Transnet sd-plan-presentation 20120618

Transnet’s Approach to Supplier Development (SD)
DPE “Bootcamp” 19 June 2012

Content
1
Background and context to Supplier Development within Transnet
2
The Market Demand Strategy: an opportunity to drive SD
4
Successes and lessons learned
3
Transnet’s approach to SD
6
Transnet’s ambitions to drive SD into the future
5
Implementation of SD within Transnet

Background and context to the Supplier Development Strategy: key messages
* Source: Team Analysis , Transnet Supply Chain Policy 2012
Transnet Supply Chain Policy
Overview of the Supplier Development (SD) requirement for Transnet
•Transnet’s mandate is to lower the cost of doing business in South Africa whilst promoting shared growth and transformation
•The new Corporate Strategy, the Market Demand Strategy (MDS) provides an opportunity to accelerate South Africa’s economic transformation and industrialisation objectives through leveraging the planned capital investment of R300bn. Longer planning horizons provide better opportunity for sustainable economic development
•In late 2007, Transnet began its participation in and focus on the CSDP and produced its first Supplier Development Plan (SDP) February 2008.
•The SD Plan is aimed to include a view of how the capital investment plan and other planned procurements will be leveraged to achieve Government’s objectives of job creation, industrialization, skills development and transformation
•The purpose of this document is to present an overview of the SDP
•Transnet shall apply section 217 of the Constitution of the Republic of South Africa, (Act No 108 of 1996, as amended) by contracting for goods and services in accordance with a system which is fair, equitable, transparent, competitive and cost effective.
•Transnet shall reform all its procurement activities in order to align them in an integrated manner with national developmental goals, relevant legislation that enforces the goals and relevant governmental supply chain management approaches that are cost- effective.
•Transnet shall also provide for a preferential procurement system in line with the Constitution and ensure good governance via SCM
•The following Policy Statements are relevant to and have been considered in the development of the SD Strategy and Plan:
̶Policy statement 6.1: Transnet as a Public Entity
̶Policy statement 6.4: Transformation & Empowerment
̶Policy statement 6.5 and all sub-sections: Economic Growth & Development Initiatives
̶Policy statement 6.6: Localisation of Supply
̶Policy statement 6.7.2: Social Economy

PAGE
Source: Team Analysis
Corporate Strategy (MDS) drives various other strategies and frameworks inside Transnet to cascade and align with its objectives
Supply Chain
Policy (SCP)
Corporate Strategy (MDS)
Document reference
Key objectives (not exhaustive)
•Corporate Plan
•iSCM Strategy
•Increase volume and revenue growth
•Create greater capacity
•Increase operational efficiency
•Maintain financial strength
•Improve safety and health
•Develop Suppliers: growth, transformation
•Optimise value from sourcing activities
•Increase supply chain efficiency
•Proactively manage compliance risk
•Integrate SD strategy
•Develop supplier base
•Supplier Development Strategy
•Support NGP objectives through leading empowerment and transformation of the supplier base
•Leverage procurement to develop local suppliers to support localisation and industrialisation; creating jobs and reducing the unemployment rate
•Identify key areas to target for SD within the IC3 framework, together with their Strategies
•Provide implementation framework for SDP
•Transnet SDP
Supplier Development Plan (SDP)
SD Strategy
Integrated Supply Chain Management (iSCM) Strategy
•Supply Chain Policy
•Carry out procurement cost-effectively while meeting commercial, regulatory and socio- economic goals
•Ensure good governance via integrated Supply Chain Management
Key Transnet guidance framework’s / strategies / plans
3
Focus area

PAGE
Transnet’s Supplier Development journey began in 2008 and has evolved to service current opportunities within MDS and align with broader SA objectives over time
4
Initiation of CSDP within Transnet
Transnet applies SD in first transactions
SD begins to be rolled out to all transactions
Transnet launches Market Demand Strategy with significant SD opportunities
•Transnet was the first SOE to launch the DPE’s Competitive Supplier Development Programme (CSDP) as an initiative within the Transnet group
•The first SDP developed and submitted to DPE in 2008
•Transnet designs SD structure into business procurement operating model
•Plans in place to expand SD to all transactions
•R5,2bn committed to local content via CSDP contracts, including:
̶100 GE locomotives
̶Additional 43 loco’s
̶Long-term parts agreements for the locos
̶32 Mitsui/Venus 15E locos
̶STS and mobile harbour cranes
̶Draft gear components
•The experience gained in CSDP transactions enabled Transnet to refine policies, processes and procedures
•In 2011 the SD concept broadened beyond CSDP
•Pursuing a broader range of SD opportunities through the supply chain could lead to improved industrial capability building and economic transformation
•Transnet launches its R300bn Capital expansion programme over 7 years
•SD becomes a cornerstone of the overall programme
•The SD strategy and SDP is updated to ensure maximum realisation of SD over the course of MDS
•The revised SD Strategy and SDP is integrated into the new SCM Policy and Framework
NIPP
•Post tender process not offering much leverage
•Investment not necessarily industry- related (30% of contract)
•Penalties were negligible and often built into price
•DTI programme mandatory for all SOC’s imports over US$10 million
•Suppliers were clear of what was expected of them at outset
Pre 2008
2008
2010
2011
2012
Source: Team Analysis *New Growth Path ** National Development Plan *** Industrial Participation Action Plan

PAGE
•Transnet has a significant role to play in driving economic growth and transformation in South Africa. The historical under-investment in infrastructure and exclusion of disadvantaged individuals from the mainstream economy over the past 3 decades, has resulted in:
̶an un-transformed manufacturing base and
̶a decline in manufacturing capabilities and capacity
̶monopoly structures within the local economy
̶worsening of the gap between rich and poor as evidenced through the Gini coefficient ratio which rose from 0.66 in 2007 to 0.679 in 2009 to 0.7 in March 2012
•The New Growth Path (NGP1) has set job creation as a country priority and has identified infrastructure development as a means to achieve this. Transnet will be spending R300 billion on infrastructure programmes over the next 7 years, as well as R325 billion on Opex. This significant spend will create a massive opportunity to develop competitive local supplier industries through Supplier Development
•The Department of Public Enterprises (DPE) developed the Competitive Supplier Development Programme2 (CSDP) - a policy for its State Owned Companies (SOC) to harness such opportunities. Participants in the CSDP are required to develop and submit Supplier Development Plans (SDP’s), which set out how they will capture opportunities. Transnet signed up to the CSDP in 2007 and produced its first SDP in 2008.
Supplier Development will play an important role in Transnet into the future
5
1.The NGP was launched in Dec. 2010
2.CSDP was launched end 2007 Source: Team analysis

