@tbtele.com www.tbnetworks.net

100 50

1

GP

Noordwyk

Absolute Telecommunication and Technology Solutions

011 039 2845

tebogop@absolutetelecoms.co.za

100 100

3

Pinelands

DLK Group

021 531 9403

leon.hendricks@dlkgroup.com www.dlkgroup.com

100 50

1

GP

Benoni

Dataopt

086 123 4568

thabo@dataopt.co.za www.dataopt@co.za

100 0

3

GP

Bertrams

The Curve Behind Trading 550

076 890 7979

curvebehind@gmail.com

100 100

3

GP

Centurion

Delivertoday

081 766 7932

info@delivertoday.co.za www.delivertoday.co.za

100 50

3

ICT

Information Technology National

SmartProcurement Review

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Directory information provided by www.scnet.co.za

Region

City Town

Company Name

Email Website

Telephone

% Black Ownership % Black Women

BEE Level

GP

Diepkloof

ZNZ ICTe

083 928 3971

znz@znz.co.za www.znz.co.za

100 0

3

GP

Halfway Gardens

Zikode Industries And Investment

072 548 6310

info@zikodein.com www.zikodein.com

100 0

3

GP

Johannesburg

Extortion Graphic Designs

011 264 2107

eugene@extortiondesigns.co.za www.extortiondesigns.co.za

100 0

3

GP

Johannesburg

Vuselelwa IT Solutions

083 704 7442

info@vuselelwa.co.za www.vuselelwa.co.za

100 0

3

GP

Kempton Park

Mabutec

011 393 2502

info@mabutec.co.za www.mabutec.co.za

100 0

3

GP

Lenasia South

Eclipse Stationers

011 211 3686

clifton@eclipsestationers.co.za

100 100

3

GP

Lonehill

NKUSI IT Specialized Services

072 655 5005

admin@nkusi it.co.za www.nkusi it.co.za

100 0

3

GP

Meredale

Sapware Management Consultants

011 941 2461

info@sapware.co.za www.sapware.co.za

100 70

3

GP

Midrand

IT ABOT Technology

011 042 7645

ngwanam@abottech.co.za www.abottech.co.za

100 50

3

GP

Midrand

Theko Inc

076 021 7272

temogo@thekoinc.co.za www.thekoinc.co.za

100 0

3

GP

Morningside

Oval Ventures Trading

011 783 4180

elias.diale@ovalventures.co.za www.ovalventures.co.za

100 0

3

GP

Pretoria

Loreng ICT

012 751 8491

Pine.Malewa@gmail.com www.lorengict.co.za

100 100

3

GP

Randjespark

Infrasol

011 653 3940

marthieh@infrasol.com www.infrasol.co.za

7.94 0.42

4

GP

Rivonia

Netcampus

011 235 7000

warrickg@netcampus.com www.netcampus.com

61 0

4

GP

Sandton

MBA Connect

011 262 2441

colette@mbaconnect.net www.mbaconnect.net

0 0

4

GP

Van der Bijl Park

Morena Technologies

078 505 7875

morena@moreNationalech.co.za www.store.moreNationalech.co.za

100 0

3

GP

Vanderbijlpark

Izindimba Trading Enterprise

016 931 0355

bonke@izindimba.co.za www.izindimba.co.za

100 0

3

GP

Vereeniging

Batloung Technologies

016 422 0548

batloung@gmail.com

100 55

3

GP

Victory Park

PPE Test Enterprise

011 340 7249

mfarrell@scnet.co.za

100 30

2

GP

Vorna Valley

Falcorp Technologies

011 805 2859

rikash@falcorp.co.za www.falcorp.co.za

100 0

2

GP

Woodmead

Global SoftechSolutions

010 590 8060

info@softechsolutions.net www.softechsolutions.net

0 0

4

GP

Woodmead

Relational Database Consulting

011 656 1902

rodneyn@rdc.co.za www.rdc.co.za

71.40 22

3

GP

Wychwood

KPS Network Solutions

071 303 3388

pule.matlholoe@yahoo.com www.kpsnetworksolution.co.za

100 0

3

KZN

La Lucia

Mbasane Enterprises

083 458 8682

pindiwe.filtane@mbasane.co.za

100 100

3

KZN

Pinetown

SQM Technologies

031 701 5313

sqmtechnologies@telkomsa.net www.sqmtechnologies.co.za

