Eskom Procurement Book 2015

SUPPLIER RELATIONSHIP MANAGEMENT

• Regulatory: Available legislation may define what exactly is meant by a local supplier. • Geographic: A geographic region within the country may be used to define which organisations qualify as local suppliers. • Ownership: Is the organisation targeting suppliers who are owned by foreign entities, locals, or by both foreign and local individuals and entities? • Size of enterprise: Is the organisation targeting large, well-established suppliers or small to medium enterprises? • Vulnerable groups. Is the organisation targeting suppliers operated by under- represented groups or previously disadvantaged groups? The above suggests that it is not enough for a supplier to be operating in a country for it to be selected as a local supplier by the buying organisation. The prospective supplier also has to be considered within the parameters of the specified criteria. For example, the organisation may adopt the ‘regulatory’ definition or the ‘size of the enterprise’ definition as part of its strategy in selecting the local suppliers to work with. A local procurement policy is developed so that it demonstrates the organisation’s dedication to local procurement and helps to entrench the practice throughout the organisation. A policy enables the organisation to put together strategies, systems, plans and programmes to address the gaps between local supplier capability and the organisation’s procurement standards. Since procuring from local suppliers may require training support, the policy should also outline the organisation’s proposal for strategies for optimising opportunities for SMMEs. When developing a local procurement policy, the information gathered in establishing the business drivers, applying the self-assessment process and appropriately defining the term ‘local’ should be taken into consideration. The template illustrated in Table 5.4 demonstrates the important aspects to be included in the local procurement policy.

5.7.1.4 Develop a Local Procurement Policy

Table 5.4: Template for developing a local procurement policy [24].

Section

Description

Sample language

The purpose The purpose of the document and key

• The purpose of this document is to set out our global local content policy. This policy is effective from 1 January 20xx and will be subject to detailed review in January 20xx.

information relating to policy implementation, e.g., the geographical focus and the date of launch.

119 CHAPTER 5