Eskom Procurement Book 2015

Chapter 3, The Planning, Organising, Leading and Control (POLC) of Procurement, discusses the four important aspects of procurement featured in the title. These functions are strategically important for any organisation as they form the foundation of an effective procurement function which, in turn, affects the success or failure of a company. The chapter also explains key concepts related to these four functions within the context of procurement. The second section includes two chapters that focus on how procurement and supply groups begin to elevate the contribution they make at a corporate level. Chapter 4, Procurement as a Support and Strategic Function within Companies, focuses on the contribution that procurement can make to a firm’s competitive position and how this contribution should be linked to a firm’s goals and objectives. The chapter also addresses the evolution of procurement strategies, including strategies that can be adopted to help ensure the achievement of corporate objectives and strategies. Chapter 5, Supplier Relationship Management and Development and Supply Base Localisation, shows how certain areas contribute to the success of an organisation. Several critical supplier-oriented issues are presented, including supplier evaluation and selection, Supplier Relationship Management (SRM), supplier development, supply-base localisation, the Black Business Supplier Development Programme (BBSDP) and dispute resolution. The final section in the book presents a set of essential tools and techniques that should be part of the toolkit of every procurement and supply professional. Chapter 6, Total Cost of Ownership, explores the concept of total cost of ownership, which is a philosophy for developing an understanding of all relevant supply chain related costs tied to a transaction or process. Total cost modelling, a key part of this chapter, requires a determination of all the costs related to the procurement of a given product or service to arrive an accurate accounting of true costs. Chapter 7, Negotiation, places this topic within the context of procurement and describes it as a process by which parties attempt to resolve a conflict or reach an agreement. The chapter is a practical guide that explains how to prepare for a negotiation by itemising all potential issues that may be discussed in the negotiation. The book concludes with Chapter 8, PurchasingAnalysis Tools and Techniques. This chapter presents three techniques that procurement professionals can apply across value analysis, process improvement tools and techniques, and project management. These chapters are not intended to be a comprehensive presentation of a particular topic. Entire books are available that address many of the subjects presented here. The challenge is to organise a large body of information in a way that works for, rather than against, the reader by presenting the more important aspects of each topic. It is about seeing how the different elements that comprise procurement and supply management come together to help create competitive advantage at the corporate level. Robert Trent Ph.D.

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