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CHAPTER 1
PRINCIPLES OF SUPPLY CHAIN AND PROCUREMENT MANAGEMENT
from the supplier (the originals are to be kept in a safe).
• Bid protests.
• All correspondence with the contractor.
• Amendments to contracts.
• Any required progress reports and/or other proof of delivery of milestones
as provided for in the contract.
• Proof of receipt of goods.
• Receipt and inspection reports.
• The acceptance report from the requisitioner or end user.
• Certificate of substantial completion.
• Certificate of final completion.
• Insurance claims.
• Proof of payment.
• Supplier evaluation reports [9].
It is the responsibility of the procurement directors or managers to ensure that
all documentation is filed for future reference. The procurement policy within
the organisation will also determine what documentation will be kept and for
how long.
1.13 TRENDS AND DEVELOPMENTS IN PROCUREMENT
The environment within which organisations operate is dynamic. This requires
that organisations study and adapt to changes/forces taking place both within
and outside their organisations in order to remain competitive. For example, the
advancement in information technology is one of the developments in the market
that has had an impact on how sourcing is carried out in large organisations.
Some of the major trends and forces affecting the procurement function are:
• Global sourcing
– Owing to competitive pressure, ongoing financial and
economic crises, and consumer demand for greater value for money,
organisations are increasingly expanding their supplier bases by sourcing
products and services globally from low-cost countries. Some organisations
have also set up international purchasing offices in different regions of the
world to facilitate global sourcing. Procurement officers are driven by cost
targets and therefore source suppliers globally to achieve these targets.
• Supplier development
– Supplier development is a major issue, particularly
in South Africa where government requires that large organisations also
source products and services from small businesses. Some of these small
organisations lack the resources and capabilities to meet the needs of large
organisations, which compel large organisations to develop and support
them so as to improve the performance of small organisations. Supplier
development is discussed in detail in Chapter 5.
• Electronic procurement (e-procurement)
– The procurement function
benefits from using the Internet to procure goods and services. E-procurement
improves efficiency and facilitates the development of effective buyer-supplier
relationships.