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South African firms 'losing out' in procurement


22/11/2006 17:09 
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Procurement among South African businesses is not what it should be, according to the national strategic sourcing manager at MWEB CommerceZone, as firms fail to take advantage of technology such as purchasing software.

Wayne van Deventer has claimed that procurement practices are relatively lax in the country with many companies not keeping an accurate log of the intricacies of their daily purchases which is losing them money in the long term.

Firms are failing to take into account the actual spend of a purchase which relates to not only the individual purchasing process but also the loss of productivity and time when, for instance, an employee leaves the office to buy an item.

Mr van Deventer said: "Our strategic sourcing process involved all suppliers from which our customers had obtained supplies in the past year, including those who we were told were 'absolutely the cheapest' for one or more commodity. In most cases, we found the 'absolutely cheapest' was more a case of perception than reality."

As a result of these losses incurred by businesses, Mr van Deventer urged more companies to adopt e-procurement software so that they could effectively manage their purchases and avoid over-spending.

In South Africa, companies must calculate their Black Economic Empowerment (BEE) scorecard – a scheme designed to reward companies who procure from BEE compliant firms.

 
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