Selection of procurement systems in the South African construction industry : an exploratory study
- Authors: Thwala, Wellington Didibhuku , Mathonsi, Musa D.
- Date: 2012
- Subjects: Industrial procurement , Construction industry - South Africa
- Type: Article
- Identifier: http://ujcontent.uj.ac.za8080/10210/367333 , uj:4669 , ISSN 1684-1999 , http://hdl.handle.net/10210/10427
- Description: Purpose of this paper: Procurement systems are vital in ensuring the successful implementation of construction projects precisely in all the phases of any particular project. Therefore, this paper aims to investigate in a systematic manner the factors that influence the selection of a procurement system in the South African construction industry. Research methodology: An extensive theory and literature review of procurement systems was conducted. The literature reviewed included a sample of case studies of procurement systems successfully implemented in completed building and civil engineering projects in South Africa. A questionnaire using a four-round Delphi survey method was used to conduct the empirical study in order to obtain participants' opinions about factors influencing the selection of procurement systems as well as the utility value of various procurement systems on each factor as identified. Finally, data analysis of both qualitative and quantitative techniques was performed using the Statistical Package for Social Sciences (SPSS). Findings: After qualitative analysis, findings of the literature reviewed suggest that factors that influence the selection of procurement systems cut across all the phases of the project as identified in this paper. Therefore, these factors are categorically classified into internal and external factors. Factors from the internal environment were further classified into client characteristics and project characteristics, with client characteristics comprising of variables such as clients' level of knowledge and control, political and social consideration, familiarity of procurement systems, competition, funding arrangement, government public/private sector projects and risk allocation whereas project characteristics comprise of factors (variables) such as size and technical complexity of the project, influence of the project life cycle, expedited project delivery, time, quality and price certainty. Factors from the external environment include variables such as market competition, information technology, regulatory environment, natural causes and globalisation. Research limitations: In terms of its scope this study focused on both national and international literature reviews and the empirical survey of this study was conducted within South Africa. Its target participants were limited to civil engineers, quantity surveyors, construction/project managers, architects and contractors located in three provinces of South Africa, namely Gauteng, Mpumalanga and Limpopo Provinces. Value: This study investigates factors that influence the selection of procurement systems in South Africa for the purpose of assisting and guiding construction practitioners in selecting suitable procurement systems for their planned projects. Conclusion: This study demonstrated that due to changes in the construction industry both factors from the internal and external environments such as size and complexity of construction projects, macro and micro economic conditions, political and social and information technology prevailing, traditional procurement method need to be supplemented with contemporary procurement systems in order to meet the new demands of the industry.
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Total cost of ownership : a strategic sourcing intent
- Authors: Khoza, M.M.
- Date: 2016
- Subjects: Organizational effectiveness - Management , Strategic planning , Business logistics , Industrial procurement
- Language: English
- Type: Masters (Thesis)
- Identifier: http://hdl.handle.net/10210/233817 , uj:23881
- Description: M.Ing. (Engineering Management) , Abstract: Today’s competitive market climate call for organisations effectiveness in applying extra precautions on sourcing processes and decisions leading to assets acquisitions. Often than not, during sourcing activities, one of the key objectives is to find out all there is to know as far as the potential costs pertaining the acquisition in prospect is concerned. Beyond reengineering and enabling continuous improvement on supply chain processes to gain market competitiveness, organisations adopts the Total Cost of Ownership (TCO) philosophy designed to deliver a beyond price-based outlook upon sourcing decisions to ensure that all possible costs elements incurable is fully accounted and outlined accordingly. This study intends to evaluate and analyse the typical perceptions surrounding the widespread adoption of the TCO philosophy by organisations’ acquisitions key decision-makers. Further evaluating the overall implications of adopting the concept of TCO upon strategic sourcing objectives towards fulfilling the organisations key bottom-lines in a cost effective manner. It is often common practice for purchasing organisations to base their performance measures on savings achieved. Thus making saving the key performance indicator (KPI) of the strategic sourcing function without enabling possibilities to consider a price-based approach as an enabler of savings. Savings breeding from reduced face value or purchase price with little insight of the total value cost of the offering and without considering the Life Cycle Cost (LLC) inherent some limitations as far as the consideration of all the cost effects is concerned. In order to enhance the understanding of the TCO concept to its widest sense and its applicability within the strategic sourcing function. Major value drivers within the strategic sourcing space are critically analysed to depict their major influences to the value chain and to the widespread adoption of the TCO concept. The empirical findings points out the prevalence of quality and reliability of the suppliers’ offering and the capability to adequately meet the purchaser’s stipulated requirements. High dependency of the quality and reliability levels of the offered suppliers’ expertise, the overall costs of such relationships is sought to carry ripple effects to the value chain. As a result, in pursuit of understanding all possible cost impacts breeding from supplier selection, TCO enables quantification of major cost drivers and channels continuous improvement initiatives for effective strategic sourcing intent’s fulfilment. There also exists an outlying dominance of lower price preferences as a major contributor to the reduction of TCO of the purchasing function leaving a loophole for non-quantified cost impacts, which is detrimental to organisational effectiveness. Moreover, the reduction of the purchasing function TCO directly prevails from the adoption of the Life Cycle Cost (LCC) as it enables quantification of all costs associated with the acquisitions during its validity or existence. Co-value creation between suppliers and buyers displayed a resounding significance towards...
