Motor industry discussion workshop

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Motor industry discussion workshop
To discuss the participation of the motor
manufacturing industry in the provision of
products and services related to the
infrastructure development programme
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Discussion points

• What is the Competitive Supplier Development
  Programme (CSDP)?
• Transnet and Eskom obligations and strategy
• Alignment with other industry and regional
  development initiatives
• A shared industrial development and alignment
  platform
• Process view
• Typical cost
• Proposed next steps

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The aim of the CSDP is to maximise local supplier
participation in the Infrastructure development
programme

• Approximately R1.5 trillion to be invested in
  local infrastructure development programmes
  through Transnet and Eskom the next 20 years
• Most of these contracts are with global OEMs,
  which also operate across other industries
• These OEMs have a global network of suppliers
• The primary aims of the CSDP are to
• Maximise local participation in the immediate
  contracts without compromising cost or quality
  (Import substitution)
• Ensure the participation of local suppliers in
  the global supplier networks of these OEMs
• This needs to be done on a cross-industrial basis
  as supply chain improvement affects a number of
  other industries
• Although Transnet and Eskom provides the buying
  pressure, our main focus is on the global OEMs

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Transnet identified locomotives and harbour
equipment as their main impact areas
Transnet Spend 2008 2012
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Working throughout the infrastructure development
programme supplier network
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We need to drive development on an industry or
cluster basis

• Legal constraints require that Transnet and Eskom
  participate in a non-exclusive collaborative
  environment
• Competition is increasingly moving towards
  industry clusters competing on a global basis
• Supporting development needs Visibility across
  an industry on total projected demand, strengths
  and weaknesses of the supplier base, support
  organisations etc.
• OEMs require visibility on the total supply
  chain down to a 2nd and 3rd tier level
• The Rail and Harbour Supply Chain Association has
  been formed as a cluster to ensure collaboration
  and open communication
• Various rail operators across the region
• All potential suppliers and OEMs

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Eskom similarly looked at component groups from
an import substitution perspective
Source Dorbyl Industry experts Eskom CSDP
team analysis TSAPRO team analysis
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Eskom is focusing on a number of component hubs

• A number of multi-billion Rand contracts have
  already been placed on OEMs with significant
  CSDP obligations
• These OEMs need to have visibility on the total
  supply chain
• Suppliers also require visibility on the
  performance requirements of the OEMs
• These component hubs will also operate on a
  cross-industry basis
• Turbines
• Boilers
• Steel
• Control instrumentation
• Construction

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Many initiatives, but disjointed
Industry Clusters
Local Content
Strategic Sourcing
ASGISA
Financial Support
Enterprise Development
Infrastructure Development Programme
Global Trade
Supplier Evaluation
Knowledge Transfer
Supply Chain Alignment
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A collaborative framework to accelerate
industrial development across the economy

• Alignment
• Common assessment
• Benchmarking
• Cluster development
• Industry-wide development
• Shared IT platform
• Visibility

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Companies are benchmarked against world-class
competitiveness across a number of key
performance areas
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The benchmarking makes use of practices and some
performance metrics
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It provides a detail view of performance gaps,
what to do about it and who can assist in doing so
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The data provides intelligence from an in-depth
micro, to a macro economic level
As an economic development solution (Macro
Level) As a means to monitor and intervene on a
collaborative basis across the economy
As an industry or cluster development
solution Monitoring and development of all the
companies who belong to a specific industry
Supply chain view As a comprehensive vendor
management solution across the total supply chain
Individual company level (Micro Level) Monitoring
and development on an individual company level
This is a simple, yet comprehensive solution
which provides a common base for the various
stakeholders to collaborate
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Value proposition (Buyer and supplier
organisations are the primary clients)

• Buyer organisations
• A cost-effective means to evaluate and monitor
  the performance of current and potential
  suppliers
• The ability to improve performance across the
  total supply chain
• Ability to reduce supply chain cost through the
  ongoing development of suppliers in this regard
• The ability to monitor and mitigate risk down to
  2nd and 3rd tier suppliers
• The ability to ensure sustainable development is
  deployed throughout the local and global supplier
  base
• Suppliers
• Additional business and growth opportunities
• Ability to monitor customer expectations on a
  global basis
• Sustainable customer relationships
• A comprehensive development platform and support
  network to accelerate development in line with
  market and customer expectations
• Development organisations (Consultants,
  governments, UNIDO etc)
• Additional business (Organisational and supply
  chain consulting and development work)
• Ability to monitor current development and
  development opportunities
• A development framework to develop organisations
  in line with market expectations
• Financial support organisations

