Eskom Procurement Book 2015

PRINCIPLES OF SUPPLY CHAIN AND PROCUREMENT MANAGEMENT

payments and banking, business transaction processing, and on-line information services. An information infrastructure also fosters electronic access to external environment data on market opportunities, external firms, customers, market research, global finance and economics. In addition, an information infrastructure supports the exchange of operational data relating to design, marketing, finance, manufacturing, distribution and legal issues. Furthermore, an information infrastructure supports the collaboration of supply chain partners in areas such as the timeous sharing of demand information, inventory statuses, daily capacity usage requirements, evolving marketing plans, product and process design changes and logistics requirements. An information infrastructure allows business processes and systems to be integrated, making collaboration between supply chain partners easier. The integration of business processes is the most vital aspect and the pivot on which the success of the whole supply chain operation rests. It requires real- time information sharing and planning among the partners across the supply chain. Business processes must therefore be established both intra- and inter- organisationally to support the supply chain’s strategic objectives. These processes, coupled with the information infrastructure, support the efficient flow of material along the supply chain. Great emphasis has been placed on understanding business processes within organisations, but it is also essential to understand what processes must be built inter-organisationally to leverage and enhance partners’ capabilities. These inter-organisational processes must be designed to take advantage of the information that drives daily supply chain decisions. An information infrastructure and access to the Internet drive software development and underpin process support, electronic data interchange, decision support, database support, etc. Software specialists have designed and built Decision Support System (DSS) environments that optimise supply chains [15]. They therefore have a substantial impact on operating behaviour and, consequently, on overall supply chain performance. How much they enhance this performance depends on the accuracy of the data that is put into the system and the modelling approaches employed. Over the past two decades, strategic alliances and relationship management have become increasingly important ways of improving a firm’s competitiveness within the supply chain environment. For instance, forming strategic alliances with suppliers and customers allows manufacturers to focus on the core activities of providing quality products and services [16]. Besides, closer buyer-supplier relationships offer numerous technical, financial and strategic advantages [17]. 1.3.6 DEVELOP STRATEGIC ALLIANCES AND MANAGE RELATIONSHIPS 1.3.4 INTEGRATE BUSINESS PROCESSES 1.3.5 UNITE DECISION SUPPORT SYSTEMS

6 CHAPTER 1