2 years ago

Opportunity Issue 96

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  • Procurement
  • Mining
Opportunity, endorsed by the South African Chamber of Commerce and Industry (SACCI) is the mouthpiece for business in Southern Africa. The aim of the publication is to inform potential investors both nationally and internationally of the most relevant business news: trade, investment, financial, market-related information for each business sector, as well as to inform of the latest developments in business legislation from both the public and private sector.


MINING ADAPT TO UNIQUE LOCAL NEEDS After assessing the priorities, the procurement function must be able to identify and map the right suppliers across the category strategies. Four archetypes of suppliers reveal that sub-strategies that consider local characteristics are required when defining a localisation program (see Four archetypes of suppliers, see below). In South Africa, this means considering Broad-Based Black Economic Empowerment (B-BBEE) economic policy as well as the sector-level requirements in the Mining Charter. Four archetypes of suppliers Superstars Existing suppliers that are able to supply directly to increase sales Untapped Talent High-skill, underresourced firms or remote suppliers that can be incentivised to move to the area Willing Amateurs Local suppliers that are not optimally supplying with an identified capability or skill gaps Budding Artists Low-skill entrepreneurs who are able to supply indirectly with little or no support A sustainable localisation strategy requires a portfolio of local suppliers with all four archetypes. Each region has a unique subset of suppliers classified along with the four archetypes; some regions have all four, while others have suppliers that are mostly in one archetype. When dealing with unions, focus on protecting people, not jobs. In other words, prepare people for current and future jobs (if current ones are doomed to disappear). Job projection per se is not sustainable as the company will bear unnecessary costs. Combine short-term and long-term perspectives. Focus on sharing gains, not giving handouts, which have an ephemeral impact. With the ubiquitous presence of social media, individuals can quickly coordinate flash strikes or supply chain disruptions. Without decisive actions, mining companies will face increasing pressure to meet ad-hoc demands from well-coordinated pressure groups. In the long run, plan to ensure local economic viability even after site closure. After defining a local portfolio of potential suppliers, the next step is to align the procurement organisation for successful execution. Forward-thinking organisations assess the full social impact of their localisation strategies by defining the key performance indicators, measuring the interaction of business and social results. This is a twofold process. First, understand the full financial impact of interventions, including both benefits and costs, to expose their materiality and justify shared value activities. Second, use a model to determine the social impact on the community. Delivering value through procurement processes requires three elements: team excellence, category excellence, and supplier management excellence. The leaders typically achieve superior returns from supply management with a clear focus on these elements, delivering a broad range of strategic value, including innovation, risk management, and talent development. High-performing procurement teams play a proactive role in contributing to executive strategy and demonstrate leadership in containing costs and creating value. This requires that most of the team effort is focused on strategic activities and is supported by standardised, automated processes. Analytics is essential for generating timely insights. Analytical tools gain access to up-to-date spend data, track a wide range of procurement key performance indicators and conduct an end-to-end value chain analysis. This will accelerate time to insight so that the right shared value decisions are made. _____________ __ _ _ In leading organisations, procurement is aligned to gain a competitive advantage by leveraging the market value that already exists within the supply chain ___ __ ___ __ _ _____ ALIGN WITH GLOBAL BEST PRACTICES In leading organisations, procurement is aligned to gain a competitive advantage by leveraging the market value that already exists within the supply chain. This results in achieving procurement’s primary focus: improving the organisation’s overall profitability with tenable cost reduction and considerable revenue growth. South African companies must address shortcomings in the supply chain, leverage their procurement function to grow shared value, and prioritise meaningful engagement with local issues. Many organisations report on financial, social, and environmental results without analysing the connections between business performance and social impact. Often, there is no comprehensive assessment of the organisation’s performance, and distributed cash is regularly tracked but with no outcomes achieved – inhibiting the full potential for growth and multifaceted strategies. Driving category excellence requires not only a clear focus on costs but also the identification of vital business insights. This is achieved with high visibility into category and supplier spend and the ability to source and influence more than 70% of the spend. Prerequisites for this are robust sourcing processes and clear category strategies for key spend areas. Achieving supplier management excellence requires a welldefined supplier relationship management process that yields high rates of compliance and value. Well-managed supplier relationships contribute to a competitive advantage by offering innovation and risk management through a robust collaborative process. Localisation programmes are inherently complex and require real organisational transformation. The CEO’s active participation along with the commitment of senior management will be essential to success. 20 |

LEC EVENTS Pioneering CSI events in the mining and minerals industry LEC Events is an award-winning event design and production company specialising in CSI event project management in the mining and minerals industry. In an industry that has suffered a great deal due to Covid-19, LEC Events has reinvented itself and emerged with an even stronger and more relevant service offering to the industry. Safety and people first, and always adhering to all Covid-19 events safety guidelines for the event management sector. LEC Events, which is a 100% BBBEE (Level 1) women-owned business has execute some of the most prestigious events in the most remote areas of South Africa. The dedicated team, led by Clara Mdlalose, has been able to meet the needs of its clients and responded to some of the most challenging briefs because of its understanding of the rural mining communities the company operates in. “It all begins with a proper understanding of the brief from the mining client and working within the allocated budget for the event ensuring that we respond to Supply Inclusive Procurement by engaging and empowering local businesses to make a significant positive contribution to our host communities. Effective local procurement practices then contribute to job creation and skills development by lowering logistics costs and facilitates access to critical goods and services,” says Clara Mdlalose Over the years, the events industry, especially in the mining and minerals space, has been challenged to bring in more local players in the form of historically disadvantaged South African businesses. LEC Events sees this as an opportunity to create its niche. The firm specialises in creating the overall event and focus on the invitations, response handling and onsite accreditation, event site and floor plans, JOC committee, infrastructure, VIP requirements and then outsourcing the rest of the event requirements to local suppliers, managing them and assisting in overseeing the implementation of these services by acting as Community Event Specialist Advisor whereby LEC Events becomes the INTERGRATOR in terms of quality assurance and successful delivery of all CSI mining and mineral events within the host communities. In many instances, the company empowers local suppliers through on-the-job coaching and mentoring to ensure excellent execution of projects. With the tenacity and over 20 years’ experience in the events space, the leader of LEC Events, Clara Mdlalose has helped guide many a mining and mineral client into successful events execution. From working with presidents, ministers, MECs, mayors, counsellors, board members and general managers to local community members, this team has been able to service each client with the right amount of decorum required by each. With the new focus that is responsive to the needs of the clients, the future does look bright for LEC Events. The fact that the company is 100% female owned does not only bring value to the clients, but it ensures that a feminine touch based on caring shines through ITS work. The company has indeed responded to the needs of the mining and minerals industry and their host communities and are destined for greatness. Kathu-Taung-Kroonstad-Johannesburg-Rustenburg-Northam-Thabazimbi- Mokopane-Polokwane-Tubatse-Burgersfort-Musina. All over South Africa. Call us for your next mining event: Tel: 011 465 2994 Cell: 083 582 2750 Email: Web: Address: PO Box 67208, Bryanston, 2021 PROFILE

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