Download - Plenary Panel Discussion 5
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Plenary Panel Discussion 5
SMME Development and Procurement Value Chain
Facilitator: Maritha MarneweckKey Note Panellist: Clive GovenderPanellists: Allan Gibson
Champ ThekisoBongiwe Mabusela
SMME DEVELOPMENT & PROCUREMENT VALUE CHAIN Transformation Indaba 2012
Our ambition is to be the leading global mining company
‘Leading’ means being the investment, the partner and the employer of choice
‘People making a difference in a company making a difference’
ANGLO AMERICAN AT A GLANCE
Other Mining and Industrial: Following the reorganization of the business in October 2009, we decided to divest of a number of assets in addition to Tarmac (which had already been earmarked for divestment): Scaw Metals; and our zinc business (sold to Vedanta for $1.34 billion in May 2010).
Platinum
Diamonds
Copper
Nickel
Iron ore and Manganese
Metallurgical Coal
Thermal Coal
Corporate &representatives offices
Other Mining & Industrial
Key
ANGLO AMERICAN AT A GLANCE
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13809
4500
4257
3601
2222677
Figure 1: Global Economic Value Distribution 2011 $million
Suppliers
Employees
Reinvested
Taxes
Dividends
Interests
In 2011, $13,809 million paid out across our global supplier base and $ 7,263 million of this spend was in Africa.
ANGLO AMERICAN AT A GLANCE
Anglo American aims to be the industry leader and global benchmark for Supply Chain value creation
7263
361
5104
1082
Figure 2: Suppliers share of economic benefits$million
AfricaEuropeNorth Amer-icaSouth Amer-icaAsia / Aus-tralia
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Local Procurement: relationship between location of supplier and location of recipient of goods/ services. Divided into 3 levels:
National Supplier registered or based within the same country as the operation
ProvincialSupplier registered or based within the same province/region/state/territory as the operation.
Localised Supplier registered or based within the same immediate area as the operation.
South African Example
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LOCAL PROCUREMENT DEFINITIONS
In South Africa, BEE ownership is an additional criterion.
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2010 - 2011
Be Proactive• Implement LP strategic plans at all levels• Supplier development• Forward visibility, readily accessible
2012
Build Resilience• Globally competitive local
suppliers• Provide leadership to
external parties
2013 →
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Mat
urity
/ Pe
rfor
man
ce
BASICBASICBASIC REACTIVEREACTIVEREACTIVE COMPLIANTFOUNDATIONAL
COMPLIANTCOMPLIANTFOUNDATIONALFOUNDATIONAL PRO-ACTIVEPROPRO--ACTIVEACTIVE RESILIENTRESILIENTRESILIENT
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Foundational• Policy• Build commitment• Targets measured and reported• Guidelines & toolkits
Time
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LOCAL PROCUREMENT STRATEGY
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ANGLO AMERICAN'S LOCAL PROCUREMENT FRAMEWORK Deepening Anglo American Local Procurement Capacity
Arro 1
Arrow 2
Arrow 44
LEARN
1. Establish the business case & understanding the business drivers
2. Determining demand opportunities for local procurement
3. Assessing capacity of local businesses
PLAN
4. Developing local procurement strategies
DO
5. Building Anglo American capacity6. Ensuring accessibility and visibility7. Integrating large and local suppliers8. Developing supplier capacity and capability 9. Supporting entrepreneurs
MEASURE
10. Monitoring progress and impact
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LOCAL PROCUREMENT
The business case for Local Procurement is aligned to Anglo American’s ambition of being the partner, investment and employer of choice.
1. Establishing the business case
LEARN
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LOCAL PROCUREMENT2. Determining demand opportunities for Local Procurement
Determining opportunities
Prioritising opportunities
Description
Determining demand opportunities involves:• Future demand analysis for goods and
services over at least five years;• Identifying the categories with potential to
be sourced locally
LEARN
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LOCAL PROCUREMENT3. Assessing local supply capacity
Mapping suppliers to categoriesDescription
Analysis of existing capacity within the local community will locate potential suppliers relevant to the demand opportunities.
Suppliers with potential to supply a priority category will be evaluated on a range of criteria.