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Best cost country sourcing : optimising the value of conveyor belts for coal mining companies
- Authors: Viljoen, Alida Maria
- Date: 2014-10-20
- Subjects: Industrial procurement , Coal mines and mining - Equipment and supplies , Conveying machinery
- Type: Thesis
- Identifier: uj:12644 , http://hdl.handle.net/10210/12462
- Description: M.Com. (Business Management) , Background Best cost country sourcing is a relatively new concept and not many organisations are utilising this specific process nor are they optimising this as their sourcing strategy. Best cost country sourcing is one of the most profound sourcing processes available, and it has the ability to increase an organisation’s efficiency and effectiveness if implemented correctly. Purpose The purpose of this study is to determine if best cost country sourcing should be used as an alternative to local sourcing. It includes aspects of the best cost country sourcing process as well as its risks and advantages. Research method The dissertation analyses the process of best cost country sourcing and the effect it has on an organisation’s sourcing strategy. To achieve this understanding it is necessary to do a qualitative investigation, which is the reason a qualitative research was used as the research methodology in this dissertation. Conclusion Pursuing the process of best cost country sourcing requires a lot of dedication and implementation time. It is a complicated process and no two situations will be alike. Each organisation would need to determine the advantages, risks and challenges which they will encounter with best cost country sourcing. Organisations would also need to determine the best cost countries, as well as the criteria they would need to use in selecting potential suppliers.
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The supply chain value-adding role of strategic sourcing : a case study
- Authors: Bredenkamp, Jan-Daniel
- Date: 2016
- Subjects: Industrial procurement , Business logistics
- Language: English
- Type: Masters (Thesis)
- Identifier: http://hdl.handle.net/10210/237566 , uj:24341
- Description: M.Com. (Business Management) , Abstract: The value that Procurement adds to the supply chain of a business organisation is frequently underestimated. Procurement is regularly not receiving the acknowledgement and recognition it is due for the contribution it delivers through strategic sourcing. It is commonly labelled as a function that is mainly concerned with reducing the cost of products and services. The purpose of this study was to explore the supply chain value-adding contributions made by Procurement in the sourcing of logistics services for a business organisation. More specifically, the research follows a case study design as it investigated the value-adding contributions of Procurement to a supply chain of a multinational company operating in the Fast Moving Consumer Goods (FMCG) industry. This is a qualitative study, which focuses on a descriptive case study. Internal stakeholders of the focal organisation’s supply chain were interviewed to determine the value-adding contributions made by Procurement. Secondary data and literature was consulted to triangulate the findings of the interviews. The findings of the analysis revealed that Procurement does not only reduce costs for the business, it has more value-adding contributions. It delivers value to the supply chain members in the form of best value for goods and services, business understanding and innovation and achieving customer satisfaction. In addition, Procurement delivers against its set deliverables and drives sustainable supplier relationships for the internal stakeholders of a typical FMCG company. Procurement has more to offer than the general perception held within the industry.