100 50

3

KZN

Woodlands

TLKP IT Systems

031 462 5527

BJMaishi@tlkpits.co.za www.tlkpits.co.za

100 50

3

012 664 3623

angel@angelinterNationalional.co.za www.angelinterNationalional.co.za

100 100

3

Logistics, Supply Chain National

Centurion

Angel InterNationalional Trade And Projects

National

Samrand

Commerce Edge

0861 334 326

registrar@commerce-edge.com www.commerce-edge.com

27.43 9.47

3

National

Samrand

SmartProcurement

0861 334 326

events@smartprocurement.co.za www.smartprocurement.co.za

27.43 9.47

3

Fichardtpark

Rapid Supply Chain InterNationalional

100 0

3

FS

074 653 4822

thebasil@webmail.co.za

www.smartprocurement.co.za

115

0408(SPW_ReviewPublication)Final_RFP.indd 115

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BUSINESS DIRECTORY

City Town

Region

Company Name

Email Website

Telephone

% Black Ownership % Black Women

BEE Level

50 0.29

4

GP

Anderbolt

Mykatrade 256

011 892 0666

cranecorhire@mweb.co.za www.cranecorhiresa.co.za

GP

Boksburg

Consolidated Trucking & Logistics

011 823 4430

paul@ctnl.co.za www.ctnl.co.za

33 33

2

GP

Boksburg

MCV InterNationalional Forwarding

011 397 3362

ngxumisa@mcvsa.co.za www.mcvsa.co.za

100 100

3

GP

Daveyton

Predijoy Trading Enterprise

081 498 7585

predijoy@gmail.com

100 100

3

GP

Greenstone Hill

Antamna Transport & Harbour Logistics

011 524 6143

vernon.naicker@telkomsa.net www.antamNationalransport.com

100 100

3

GP

Kempton Park

LTC Process Engineering

011 976 5773

lindat@ltcpro.co.za www.ltcpro.co.za

51 51

3

GP

Midrand

Oratilwe Consultants

011 805 2245

madriaanvdb@exclusivems.co.za www.exclusivems.co.za

100 0

1

GP

Olivedale Ext 18

Sisonke Printers & Signage Co

011 704 5879

clayton@sisonke.com www.sisonkeprinters.co.za

100 38

2

GP

Radiokop

CNF Freight Services

011 475 4471

jeron@cnffreight.co.za www.cnffreight.co.za

100 0

3

GP

Riverside

Glimpse of Glamour

071 566 2722

palesa@glimpseofglamour.co.za www.glimpseofglamour.co.za

100 100

3

KZN

Pinetown

Khuvena Consultancy

083 450 8674

khuvena@mweb.co.za

100 50

3

KZN

Redhill

Seacrest Logistics

031 827 1312

naseeb@seacrest.co.za www.seacrest.co.za

100 0

3

LIM

Mokopane

Rock Fountain Clearing

078 196 6281

rockfountainclearing@ymail.com

100 0

3

MP

Embalenhle

Naxacube Close Corporation

083 366 1950

itenjekwayo@yahoo.com www.naxacubecc.co.za

100 0

3

NW

Brits

Sdeku Trading and Projects

012 252 5593

sdeku@telkomsa.net sdekutrading.wozaonline.co.za

100 0

3

NW

Rustenburg

Berco an Aramex Company

014 596 7775

Debbie.Eybers@aramex.com www.bercoexpress.co.za

0 0

4

WC

Uitzicht

Southern Tip Logistics

084 301 4572

phindile1@gmail.com

100 0

3

100 40

3

0 0

1

Management Consulting National

Bedfordview

Loago Business Consulting

082 424 4305

willy@loago.co.za www.loago.co.za

National

Kensington B

ProServ South Africa

011 700 0400

tjade@proserv.co.za www.proserv.co.za

National

Midrand

Nako Consulting

073 549 1741

info@nakoconsultancy.co.za www.nakoconsultancy.co.za

100 60

3

National

Parsons Hill

Leap Entrepreneurial Development

041 373 0086

Ricardo@smallbusiness.co.za www.smallbusiness.co.za

100 0

3

National

Rosebank

Kaelo Consulting

011 778 4340

thandi@kaelo.co.za www.kaelo.co.za

46.06 4.28

2

National

Sandbaai

RiskCom S.A.

