SPW_SpeakerPresentations2015 - Zondi Mohlatsane
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The document discusses outsourcing procurement and inbound supply chain functions in South Africa. It raises questions about the relevance and feasibility of outsourcing these functions in South Africa given regulations like BBBEE. Drivers for outsourcing include reducing annual inventory carrying costs of 18-35% of inventory value. Functions to potentially outsource include warehousing, distribution, and returns/swaps while strategic sourcing, planning, IT/administration, and customer service may be kept in-house. When considering outsourcing, organizations should check legislative requirements, do cost-benefit analyses, and evaluate whether the function involves people or machines.
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SPW_SpeakerPresentations2015 - Zondi Mohlatsane
- 1. Outsourcing Procurement &/or Inbound Supply Chain functions Zondi Tsatsi Mohlatsane Manager: Order Management MTN SSH COMPANY LOGO HERE
- 2. @SmartSPW - #SPW2015 Tweet your questions to the speaker LIVE Outsourcing Procurement &/or Inbound Supply Chain functions COMPANY LOGO HERE • To what extent is this relevant to the South African market? • How feasible is outsourcing procurement/inbound supply chain functions in the South African Context? If so what would the drivers of such a decision be? • Which organization components can be looked at and what should be kept in-house?
- 3. @SmartSPW - #SPW2015 Tweet your questions to the speaker LIVE • ABSA RFx – SBV • BBBEE Act • Other Regulations Relevance & Feasibility – SA Market COMPANY LOGO HERE
- 4. @SmartSPW - #SPW2015 Tweet your questions to the speaker LIVE 1. Inventory Management • Insurance • Broken ERP Systems 2. Warehousing • Security • Administration 3. Distribution • Planning Annual Carrying Cost 18 – 35% $5m worth of inventory Cost of money 15% ($750k) Storage 4% ($200k) Taxes 2.5% ($125k) Obsolescence 1% ($50k) Shrinkage/Damage 1% ($50k) Insurance 0.5% ($25k) – Total $1,2m a year Drivers to want to Outsource COMPANY LOGO HERE Numbers by: The Society of Cost Management
- 5. @SmartSPW - #SPW2015 Tweet your questions to the speaker LIVE To Outsource? 1. Warehousing • Inventory Management – No 2. Distribution • Route Planning? • Cargo auctions? 3. Returns & Swaps MTN HVRC 4. Procurement • Procure to pay? • Spot buying? To Remain? 1. Strategic Sourcing • “Patriotic” Function 2. Planning • JIS, JIT 3. IT & Administration • ERP systems 4. Customer Service • Delivery • Reverse Logistics? Functions to look at COMPANY LOGO HERE
- 7. 3 simple things to always check 1. Legislature vs Business Strategy 2. Constant Cost/Benefit Analysis 3. People &/or Machine COMPANY LOGO HERE