Tpt's supplier development (sd) initiative outline

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Heading heading heading Date

TPT CE’s Procurement Imbizo

KZN Region

Supplier Development

2nd November 2015

Contents

SD : Proposal vs Final plan

SD : Background and Objectives

Tender gateways : SD

2

SD : Returnables

SD : Performance bond

BBBEE : Scorecard and Improvement Plan

Supplier Development (SD)

3

• Supplier development refers to the improvement in the socio-

economic environment by creating competitive local suppliers via

Competitive Supplier Development and other initiatives. This results

in a local supply base that can eventually be competitive to market

its goods on the international market leading to increased exports

• Transnet’s SD strategy aims to holistically satisfy all of Government’s

legislation and requirements in respect of identifying and undertaking

opportunities through specific initiatives

Tier 1Systems –

Subsystems

Tier 2

Tier 3

Other

Components

Assemblies

Supplier BaseSphere of Control

Tran

snet

’s C

SDP

Fo

cus

Sup

plie

rs’

CSD

P F

ocu

s

Tran

snet

’s E

D a

nd

PP

Fo

cus

Sup

plie

rs’ F

ocu

s

Supplier Development Category

**ED – Enterprise Development / PP – Preferential Procurement

s

Transnet’s CSDP phase one Strategic Approach will be to focus on Tier 1 suppliers to assist them in engaging local Tier 2 suppliers

Transnet will use its sphere of control to contract with OEM’s as tier-1 suppliers

Sphere of Influence

CSDP Development:

Port Equipment

BBBEE Focus

Enterprise Development

4

The IC3 Matrix is used as the basic framework to plot the SD opportunities identified in its appropriate SD initiative bucket

Value leverage

Hig

hLo

w

HighLow

Focused

Small

Enterprise

Development

Programmatic1

Strategic

Ind

ust

rial

leve

rage

1 This could be further refined in the future through the DPE Programmatic Policy2Adapted from the DPE Supplier Classification Matrix focused on Increased Competitiveness, Capability and Capacity.

IC3 Supplier Development Classification Matrix2

Strategic Imp

ortan

ce to

Transn

et

Industrialisation

Capability and capacity building in SA and Supplier Development

SkillsDevelopment

Value Leverage refers to transactions where the financial scale of the transaction allows the buyer the opportunity to negotiate supplier development. Industrial Leverage refers to transactions whereby the nature of the procurement is such that the scale and the industrial complexity of the item being purchased allows for local supply chain development around a particular industry.Strategic Importance to Transnet refers to the extent to which the product to be procured has a impact on Transnet’s core business.

The IC3 supplier development

classification matrix assists in categorising opportunities according to their industrial leverage, value leverage and strategic importance to Transnet

Once opportunities are identified it will be possible to identify the tools that should be implemented to maximise the full supplier development potential from the opportunities

Not currently a focus area

5

Strategic objectives within each quadrant have been identified

Strategic ObjectiveIC3 quadrant Key Outcomes

Programmatic

• Assist Government achieve their industrialisation objectives through development of local supplier base to increase the cost efficiency of fleet procurement, support and maintenance

• Industrialisation• Technology transfer• Job creation/preservation • Skills Development• Downstream Supplier Development • Increased exports • Reduction in capital leakage

Strategic

• Influence multinational organisations toward initiatives that lead to the development of local downstream suppliers through large-scale SOE procurement in order to develop a competitive local supplier base focusing on Rolling stock, Port Equipment and Infrastructure

• Capability and capacity building in SA• Increased Technology transfer• Job creation/preservation• Skills development

Focused

• Assist local suppliers to improve their performance, enhance their existing production & skills capabilities by placing increased emphasis on benefiting previously disadvantaged individuals and rural development

• Provide a platform through which local suppliers can test their local innovations for export promotion

• Job Creation/preservation• Empowerment• Skills Development• Rural Development

Small Enterprise

Development

• Assist local suppliers to improve their skills by placing increased emphasis on benefiting previously disadvantaged individuals and rural development in line with the BBBEE strategy

• Empowerment• Rural Development• Skills Development• Job Creation/preservation

Transnet has to develop an internal policy to support product development and funding as the current innovation policy drafted by the DPE only allows for testing local products in the Transnet operating environment

Source: Team analysis

6

7

Small Enterprise

Development

Focused

Strategic

Programmatic

Strategic Focused Small ED

*Points allocated in further recognition of certain components of BBBEE in line with Transnet and government objectives

Programmatic

• Localisation

• Technology transfer/ sustainability

• Skills development

• Job creation / preservation

• Small business promotion

• Further recognition*

• Rural development and regional

integration

• Industrialisation

• Technology transfer/ sustainability


• Job creation/ preservation




integration

• localisation

• . Job creation/ preservation




integration



• Job preservation

Decreasing

emphasis on

evaluation

criteria

categories

Sphere of

influence

** Indicative and varies on business and Macro Economic need

Transnet value capture through supplier influence

Category Description

Capability and capacity building in SA

• Developing local capability and efficiency through : investment in plant, increasing the number

of products bought locally and qualifying suppliers to meet international standards.

• This criterion refers specifically to industrial capability building that focuses on value-add activities of the local industry through manufacturing or service-related functions.