028 316 2804

riskcomsa@hermanus.co.za www.riskcom.co.za

0 0

4

National

Thatchfield

E T M RECORDS

012 656 3356

elijah@etmabuza.co.za www.etmabuza.co.za

100 0

3

EC

Beacon Bay

Iingcinga Investments

043 748 2519

thandi@iingcinga.co.za www.iingcinga.co.za

100 100

3

GP

Fourways

Alpha Paratz Consulting

011 513 3492

seithati@perezconsulting.co.za www.perezconsulting.co.za

100 100

3

GP

Halfway House

Tshiamiso Financial Services

082 421 1047

btlhoaele@yahoo.com www.tshiamisofin.co.za

100 0

3

GP

Irene

TPG Africa

012 345 3518

magdalener@theprojectgroup.co.za www.theprojectgroup.co.za

25.10 0

7

GP

Kempton Park

Lufugu Projects

081 385 0728

lungi.majodina@gmail.com

100 100

3

GP

Lonehill

LGC Capital and Consultants

011 395 8591

kgomotso.lekola@lgccapital.co.za www.lgccapital.co.za

100 0

3

SmartProcurement Review

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Directory information provided by www.scnet.co.za City Town

Region

Company Name

Email Website

Telephone

% Black Ownership % Black Women

BEE Level

GP

Lonehill

Linkages Consulting

011 467 3486

mr.dhlamini@gmail.com www.linkagesconsulting.co.za

100 0

None

GP

Parktown

Yawee IT Solutions

011 480 4881

LRamaru@yaweeit.co.za www.yaweeit.co.za

100 0

3

GP

Randpark Ridge

Fertile Ground Investments

071 869 5915

info@fertileground.co.za www.fertileground.co.za

100 0

3

GP

Sandown

Associated Brewing & Beverage Consultancy

011 326 5051

heidi.grimmer@abbc.co.za www.abbc.co.za

26 26

4

GP

Sandton

Kogae Rainbow Investment Holdings

083 555 7225

thabile@kogaerainbow.co.za www.kogaerainbow.co.za

100 0

3

GP

Six Fountains

Axidex

086 174 8881

dries@axidex.com www.axidex.com

0 0

4

GP

Sunninghill

Ukuthola Business Services

011 082 1500

info@ukuthola.co.za www.ukuthola.co.za

100 0

3

GP

Sunward Park

Barjume Trading Enterprises

011 913 2596

barjumete@gmail.com www.barjumesa.co.za

100 0

3

GP

Vorna Valley

Louis Allen Southern Africa

086 110 2182

monja@louisallen.co.za www.louisallen.co.za

50 50

2

KZN

Durban

Upendo Promotions and Consultancy Services

076 668 9021

janet@upendopromotions.co.za

100 100

4

MP

Nelspruit

Excellento Services Consulting

013 744 9735

phillip@excellentoconsulting.com www.excellentoconsulting.com

100 0

3

WC

Westridge

Susumetsa Taelo Financial Management Services

083 900 8149

info@susumetsa.com www.susumetsa.com

100 100

3

Midrand

Alligator Manufacturing

011 312 4890

sandz@alligator.co.za www.alligator.co.za

10 10

3

GP

Crown Mines

Sign Edition

011 496 1210

robert@signedition.co.za www.signedition.co.za

100 0

2

GP

Evaton

MCC Vic Trading

016 595 1126

vimazibuko@gmail.com www.sawa.co.za

100 0

3

GP

Heriotdale

G. Twaddle and H. Engelbrecht

011 626 2936

graham@wirerope.co.za www.wirerope.co.za

0 0

3

GP

Kaalfontein

Woodpackers Furniture Design

083 277 4982

legoabe.owen@gmail.com www.woodpackers.co.za

100 0

3

GP

Krugersdorp

Swagefast

086 117 9243

info@swagefast.co.za www.swagefast.co.za

0 0

2

GP

Modderfontein

Packology

011 608 4616

office@packology.co.za www.packology.co.za

0 0

4

GP

Morningside

Hape Coal Services

011 706 4032

rhulanim@hape.co.za www.hape.co.za

100 0

3

GP

Wilbar

LTC PPE

011 455 4900

mfarrell@scnet.co.za www.ltcpro.co.za

51 51

3

GP

Wynberg

Under The Tree Designs

011 440 2409

nmhlanga@undertt.co.za www.undertt.co.za

100 50

3

KZN

Jacobs

Blendrite Chemicals

031 468 1205

praveen@blendrite.co.za www.blendrite.com

100 50

4

WC

Kuilsrivier

Democratic Packaging

021 905 4583

demopack@telkomsa.net

100 50

1

WC

Montague Gardens

Gutco Manufacturing

021 555 2337

laurence@gutco.co.za www.gutco.co.za

0 0

4

Manufacturing National

Media Production, Publishing National

Samrand

Commerce Edge

