WESTERN CAPE IMFO CONFERENCE

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1 WESTERN CAPE IMFO CONFERENCE JUNE 2015 PRESENTED BY RODNEY MOOLMAN

2 The following diagram gives an overview of the legislative framework for procurement CONSTITUTION OF THE REPUBLIC OF SOUTH AFRICA (ACT NO. 108 OF 1996) - SECTION 217 STATES THAT GOVERNMENT PROCUREMENT SYSTEMS MUST BE FAIR, EQUITABLE, TRANSPARENT, COMPETITIVE AND COST EFFECTIVE NATIONAL LEGISLATION Goods and Services Procurement Public Finance Management Act (Act No. 1 of 1999) and its regulations National Treasury Instruction Notes Construction Procurement Construction Industry Development Board (CIDB) Act (Act No. 38 of 2000) and its regulations CIDB practice notes Land and Buildings Acquisitions Government Immovable Asset Management Act (GIAMA) (Act No. 19 of 2007) and its regulations Preferential Procurement Policy Framework Act (Act No. 5 of 2000) and its regulations Broad Based Black Economic Empowerment Act (Act No. 53 of 2004) and its regulations NATIONAL LEGISLATION/PRESCRIPTS Supply Chain Management Model Policy MUNICIPAL PRESCRIPTS Municipal Supply Chain Management Policy Western Cape Government 2012 SCM Improvement 2

3 SCM Governance (Policy and Control) SCM Capacitation and Training (Organisational Structure Capacity and Skill) Development of SOP s for the Municipal SCM System Compliance to policy, prescripts and alignment to legislative framework. Development of System of Delegations Contractor Development Initiatives Development of a framework for risk based assessments Assessment of SCM and AM Structures SCM bespoke training interventions Training and capacitation strategy and programme Internal and external client service (helpdesks, risk based municipal interventions.) Supplier Development Initiatives in collaboration with Municipal SCM and LED units PERFORMANCE CONFORMANCE SCM Technology (Reporting, Data Integrity) Reporting that is credible consistent and provides for integrity of data and ensure councils oversight role is effectively implemented Integration of financial and nonfinancial systems Development of Enterprise Content Management System Vendor Management: Database and Administration efficiencies Development of a Information Management System link to vendor performance/contract management Research, Development and Implementation of a fully fledged E-Procurement Compliance System Procurement Planning / Demand Planning Value for money (Cost vs. quality vs. opportunity vs level of service ) Strategic Procurement Procurement Strategy aligned to SDBIP and IDP Research market intelligence and technical expertise to redress and improve municipal procurement strategies and planning Economies of Scale Assessment of the MERO/PERO link to municipal Procurement Strategies Effective utilisation of resources MGRO (CONFORMANCE AND PERFORMANCE) 3 Western Cape Government 2012

4 SCM Strategy Focus on: SCM GOVERNANCE SCM CAPACITATION & TRAINING SCM REFORM SCM TECHNOLOGY STRATEGIC PROCUREMENT Western Cape Government 2012 SCM Improvement 4

5 Overall Observations Overall perception of where municipalities are at in terms of governance maturity (can be presented graphically not a must) to illustrate the impact of support provided thus far. 5

6 Current Challenges.

7 Current Municipal Challenges Capacity constraints Challenges to adopt procurement plans with Budget process Local content Deadlines on reporting Deviations and compliance thereto SOP s on SCM that will ensure that all employees fully adhere to SCM processes Asset Management Construction Procurement Contractor Development Strategic Sourcing and Industry Analysis Understanding of commodity trends Sourcing of suppliers from database

8 Differentiated support approach for municipalities Assistance and Guidance adopted by PT:LGSCM Management Level Information Level Control Level Focus on Demand and Procurement Planning Supplier performance and contract management Strategic Sourcing Asset Management Infrastructure Delivery Management System (IDMS) Integration of financial systems Focus on Maintain compliance through validations SCM and AM templates and checklists Training and Capacitation Demand and Procurement Planning Asset Management Strategic Sourcing Focus on SCM Policy and Delegations SOP s SCM templates and checklists Training and Capacitation 4 x 4 approach hybrid (PT team) Transversal Activities 1. Western Cape Supplier Database and Reg SCM & AM Information and Assessment Tool 3. LED & SCM District Engagements 4. USB-Ed Training Western Cape Government 2012 WCG-PPT Slide Gallery pptx 8

9 Basket of specific strategies per differentiated approach Fully Fledged Assessment For SCM and AM Extensive sampling and interrogation of SCM and AM Processess Validation and Verification For SCM and AM Verifying SCM and AM processes and procedures Desktop Assessment For SCM and AM Verifying and checking institutional requirements [Policy, Delegations, SOP's etc ] Full Population of Tool For SCM and AM Assist on site with the capturing of the Tool Best Practice Workshops Rolling out of specific best practices Developing of best practices On Site Training For SCM and AM Training and discussions with SCM Practitiioners and users Audit Readiness Assessment For SCM and AM Audit Readiness checklists before AG arrives Western Cape Government 2012

10 Approach.

11 Approach Assistance to Municipalities Strategic Sourcing and Industry trends and analysis WCSD and eprocurement LED Initiatives and Procurement strategies... Sustainable Procurement Promote Value for Money 5 Pillars of procurement Economic growth Western Cape Government 2012 WCG-PPT Slide Gallery pptx 11

12 Sustainable Difference PROCUREMENT SUPPLY CHAIN MANAGEMENT... STRATEGIC SOURCING Western Cape Government 2012 WCG-PPT Slide Gallery pptx 12

13 Value Contribution SUPPLY CHAIN EVOLUTION Procurement Commercial Purchasing Buying Procurement Capability Western Cape Government

14 Sustainable Difference One of the proven enablers for sustainability transforming business, is the calculated adaptation of SCM and strategic sourcing. SCM has proven to be pertinent when seeking: Improvements in service delivery Quality Competiveness Boost economic growth Facilitate economic development Western Cape Government 2012 WCG-PPT Slide Gallery pptx 14

15 Sustainable Difference Procurer has to be innovative and strategic when sourcing Leverage public sector organisational spend Total cost of ownership Strategically procuring and not buying Focus on medium to long term impact and not short term gain Small business and enterprise development Supplier development Economic development Real negotiation and not bargaining Western Cape Government 2012 WCG-PPT Slide Gallery pptx 15

16 Sustainable Difference AVOIDING THE SHORT TERM GAIN, LONG TERM PAIN SYNDROME Textile Industry is a perfect example of this syndrome Tomato processing in Ghana Human hair imported from India Strategic source products and be prepare to pay a bit more to build industries, create jobs and accomplish real economic development Long term advantages: Requirements optimisation (Managing demand and forecasting) Efficiency optimisation Social- Economic Development Optimisation Western Cape Government 2012 WCG-PPT Slide Gallery pptx 16

17 Contact Us Rodney Moolman Local Government Supply Chain Management Tel: Fax:

18 Thank you

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