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CHAPTER 5
SUPPLIER RELATIONSHIP MANAGEMENT
Section
Description
Sample language
The purpose The purpose of the
document and key
information relating to
policy implementation,
e.g., the geographical
focus and the date of
launch.
• The purpose of this document
is to set out our global local
content policy. This policy is
effective from 1 January 20xx
and will be subject to detailed
review in January 20xx.
• Regulatory: Available legislation may define what exactly is meant by a local
supplier.
• Geographic: A geographic region within the country may be used to define
which organisations qualify as local suppliers.
• Ownership: Is the organisation targeting suppliers who are owned by foreign
entities, locals, or by both foreign and local individuals and entities?
• Size of enterprise: Is the organisation targeting large, well-established
suppliers or small to medium enterprises?
• Vulnerable groups. Is the organisation targeting suppliers operated by under-
represented groups or previously disadvantaged groups?
The above suggests that it is not enough for a supplier to be operating in a
country for it to be selected as a local supplier by the buying organisation. The
prospective supplier also has to be considered within the parameters of the
specified criteria. For example, the organisation may adopt the ‘regulatory’
definition or the ‘size of the enterprise’ definition as part of its strategy in selecting
the local suppliers to work with.
5.7.1.4 Develop a Local Procurement Policy
A local procurement policy is developed so that it demonstrates the organisation’s
dedication to local procurement and helps to entrench the practice throughout
the organisation. A policy enables the organisation to put together strategies,
systems, plans and programmes to address the gaps between local supplier
capability and the organisation’s procurement standards. Since procuring from
local suppliers may require training support, the policy should also outline the
organisation’s proposal for strategies for optimising opportunities for SMMEs.
When developing a local procurement policy, the information gathered in
establishing the business drivers, applying the self-assessment process and
appropriately defining the term ‘local’ should be taken into consideration. The
template illustrated in Table 5.4 demonstrates the important aspects to be
included in the local procurement policy.
Table 5.4:
Template for developing a local procurement policy [24].