0861 334 326

registrar@commerce-edge.com www.commerce-edge.com

27.43 9.47

3

National

Samrand

SmartProcurement

0861 334 326

events@smartprocurement.co.za www.smartprocurement.co.za

27.43 9.47

3

GP

Randpark Ridge

KeyGraphics Studio

082 084 4582

mandy@keygraphicsstudio.co.za www.keygraphicsstudioco.za

100 100

3

WC

Zonnebloem

Fotoxposa

073 716 1226

clive@fotoxposa.co.za www.fotoxposa.co.za

100 0

3

www.smartprocurement.co.za

117

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BUSINESS DIRECTORY

City Town

Region

Company Name

Email Website

Telephone

% Black Ownership % Black Women

BEE Level

Medical & Healthcare Rivonia

Occupational Care South Africa

011 803 3538

agathap@ocsa.co.za www.ocsa.co.za

42.74 19.96

3

Sunninghill

Medicross Healthcare Group

010 205 6600

nikkid@primecure.co.za www.medicross.co.za

26.18 11.72

3

Newclare

Leading African Women

011 740 0662

carmen.margro@leadingafricanwomen.co.za www.leadingafricanwomen.co.za

100 100

3

GP

Randpark Ridge

Public Display Technologies

086 112 3738

cornel@pdtsa.co www.pdtsa.co.za

32 0

1

GP

Vereeniging

Kristale E Tshoeu Communications

073 288 1211

mokoenajt@gmail.com

100 0

4

NW

Rustenburg

Innoven Consulting

014 594 2520

michelle@innoven.co.za www.innoven.co.za

33 33

4

NW

Rustenburg

Nitrade Engineering and General Supplies

082 800 3574

nitrade@mweb.co.za

100 0

4

National GP National

Motor Industry KZN

New Germany

Diamond Bridge

031 714 9188

jackshen888@gmail.co www.truckpartssa.co.za

100 0

3

MP

Lydenburg

Supreme Upholstery

013 235 3069

baxter@telkomsa.net

50 0

4

WC

Maitland

Erasmus Tyre Services

021 510 5920

gildatj@iafrica.com www.erasmustyreservices.co.za

100 50

3

WC

Parow

VW Parow Cape Town

021 929 6000

mornem@mcmotor.co.za www.mccarthy.co.za

25.77 15.10

3

WC

Plumstead

Jem Autologistics

083 253 7740

autologistics@vodamail.co.za www.jemautologistics.co.za

100 100

3

Office Support GP

Boksburg North

Stationery For Africa Office Nationalional

011 892 5900

stationery@mweb.co.za www.s4aofficeNationalional.co.za

100 50

3

GP

East Lynne

Buku Office Supplies

012 800 3734

buku.mo@telkomsa.net www.bukustationery.co.za

100 0

3

GP

Elandspark

Busy Bee Binding and LamiNationalion Solutions

011 613 7731

busy.bee@vodamail.co.za www.busybeebinding.wozaonline.co.za

100 100

3

GP

Ferndale

Bright Ideas Projects 279

011 024 5215

eunice.sais@mweb.co.za www.saindsolutions.co.za

60 30

3

GP

Glen Marais

Amazon Office Furniture

072 050 3616

lisa@amazonoffice.co.za www.amazonoffice.co.za

0 0

4

GP

Johannesburg

Bbdk Business Enterprises

011 492 3740

tumi@bbdk.co.za

100 100

4

GP

Lakefield

Keybase Training Solutions

011 894 2077

cheryl@keybase.co.za www.keybasetraining.co.za

0 0

4

GP

Moreleta Park

Izinkwazi Supplies

012 997 4285

izinkwazi@saol.com www.izinkwazi.co.za

100 100

1

GP

Val de Grace

DK2 Investments

072 209 3730

sales1@dk2invest.co.za

100 40

3

KZN

Umhlanga

Macaw Printers

031 562 0978

zinhle.mbatha@macawprinters.co.za www.macawprinters.wozaonline.co.za

100 100

3

MP

Lydenburg

NDZA Khensa Trading Enterprise

013 235 3573

adebola@accamail.com

0 0

4

NC

Pampierstad

Kabo Integrated Technologies

083 270 7433

lebogang@kabotechnologies.co.za www.kabotechnologies.co.za

100 0

3

WC

Bridgetown

Excell Consumables

021 637 2685

excell@telkomsa.net www.excellconsumables.co.za

100 40

3

WC

George East

Inter Power & Infrastructure

086 110 6567

celeste@interpower.co.za www.ifurn.co.za

0 0

4

WC

Oranjezicht

Essay Gifts

021 461 3809

beatrice@essaygifts.co.za www.essaygifts.co.za

30 0

4

SmartProcurement Review

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Directory information provided by www.scnet.co.za City Town