The Market Demand Strategy (MDS) provides an opportunity to accelerate national growth and transformation through Supplier Development
MDS will also provide an opportunity to accelerate economic growth and transformation
MDS is a R300bn CAPEX programme that will increase capabilities and capacity to meet market demand
•Transnet will leverage procurement spend to drive industrialisation and transformation of the local supplier base
•Become the main thermal coal supplier for India as well as key supplier to china
•Capture its rightful place as a leading manganese exporter globally by providing additional freight capacity and by lowering the cost of doing business
•Maintain its position as credible supplier of iron ore for both the domestic and export market
•Create a reputation of world-class operational efficiencies
•Become the port of call for global container lines
•Position itself as the leading logistics hub in the region
•Enable Transnet to continue its financial stability and strength
•Result in significant productivity and operational- efficiency improvements
•Stimulate economic growth
•Increase capacity to meet market demand
•Promote a modal shift from road to rail, reducing the cost of doing business and carbon emissions
•Influence SADC regional integration
•Substantially increase Transnet’s on-going MRO spend (~R328 bn)

Capex and Opex spend allows for the development of
manufacturing capability and can be linked to specific
MDS opportunities
MDS opportunity
Estimated spend over 7 years
Rbn Main areas of opportunity
40,871
47,318
56,190
47,927
37,219 38,716
31,096
2016 2017 2018
53.7
45.9
40.3
2015
37.4
2014
33.1
2013
31.4
2012
27.3
Machinery and equipment
Locomotives
Pipeline
Land, Buildings & Structures
Wagons
Port Facilities
Perway
Other Operating Costs
Personnel Costs
Electricity
Fuel
CAPEX
OPEX
• While MDS Capex spend is set to peak in 2016, Operating expenses will continue to rise as the operating tempo of the
company increases with increased volumes being moved
• Capex spend of R300m over 7 years whilst Opex spend will be R328 million
• Significant opportunity to extract SD through both Capex and Opex plans
Source: Team analysis

PAGE
The majority of the investments will be in General Freight and Freight Rail
Commodity split (Rbn)
Divisional split (Rbn)
Major programmes
GFB rail capacity growth to meet market demand volumes from 79,7mt to 170,2mt
Completion of the New Multi-Product Pipeline (NMPP)
Increase export coal to 97,5mt – including Waterberg
Increase export iron ore to 82,5mt
Increase export manganese to 16mt
Increase in fleet and improvement to the infrastructure
24
25
32
151
30
3
26
9
Containers (Ports)
Export Iron Ore
Export Coal
GFB
Bulk
Piped Products
Break Bulk
Other
4
11
33
47
4
201
Other
TPL
TPT
TNPA
TRE
TFR

PAGE
The revised SDP breaks down spend associated
with the MDS by division, asset and commodity
Land Buildings and Structures
Wagons
Locomotives
Perway
Machienary and Equipment
Port facilities
Pipeline
Other
Asset type split (Rbn) OD Business unit (Rbn)
Divisional split (Rbn)
31
33
3
9
24
25
32
143
77
72
11
66
9
1 16
48
Other
Bulk
Break Bulk
Piped Products
Containers (Ports)
Export Iron Ore
Export Coal
GFB
201
47
4
11
4
33
TRE
TFR TPT
TNPA
TPL
Other
Source: Consol 10 V15, Team Analysis

MDS will develop and transform Transnet by 2019
Contribute to job creation and skills development
•Increase Transnet employees: +25% (~14 700 jobs)
•Increase indirect jobs: +85% (~78 800 jobs)
•Qualification of 5 000 artisans and 1 000 train drivers (over 4 years)
•Training spend of R7.7bn over 7 years, especially first line management and supervisory skills
•Training students from the ODs in Transnet’s schools of ports, rail and pipelines
Promote a modal shift (road to rail)
•Rail market share growth: From ~25% to 35%
•6 200 track reduction p.a.
•28 Mt low cost C02 emissions (over 7 years)
Capacity & capability building* and transformation
•Localisation program for rail and port equipment, e.g., increase local content share of contract value to 40% by FY16/17 (CSDP); partnership with IDC, coordination with Eskom
•Improving Transnet BBBEE level from 5 to 3 (within 2 years), e.g., increase preferential procurement to 80% of spend by FY16/17
Reduce the cost of business
•Reduction of logistics costs: 4-7% (0.5% as a % of GDP) through rail initiatives alone
•Modal shift from road to rail (from ~25% to 35%)
•Operational efficiencies and reduced transport times (e.g., reduction of loading times)
•Economies of scale (e.g., attracting larger vessels through berth deepening)
•Coastal trans-shipment (trans-shipment hub at Port of Ngqura)
Influence SADC regional integration
•Increase maintenance, regional connectivity, especially through trans-shipment hub at Ngqura, growth of the Maputo corridor and construction of the Swaziland rail link
•Increase over-border rail volume (+14% within 7 years)
SD Focus
15,000 direct jobs
60% local content – electric locomotives
55% local content – diesel locomotives
70% local content – wagons
20% local content – port equipment**
* Previously referred to as localisation ** All target s to be validated by baseline survey Source: Transnet EXCO presentation of MDS January 2012

PAGE
Transnet’s SD strategic objectives support MDS whilst ensuring alignment with Government’s objectives of growth and transformation
12
Transnet’s MDS Objectives
Government’s Objectives
•Increase the employment intensity of the economy
•Facilitate diversification beyond our current reliance on traditional commodities and non-tradable services
•Increase the education level and skills capability to address shortfall in artisan and technical skills
•Promote an equitable socio-economic society through the integration of historically disadvantaged persons into the main stream economy
•Enable small businesses to compete successfully in the economy
•Balance spatial development of rural areas and poorer provinces
Source: Transnet Corporate Plan, NGP, B-BBEE, CSDP
•Volume and revenue growth
•Creating capacity
•Operational efficiency
•Financial strength
•SHEQ
•Development
The SD Strategy aims to support the key Govt. objectives through infrastructure development by:
•Leading the transformation of its supplier base
•Leveraging procurement to develop local suppliers, in order to grow localisation and industrialisation

PAGE
Transnet’s SD approach is to leverage the MDS infrastructure programme to foster economic growth and promote transformation
14
•Achieving SD objectives through leveraging high-value procurement by including:
̶Industrialisation
̶Localisation
̶Promoting technology transfer
̶Job creation and preservation
̶Developing industry- specific skills
̶Enterprise development
̶Rural integration
•Ensuring transactions to bring HDI’s* into the economic mainstream through the advancement of HDI ownership
•Address economic disparities and entrenched social inequalities through the use of:
̶FRC (current, future)**
̶Generic B-BBEE scorecard
•Ownership
•Management Control
•Employment equity
•Preferential procurement
•Enterprise development
•Socio economic development
•Skills development
SD objectives
Drive economic Transformation (Empowerment)
Facilitate economic Growth
Transformation
Growth
SD approach
SD objectives
Enterprise
Development
Focused
Strategic
Programmatic
* HDI = Historically Disadvantaged Individuals as per the B-BBEE Act 2003 ** FRC = Further Recognition Criteria Source: Team analysis

