Insight into supply chain management in a municipal context

Intaher Marcus Ambe

doi:10.21511/pmf.5(2).2016.02

Abstract

Supply chain management is strategic to the quest for service delivery excellence in South African municipalities. The supply chain journey in South African municipalities started in 2005 with reforms to introduce internationally accepted procurement best practices. The previous system failed the country due to deficiencies and malpractices resulting from the interpretation, implementation and governance of the preference procurement policy. Today (2016), supply chain management has become a talking point on which citizens are raising major concerns and it is perceived as being handled in a way that ﬁnancially beneﬁts few individuals. Laws and regulations governing municipal supply chain management are intentionally ignored or ﬂouted by municipal officials resulting in corruption, fruitless, wasteful and unauthorized expenditure. In an effort to address these challenges, the National Treasury continuously provides guidance in terms of policy revision, clarity in the provisions of the supply chain management policy, as well as training to supply chain management officials. This article provides an insight into supply chain management practices in a municipal context in South Africa. It highlights the status, challenges and way forward for the implementation of supply chain management in a municipal environment. Keywords: insight, supply chain management, municipality, public procurement, South Africa. JEL Classification: M38

Highlights

Background to municipal Supply chain management (SCM) practicesSCM, in the South African municipal context, is a financial management tool that seeks to reform and regulate the manner in which public funds are utilized when procuring goods and services while in pursuit of service delivery that is responsive to the needs of society and to curtail any maladministrative and fraudulent practices on the procurement front
To date (2005-2016), SCM in municipalities over the years has been characterized by fraud and corruption despite the effort of the National Treasury
Many professional government organizations have indicated that SCM could hold great promise in enhancing public procurement systems

Summary

Global perspective of supply chain management

SCM is an important concept in today’s business environment, as it contributes significantly to the bottom line (Agus, 2011, p. 269). According to the Council of Supply Chain Management Professionals (CSCMP, 2007), “Supply chain management encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. It includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers”. It can be asserted that SCM encompasses the planning and management of all the activities involved in sourcing and procurement, conversion, and all logistics management activities Analyses of intranet work, as well as of internet work relationships are essentially necessary elements of the concept

Municipal supply chain management practices in South Africa

Current status of supply chain management practices in municipalities

The way forward for munÖcÖpal supply management

Findings

Conclusion