Eskom Procurement Book 2015

SUPPLIER RELATIONSHIP MANAGEMENT

taxes associated with importing goods from abroad. Facilitation fees as well as other frustrating obligations associated with international procurement are also eliminated, thereby streamlining the procurement process. Local suppliers are also in close proximity. This makes it easier for the buyer organisation to execute site inspections, supplier development programmes and other contract management interventions. Close proximity reduces the length of supply chains, which reduces risks associated with the uncertainty and unpredictability of delivery schedules. Proximity also reduces the amount of fossil fuel used and consequently carbon-dioxide emissions as well as less packaging during transportation of goods, which results in significant cost savings for both the buying and supplying organisations. Finally, the use of local suppliers reduces the number of middlemen/brokers used in the process. This reduces supply costs and the risks associated with the use of middlemen in the procurement process [14]. 5.8 CONCLUDING REMARKS The supply chain topics of supplier relationship management, supplier development, supplier base localisation, the BBSDP and buyer-supplier conflict management were discussed in this chapter. These discussions focused on the theory underpinning the concept, with the intention of giving the reader a solid overview. In addition, current best practice in the examined topics received emphasis. This was meant to give the reader some practical suggestions on how programmes linked to these topics could be initiated and implemented. In all cases, evidence was given on the benefits and drawbacks of each concept. Benefits were mentioned to provide motivation for the adoption of these programmes; whereas drawbacks were mentioned to enable the reader to take steps to avoid or minimise associated pitfalls when these programmes are implemented in organisations. Information provided on each topic also enables those involved in these programmes to weigh up the positive aspects against the potential negatives in each case. This will allow them to make decisions in advance for the benefit of the organisation. The discussions throughout the chapter emphasised that these topics are critical for the prosperity and long-term success of any organisation. The challenge remains for supply chain practitioners to ensure that these programmes are not neglected and that their conception and implementation is efficient and effective.

5.9 REFERENCES [1]

Gartner Consulting, SRM, Enterprises drive competitive advantage through SRM, White paper prepared for PeopleSoft, San Jose, 16 April 2001.

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