PAGE
Transnet’s approach to SD will centre around driving both
growth and transformation
15
Transformation Growth
Strategic
Focused
ED
Programmatic
Job creation/
preservation
Enterprise
Development
Focused
Strategic
Programmatic
Industrial-isation
Technology
transfer/
sustainability
Skills
development
Job creation/
preservation
Enterprise
development
Rural
integration
Localisation*
Technology
transfer/
sustainability
Skills
development
Job creation/
preservation
Enterprise
development
Rural
integration
Localisation
Skills
development
Job creation/
preservation
Enterprise
development
Rural
integration
• Ownership
• Management
control
• Employment
equity
• Preferential
procurement
• Enterprise
development
• Skills
development
• Socio-economic
development
Decreasing
emphasis on
evaluation
criteria
categories
Sphere of
influence
B-BBEE FRC
Rural
integration
Source: Team Analysis *capacity and capability building
• Ownership
• Management
control
• Employment
equity
• Preferential
procurement
• Enterprise
development

PAGE
Source: DPE Policy * These values serve as a GUIDELINE only
‘Programmatic’ Focus Areas:
•Creating sustainable new industries
•Development of new technology and innovation
•Active Industrial Policy through CSDP and Programmatic policies outlined by the DPE
•Investment in infrastructure and manufacturing industries
•Skills development amongst scarce resources enhancing the intensity and quality of jobs available in South Africa >R1bn value of transaction/s*
‘Strategic’ Focus Areas:
•Preference and development will be used to transform and grow local industry
•Skills development amongst scarce resources, increasing the quality of jobs
•Transfer of technology and innovation to local suppliers from foreign OEM’s >R70m and <R1bn value of transaction/s*
‘Enterprise Development’ Focus Areas:
•The focus will be on providing small enterprises with opportunities and preferential trading terms
•Empowering HDI’s to create their own business resulting in quality job creation < R35m value of transactions*
‘Focused’ Focus Areas:
•Preferential Procurement and B-BBEE used to develop local industry owned and managed by HDI’s
•Development of quality job creation reducing the lower income inequality and reducing poverty R35m to R70m value of transaction/s*
The IC3 framework classifies SD opportunities into four quadrants: each with its own focus, though transformation is all pervasive
Value leverage
High
Low
High
Low
Focused
Enterprise Development
Program- matic
Strategic
Industrial leverage
Not currently a focus area
16

PAGE
‘Programmatic’ Supplier Development will secure South African economic growth & build a competitive supplier base
‘Programmatic’ initiatives follow a longer than normal planning horizon and generally exceed the funding capacity of Transnet’s balance sheet. They are identified either in IPAP II & III or through the SOC as designated fleets. Collaboration between the SOC and Government is achieved through focused task teams whereby infrastructure development and industrialisation is achieved through joint support and in some cases public spending. Investment is focused in plant, technology and skills in both intermediate and advanced capabilities to develop competitive advantage
Opportunities for Transformation*
Key Opportunities for Growth
•Securing economic growth and building a competitive local supplier base, resulting in job creation
•Development of new manufacturing capability and enhancement of existing capabilities
•Development of globally competitive suppliers within the local industry, creating quality jobs
•Continuing to influence downstream development and transformation of local suppliers
•Promoting transformation of manufacturing supplier base through FRC & B-BBEE scorecard criteria
•Policy Statement 6.6 (Supply Chain Policy): “Transnet shall identify programmatic/strategic procurement and develop long-term procurement and local content plans. Tender requirements shall include local procurement and supplier development which will also address the transformation agenda and aim to achieve industrialization and localisation objectives”
Desired Outcomes
•Create sustainable new industries
•Ability to build new industry and increase competitiveness of existing industry through:
̶Investment in plant
̶IP transfer
̶Industry-specific skills development in support of industrial objectives
̶Setting targets for local content on specific components
•Ability to transform industry through the entire supply chain by means of:
̶Black equity with the emphasis on “active equity” - i.e. ensuring daily operational involvement by Black people
̶Promoting transformation through preferential procurement, Enterprise Development, skills development and management control
•Further transformation opportunities exist within the usual B-BBEE scorecard categories (e.g. employment equity etc.)
17
Source: Team analysis * Explored in more detail in the MS Word version of the SD Strategy
NOT EXHAUSTIVE

PAGE
Desired Outcomes
•Ability to develop new capability with appropriate government support
•Enhance existing capability by influencing OEMs to transfer skills and know-how on products and manufacturing process
•Develop manufacturing capability and skills transfer related to maintenance
‘Strategic’ Supplier Development will encourage growth through the development of a competitive local supply base, supported by OEM’s
‘Strategic’ initiatives follow a 3 to 5 year planning horizon, involving investment in at least plant, technology and/or skills in intermediate capabilities. This enforces the need for multinational corporations and original equipment manufacturers to develop a certain percentage of their products locally. Strategic initiatives can therefore be used to achieve capability & capacity building (localisation) objectives by increasing the competitiveness, capability and efficiency of local suppliers. Strategic initiatives can sometimes focus on advanced capabilities but will in most cases require government support to develop local capability
•Increasing the competiveness of South African supply base where comparative advantages can be achieved in the local supply chain by influencing foreign suppliers and OEMs to develop identified local suppliers resulting in job creation and retention
•Promoting transformation of manufacturing supplier base through FRC & B-BBEE scorecard criteria
•Policy Statement 6.6 (Supply Chain Policy): “Transnet shall identify programmatic/strategic procurement and develop long-term procurement and local content plans. Tender requirements shall include local procurement and supplier development which will also address the transformation agenda and aim to achieve industrialisation and localisation objectives”
•Include Black equity in tenders
•Promote transformation through the supply chain through preferential procurement and Enterprise development, skills development
•Further opportunities exist within the usual B- BBEE scorecard categories (e.g. employment equity etc.)
18
NOT EXHAUSTIVE

