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CHAPTER 1
PRINCIPLES OF SUPPLY CHAIN AND PROCUREMENT MANAGEMENT
or partiality; whereas ‘objective’ implies a detachment that permits impersonal
observation and judgment.
Another important principle necessary to guarantee best value for money is
integrity. This relates to a soundness of moral character, having a sense of
honesty and truthfulness in regard to personal and organisational behaviour. It
means adhering to commonly accepted moral and ethical principles; impartiality
and incorruptibility; and avoiding any behaviour that may be construed as
inappropriate.
A fair process also requires transparency, which is defined as the process
by which reliable, timely information about existing conditions, decisions and
actions relating to organisational activities are made accessible, visible and
understandable. Transparency means unimpeded visibility and openness in all
transactions. It ensures that all information on procurement policies, procedures,
opportunities and processes are clearly defined and made known simultaneously
to all interested parties.
1.4.3 EFFECTIVE COMPETITION
Effective competition is best explained as a situation in which at least three
independent contractors acting on their own (not in collusion) effectively compete
for the same business opportunity and submit a responsive bid. Organisations
attempt to foster effective competition in all procurement processes as a
means of ensuring fairness, integrity, transparency and achieving best value
for money. In a quasi-public organisation, competition is imperative and should
be encouraged in order to obtain the best value for the money.
1.4.4 BEST INTERESTS OF THE ORGANISATION AND ITS CLIENTS
This principle is based on the ultimate objective of procurement, which is to add
value to the organisation and its clients in fulfilling their goals and objectives.
Undertaking procurement in the interest of the organisation and its clients
means carrying out procurement activities in the manner that best enables the
organisation and its clients to reach the general and specific objectives of the
project agreements, in compliance with applicable procurement procedures.
By applying these principles in the procurement process, organisations
ensure effective and purposeful implementation of their activities by avoiding
a wastage of resources; producing the most appropriate solutions at all times;
and addressing the needs of the organisation and its clients. For instance, the
ultimate objective of a power utility such as Eskom could be the effective and
efficient provision of electricity to all its clients. In such a case, the procurement
objective, amongst others, would be to acquire the needed production supplies
with precision and in time in order to satisfy its clients’ power needs.