Gordhan's supply chain promise hampered by semantics

Mungo Park

Gordhan said in his speech that: “we have indicated in previous years that supply chain management reforms and transparency are important elements in achieving value for money and combating corruption.” While the intention of this statement is welcomed, it refers to public sector procurement processes, rather than the broader and somewhat specialised field that is supply chain management.

References to supply chain problems in the public sector as a catchall term for public procurement policies that lead to fruitless and wasteful expenditure are inaccurate and misleading, as it shifts the focus away from the true problem at hand. It also disregards the efforts of dedicated and qualified professionals that ensure, on a daily basis, that South African consumers have easy access to a wide variety of local and imported products and services that support their lives and lifestyles.

Far more than just procurement

The term supply chain management describes far more than just procurement. It encompasses all the activities needed to deliver the right product or service to the right customer, at the right time, place, and cost. Supply chain management encompasses the efficiencies of sourcing, processing, manufacturing, transporting, storing, distributing, and tracking a myriad of raw materials, finished products, and commodities as well as the return of goods and waste.

Managing a supply chain demands an understanding of the entire value chain; all elements working seamlessly together to ensure, for example, that doctors have the necessary equipment and supplies to perform life-saving operations, that enjoying fresh seafood is possible even hundreds of kilometers from the sea, and that online shopping orders arrive at a time and place convenient for you.

The proof of public sector organisations that have a solid grasp of the true meaning of supply chain is evident in an increase in clean audits, significantly improved delivery of basic services to its citizens, and a number of other statistics that show that local government can serve its constituents well, within the framework of the Public Financial Management Act (PFMA) that sets out public sector procurement – referred to as supply chain – processes.

The next step

While it can be argued that the matter at hand is one of semantics, it is important to understand that there is more to supply chain – and contented citizens as a result – than simply the procurement of goods and services within a legislative framework. The next step would be to ensure that all civil servants employed in a supply chain capacity are well trained in the concepts of end-to-end supply chain management.

It would be a significant achievement if a year from now media reports could reflect the number of Certified Supply Chain Professionals ensuring service delivery to South African citizens, rather than the number of times supply chain processes were blamed in error.