Desired Outcomes
‘Focused’ initiatives include all high value transactions with limited industrial leverage and medium to low strategic importance. These initiatives address short to medium term contracts that can be leveraged to encourage supplier development, with a focus on investment in technology or skills that enhance existing local capability. Emphasis will largely be placed on benefiting Historically Disadvantaged Individuals (HDI’s), especially through job creation. The overall result improves the socio-economic environment by creating competitive local suppliers and furthers objectives of empowerment, transformation and regional development
Transnet will undertake ‘Focused’ Supplier Development to enhance the capacity & capabilities of the local supply base
•Industry and firm-related skills development with an emphasis on women, disabled and youth
•Encourage enterprise development and use of local suppliers and local labour especially in construction related activities
•Discounts in addition to normal ED support practice
•Minority investment in Black-owned EME’s and QSE’s
•ED investment with lower dividend to financier
•Investment into 3rd party ED service providers
•Professional Services rendered at no cost and supporting ED
•Professional services rendered at a discount and supporting ED
•Time of employees productively deployed in assisting ED
•Providing opportunities for Black business
•Promoting skills development with a focus on scarce skills in related industry
•Supporting local innovation
•Promoting development of rural communities
•Policy Statement 6.5 (Supply Chain Policy): “As the main economic agent in the South African transport and logistics infrastructure, Transnet’s planned capital expenditure forms the bulk of Transnet’s procurement spend. As a result, Transnet shall ensure that the majority of its spend results in creation of long term and sustainable economic growth resulting in job opportunities”
•Specific skills and technology transfer to enhance capability of local industry to increase global competitiveness of firms
•Encouraging and supporting innovation by local firms
•Job creation
NOT EXHAUSTIVE

Opportunities for Transformation
Opportunities for Growth
Desired Outcomes
•Introduction of new suppliers into the complete Transnet SC
•Focus on Black women owned, Black youth owned, Black disabled owned etc
•Focus on local community development and participation
•Interest-free loan with no security requirements
•Standard loan to Black-owned EME or QSE
•Standard loan to other Beneficiary Entities
•Guarantees provided on behalf of beneficiary
•Lower interest rate
•Grant and related contributions
The underlying outcome of ‘Enterprise Development’ is the promotion of emergent Black businesses
‘Enterprise Development’ transactions are typically of low value and have no industrial leverage as it is characterised by low complexity goods and high competition. These initiatives concentrate on increasing the capability of small local suppliers and are targeted toward Historically Disadvantaged Individuals and communities, providing basic skills development and improving local employment and quality job creation. It includes a wide range of non-financial services that help entrepreneurs start new business and grow existing ones
•Skills development with an emphasis on women, disabled and youth
•Discounts in addition to normal business supporting ED practice
•Minority investment in Black-owned EME and QSE
•ED investment with lower dividend to financier
•Investment into 3rd party ED services provider
•Professional Services rendered at no cost and supporting ED
•Professional services rendered at a discount and supporting ED
•Time of employees productively deployed in assisting ED
•ED points for Transnet
•Involvement of local communities and Black businesses
•Job creation
•Policy Statement 6.4 (Supply Chain Policy): “In evaluating and awarding tenders for procurement of goods and services, Transnet shall award preference points in regard to the contribution that a supplier makes towards the achievement of B-BBEE objectives”
•Policy Statement 6.5.4 (Supply Chain Policy): “Transnet shall explore opportunities of procuring goods and services in rural areas with the aim of creating employment”
NOT EXHAUSTIVE

PAGE
Since the inception of the SD journey Transnet has had successful SD transactional impact…..
22
Successes
Venus / Mitsui
32 X Class 15E Locomotives
•The SD value as a percentage of the contract (R1,312m) is 40% including:
̶Skills development (1%), local assembly by UCW (12%) and purchasing from local suppliers (27%)
̶734 jobs were preserved and R79m realised to date, as a result of this build
GE 100 X Class 43 Diesel Locomotives
•The SD value as a percentage of the total contract (R2,300m) is 54% including:
̶Skills development at TRE & TFR (17%) over 4 years, local assembly (15%)
̶Purchasing of local content and services (17%) over a ten-year period and other commitments (5%)
̶R388m or 31% spent on SD as at Jan 2012
Source: FINCO dashboard March 2012 *contracts recently awarded or in the process of being awarded
GE*
43 X Class 43 Diesel Locomotives
•The SD value of the contract is R631m or 65% of the total contracted value
•The CSDP has been finalised and signed off by GCE*
•Implementation meeting scheduled for 5 April 2012
Cruzaco* Draft gear
•CSDP signed off by all stakeholders as of March 2012
•Contract valued at R128m with SD portion R15m or 5% (imported goods)
•Training and IP transfer is the key component of this CSDP agreement, including finding ways to improve efficiencies, reducing costs
RTA Alesa*
Pneumatic Ship Unloader
•Total contract value is R125m
•R16 of contract value is committed to SD over the life of the contract
•SD obligation amounts to 12% of contract value
Liebherr*
6 X Mobile Harbour Cranes
•Total project contract is worth R248m
•23% of this or R58m is committed to SD

Evaluation criteria have been designed for “designated commodities” to ensure that governance, development and transformation objectives have been met
Source: PPM
*Only applicable in designated sectors.
**Only if RFP document provided for PTN
Method 1 (Preferred Method)

Successes
SD Organisational successes to date
Processes integration
•SD has been incorporated in a high-value gateway review process
•SD is a formal participant in the Sourcing Centre Of Excellence (COE) since 2012
Management support
•A dedicated SD Executive Manager has been appointed within the Group Supply Chain function
•A dedicated senior B-BBEE manager, with responsibility for Enterprise Development, has been appointed to Group
Approvals
•The Supply Chain Policy which incorporates the SD Strategy and Plan has been approved by the Board
•SD is now fully integrated into Transnet’s Supply Chain Policy framework
Capacity & capability
•Group SD structure has been signed off
•The new Transnet Procurement Academy provides e-learning for staff wishing to develop related skills via a 12-18 month programme. Bursaries are available
•Procurement skills are being honed via the Chartered Institute of Purchasing and Supply (CIPS) programmes, with several employees already graduated. More graduates expected in 2012
Mind-set
•The SD COE has gained “traction” in 2012 with full commitment from its various members since inception in 2010
•BADC* fully supports SD across the organisation
…. Transnet has also had some success in terms of its internal procurement capability and skills development efforts, though this is on-going
Source: Team analysis *Board Acquisition and Disposal Council

PAGE
However, a number of valuable lessons have been learnt through Transnet’s SD implementation experience to date (1/3)
Lesson Theme
Lessons learnt
Capacitation of SD teams
•The implementation and monitoring of SD requires dedicated teams to ensure full value capture
Integrated planning and demand forecasting
•Earlier integration with business users is needed to fully understand the SD opportunities
•Business requires further training on SD initiatives that a transaction could offer (Skills development, Enterprise development ideas)
SD tender specifications
•A better SD response from suppliers comes from clearly articulating the SD requirements, based on market intelligence and a thorough understanding of Transnet’s regional development objectives, opportunities and requirements
High-value asset steering committees
•Conducting regular high-value Asset Steering Committee meetings with SD firmly placed onto the agenda, ensures integration of SD in major asset transactions
Syndication with approval committees
•Detailed syndication with all divisional Approval Committees has led to greater compliance and a higher number of transactions with SD integrated into the sourcing strategies
25
Stakeholder engagement
•Dissemination and embedding of policy and procedure must be adequately communicated to the entire business to create awareness and ensure compliance
•Adequate understanding of the various stakeholders’ mandates and environments is key to successful and meaningful engagement
Supplier readiness
•The capability and capacity of local industries needs to be taken into account , when thinking about Transnet’s procurement requirements
•A development plan - ensuring local companies are incubated and supported to further develop their ability to service Transnet's future requirements could be created

