Mr Ozias Ncube, Senior Lecturer: Supply Chain Management
As municipalities across South Africa begin to grapple with their new realities and determine practical next steps, many communities are anxious to ensure their vote yields the results they were promised. While many might believe the starting point for this is service delivery, Ozias Ncube, Senior Lecturer of Supply Chain Management at SBL, maintains that it actually lies in the supply chain principles and practices in place in each municipality, as these directly enable or impede delivery at any level. As such, for opposition-led councils to succeed, they need to start making their presence felt through procurement – with a robust and honest review of their supply chain systems.
With public spending a key stimulus of economic participation and growth, policies relating to procurement and supply chain management are critical to level the playing field and create an inclusive society. “In using B-BBEE principles, especially ownership and management control to shape value chains, there is an additional opportunity to gradually move South Africa from being a ‘consuming’ nation to a ‘producing’ nation,” Ncube explains. “This relates directly to the strategic intent behind one’s sourcing activities and requires a different ‘agenda’. One essentially needs to move from a cost reduction focus to creating value. This, in turn, creates opportunities for industrialisation and growth.”
In a country with a “growth” rate of 0.2% however, he notes that this will require a radical departure from the current response of cutting back, holding onto one’s cash as part of a “wait and see” strategy, and subsequent business contraction. “By stimulating certain industry sectors directly through procurement policies, it’s possible to make them competitive and, ultimately, world-class.”
Nowhere is there perhaps a better opportunity to implement this alternate approach than in newly instated -hung metros. “Given that numerous election promises were made specifically regarding service delivery and job creation, councils will need to deliver – and quickly. And, while it might not seem the obvious starting point, they should begin this process by reviewing the supply chain strategy they find in place, focusing specifically on how the municipality spends; who it spends its money on; and why,” says Ncube.
Because most municipal service delivery models are debt-focused as opposed to revenue-focused, he notes that alliances are sure to be tested and that many tough decisions lie ahead. This will potentially be exacerbated by the fact that municipalities need to serve ALL residents – not just those who voted to put them in power (already a concern that has been voiced by the likes of the EFF). “Taking the view that communities, not wards, are ultimately clients and that service provision is a critical indicator of municipal delivery, many new incumbents will soon find that their credibility is directly linked to the supply chain policies and guidelines they put in place. They will additionally have to revise these so that they serve these communities beyond service delivery – but add specific value from a job creation perspective. Our country does not need another generation of ‘briefcase-businessmen’. Struggling communities want ‘real’ jobs beyond directing traffic at roadworks, for example. Supply chains have to be used to answer this need.”
With service delivery and job creation both linked to supply chains, Ncube warns against believing that a “quick fix” is both possible or in order. “As exciting as the current change of guard is for many communities, they will need to be patient and allow new municipalities to put the right systems and processes in place, as well as train the people responsible where required. Only by taking a forward-focused long-term view of our supply chains will we unlock their full potential – and be able to use them to realise the needs of all South Africa’s people,” he concludes.