Region

Company Name

Email Website

Telephone

% Black Ownership % Black Women

BEE Level

PR, Communications EC

Baysville

Khoni Konsulting

043 721 2462

lindap@khonikonsulting.co.za www.khonikonsulting.co.za

100 100

3

GP

Boksburg

Martiq 956

011 892 8232

suhana@thenichemarket.co.za www.thenichemarket.co.za

100 100

3

GP

Craighall Park

JT Communication Solutions

011 788 7632

dees@jtcomms.co.za www.jtcomms.co.za

100 50

4

GP

Garsfontein

Blissful Working Zone

012 993 4105

zintlem@bwz.co.za www.bwz.co.za

100 100

3

GP

Laudium

Thusani Media Productions

012 772 3440

info@thusanimedia.co.za www.thusanimedia.co.za

100 100

3

GP

Parktown

Moxy Communictions

011 486 9373

madelein@moxycomms.co.za www.moxycomms.co.za

100 100

3

WC

Mowbray

African Kaleidoscope Events

021 686 3244

alison@africankaleidoscope.co.za www.africankaleidoscope.co.za

100 100

2

WC

Rondebosch

Umtha Strategy Planning and Development Consultancy

021 685 9988

kuku@umthasp.co.za www.umthasp.co.za

100 100

1

Professional Services GP

Douglasdale

Andira Urban Services

082 555 9139

andile@andira.co www.andira.co

100 65

3

GP

Horison

NRG Designs

011 760 5945

rani@nrgdesigns.co.za www.nrgdesigns.co.ca

100 100

3

GP

North Riding

Skupiac Group

079 067 5269

skupiacgroup@gmail.com

100 20

4

FS

Vaalpark

Cyber Steel

084 056 7777

werner@cybersteel.co.za www.cybersteel.co.za

0 0

None

GP

Halfway House

Afro Visual Solutions

011 312 0467

vishnu@afrovisual.co.za www.afrovisual.co.za

100 49

3

GP

Midrand

SCNet PPE

011 889 0009

mfarrell@scnet.co.za

50 33.30

3

GP

Sunward Park

Woman for Nutrition

076 635 9386

nyamekopepu@gmail.com

100 50

3

LIM

Lephalale

Top Carpets and Floors

014 763 1673

noel@projectnotza.co.za www.topcarpets.co.za

100 0

3

NW

Rustenburg

Bojanala Office Nationalional

014 597 0918

rtbadmin@officeNationalional.co.za www.bojanalaofficeNationalional.co.za

26 13

2

WC

Ottery

Parksafe Protective and Safetyware

021 762 4880

Rholda@parksafe.co.za www.parksafe.co.za

100 100

1

WC

Rome Glen

KS Carstens

021 851 7854

info@yabulela.co.za www.yabulela.co.za

0 0

4

Retail

Safety & Security National

Arcadia

Sibongile Security Services

012 343 1164

annah@sibongilesecurity.co.za www.sibongilesecurity.co.za

100 100

1

National

Boksburg

Leseka Technologies

011 914 5247

lesego@leseka.co.za www.leseka.co.za

100 50

3

National

Ridgeworth

Firetech Projects Cape Town

021 919 5915

casper@cpt.firetech.co.za www.firetech.co.za

0 0

3

National

Springfield Park

Fire Check

031 579 1340

sharon@firecheck.co.za www.firecheck.co.za

100 50

1

FS

Bedelia

De La Donna

071 763 5259

deladonnapty@gmail.com

100 0

None

FS

Langenhovenpark

Protecht

051 446 1009

emile@protecht.co.za www.protecht.co.za

100 50

3

GP

Booysens

Ebandleni Supplies

011 680 6297

ebandleni@telkomsa.co.za www.ebandlenisupplies.co.za

100 100

3

GP

De Wetshof

Lets Share Trading 54

011 616 0987

mellanie@letssharetrading.co.za www.letssharetrading.co.za

100 100

3

www.smartprocurement.co.za

119

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BUSINESS DIRECTORY

City Town

Region

Company Name

Email Website