PAGE
Lesson Theme
Lessons learnt
SD Interpretation
•Suppliers each have a unique way of understanding SD and therefore of interpreting and responding to the SD requirements in Tenders
•Unclear calculation methodologies in certain current categories complicates SD evaluation e.g. how the value of IP or technology transfers is calculated
Confusion on methodology
•Generally Suppliers are still unsure as to how SD will be evaluated and what exactly is required from them in order to comply with bid requirements
•Suppliers are still confused around the definition of certain SD categories (even with explanations in tender documents)
•Multiple “tender returns” are required from suppliers.
Quality of submissions
•Low quality of bidder responses to SD is experienced, due to confusion and interpretation of SD (seen in documentation and other issues already mentioned), resulting in a cumbersome evaluation process
•Transnet must consequently ask for clarification on bid documents, further delaying the evaluation process
Confusion of policy
•Underlying SD policy is not well explained in regard to those suppliers who have current NIPP obligations, resulting in suppliers ‘being confused about the differences
•Suppliers often want a return to NIPP-only obligations
26

PAGE
27
Setting tangible goals
•Targets should be as detailed and clear as possible to prevent them from being open to interpretation
•Targets which are not clear at the onset often do not get delivered
Creating clear milestones for delivery
Monitoring for delivery
Driving compliance
Key lesson learnt around monitoring of SD commitments
Lessons learnt
Meaningful reporting
•Reporting is needed to provide a status of all elements of SD (not just BBBEE)
•It is vital that meaningful reports area created which provides insight into performance by department/division since this assists in surfacing areas where interventions are needed
•Suppliers attempt to reduce SD obligations, once contracts are awarded. Setting clear deliverables based on their proposal is key to ensuring that value is delivered
•Setting periodic milestones is often a more effective way to manage performance, since it gives suppliers time to correct areas of underperformance before it is too late
•Monitoring should be both outwards (ie suppliers performance) and inwards (Transnet's SD performance)
•Ensuring that the right metrics are being monitored is key to ensuring that delivery from suppliers as well as internal performance against plans
•Compliance must be encouraged pre contracting (via insertion of legal clauses placing ones on suppliers to deliver on commitments)
•Compliance should also be enforced by post contracting mechanisms (eg random audits and enforcing penalties where deviation from commitments are found)

Transnet has a long tradition of “learning by doing” which provides a useful framework for implementation of SD going forward …
Strategy
Over the years Transnet has updated its strategy to include changing government objectives such as NGP and integrating SD into the corporate plan
Planning
Transnet has moved to incorporating SD in the planning stage as opposed to execution and the movement towards longer term demand planning has increased SD opportunities available
Execution
•From the first GE 100 loco transaction to current transactions, Transnet has improved upon processes and evaluation criteria to better integrate growth and transformation opportunities
•Included SD as a key criterion in negotiations
Monitoring
Feedback
Strategy
Over the years Transnet has updated its strategy to include changing government objectives such as NGP and integrating SD into the corporate plan
Planning
Transnet ‘s move to incorporate SD in the planning stage as opposed to execution and the movement towards longer term demand planning has increased SD opportunities available
Execution
•From the first GE 100 loco transaction to current transactions, Transnet has improved upon processes and evaluation criteria to better integrate growth and transformation opportunities
•Included SD as a key criterion in negotiations
Monitoring
Monitoring and reporting to the DPE (on key KPIs) and process of collection between OEMs and Transnet, have been updated and are now more closely linked to contractual obligations and SD criteria
Feedback
Listening to suppliers, SD managers and key stakeholders after each major transaction together with annual SD strategy updates results in a continuous cycle of improving SD value capture in each transaction

PAGE
There is a requirement to streamline and simplify SD evaluation criteria
29
To
From
•A large number of unfocused evaluation criteria
•A smaller number of evaluation criteria focused on the outcomes Transnet wishes to achieve
•Uncertainly in divisions about which evaluation criteria to use and their weightings
•Guidelines are created to aid divisions in selecting evaluation criteria and their weightings
•Reluctance from suppliers to commit to SD obligations made at a granular level
•Higher level commitments with an emphasis on outcomes
•Uncertainly from suppliers on definitions and calculation formula
•Clear definitions and calculation formula

PAGE
Currently Transnet has an excessive number of evaluation criteria which are often impossible for suppliers to complete accurately (1/4)
Main SD category
Secondary SD category
Functional category
Proposed percentage use of local content as percentage of total contract
Localisation
No. of local manufactures / suppliers used to fulfil contract
Proposed value & percentage use of local content in plant machinery
Value of investment in plant & machinery sourced from SA suppliers
Industrialisation
Potential percentage increase in Export content resulting from bid
Value of New SA Manufactures in supply chain
Potential percentage reduction in Import leakage
Value of spend on B-BBEE
Value of spend on EME
Value of spend on Black Owned enterprises
Value of spend on Black Women Owned enterprises
No. of QSE’s suppliers
No. of EME’s suppliers
No. of Black Owned suppliers
No. of Disabled suppliers
Value of spend on People with Disability
Value of spend on Black Youth Owned enterprises
No. of Black Owned Women suppliers
No. of Black Youth Owned suppliers
No. of B-BBEE suppliers
* Transnet is the only organisation which splits the support into financial and non-financial, other organisations include this in one bucket under Small Business Promotion ** Transnet uses rural community, other organisations use local community Source: Team analysis
Proposed percentage of local parts in relation to BOM as percentage of total spend
Transnet specific
All encompassing: Eskom, Department of Health, Department of Education
Value of proposed IP transfer to SA
Sustainable / Technology & IP transfer
Non-Financial support
Number of new local suppliers evaluated for integration into OEM supply chain
30