LEARN
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LOCAL PROCUREMENT4. Developing local procurement strategy
Description LP Tactics Matrix
The Local Procurement strategy integrates the business case, demand-side analysis and supply-side analysis to identify strategies to increase sourcing from local suppliers
Local procurement targets and action plans are specific deliverables
PLAN
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LOCAL PROCUREMENT5. Building Anglo American Capacity
Resources appointed
Capacity Building Workshops
Description
Appropriate resources are required:
Competent dedicated staff
Steering committees
Collaboration across disciplines
Systems and procedures
Budget
New roles were created and resources appointed to focus on local preferential procurement
Local Procurement workshop: South Africa: 2 – 4 April 2012Participants from Supply Chain, Group Category teams, Business Units, Social Performance, S&SD.
DO
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LOCAL PROCUREMENT6. Ensuring accessibility and visibility
Payment Terms
Ring-fencing / Set asides
DescriptionDrawing on various approaches to make opportunities more accessible and visible to local suppliers, for example
A range of preferential sourcing methods suited to local suppliers and SMMEs
Only considering local suppliers for some contracts (ring-fencing);
Creating smaller work packages (unbundling);
Our payment terms will accommodate the needs of SMMEs
DO
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LOCAL PROCUREMENT7. Integrating local and large suppliers
Partnerships
Connecting large & small suppliers (LP Trade Fair)
Partnerships between our construction partners are improving development in the Northern Cape.With guidance and mentoringfrom Stefanutti, a local BEE supplier is gaining considerable knowledge and exposure to safety standards, quality control, programming and commercial activity.
Description
Many opportunities for local procurement are influenced by large suppliers (e.g. integrating local suppliers into large contracts)
DO
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LOCAL PROCUREMENT8. Building supplier capability
Supplier Development Description
Using supplier development programmes to work with existing local businesses
The suppliers’ capability is built and they are guided and supported towards growth and increasing competitiveness
DO
• Increased attention is being given to Supplier Development programmes by Anglo American’s South African Business Units
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LOCAL PROCUREMENT9. Supporting entrepreneurs
Entrepreneur Internship ProgrammeDescriptionEntrepreneur Internship Programme (EIP) was launched end 2011. The EIP is a targeted internship programme hosted by Anglo American’s Supply ChainAims to be a catalyst for high potential entrepreneurs interested in developing or growing a business in strategic, non-traditional areas364 applicants applied, including current Anglo American employees. Five finalists were selected to join the 2012 programmeA mix of skills training, targeted business exposure, and business planning support is being provided
In many of the communities in which we operate, the constraints to Local Procurement are so large that our efforts to bridge the gaps also require attempts at strengthening the local market economy.
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OVERVIEW: THE EIP FRAMEWORKTransforming ideas into sustainable businesses
Mentoring & CoachingOperational Exposure to Anglo American Business
Access to Technical ExpertsNetworking with Key Stakeholders
Capability AcceleratorDemand Driven Learning & Skills Development
MarketingSystems
StrategyDevelopment
Sales Systems
1. EIP Milestone Schedule2. Aurik Monthly Reviews3. EIP Progress Reviews4. Scheduled "Show & Tell" 5. Zimele Review(s)
FinanceSystems
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LOCAL PROCUREMENT10. Monitoring progress and impact
Spend with Suppliers in Host communitiesDescription• In monitoring and measuring our progress,
we consider what impact we are having - both positive and negative.
MEASURE
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Anglo American’s approach and activities to promote local procurement and enterprise development are focused on exceeding compliance and collaborating for sustainable, meaningful change.
Lessons Learnt to DateOn Our Local Procurement Journey
• There is no magic ‘silver bullet’ – a multi-faceted approach is required
• Local procurement is sustainable over economic cycles when built on a strong business case
• Collaboration creates enabling environments for successful local procurement
• Local procurement creates a positive impact by contributing to skills development, creating jobs, and investing in local infrastructure
• Sound business principles and governance underlie all engagements and transactions
THANK YOU
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Plenary Panel Discussion 5
SMME Development and Procurement Value Chain
Facilitator: Maritha MarneweckKey Note Panellist: Clive GovenderPanellists: Allan Gibson
Champ ThekisoBongiwe Mabusela