Eskom Procurement Book 2015

FOREWORD The Eskom Power Series is a comprehensive series of technical reference books used primarily by power utilities around the world. Based on the success of this series and the Institute of People Management’s acknowledgement that there is a global trend towards professionalism, the Professional Development Series was conceived. This series is aimed at developing the various professions within South Africa so that large state owned enterprises and the private sector can grow and thus facilitate job creation in the country. Unlike the Power Series, this new series will have a much broader readership including executives, professionals, technical staff, non-technical staff, managers and academics residing in the private sector, government State Owned Companies (SOCs) and academic institutions. There was a fair amount of debate as to which should be the first book within the series. The question posed was which area could add the most benefit to businesses and the general consensus was that a book on procurement would add significant value. Most practical books currently available focus on supply chain management with little insight into the procurement challenges faced by organisations. Boston Consulting Group (BCG), in partnership with Wharton University in USA, performed a roundtable with about 30 European Chief Procurement Officers (CPOs). This survey discussed the most challenging topics facing procurement. People training and development was identified as the key challenge for procurement. Based on this study and work done within the Eskom procurement department, this book will be a valuable resource for the training and development of procurement professionals and other staff. Being Volume 1 of the Professional Development Series, the procurement book will provide guidance to leaders, managers, professionals, staff, academics and students. It does not represent present practice within Eskom or any other organisation but rather aims to develop the international best practice for procurement that companies should adopt. Contributors have been sourced locally and internationally to give the book a good balance between international best practice and local challenges. They are academic thought leaders in procurement with extensive experience. The chapters have been written in a practical yet academically rigorous way. Companies should move away from transactions to lifelong ongoing Supplier Relationship Management (SRM) philosophies. This concept is introduced in Chapter 5 where it is confirmed that suppliers can contribute to the competitive advantage of an organisation. This creates a win-win situation for the organisation and the supplier. Nobel Prize winner Nelson Mandela stated: “If you want to make peace with your enemy, you have to work with your enemy. Then he becomes your partner.” He used this philosophy to work with the former government to develop South Africa’s first democracy. Companies can learn from his approach by creating trust relationships with suppliers. Employees within companies can use it to develop trust relationships between the various departments, thus forming the basis for Employee Relationship Management (ERM), which can significantly improve delivery on procurement projects. During a mentorship programme presented in the project procurement department in Eskom it was apparent that

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