PAGE
Currently Transnet has an excessive number of evaluation criteria which are often impossible for suppliers to complete accurately (2/4)
Main SD category
Secondary SD category
Functional category
* Transnet is the only organisation which splits the support into financial and non-financial, other organisations include this in one bucket under Small Business Promotion ** Transnet uses rural community, other organisations use local community Source: Team analysis
Development of skilled staff
Skills Development
Development of unskilled staff
No. of skilled staff trained
No. of skilled Black staff trained
No. of skilled Black female staff trained
No. of skilled disabled people trained
No. of skilled Black youth trained
No. of unskilled staff trained
No. of unskilled Black staff trained
No. of unskilled Black female staff trained
No. of unskilled Black youth trained
No. of unskilled disabled people trained
Transnet specific
All encompassing: Eskom, Department of Health, Department of Education
Creation of skilled jobs
Job Creation
Creation of unskilled jobs
No. of new skilled jobs created
No. of new skilled jobs created in rural areas
No. of new skilled jobs created for Black female
No. of new skilled jobs created for disabled people
No. of new skilled jobs created for Black Youth
No. of new skilled jobs created for Black people
No. of new unskilled jobs created
No. of new unskilled jobs created in rural areas
No. of new unskilled jobs created for Black female
No. of new unskilled jobs created for Black Youth
No. of new unskilled jobs created for Black people
No. of new unskilled jobs created for disabled people
No. of job maintained by respondents
No. of jobs maintained by Sub-contractors
Job Maintenance
No. of jobs maintained by Other
No. of jobs maintained by Suppliers
31

PAGE
As a result of the lessons learnt, three key enablers and their action points have been identified to guide SD implementation
33
Process Enablers
Capacity and Capability Enablers
Mind-set and Behaviour Enablers
Key “Process” Action Points:
–Demand Planning
•On-going initiatives to improve demand- planning and involve key internal and external stakeholders must continue
•SD evaluation criteria & targets to be refined, standardised, communicated
•KPI’s for SD monitoring, reporting & compliance to be developed, integrated and implemented across departments
–Supplier Intelligence
•Full analysis of the local and international Supply market to be conducted and a repository for this intelligence established
–Stakeholder Engagement
•PPM changes (long contracts) to be effected and signed off
–Integration
•A formal SD Policy to be finalised & integrated into the PPM
•Divisional SDP’s to be integrated into Group SDP and Corporate Plan
–Risk & Compliance
•PPM will be updated on an on-going basis with SD changes
•Negotiation teams must be prepared around risk-management for new contracts
Key “Capacity & Capability” Action Points
–Skills Development
•Update procurement and SD skills programmes, ensuring adequate skills
–Internal Support & Structures
•Refine and communicate SD roles & responsibilities throughout Transnet
•Include SD targets in staff’s SPO’s
•Investigate required system (ERP, etc.) changes for SD
•Continue to recruit for and staff SD positions
Key “Mind-set & Behaviour” Action Points:
•A Change Management Strategy is required to ensure stakeholders are on board for SD and are enabled for change
•Re-examine SD “uptake” parameters within OD’s to ensure efficacy
•Educate stakeholders (both internal and external) around SD requirements and evaluation criteria
•Conduct SD Road shows both internally, across OD’s and externally with suppliers
Source: Team analysis * Railway Harbour Supply Chain Association of which Transnet is a founder member

Initiatives to improve demand planning and involvement of key stakeholders internally and externally are underway
•Accurate demand forecasts as input to the SD opportunity process
•Accurate fleet plans for key capital commodities
•Identification of SD opportunities should take place pre-procurement and be executed throughout all phases of the Sourcing process
•SD incorporated into the “business as usual activities”
•KPI’s developed for monitoring, reporting and compliance
Demand Planning
Processes
Supplier Intelligence & Market Analysis
•Knowledge & understanding of local and international supplier base developed
•Economic & capabilities analysis of the supply market conducted
•Supplier repository set up to capture critical supplier intelligence and inform target setting process
Stakeholder Engagement
•Supplier industry informed of SD requirements
•Mechanism designed and deployed for suppliers to communicate SD issues
•Required changes (contract lengths) agreed and applied to PPM
•Relevant updates to PPM finalised to encourage compliance
•Board sign-off on SD incorporation into Corporate Plan obtained
•Revive the RHSCA as a communications and collaboration platform
Integration
•Divisional SDP’s obtained for Group to incorporate into Group SDP
•All relevant SD related supporting documentation made readily available for immediate use to expedite the tender process. (e.g. appropriate legal documents, inserts into tender stacks)
•A formal internal SD policy finalised and integrated into the existing Policy Procurement Manual - PPM
Risk & compliance
•Governance as the key driver of performance ensured by finalising a formal internal SD policy
•SD Policy integrated into the existing Policy Procurement Manual – PPM
•Relevant updates to PPM finalised to encourage compliance
•Negotiation team prepared on risk management

Capability and capacity constraints are critical enablers for successful SD implementation
•Create capacity to conduct meaningful and effective monitoring activities
•Create and capacitate dedicated teams to ensure full value- capture
•Continue to staff the SD and iSCM functional areas with the correct numbers of people
•Identify “relevant” positions in relevant business areas
•Create time-line and plan for their recruitment, engagement
•Include SD targets into individual's strategic performance objectives (SPOs) and balance with required commercial outcomes
•Investigate system (ERP/SAP, etc.) changes required
•Update Procurement and SD skills development programme
•Continue to staff the SD and iSCM functional areas with the correct skills
Capabilities
&
Capacity
Internal Support & Structures
Skills Development
Key requirements

The correct mind-set and behaviour is a key enabler for Transnet staff and stakeholders
•Group-wide Executive sponsorship is required to ensure SD is incorporated into “business as usual activities” across the organisation
•A Change-Management Strategy to ensure all stakeholders are addressed company wide and are on board (understand SD)
•Clear articulation and communication of Transnet SD in relation to Govt. policy and Transnet mandate is required
•Engage the supplier industry around benefits to Transnet’s SD programme
•Collaborate with “relevant value adding organisations ( be it -United Nations Industrial Development Organisation (UNIDO), etc.) to understand SD global trends, opportunities, partnerships
Mind-set &
behaviour
Stakeholder
Engagement
Key requirements