Telephone

% Black Ownership % Black Women

BEE Level

GP

Garsfontein

Safework Consultants

079 873 7546

info@safework.co.za www.safework.co.za

0 0

4

GP

Industria North

Umlilo Protection Management

011 477 7707

charlotte@umlilo.biz

100 50

3

GP

Oakdene

Sjr Security Cleaning Services And Transportation

011 343 5244

juliasjr@webmail.co.za

100 100

3

GP

Sydenham

Easy Security Auto Gates And Guards

011 640 1641

info@easysecurity.co.za www.easysecurity.co.za

100 60

2

GP

Villiera

Bitz Technologies

012 333 3749

andre@bitz.co.za

0 0

3

GP

Witkoppen Ext

Multi Locking Vehicle Tracking Security Systems

011 467 1590

admin@multi locking.co.za www.multi locking.co.za

0 0

4

WC

Blackheath

Globescope Security

021 905 8601

glynn@globescope.co.za www.globescope.co.za

100 100

3

Sales & Marketing GP

Carlswald

3@1 Carlswald

011 318 9986

carlswald@3at1.co.za www.3at1.co.za

100 100

None

GP

Johannesburg

Kopano Ke Maatla Communications

011 838 5661

ronny@jrconsulting.co.za

100 0

3

GP

Kelvin

Ntinga Promotions

011 444 0622

zanele@ntingapromotions.co.za www.ntingapromotions.co.za

100 100

3

GP

Midrand

Dot Office Supplies

011 347 1000

dineshm@dotoffice.co.za www.dotofficeNationalional.co.za

100 0

3

GP

Rabie Ridge

Classique Promotions

011 310 1336

mokete@classiquepromotions.co.za www.classiquepromotions.co.za

100 25

3

KZN

Dundee

Glendee Fertilizer & Lime

034 212 3425

selwynmuller@telkomsa.net

15 5

8

WC

Strand

Helderberg Trailer Sales

021 853 5009

johan@helderbergtrailer.co.za www.helderbergtrailer.co.za

0 0

4

GP

Lenasia

Bass Mechanics

011 852 8338

sushil@bassmechanics.co.za www.bassmechanics.co.za

100 0

3

GP

Wadeville

Mines & Industrial Inspection Services

011 902 1623

tnel@absamail.co.za www.mjnel.co.za

0 0

4

Technical

Textiles, Clothing GP

Johannesburg

HI Tech Embroidery

011 334 0807

hitech@iburst.co.za

100 0

3

GP

Montana

Bontle Ba Ma Africa Clothing & Corporate Gifts

012 548 3372

angela@bontlebamaafrica.co.za www.bontlebamaafrica.co.za

100 100

3

GP

New Doornfontein

Batsumi Office Supply And Projects

011 402 2080

batsumi@webmail.co.za

100 100

3

GP

Spruitview

Dikjoy Trading Enterprises

082 925 1682

keoagile@mweb.co.za www.dikjoytrading.com

100 100

3

WC

Salt River

Sallvit Trading 84

021 447 8382

shabier@atlanticlaundry.co.za www.atlanticlaundry.co.za

100 0

3

Tools & Equipment GP

Spartan Ext 16

Tool Rep Guys

011 392 5161

Nationalhan@toolrepguys.co.za www.toolrepguys.co.za

100 100

1

GP

Weltervreden

LCE Trading Enterprise

083 487 6150

lorrainej939@gmail.com

100 100

3

Travel, Tourism National

Malvern

City of Choice Travel and Tours

031 464 0920

guru@coctravel.co.za www.cityofchoice.travel

100 80

1

GP

Milpark

Harvey World Kimzan Travel

011 726 2180

amanda.britton@harveyworld.co.za www.harveyworld.co.za

100 100

3

GP

Pretoria

Ubuhle Be Narha Tours

012 326 9196

maphuti@ubuhletours.com www.ubuhletours.com

100 50

3

GP

Sandton

Haniel Travel Solutions

011 783 9202

melany@hanieltravel.co.za www.hanieltravel.co.za

100 100

3

SmartProcurement Review

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Sp review 2013