Eskom Procurement Book 2015

SUPPLIER RELATIONSHIP MANAGEMENT

Local procurement programme drivers Cost reduction/ increased quality

Benefits

Questions to consider

• Reliability of supply, reducing risks and lead times on delivery (particularly for remote locations). • Increased ease in design and production changes. • Improved capacity for quality oversight and for innovation and service improvements through easier interaction between internal service users and suppliers. • Promotes diversification of suppliers. • Proximity to suppliers reduces delivery time. • Proximity also means ease in collaboration. • A local procurement process helps build a diversified local economic base which can be self-sustaining.

• How can local procurement decrease cost and increase quality? • Is there evidence of growing cost, disruption or risk associated with a reliance on international suppliers?

Business continuity (logistics and efficiencies) Long-term economic diversification

• Are there areas in the supply chain that are losing efficiency? • Is economic diversification a stated goal of the development of the region of operation/ host countries? • Is economic diversification an element of the company’s closure guidance or plans?

5.7.1.3 Define the Type of Local Enterprises Being Targeted

In this phase, supply management practitioners identify the type of enterprises to be targeted by providing a clear definition of the word ‘local’. At first sight it may be defined in terms of geographical distance, but the issue is not quite that simple. For instance, a supplier who is located next door to the organisation is clearly local but there is still a need to specify the distance that should be considered when defining a local supplier. It is therefore important to properly define a local supplier so that the local procurement programme may be given an appropriate focus and to enable the organisation to manage the expectations of its various stakeholders. In defining ‘local’, the following criteria may be useful:

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