PAGE
Overview of the Supplier Development Plan (SDP)
37
Current Position
• Transnet is currently embedding the
foundation for SD based on an MDS-aligned
Strategy and SDP
• The SD Strategy is integrated with the Supply
Chain Policy Framework which has been
adopted by the Board
• Processes are underway to improve the
enabling environment at all levels
• The organisation is engaging with the OD’s to
better understand and implement SD and will
start engaging suppliers holistically, to the
same end
• OD’s will be guided in the development of
their divisional SDP’s
• Transnet has developed a high-level
“journey” for SD for the next 7 years
FY 13/14
Process activities Q1 Q2 Q3 Q4 Q1
Stakeholder Engagement Apr-Jun 12 Jul-Sep 12 Oct-Dec 12 Jan-Mar 13 Apr-Jun 13
Supplier summit
Board sign-off on formal SD incorporation into Corporate Plan and process
Integration, reporting, supplier intelligence
Develop knowledge and understanding of supplier base
Conduct economic and capability analysis of supply market
Initiate random audits of supplier obligations
Develop and refine KPI's for SD monitoring, reporting and compliance
ongoing
ongoing
ongoing
ongoing
Finalise SD evaluation criteria sheet for inclusion in Tenders
SD related documentation made readily available for use in Tenders
Refine SD Dashboard Reporting
Integrate tracking of SD commitments with contract timelines
Embed SDP categorisation process
FY 12/13
ongoing
ongoing
ongoing
SD Implementation Plan Transnet Group: Key enablers
Inform supplier industry of Transnet SD requirements through tenders, RFP's
Design & deploy mechanism for suppliers to communicate SD challenges/queries to Transnet
Agree and apply required changes (contract lengths) to the PPM
DPE Bootcamp
Send Group SD Strategy and Plan to OD’s as guidance for their own SDP’s
ODs receive high level business targets from Group (subject to Base Line study)
ODs create Divisional SDP’s, submit end Q2
ODs submit Divisional SDP's to Group for incorporation into Corporate Plan
FY 13/14
Capabilities & Capacity Q1 Q2 Q3 Q4 Q1
Internal support Apr-Jun 12 Jul-Sep 12 Oct-Dec 12 Jan-Mar 13 Apr-Jun 13
Skills Development
Mind-set & Behaviour
Enterprise Development Hub
Finalised ED strategy
Establish Transnet ED Hub
Launch ED Hub
Launch mobile ED Hub
Roll ED hub to other provinces
ongoing
ongoing
ongoing
ongoing
ongoing
ongoing
ongoing
ongoing
Include SD target into individuals' performance objectives
Fill SD positions
Set up SD training sessions at Group, OD's and regions (use Training Pack Oct 2011) ongoing
SD Implementation Plan Transnet Group: Key enablers FY 12/13
Sign off updated SD training pack at Group level for use
Identify vacant positions, skills required, create recruitment plan
Articulate and communicate Transnet SD in relation to Govt. policy and Transnet mandate
Engage the supplier industry around benefits to Transnet’s SD programme
Collaborate with UNIDO to understand SD opportunities, partnerships
ongoing
Run SD training sessions at Group, OD's and regions (Use Training Pack Oct 2011)
Continue to upskill the relevant divisional SD departments
Obtain Group-wide Executive sponsorship to ensure SD is “business as usual”
Investigate other system (e.g. ERP) changes/needs (e.g.. B-BBEE reporting automation)
Develop a focused Change-Management Strategy around MDS and SD
Key SDP activities have been identified and assigned

Specific Commodity Strategies have been drawn up for wagons, rails & straddle carriers
Implementation Plan for Wagons
Implementation Plan for Rails
Implementation Plan for Straddle Carriers

PAGE
Transnet has plotted a proposed SD journey that meets its aspirations to be a world class SD organisation
Short-term (1-2 years)
Long-term (5 years+)
Capture SD value
•Refresh the OD 2011/12 SD Plan
•Embed SD organisation-wide in standard procurement policy (PPM)
•Strengthen long-term relationships with Suppliers to secure export opportunities by embedding local suppliers in OEM supply chains
•Develop sustainable category COE’s in the rail industry (e.g. traction motors)
•Leverage internal knowledge to enhance Transnet's Supplier Development initiatives
•Strongly contribute toward the Transnet B-BBEE score though focused ED initiatives
•Negotiate best value contracts that integrate SD objectives
•Create appropriate governance structure allowing for longer contracts
•Build internal procurement skills
•Develop demand planning capability and process
“World Class SD”
•Lead the supplier development thought leadership domain with an established COE for SD
•Extend supplier development goals beyond supplier base into the client base through PSP agreements (Customer Supplier Development)
•Collaborate with suppliers to develop required products to promote operational efficiency
•Recognised as the benchmark
•Develop supplier intelligence function for key areas for local and international suppliers
•Collaborate with external stakeholders to determine skills requirements for industry
•Move from commodity-based SD to technology-based SD where common technologies exist (e.g. transformers)
Embed the Foundation
•Develop SD Plan (2011/12)
•Adoption and Embedding IC3 Framework to Embed Holistic Focused approach to SD
•Programmatic
•Develop Programmatic Loco Plan
•Commence Programmatic procurement of locomotive fleet and focus on related industrialisation opportunities inherent in this procurement
•Strategic
•Further embed the CSDP Foundation
•Capture SD value from CSDP plans developed by OEMS
•Monitor CSDP successes
•Focused
•Identify focus spend
•Develop the Focused SD Plan
•Embed Focused SD foundation
•Capture SD Value
•Small Enterprise Development
•Identify Spend
•Develop the Small Enterprise Plan
•Embed Small Enterprise Development
•Capture ED Value
Medium-term
(3-4 years)
40
Current Position:

PAGE
The SD Planning process has been integrated into the development of the Corporate Plan
43
End Feb: Corporate Plan submitted to Minister of DPE (requirement)
Sept-Jan: OD’s and Group develop & refine business, SD plans
OD’s develop detailed targets and plans per OD
Sept: Group gives OD’s guidelines (top-down) and rules for business plans
June: Finance, Strategy, Exco set high-level business targets
Annual Corporate Planning Process
Receive corporate plan/ annual budget & Transnet SDP
Understand requirements and set SD targets
Perform spend and value analysis
Determine industrial leverage
Categorise SD opportunities
Prioritise opportunities
Develop 7yr SD category strategic plan
Develop high level key commodity plans and initiatives
Update SDP
IC3 four-step process
Annual SD Planning Process
•The Transnet SDP process has been integrated into the overall Transnet annual planning process
•The SDP is triggered once the initial Corporate targets are received
•Over a 5 month period the SDP is rigorously developed between the ODs and Corporate
•Utilising the approach described earlier, the SDP is checked against the SD category plans
•Once key commodities for the next review period have been selected, the SDP is finalised and submitted to Corporate centre for consolidation

PAGE
Three step strategy (with technical and SD criteria thresholds)
•The evaluation will a follow a 3 step process, starting with a SD/B-BBEE evaluation. It is then followed by a Technical evaluation, and finally an overall submission evaluation including price
•A minimum threshold of XX% will be set for the SD/B-BBEE criteria evaluation. This threshold needs to be equalled or exceeded for the submission to qualify for technical evaluation
•A minimum threshold of XX% will be set for the technical criteria evaluation. This threshold needs to be equalled or exceeded for the submission to qualify for the final step
•Once the minimum criteria thresholds are both met or exceeded, the supplier’s submissions will be evaluated against Price, SD and B-BBEE including FRC*
*Further Recognition Criteria
** To be used for non designated commodities
44
Evaluation criteria have also been designed for “non-designated” commodities
Minimum
SD/B-BBEE
Threshold**
Minimum
Technical
criteria
Price – XX%
SD – XX%
BBBEE/FRC – XX%
Minimum
SD/B-BBEE
criteria
Minimum
Technical
Threshold*
Substantive responsiveness
Administrative responsiveness
Pre- qualification
Returnable documents/ schedules

