2. SCM - Demand Management Eliminating Wasteful Exp
Presented by:Lucas Raphela
Date: 08 October 2019

3. Objective of SCM Managing the institution
Benefits for all citizens from the services rendered
Enhanced accountability
Greater transparency, and
Value for money

4. Different Levels of Planning
TOP MANAGEMENT
VISION, MISSION AND LONG TERM OBJECTIVES
SUPPLY CHAIN MANAGEMENT
INTEGRATED OBJECTIVES
COST CENTRE MANAGEMENT/PROGRAM MANAGEMENT
OPERATIONAL OBJECTIVES
LONG –TERM OR STRATEGIC PLANNING
MEDIUM-TERM OR INTEGRATED FUNCTIONAL PLANNING
SHORT TERM OR TACTICAL PLANNING

5. Supply Chain Management Pillars
Elements of SCM Model
Supply Chain Management Pillars
Record keeping
Distribution
Inventory
Transport
Needs analysis
Database
IDP
Disposal Committee
Record keeping
Transferring
Adjudication
Evaluation
Invitation
Evaluation of SCMU
Achieving objectives
Acquisition
Management
Logistics
Management
Demand Management
Performance Management
Disposal Management
Specifications/TOR
Risk Management
Risk Management
Risk Management
Risk Management

6. Role Players in the Demand Process
Accounting Officer / Authority
Chief Financial Officer
Cost centre managers
End-users
Information Technology (IT) Component
Suppliers
SCM practitioners
Bid Specification Committee
Bid Evaluation Committee
Bid Adjudication Committee

7. Bid Committees Specification Committee. Drafting TOR/RFP
Specifications must be SMART
Evaluation Committee
Evaluated in terms of the bid criteria
Prepare a summary evaluation report on its findings
Adjudication Committee
Final award, recommend to AO

8. Considerations for SCM Plan
Decision processes for make vs. buy
Make or buy calculations?
Is the component / assembly strategy important / core business?
Have we design capability?
Have we manufacturing capability?
Are we competitive?
* May consider buy-in design capability
* May consider buy-in manufacturing capability
* May consider total cost of acquisition. Must accurately establish in-house costs
Yes No
Make
Make vs. Buy

9. Demand Management
A supply chain management policy must provide for an effective system of demand management in order to ensure that the resources required to support the strategic and operational commitments of the municipality or municipal entity are delivered at the correct time, at the right price and at the right location, and that the quantity and quality satisfy the needs of the municipality or municipal entity.

10. Factorsensuri for money
Factors ensuring value for money
What will the benefits be if the need is satisfied?
What positive results will be forthcoming with regards to service delivery?
What was the position (what was used) prior to the need being identified?
Why is what was used no longer feasible?

11. Factors ensuring value for money
PURCHASE COST
Purchase price
Cost of purchasing eg. Advertisement, documents etc.
OPERATIONAL COST
Running cost eg. Licencing, consumables etc.
Repairs and maintenance
DISPOSAL COST
Cost of disposal eg. Advertisement, auctionering etc.
Revenue from disposal eg. Selling price, trade in etc.

12. Expenditure and Price Analysis
The expenditure can be gathered in terms of the following expenditure patterns:
per division
per department/institution within a province/district/region
per site
per supplier
per item/commodity, and
per market.

13. Understand Expenditure Analysis
In terms of the expenditure analysis the focus will be on:
What the municipality buys
How the municipality buys
Who the municipality buys from
When is the peak and low of needs relative to expenditure?

14. Commodity Analysis Elements may include: Price Inventory costs
Transportation costs
Availability of spare parts
Period in the market
After sales support
Maintenance costs
Supply costs
Other relevant costs

15. Bid Specification Committee should ensure that:
Procurement obligations are adequately analysed, and identified
The potential risks that may be associated with the requirement or need
Possible transversal or other ad hoc agreements targeting the same requirements or needs has been identified and taken into account
The requirement or need is aligned to the department’s procurement activities, budget and strategic plans

16. Drafting of Specifications
Must allow for:
Fairness
Transparency
Competitiveness
Equity
Cost-effectiveness

17. Thank you