SPW_SpeakerPresentations2015 - Zondi Mohlatsane

Outsourcing Procurement &/or Inbound Supply Chain functions

Zondi Tsatsi MohlatsaneManager: Order ManagementMTN SSH

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Outsourcing Procurement &/or Inbound Supply Chain functions

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• 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?

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• ABSA RFx – SBV

• BBBEE Act

• Other Regulations

Relevance & Feasibility – SA Market COMPANY LOGO HERE

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1. Inventory Management• Insurance• Broken ERP Systems

2. Warehousing• Security• Administration

3. Distribution• Planning

Annual Carrying Cost18 – 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

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To Outsource?

1. Warehousing• Inventory Management – No

2. Distribution• Route Planning?• Cargo auctions?

3. Returns & SwapsMTN 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

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3 simple things to always check

1. Legislature vs Business Strategy

2. Constant Cost/Benefit Analysis

3. People &/or Machine

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THANK YOU

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