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South Africa’s Reform Process Crucial To Improving Supply Chain Performance

The impact of the Covid-19 pandemic, corruption and breach of ethics, rising unemployment, power interruptions and the conflict in Ukraine have created an extremely volatile and uncertain environment around the world, meaning that resilience in supply chains has become more important than ever.

According to Malcolm Harrison, CEO of the Chartered Institute of Procurement & Supply (CIPS), the global professional body for procurement and supply professionals, it has become critical for supply chains to be balanced and aligned to deliver agility and innovation, to conserve the planet, mitigate risk and benefit end customers.

In early September, Harrison toured Namibia, Botswana and South Africa, speaking at a number of business breakfasts, roundtable discussions and the region’s CIPS graduation ceremony in Johannesburg. Attendees included government bodies, private sector businesses such as Auditor-General South Africa, SAPPI, ABSA, FNB, Standard Bank, Department of Justice and Constitutional Development, Transnet, AfriSam, NTP Radioisotopes, Telkom, BP, Rand Water, Trans-Caledon Tunnel Authority (TCTA), Saint Gobain and SARS.

The gala graduation ceremony was held at the Hilton Hotel in Sandton on 9 September and attended by over 230 guests and dignitaries, including graduating MCIPS members from Gaborone City Council, Namibia Breweries Limited, Commission for Conciliation  Mediation and Arbitration (CCMA), Transnet, Standard Bank Lesotho, Public Procurement Regulatory Authority: Botswana, Eskom, Shell, Northern Cape Department of Education, Heineken South Africa, Eswatini Water Services Corporation, Ministry Of Tourism, Liberty, EThekwini Municipality, Gauteng Provincial Treasury, The Foschini Group and Rand Water etc, as well as family and friends of the graduates.  

CIPS, has over 3,000 full MCIPS members in South Africa as fully trained professionals, and provides universities, study centres and students the opportunity to access teaching and learning of a world-class professional qualification accredited by the South African Qualification Authority (SAQA). This support for the procurement and supply chain profession not only contributes to best practice in ethics and sustainability but also contributes towards an ethical and sustainable society, improved economy and rewarding careers for individual citizens.

Harrison says the considerable challenges occurring in Southern Africa have not escaped South Africa, which was already in a precarious economic position even prior to Covid-19 arriving on its shores, despite the wealth of resources, talent and possibilities the country offers.

In 2019, the country’s economy grew by only 0.1%, partially caused by the resurgence of Eskom’s load-shedding, and while there has been a slight recovery, GDP growth is still only expected to be 1.7% over the medium term.

Coupled with the global impact of volatile trade relationships around the world hampering the smooth running of supply chains, the situation is daunting, but procurement and supply professionals are rising to the challenge, Harrison says.

“Procurement professionals have always managed risk and disruption, and the recent challenges have stretched this profession even further, but trained professionals are adept at finding solutions and building resilience. Our professionals understand true value across the supply chain, which is not just about cost efficiencies. The most expensive item you will ever buy will be the one that doesn’t turn up and our professionals understand that other issues, such as ensuring supply, come into play when managing disrupted supply chains.”

After years of corruption and state capture, the South African government is attempting to reform, addressing the professionalisation of public service first and raising skills levels in the workforce which CIPS is providing support on.

The reforms will result in a more ‘business-friendly’ environment, create a more transparent environment for suppliers to have more success in bids and tenders and reduce the level of disruption and lack of clarity as much as possible.

While Harrison notes the Public Service Act Amendment Bill and the Public Service Commission Bill are key to giving effect to the government’s efforts to institutionalise professionalisation of the public service these critically important interventions are yet to be concluded and signed into law by President Cyril Ramaphosa.

On another note, Harrison believes digitisation of government systems will also go a long way in driving procurement reforms, creating effective communication platforms that can be utilised by the state to limit corruption.

“Digital transformation will increase public value and trust, lead to greater transparency, improve citizen participation, stimulate proactive service delivery and enable economic development and growth,” he says.

Harrison tackled many issues during his visit, also mentioning sustainability.

“The reality is the world is running short of vital resources at a fast rate.  Wildfires droughts and floods are a regular occurrence, and we can expect to live with pandemics for the foreseeable future. Now is the time for procurement teams to get a handle on the risks to their supply chains,” Harrison says.

The Intergovernmental Panel on Climate Change report in 2021 declaration of “code red for humanity” has made it a business imperative to increase the focus on actions to establish more sustainable supply chains.

“In many organisations, 90% of the impact on the climate is in the supply chains, not from within the walls of an organisation’s activities. No organisation will address climate change or truly have a sustainable business model unless they focus on addressing these issues in their supply chains,” Harrison says. 

For procurement professionals to not only negotiate but overcome the many challenges disrupting supply chains, both in South Africa and globally, Harrison recommends that they:

  • Embrace technology and seek out new opportunities to find better ways of working and drive greater transparency for risk and sustainability;
  • Understand the available data and become a go-to person for stakeholders to gain valuable insights and information;
  • Embed themselves within the business and align with stakeholders’ goals and language. 
  • Add true value to their organisation not just in terms of cost efficiencies, but the good they can do in society which includes the contribution to tackle climate change
  • Seek out opportunities to embed sustainability and local value within sourcing projects.

“Procurement professionals are in a very privileged position to make significant changes for good, and should use their knowledge, skills and influence over supply chains to make a difference now and for future generations,” Harrison concludes.