Supplier Development and Localisation(SD&L)

Feb 2011

Version 20100323 v0.2

These initiatives are aimed at a few development goals with significant existing overlap

This operating model will have three core functions

SOURCE: Interviews with Eskom staff, team analysis

Strategy and planning

Monitoring and reporting Execution support

Function▪ Collection, verification and management

of contract data/KPIs ▪ Internal and external reporting of

contract data/KPIs▪ Collection and communication of

success stories

Function▪ Tactical support to buyers▪ Local development policy advice▪ Basic skills development▪ Business improvement interventions▪ Business opportunity advice▪ Infrastructure investment advice▪ Industry hub participation

Function▪ Analysis of local industries, suppliers and skills

base (capacity and capability)▪ Eskom-wide strategy and target setting ▪ Cascading of targets, milestones and penalties

into new contracts/operational procurement▪ Segmentation of suppliers▪ External stakeholder and policy relationship

management

1

23

Rollout of SD&L process to date

• SD&L Policy (Draft)

• SD&L functional / org structure

• SD&L Evaluation template for Tender processes

• 4 functional pillars:

• Skills development

• Job Creation

• Localisation (development of existing industry)

• Industrialisation (development of new local industry)

SD&L fit to Structure

Supplier Development &

Localisation(GM: Mr MM Gobingca:

as of Feb 2011)

Strategy and Planning Execution, Monitoring and Reporting Support Supplier Management

7

Supplier Development and Localisationevaluation criteria (DRAFT)

Relative contribution of SD&L dimensionsPercent

Supplier developmentand localisation %

Skills development and job creation

%

Local content%

Number of persons to be trained

Number of persons to be employed full-time (>12 months)

Amount to be committed to training (Rm)

Local content (total procurement spend on SA companies) %

Local to site (municipality)

%

Local to South Africa %

Local to site (municipality)

%

Local to South Africa %

Local to site (municipality)

%

Local to South Africa %

Local content to site(municipality)

%

Local content to South Africa % Procurement

from LBScompanies %

Procurementfrom BWOcompanies %

Procurementfrom SBEcompanies %

INDUSTRIAL DEVELOPMENT TO BE FACILITATED THROUGH COMPONENT HUBS, IDEALY

Participant/s according to relevant industry requirements

• Regular meetings

• Agenda compiled by hub chair with hub input and circulated in advance

• Each party has clear role and deliverables

• Regular meetings

• Agenda compiled by hub chair with hub input and circulated in advance

• Each party has clear role and deliverables

• UNIDO• Dti (IDC)• Private sector• …

FundingSkills Accreditation

Customers

Pre-qualified suppliers

Industry associa-

tion

• Tier 1 OEMs / companies• Tier 2 suppliers where

relevant• …

• Represents non-qualified suppliers and relevant industry organisations

• …

• DST• DoE• DoL• Universities• Technical colleges• Supplier training

programmes • …

• SABS• Standards

committees• …

• SOEs• Related

customers, e.g., municipalities

• …

Chair

• Elected by hub members

• Sits on governance council with other chairs

Competitive assurance

Benchmarking

• UNIDO• dti• OEMs• …

Also requires some facilitation, including tracking against milestones, incorporation into central co-ordinating mechanism, and networking across hubs. Could be fulfilled by Chair, SOE, TSAPRO or industry association depending on industry

• Competition Commission

• dti• …

• Hubs co-ordinate investment in skills, R&D and plant at a component level

• Community of local suppliers that benefit from power cluster fund co-ordination and contributions

• Develop ‘business case’ for funding of R&D, skills development and shared technical infrastructure

• Hubs co-ordinate investment in skills, R&D and plant at a component level

• Community of local suppliers that benefit from power cluster fund co-ordination and contributions

• Develop ‘business case’ for funding of R&D, skills development and shared technical infrastructure

Description

Possible hub participants

Source:TSAPRO team analysis; Eskom CSDP team analysis

EXAMPLE HUB