SUPPLY CHAIN MANAGEMENT: CFO FORUM MEETING6 SEPTEMBER 2013

SUPPLY CHAIN MANAGEMENT1. Introduction

The 2nd quarterly SCM Forum for 2013 /14 Financial year was held on 16 August 2013 in Worcester. The institutions listed below were invited and made presentations on the identified topics.

2 National Treasury Updates from the Office of the Chief Procurement Officer.

Proper platform for SCM. Revision of the Legislative Framework for SCM. Address critical SCM areas Regulations 32, 36, MFMA section 33 etc. Training and capacity programmes.

Department of Trade and Industry Updates in terms of the codes of good practice and discussion on the relevant changes. Update on designated sectors for local content. Procedures for suppliers Completion of all documentation for suppliers Discussion regarding all the problem areas Proposal from the forum was that the DTI issue Local Content Certificates to suppliers

SUPPLY CHAIN MANAGEMENT

CIDB

Presentation on Revised CIDB Regulations. Changes made to stimulate the market and provide more business opportunities.

AUDITOR –GENERAL

Presentation by AG on SCM audit outcomes and focus for the current audit.

SABS

Presentation by SABS on local content verifications and initiatives Provincial Local Content Task Team was established to address all concerns with NT and DTI

Documents for calculation of Local Content

Standard bidding document (SBD / MBD 6.2)- Latest version published by the National Treasury- Should forms part of the bid document for all designated products- http://www.treasury.gov.za/divisions/sf/sc/default.aspx

SATS 1286: 2011 (SABS technical specification)• Standard approach for the calculation of local content- Can be downloaded from http://www.thedti.gov.za/industrial_development/ip.jsp

Guidance document for calculation of local content

- Can be downloaded from http://www.thedti.gov.za/industrial_development/ip.jsp

4

5

Designated sectorsIndustry/sector/sub-sector Minimum threshold for local content

Buses (bus body) 80%

Textile, clothing, leather and footwear 100%

Power pylons 100%

Canned / processed vegetables 80%

Rolling stock 65%

Pharmaceutical products

(oral solid dosage tender)

73%

Set-top boxes for TV digital migration 30%

Furniture Products

Office Furniture School Furniture Base and Mattress

85% 100% 90%

Solar Water Heater Components 70%

Electrical and telecom cables 90%

• CIDB Amendments – Annual Turnover

Amendments – Largest Contract (Track Record)

SCM audit report findings

10

35%

4%

8%

4%

12%

31%

19%

8%

8%

8%

8%

12%

15%

19%

Declarations of interest not submitted by providers

Competitive bids not invited and/ or deviations not justified

Procurements from suppliers without SARS clearance

Preference point system not applied

Persons in service of the auditee whose close family members had interest in provider failed to disclose it

Three written quotations not invited and/or deviations not justified

Awards made to providers who are in service of other state institutions

2012 2011

5

2

2

2

3

4

2

5

9

1

2

1

3

8

LOCAL CONTENT VERIFICATION PROCESS FLOW

• VERIFICATION AUDIT CONDUCTED IN TWO PARTS: VERIFICATION OF THE DOCUMENTATION TO ENSURE LOCAL

CONTENT IS AS PER THE DESIGNATED REQUIREMENT. FACTORY SHOP FLOOR TECHNICAL VERIFICATION OF THE

LOCAL CONTENT AS DESCRIBED IN THE DOCUMENTATION

VERIFIED ABOVE

• THE AUDIT WILL CONSIST OF AT LEAST TWO TIERS AT THE FINAL

ASSEMBLY LEVEL AND SUB-ASSEMBLY LEVEL DEPENDING ON THE

DISCUSSIONS WITH the dti OR RELEVANT STATE ORGANISATION.

CURRENT PROJECTS

• TRAINING OF PROCUREMENT OFFICERS – ECONOMIC DEVELOPMENT

GAUTENG & ESKOM SUPPLIER DEVELOPMENT & LOCALISATION TEAM.

• WORKSHOPS WITH TRANSNET FOR ROLLING STOCK SECTORS

• PLANNING WORKSHOPS FOR THE SOLAR WATER HEATER SECTOR VIA

ESKOM LOCAL CONTENT VERFICATION PROCESS SCOPING COMPLETED FOR BUS

BODIES – BRT JOHANNESBURG LOCAL CONTENT VERFICATION PROCESS SCOPING COMPLETED FOR

TEXTILE SECTORS VOLUNTARY LOCAL CONTENT VERIFICATION EXPLORED WITH PRIVATE

SECTOR ON NON-DESIGNATED PRODUCTS

THANK YOU