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Welcome to IMFO

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Title: Welcome to IMFO Author: Terrence Last modified by: Dumisani Sibanda Created Date: 11/24/2008 10:09:04 AM Document presentation format: On-screen Show (4:3) – PowerPoint PPT presentation

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Title: Welcome to IMFO


1
(No Transcript)
2
Striving Towards Excellence in SCM
  • There are key areas which are being addressed
    through various projects and initiatives in order
    to achieve excellence in SCM
  • The projects and initiates being undertaken are
  • Implementing a Quality Management System based on
    ISO 9001 standards
  • Review of SCM Policy
  • Improved Capital Expenditure
  • Procurement Planning/Procurement Schedules
  • Tracking Contract requests through the Bid
    Committee process
  • Preventing/Reducing Irregular Expenditure
  • Centralized contracts register
  • Electronic procurement system (first phase
    addressing ltR200,000 procurement)

3
ISO 9001
4
What is ISO 9001
  • ISO 9000 is the generic name given to a family of
    international standards developed to provide a
    framework around which an effective Quality
    Management System can be developed
  • ISO 9001 is the auditable standard in the ISO
    9000 family
  • ISO 9001 is based on eight quality management
    principles
  • Focus on your customers
  • Provide leadership
  • Involve your people
  • Use a process approach
  • Systems approach to management
  • Encourage continual improvement
  • Factual approach to decision making
  • Mutually beneficial supplier relationships

5
What is ISO 9001
  • Benefits of implementing a Quality Management
    System developed in accordance with ISO 9001
    requirements
  • Motivate staff by defining key roles and
    responsibilities
  • Cost savings can be made though improved
    efficiency and productivity
  • Improvements can be developed which will assist
    reducing waste, rejected work and fewer
    complaints
  • Customers satisfaction is improved

The sight of an achievement is the greatest gift
a human being could offer others Ayn Rand
6
ISO 9001 - A Process Based Approach
  • ISO 9001 does not specify the requirements for
    the goods and services being procured, ISO 9001
    is a set of requirements against which a Quality
    Management System can be developed
  • ISO 9001 makes it very clear that organisations
    must identify and manage the process which make
    up their Quality Management Systems
  • What is a Process?
  • A process is an integrated set of activities that
    use resources to transform inputs into outputs
  • A system exists whenever several processes are
    inter-connected using input-output relationships

To double your income, triple your rate of
learning Robin Sharma
7
ISO 9001 - A Process Based Approach
  • In effect processes are glued together by means
    of such input-output relationships
  • As the output of one process becomes the input of
    another process inputs and outputs are in effect
    the same entity
  • Inputs and outputs
  • Inputs and outputs (from a process based
    perspective) can be grouped into four general
    categories
  • Products
  • Services
  • Resources
  • Information

Only the mediocre die always at their best. Real
leaders are always improving and raising their
bar on how superbly they can perform and how
quickly they can improve Jean Giraudoux
8
A Quality Management System Illustrated
CUSTOMER and LEGISLATIVE REQUIREMENTS
Requirements
SCM
Service
Service
Service
Service
QUALITY MANGEMENT SYSTEM
Process
Process
Process
Process
Process
Process
Processes connect by input-output relationships.
Several interconnected processes form a system
A process takes inputs and though a set of
activities translates these into outputs
Required for each process
Work Instruction
Procedure
Document (s)
Record (data)
  • Document what you do and do as is documented

9
Contract Management
10
Procurement Scheduling and Contract Request
Tracking
11
Tracking Contract Requests Through Bid Committees
  • An electronic tracking system has been
    implemented to track both procurement schedules
    and contract requests (created from procurement
    schedules)
  • Each contract request is tracked through the
    various bid committees (Bid Specification, Bid
    Evaluation, Bid Adjudication and Award
    Finalisation)
  • The information extracted from the electronic
    tracking assist in highlighting any
    blockages/delays in the process which allows for
    these to be addressed
  • All Bid Committees convene on a weekly basis

The 5 Rules to being a great leader See
clearly, Health is wealth, Inspiration matters,
Neglect not your family, Elevate your lifestyle.
Robin Sharma (SHINE)
12
Procurement Schedule for Top 150 Budget Line
Items
  • SCM is complete for 62.98 of top 150 Capital
    Budget line items for 13/14 budget
  • For 2014/2015 all procurement will be completed
    by June 2014

13
Contract Register
  • A centralized contracts register is being put in
    place to ensure all contracts awarded are
    recorded in the centralized register
  • Weekly meetings between CFO and SCM Management
    review contract expiry dates to ensure new
    contracts are put in place timeously to avoid
    irregular expenditure
  • Essential information being recorded in the
    register
  • Contract number
  • Contract Award Date
  • Contract Start Date
  • Contract End Date
  • Contract Value
  • Vendor details