PAGE
A reporting framework has been created to monitor the progress of SD initiatives within Transnet
45
Group prepares SD reports for DPE
Group consolidates SD reports from OD’s
OD consolidates SD reports for Group
Supplier reports on contractual SD obligations to OD
Frequency
Monthly
Monthly
Quarterly
Quarterly
SD reporting
Process
Reporting
Guidelines/
Supporting
Documen-
tation
•Localisation as % of contract
•Skills development as % of contract
•Investment in plant as % of contract
•Identified Initiative
•Contract Value
•SD target
•New SD tenders
•DOA* 1-6
•Quarterly report by spread- sheet, by supplier:
•New SD tenders
•DOA 1-6
•Investment in Plant by supplier
•Investment in Skills by supplier
•Investment in Skills by SOE/SOC
•Last Procurement Capability Benchmark
•Projected SOE/SOC lifecycle costs
* DOA=Degrees of Attainment

PAGE
Mind-set and behaviour towards SD is already being monitored in Transnet, with tracking showing reasonable uptake
46
Supplier Development Adoption funnel
Awareness
Buy In
Adaptation
Consideration
Adoption
Have heard of it
Have thought about implementing it
Targets accepted and forms part of scorecard
People have started to implement it in their own OD
Process is embedded i.e. is in regular use
SCM
Business
•From a monitoring and tracking perspective, initiatives have been put into place to ensure that the OD’s are fully aligned with Transnet’s Supplier Development programme
•Adoption levels are monitored monthly, both by the OD’s themselves and by Group
•In most cases, OD’s have progressed beyond mere “awareness”
•At least 3 OD’s have already reached the stage of adopting SD into both the business cases and Supply Chain Management
TFR
TCP
TRE
TNPA
TPT
Source: Jan 2012: iSCM dashboard report

Transnet has progressed significantly in transforming
its supplier base in line with a Broad Based Black
Economic Empowerment supply base
Recognised B-BBEE % spending against TMPS
• Transnet is fully committed to empowering small, medium and
black enterprises in supporting Government's policy on B-BBEE
• Significant focus has been placed on B-BBEE spend evidenced by
the large increase in spend in recent years
• Emphasis will be placed on improving direct Enterprise
Development which is led by the Supplier Development Centre of
Excellence (COE)
• 62% of the R25.81bn TMPS spend in 2011/12 FY was from B-BBEE-
compliant companies that are certified on levels 1 to 4
Black-Owned Enterprises
R3.96bn
(~15% of B-BBEE spend)
Black Woman-Owned
enterprises
R2.25bn
Qualifying Small Enterprises
R2.91bn
Exempted Micro-Enterprises
R2.2bn
+46%
2012
25,8
2011
19,4
2010
13,5
2009
11,6
2008
6,9
2007
3,9
2012
80%
2011
75%
2010
65%
2009
59%
2008
41%
2007
37%
B-BBEE spending
(Rbn Total Measurable Procurement Spend )
31 March 2012
Source: Team analysis, iSCM Dashboard

PAGE
Capacity constraints exist within the organisation but are at critical levels at TFR, TCC and TNPA
Required staff
Current staff
Vacancies
Heat map
SOURCE: TFR Supply Chain Services Structure, November 2011; Revised Group iSCM Structure, December 2011; TCP Procurement Org Structure, November 2011; TNPA SCM Structure, 2011-2012; TPT Supply Chain Management, December 2011; TRE SCM Structure, November 2011
% Vacancies
Stable
Concerning
Critical
TFR
489
299
190
39%
75
35
40
53%
TCC
113
43
70
62%
62
21
41
66%
TPT
88
56
32
36%
16
12
4
25%
TNPA
39
16
23
59%
22
8
14
64%
TCP
57
41
16
28%
54
39
15
28%
TRE
58
45
13
22%
37
27
10
27%
TPL
14
13
1
7%
9
8
1
7%
All functional areas
Focus functional areas

PAGE
Content
1
2
Background and Context
Integration of CSDP / SD into iSCM
4
Lessons learnt
3
Capacity to deliver on SD across the organisation
5
Back up

PAGE
The overall vacancies that exist within MDS related
functional areas are at critical levels
Sourcing
Governance
Supplier
development
135
4
14 13 14
42
19
29
84
4
7 11 14
29
12 7
-38%
TP Total
L
TR
E
TP
T
TNP
A
TC
P
TC
C
TF
R
41
6 3 2 5
11 14 12
0 1 2
6
1 2
-71%
TP Total
L
TR
E
TP
T
TNP
A
TC
P
TC
C
TF
R
*Includes the following functional areas: iSCM strategy and operational support; strategy and continuous improvement
SOURCE: Team analysis
*Other
4
22
18
3
7
4
-68%
TR
E
TNP
A
TC
P
TF
R
TP
T
TP Total
L
TC
C
77
1
18
5 1 6
11
35
47
1
11
4 1 0 8
22
TF
R
TC
C
TR
E
TC
P
TNP
A
TP
L
TP
T
-39%
Total
13
9
5
2
Support
personnel
Specialised
personnel
Middle
management
Senior
management
18
26
6
1
Support
personnel
Specialised
personnel
Middle
management
Senior
management
16
10
2
2
Support
personnel
Specialised
personnel
Senior
management
Middle
management
4
4
7
Support
personnel
Specialised
personnel
Middle
management
Senior
management
275
150
Total
51
49
20
5
Support
personnel
Specialised
personnel
Middle
management
Senior
management
45%
No. of vacancies
No. of vacancies

PAGE
Several short term initiatives have been identified within the capacity constraints to accelerate procurement
Immediate improvement plans
Medium term initiatives
•Adopt “bandage approach” to deploy temporary staff and consultants and increase admin staff so HR can focus on recruitment
•Establish MDS champion at Group dedicated to drive MDS requirements in ODs
•Accelerate organisational structure approval
•Allocate support staff for Human Resource consultants to enable HR personnel to accelerate the recruitment process
•Initiate external MDS recruitment programme through a credible, specialised recruitment agency
•Revitalize the Human Capital COE
•Review and modify current compensation model for specialised procurement positions to current market level value
•Place strong emphasis on Employee Value Proposition to ensure staff retention and retraction
•Establish a “class of” developmental programme to ensure development, mentoring and coaching of staff
•Introduce graduate recruitment program to start bridging the gap and building the organisation from the bottom up with new talent
Capacity
SOURCE: Team analysis

Transnet sd-plan-presentation 20120618

Recomendados

Recomendados

Mais conteúdo relacionado

Mais procurados

Mais procurados (20)

Destaque

Destaque (18)

Semelhante a Transnet sd-plan-presentation 20120618

Semelhante a Transnet sd-plan-presentation 20120618 (20)

Transnet sd-plan-presentation 20120618