WHAT IS SUPPLY CHAIN MANAGEMENT?
Supply Chain Management is defined as “the interconnected process of planning, buying, storing, utilizing and disposing” and involves optimising the economic return on the working capital invested in goods, stores and services. Key elements include proper planning during the budgeting phase (an activity which happens at the strategic planning stage), careful product/service selection, supplier selection and management, bidding, requisitioning and catalogue management.
The core function is to support all departments in their procurement needs and responsible for demand, acquisition and logistics management.
WHY SUPPLY CHAIN MANAGEMENT?
Supply Chain Management is not only crucial to enable effective service delivery within the municipality but also to assist the government’s preferential procurement policy objectives and to ensure achievement of the government’s broader objective, e.g. BEE targets.
Whereas traditional procurement practices considered only the buying of goods and services; the intention of Supply Chain Management is to add value at every stage of the procurement cycle from the demand, acquisition, use and eventual disposal of goods and services. The vulnerability to abuse as well as the monetary commitment associated with these processes requires that procurement of goods and services is properly managed.