Money, influence and position are nothing
compared with brains, principles, energy and
perseverance Orison Sweet Marden
14
eProcurement
15
SSS System
  • Clause 18 of SCM policy requires the accounting
    officer to develop a system for procuring goods
    or services through written or verbal quotations
    and formal written price quotations
  • Policy requirement that all procurement in excess
    of R30 000 (VAT included) that are to be procured
    by means of formal written price quotations must,
    in addition to the requirements of paragraph 17,
    be advertised for at least seven days on the
    website and an official notice board of the
    municipality
  • Supplier Self Service (SSS)
  • RFQs are being advertised on the internet All
    Suppliers will be able to view all advertised
    RFQs
  • Suppliers are required to logon to the new
    Quotations System in order to view the RFQs
    advertised by eThekwini
  • All supplier quote responses must be Captured
    On-Line

16
SSS System
  • Launched supplier self-service (SSS) system on
    JDE - went live on 1 July 2013
  • It caters for the procurement of stock and
    non-stock goods ltR200 000
  • Caters for the following transactions
  • - management of requisitions
  • - online quote gathering with the option to
    re-publish
  • - automated supplier selection, override
    available with approval
  • - standard JDE approval routing
  • - conversion to purchase order
  • - reselection available on non-performance of
    supplier

Take care of your relationships the money will
take care of itself- Sharma
17
SSS System - Benefits
  • Directly transforms JDE system information into a
    web interface
  • Guarantees accuracy due to no integration being
    required
  • Improves security protocol using Secure Socket
    Layer
  • Provides reliable iSeries technology
  • Easier and faster to use
  • Automated adjudication of preferred supplier
    response
  • Built-in approval route processing
  • Familiar JDE business processes
  • Added value to suppliers order information
    account information automated supplier
    communication

Lift your teammates up versus tear your
teammates down. Anyone can be a critic. What
takes guts is to see the best in people. Robin
Sharma
18
SSS System
  • Some Statistics
  • Supplier Responses since 1st July 2013 34,455
  • No of Suppliers Registered on SSS 1,882
  • RFQs Currently on the Web 13,143
  • Purchase Orders Converted since 1st July 2013
    6,527

Life begins at the end of your comfort zone.
Neale Donald Walsch
19
SCM Policy
20
SCM Policy Review
Continual Review
New Policy
Current Policy
Revised Policy
Start
Future
Phase 1
Phase 2
  • Continual Review
  • Continual review of policy on an annual basis
  • Phase II
  • Review structure and format of Policy
  • Develop Policy guidelines, tools, templates and
    procedures
  • Release new policy that is ground breaking in
    both format and application
  • Input and Consultation with line departments, and
    review of external policies
  • Timeline is highly dependant on resources
  • Immediate Steps
  • Project Charter
  • Project Plan
  • Project Objectives
  • Project Milestones
  • Project Phases
  • Phase I
  • Identify operational issues
  • Identify legislative gaps
  • Identify supplementary guidelines/ circular/
    legislation gaps
  • Release revised interim Policy
  • Consultation with Policy users
  • Presentation to Committees for approval

21
SCM Policy Improvements
  • Definitions that have been the cause for some
    concern and confusion have also been added to
    increase consistency in application
  • Amendment to contracts has been defined in
    keeping with MFMA Circular 62.
  • The definition for persons in the service of the
    state has been amended to include for exemptions
    provided for non-executive board members of
    municipal entities. Also, employees are taken to
    be full-time employees, and part-time employees,
    etc. need to be specifically cleared via the
    conflict of interest task team.

You get the best of others when you give the
best of yourself- Harry Firestone
22
SCM Policy Improvements (Cont.)
  • System of Demand Management
  • The requirement for the submission of procurement
    plans during the budget approval process has now
    been included in keeping with MFMA Circular 62.
  • The procurement methods for all budget line items
    are to be approved by the bid Specification
    Committee to ensure that inappropriate unbundling
    of contracts is avoided.
  • All contracts exceeding R10 million are to be
    accompanied by project-specific procurement BEE
    strategies developed by multi-disciplinary teams.

If everyone was satisfied with themselves, there
would be no heroes. Mark Twain
23
SCM Policy Improvements (Cont.)
  • Section 36 Deviations from, and ratification of
    minor breaches of, procurement processes
  • Report to EXCO for noting only
  • Report to BAC for support
  • Final approval via Accounting Officer
  • Monthly reporting to Finance Procurement
    Committee (further oversight by Audit Committee
    and Municipal Public Accounts Committee)
  • (Emergencies require AO's prior approval,
    formalised by a report within 24 hours, and
    report to next possible EXCO)

This day and every one that follows for the
rest of your life offers a platform of
possibility. Every day is your life in
miniature. Robin Sharma
24
SCM Policy Improvements (Cont.)
  • Special Deviations from SCM Policy
  • Allows for certain contracts, for which following
    any SCM process is not prudent.
  • Prior approval from the CFO, Head SCM or
    designated official, and annual reports are to be
    produced for the Accounting Officer on
    expenditure incurred, and/or to be incurred.
  • It covers areas like computer software systems
    licensing and approved maintenance contracts -
    where these systems have appropriate authority
    via the normal SCM policy.

