Guidelines for establishing an effective supply chain management framework for local municipalities
Matolong, Maleke Joel
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South African Government introduced the supply chain management framework in 2003, with a vision of creating a seamless system which will play a pivotal role in service delivery provision to the communities, while achieving the objectives of cost effectiveness, fairness, equity transparency and ethics. The main aim of adopting this framework immediately after reform was to align the Public Sector Supply Chain management to the best practices. Unfortunately since its inception the supply chain management, particularly in the local government, has not enjoyed good publicity, due to the following three main factors, firstly incompetency of the supply chain management practitioners on using the preference points system, writing insufficient motivation when deviating from the SCM policies and irregular extensions of validity periods. The second main factor is the unethical conduct of the supply chain management practitioners in collusion with suppliers to overprice their respective tenders and also to supply inferior material for projects intended for community development. The last main factor is the lack of political leadership to enforce compliance, such as consequence management for those who contravened the supply chain management policies, as some councillors are also found doing business with their municipalities which is against the Municipal System Act 32 of 2000. The aim of this study was to establish an effective supply chain management framework for local municipalities in order to achieve the primary objectives of Section 217 of the Constitution of the Republic which are fairness, equity, transparency, and competitive and cost effectiveness. The study found that supply chain management practitioners have indicated that they have a very good understanding of how the supply chain management framework should be applied and of related legislations, but the literature differs with the views of the practitioners, as corruption, fraud and lack of consequences reports are still raised by the Auditor General South Africa and by other publications over the years. The following are recommendations that should be taken into account for the supply framework to function effectively: - Establish a Supply Chain Management Professional Association (SCMPA) of which the role is to provide annual online assessment for all the supply chain management practitioners; - To use the Construction Industry Development Board (CIDB) grading certificate as evaluation minimum criteria of assessing functionality in accordance with the specific project; - Cancel the provision to re-issue or re-advertise the tenders after the supply chain management unit has received quotations from suppliers. - Municipalities should develop an integrated online commodity price listing supply database which should be operational 24 hours. Also to develop a Cellular phone application that will enable all the service providers to access the portal at any time to load their respective prices. - Make provision to include members of the audit committee to be charged for negligence under financial misconduct section 171 of the Municipal Finance Management Act 56 of 2003. - To provide the Auditor General South Africa and the Public Protector with legislative powers to refer malpractices or contravention with the supply chain policies to the SCMPA and SAPS to recover wasteful and fruitless expenditure as required by Section 102 of Municipal Finance Management Act (MFMA) of 56 of 2003 after complying with section 173 of the MFMA.