Source: Team Analysis

Technology transfer/Sustainability

• Refers to process, know-how and Intellectual Property associated with developing a competitive local supplier post the current transaction

The recommended SD categories are based on the alignment with government objectives

8

Skills development

Job creation/ preservation

Small business promotion

• Refers to skills transfer with an emphasis on the accumulation of knowledge and experience • Generally targeted toward sector specific skills development with a focus on artisan and technical

skills

• Refers to an increase or preserve in the number of jobs due to the award of business from Transnet• Favouring more labour intensive methods for job creation• Jobs include both skilled and unskilled

• Encourage the growth and expansion of small businesses and start ups through procurement and support mechanisms

Contents




9

SD : Returnables



SD Plan: Capability and capacity building in SA Summary – Supplier (x/x)

Description Sub-initiative

Total Summary • 1.0 xxx• 2.0 xxx• 3.0 xxx

• Total Capability and capacity building in SA Value

1.0 xxxx • xxxx • Rx.xm

Key KPICategory

Capability andcapacity building in SA

A • R xxx.xm• R xxx.xm• R xx.xm

• R xxx.xm

Transnet Authorised Signatory Date

Name / Title

Supplier Authorised Signatory Date

Name / Title

2.0 xxxx • xxxx

3.0 xxxx • xxxx

• Rx.xm

• Rx.xm

Example

10

SD Plan: SD Capability and capacity building in SA Initiative (x/x)


Name / Title


Name / Title

Initiative Description: Target KPI

Detailed DescriptionR x.x* ZAR

Transnet Lead:TPT Lead:

x# of reports completed

Supplier Lead:Supplier Lead:

TBD at selection meeting

# of components selected

Start Date:

End Date:

Reporting Frequency:(one month prior to DPE report)

Monthly

11


Name / Title


Name / Title

412 9871110 498764321

20132012

8765 9321 10 11

2011

5 12 1 62 3 5 121110

Year

xxx

xxx

xxx

xxx

xxx

xxx

xxx

xxx

xxx

xxx

xxx

xxx

xxx

xxx

xxx

Activity

SD Plan: SD Capability and capacity building in SA Initiative (x/x)

12

SD evaluation

> Prequalifier

MinimumSD Requirement

SDTechnical and price

Award tender to successful supplier

Review for

1

13

Equipment SD Prequalification

Main offer

Equipmnet acquisition 10%1

Note: The tender indicates that the SD commitment is aimed at achieving at least 10% of the supplier’s tender value as part of the tender bidIf no tenderer passes the 10% gateway requirement, the SD prequalification percentage will be reduced to 5%

Contents




14

SD : Returnables



SD Returnables


15

Document reference

Description Purpose

1 Supplier Development Initiatives

Outlines the SD requirements for this particular tender

2 Supplier Development Guidelines

Informs tenderer about the various SD options available

3 Supplier Development Value Summary

Compulsory returnable to be completed and submitted, used to determine whether the tenderer has met the prequalification and threshold requirement

4 Supplier Development Bid Document

Compulsory returnable to be completed and submitted, used to negotiate and finalise the SD Plan

SD returnablesWhat is the consequence of non-submission ?

16

As SD is a prequalifier that must be passed in order to be considered for the nextgateway, failure to submit the SD returnables WILL result in the tenderer beingdisqualified.

SD ReturnablesCompletion guidelines based on lessons learnt

17

• All fields require completion. Instead of leaving a field blank, please enter anexplanation in SD Value summary notes column.

• Cross reference the SD Proposal document to the narrative SD value summary• Include only initiatives that are being implemented as a direct result of this contract,

other initiatives already implemented do not qualify as SD on this contract• Ensure that your total Rand values / percentages cast (sum up)• A total SD commitment as a percentage of the tendered value is required. Ensure that

your total commitment value is included and ensure that a breakdown of this value issupplied

• For Capability and capacity building in SA initiatives, note that the acquisition ofgoods or services necessary to operate the equipment post its supply, acquired froman existing SA based supplier, does not qualify as SD eg. Acquisition of tyres fromexisting SA supplier.

• Specify details in the SD Bid summary narrative eg Overseas training

Contents




18

SD : Returnables



SD Performance Bond


19

Please note that the RFP requires that a depreciating performance bond of 100% be issued to Transnet to cover the SD commitment value. The bond is required to be in place for the duration of the SD commitment

Contents




20

SD : Returnables



BBBEE Scorecard and Improvement Plan


21

The RFP includes the following documents i.r.o BBBEE:• BBBEE scorecard - BBBEE threshold• BBBEE Improvement Plan

• BBBEE Thresholds• Transnet will set minimum BBBEE threshold as a pre-qualification criteria where the normal

preference points system will not bring about the required transformation.• The threshold determined will take into account the industry and a thorough market analysis

conducted• Bidders not meeting the threshold will be DISQUALIFIED from further consideration

• BBBEE Improvement Plan

The BBBEE Improvement Plan is commitment by supplier to improve its BBBEE scorecard over the duration of the contract.

• Transnet will set the BBBEE Improvement Plan as a pre-qualification criterion where deemed appropriate

• This will be used in markets (sectors) that are lagging behind in terms of transformation• QSEs and EME’s which are Level 1 and 100% black owned maybe requested to simply maintain their

BBBEE status• Bidders may required to improve on one or another element of the BBBEE scorecard over the

duration of the contract.• Where BBBEE improvement plan is used as a prequalification, the plan will be requested upfront

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Date post:	12-Apr-2017
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Tpt's supplier development (sd) initiative outline

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