Csdp Sean

Competitive Supplier Development Programme (CSDP) 25 August 2008

The need for a competitive supplier development programme for SOE ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Advantages of competitive supplier development to SOE In the current context of huge global demand for infrastructure and shortages of certain items, SOE have a commercial interest in the development of internationally competitive local supply industries, in order to secure supply and reduce costs. The CSDP focuses on those areas of supply where there is a coincidence or overlap between national economic development interests and the commercial interests of the SOE and their first tier multinational suppliers to lower total costs and secure supply. The focus must be on items where there is potential for globally competitive local manufacturing. ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

A key caveat - price premiums Price premiums could crowd-out investment amongst SOE’s customers while encouraging unsustainable investment amongst SOE suppliers. The objective must be to build the competitiveness (in terms of quality, cost and responsiveness) of local supply industries, not to pursue local content at all costs . Price premiums paid to suppliers for local content Increase in prices charged by SOEs for services Crowding out of investment in customer industries – negates goal of increasing growth and job creation increased costs

Participation in the programme ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Three of DPE’s SOE, i.e. Eskom (March 2007), Transnet (February 2007) and PBMR (July 2007) have formally committed to implementing the CSDP and to producing SDPs within a year. Transnet submitted its SDP at the end of February 2008, and it has been approved. Eskom submitted its SDP at the end of May 2008, and PBMR at the end of July 2008.

Process flow chart for CSDP (1) Industry consultation Revise SDP ,[object Object],An SOE draws up a Supplier Development Plan in consultation with industry and relevant government departments. Draft Supplier Development Plan (SDP) Analysis Identify focus areas ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Identify interventions ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Targets KPIs spend and supply analysis across value chain

Process flow chart for CSDP (2) Finalisation of SDP SOE SDP execution through procurement process Monitoring ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Once finalised, the plan will be assessed by DPE and the dti. We are just moving into the implementation phase

The importance of procurement ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],The essence of the CSDP is to procure in such a way as to create a conducive environment for investment in supplier industries.

Procurement capacity building in the SOE ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],A major focus of the CSDP has therefore been to put in place a procurement capacity building programme for participating SOE.

Csdp Sean

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