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A measurement process for quantifying the progress towards real commercial equity
- Authors: Cilliers, Michelle
- Date: 2011-11-21
- Subjects: Affirmative action programs , Industrial procurement
- Type: Thesis
- Identifier: uj:1712 , http://hdl.handle.net/10210/4055
- Description: M.Comm. , Affirmative action has been greatly debated as a means of righting the injustices of South Africa's past. Its proponents claim it to be an effective way of providing opportunities to those falling under the definition of previously disadvantaged, while cries of "reverse discrimination" echo from those vigorously opposed to it. One of the ways in which empowerment can be achieved is through encouraging government and businesses to make use of affirmative companies in the procurement of day to day goods and services. The first initiative from government came in the form of the Ten Point Plan from the Departments of Public Works and Finance. This was later encapsulated in the Green Paper on Public Sector Reform and the "Resource Specification for the Targeting of Affirmable Business Enterprises". This allowed businesses quoting for government work to score themselves against certain criteria, viz. either by virtue of their being affirmable business enterprises (ABEs), which are two thirds owned by previously disadvantaged individuals (POls), or by entering into joint ventures of various kinds with ABEs. It is believed that the approach of basing a company's contribution to affirmative procurement purely on two-thirds ownership is limiting, and that more aspects need to be investigated to determine the level of empowerment a company is offering its employees. In addition, the high percentage ownership is a temptation for companies to engage in fronting, where token appointments are made and there is no true management or control by the company's PDI management. Subsequently it is vital that alternative approaches be taken. Corporations need to keep track of their spend with PDI owned companies, but need to know how to determine how effective these are in implementing to true economic empowerment.
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Productivity improvement in engineering-procure-construct projects through a value stream based scope change management system
- Authors: Cleaver, Jayson
- Date: 2014-09-17
- Subjects: Production management , Industrial procurement
- Type: Thesis
- Identifier: uj:12336 , http://hdl.handle.net/10210/12122
- Description: M.Ing. (Engineering Management) , This dissertation provides a study of productivity improvement to project Scope Change Management (SCM) processes in the Engineer-Procure-Construct (EPC) project environment using lean techniques. The motivation for carrying out this study was, to optimise the typical scope change management systems to improve efficiency and most importantly the process productivity. It aims to present a conceptual approach to reduce bottom line impact brought about by the management of scope change events. A brief literature study of the industry, scope change management systems and the EPC project environment is provided together with an overview on the Value Streams (VS) mapping methodology for lean systems improvement. The improvement study sets out to establish the current status quo of EPC project change management systems through survey and literature study. The assessment establishes a necessary baseline and identifies various aspects within the scope change management system that need to be improved. An improvement effort is made on the current state map using lean principles and Design Structure Matrix (DSM) techniques to establish process efficiency and hence productivity increase. The study presents the results of the lean improvement; this is presented in the form of a process future state map proposal for further lean intervention and implementation. The study concludes with a brief discussion of an implementation plan. Collectively, the study aims to provide tools for VS based improvement and consequently meet the objective of a solution for bottom line productivity improvement in EPC Scope Change Management systems.
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An engineering management view of the impact of the procurement cycle on the project schedule of an outsourced PMO in a matrix-style organisation
- Authors: Van Jaarsveldt, Marius
- Date: 2013-05-27
- Subjects: Engineering management , Project management , Outsourcing , Industrial procurement , Materials management
- Type: Thesis
- Identifier: uj:7545 , http://hdl.handle.net/10210/8403
- Description: M.Ing. (Engineering Management) , Projects are often outsourced to an external project management office that has to adapt and operate in a matrix style organisational structure. This project management office is then forced to follow the project management framework enforced by their clients, especially if these clients operate on a global, multinational business level. In such cases it is common practice that the project management office also has to follow a strict procurement approval process to ensure controlled project capital governance, which often results in project baseline schedule delays. The source of these project schedule delays may even cause conflict between the project management office, the respective project manager and their common clients. As part of the current research, various procurement transactions within such a project environment were tracked as a case study to validate the approval efficiency of all approval authorities within the procurement process itself. The duration for transaction approvals were tracked in order to compare it with existing service level agreements between the relevant stakeholders. The results obtained from the above study indicate that the actual procurement approval duration is misaligned with the theoretical and expected procurement approval duration, confirming that existing service level agreements should be aligned with more realistic deliverable expectations. The current research confirms that the organisational structure of this particular matrix style project environment and the way in which the procurement process is governed for transaction approval, have a direct negative impact on project deliverables; especially on the baseline schedule. The current research also confirms that the client organisation should be sensitive in how they structure their project organisational environment as over-governance of the procurement process can often result in unexpected schedule delays. This over-governance of the procurement process exposes various inefficiencies in the overall process, without necessarily enhancing overall project governance. The current research shows that restructuring of the procurement approval process could reduce the procurement approval duration, and present a more realistic service level agreement between the project stakeholders. This will allow the project manager to more accurately define his baseline project schedule and align all stakeholders’ project schedule expectations.
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