You tell the world what you believe via how you
behave. Complain all day and you reveal a deeply
in grained set of beliefs that you are powerless
and apathetic. Present work that has typos and
poor wording and you express a belief that
average is cool with you. Robin Sharma
25
SCM Policy Improvements (Cont.)
  • Additional areas receiving special focus (and
    discussion with NT and CFOs Forum)
  • Conflict of Interest Task Team
  • Blacklisting Committee
  • Appeals
  • Extension and amendments to contracts MFMA
    Section 116(3)
  • Validity and timing of certificates (Tax
    Clearance, BEE, etc.)
  • MFMA Circular 68 - Unauthorised, Irregular,
    Fruitless and Wasteful Expenditure

Remember that genius is much less about natural
talent and much more about out-studying, out
preparing, out-practicing, and out-learning
everyone around you. Robin Sharma
26
Irregular Expenditure
27
Unauthorised, Irregular, Fruitless and Wasteful
Expenditure
  • Key Highlights of MFMA Circular 68 Issued on 10th
    May 2013
  • Register of irregular expenditure to be kept with
    effect from 01 July 2013
  • All irregular expenditure must be recovered from
    liable official unless the expenditure is
    certified by Council, after investigation, as
    irrecoverable
  • No distinction made in terms of unauthorised,
    fruitless and irregular expenditure
  • All expenditure that is non-compliant needs to be
    regularised
  • In particular, the irregular expenditure reports
    must be considered by MPAC prior to submission to
    Council
  • In discussion with National Treasurys SCM Unit
    to reconsider meeting on 9 October 2013

Brilliant things happen when you go the extra
mile for the customer Robin Sharma
28
Unauthorised, Irregular, Fruitless and Wasteful
Expenditure
IRREGULAR EXPENDITURE STATS IRREGULAR EXPENDITURE STATS IRREGULAR EXPENDITURE STATS
2011 (R'000) 2012 (R'000) 2013 (R'000)
1 313 362 782 547 324 925
  • Outstanding irregular expenditure in the AFS is
    only R60 M
  • This relates to employees in the service of the
    State due to lack of accessibility to Persal
    database
  • All other expenditure has been regularised and
    condonement sought

Leaderships no longer about position. Now its
about passion. And having an impact through the
genius-level work that you do. Robin Sharma
29
Service Level Agreement
30
Service Level Agreement
  • An SCM service level agreement has been
    introduced so that customers know the level of
    service they can expect from the SCM Unit
  • Bid Committee (BAC, BEC and BSC) decision
    circulars will be posted on the intranet within
    48 hours
  • Bids over R10 Million will also be posted on the
    intranet within 48 hours
  • All letters of awards will be released within 48
    hours

Ill be blunt. If you are not building leaders,
then you are not leading, youre following. Your
job is to help people do work they never dreamed
they could.- Robin Sharma
31
Service Level Agreement
  • All verification and auditing of tender
    documentation will be done within 21 days also
    looking to reduce this further by doing
    pre-screening and doing checks in parallel with
    evaluation undertaken by line department
  • Delays between BEC and BAC are strictly monitored
    and will be kept to a minimum
  • Templates will be provided by SCM to ease the
    work of line departments

A title, position and a large office do not
guarantee people will respect you. Nope. Youve
got to earn that gift. And the quickest way to
earn respect is to give it. No need to say much
more. Robin Sharma
32
Conclusion
  • Special thanks and appreciation to National
    Treasury for continued support to Local
    Government
  • Kenneth Brown as Chief Procurement officer, and
    the commitment of his team under the leadership
    of the Chief Director Henry Malinga
  • Remember that it is our duty, however, to
  • Plan appropriately
  • Be proactive
  • Have zero tolerance for non compliance

Victims make excuses while leaders drive
exceptional results. You can spot a victim a mile
away. They blame and complain and are negative
and cynical. You are not a victim Robin Sharma
33
Conclusion
  • Confident that these SCM initiatives will attest
    to be fair, transparent, equitable, competitive
    and cost- effective
  • Especially the revised processes for contract
    management, ISO 9001 and the SSS System
  • Is the foundation for monitoring spending on
    capital projects and operational expenditure,
    fostering spending that advances service
    delivery, economic development initiatives, and
    ensuring value for money

According to the Financial Times we collectively
spend 100 000 000 minutes a day playing Angry
Birds on smartphones. Most people in business are
spending the absolute best hours of their days
being busy being busy. Robin Sharma
34
The End
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