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The Competitiveness Foundation maintains the
common standard and organisation to align the
various players
Small
Large
KPMG, EY, McK etc
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Summary

• A collaborative framework to accelerate supplier
  competitiveness across commodity groups,
  industries and the region
• Maximising import substitution through
  competitiveness improvement
• Integrating local suppliers into the global
  economy
• An organisational structure to house and finance
  the supply chain alignment hubs
• The ability to support the development of SMEs
  into the mainstream economy through the UNIDO
  support network
• These mechanisms have proved itself on a global
  level, the challenge now lies in our willingness
  to collaborate to drive competitiveness on a
  national/regional level

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The Benchmarking and Supplier Development Process
Ongoing improvement cycle
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Impact areas within an typical buyer/supplier
organisation
Supplier performance management
Fulfilling customer expectations
Internal competitiveness evaluation and
development
Supplier base
Market
Driving our own supplier competitiveness
Understanding buyer expectations and contracts
Developing our internal competitiveness



Competitiveness
Expectations
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The programme deploys a common framework to rate
competitiveness and develop this in line with
contract and/or management expectations
Supply chain matrix

• The benchmarking framework provides the ability
  to strategically position a company in terms of
  it ability to minimise cost and risk performance.
  This can be cascaded into the detail evaluation
  of each of the underlying performance areas.
• It then provides the means to identify the
  development areas in line with management and/or
  customer expectations.
• It provides the means to determine what needs to
  be done to address development gaps and who can
  assist in this.
• It then provides the management team with
  visibility on the ongoing development of the
  organisation, which can also be provided to
  customers and other stakeholders.

Expectations
Ability to minimise risk
Current competitiveness rating
Ability to minimise cost
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Proposed next steps and possible cost
implications (This excludes the cost to maintain
the hub manager)

• We need to capture your basic info to understand
  whos who in this network and your areas (product
  groups) of interest to get the ball rolling
• Capture basic (Yellow Pages) info directly on
  www.benchmark2grow.org in two weeks (No cost)
• Or complete these basic info questions which we
  will send to you on Monday
• Go through the supplier self-evaluation process
  for self development and/or OEM alignment
  purposes, with the following options
• Quick and Fast Do the benchmark on paper and we
  will capture it on the system and provide you
  with benchmarking feedback reports (R540-00).
  Info will be marked as fully confidential.
• Capture it directly on the system without
  training with some risk (Free of charge)
• Send an accountable person in the organisation
  for a one day system and performance training to
  take ownership of the programme in-house, with
  on-site training support (R6 800-00)
• Use the solution for your own supply chain and/or
  client relationships
• Annual user fee per user
• 1-50 people (250-00 pa). (UNIDO SMEs free of
  charge)
• 51 500 people (500-00 pa)
• 500 plus people (1 000-00 pa)

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From a Naacam perspective

• Participate in the initiative to oversee the
  interest of the Naacam members
• Use the same facility to monitor and drive
  development and growth across the Naacam
  membership base, on a collaborative basis
• Involve the motor manufacturing OEMs on a
  similar basis
• Other suggestions...

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Thank you
Herman Potgieter 08610 58687 / 083 227
2277 Herman.potgieter_at_lumusnet.com www.benchmark2g
row.org (This presentation and the
benchmarking questionnaire will be forwarded to
you)
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Free-of-charge functionality (Free for full
access to own evaluation and data)
Capture of Yellow pages info of who is whom in
this community and what do they provide/procure
Incorporation of data for cluster and industry
development purposes
Access to the various questionnaires, user guides
and the ability to capture directly on the system
Ability to capture own procurement requirements
and contracts for suppliers to view
Supplier Development Platform
Comprehensive feedback reports on competitive
strengths and weaknesses
Incorporation into local and global buyers
procurement radar for selection purposes
Web based access to a comprehensive support
material and web-based courses to address
development gaps
Linking to financial institutions who can help
with financing based on the verified data
Access to a list of local mentors, service
providers, training institutions and programmes
who can assist
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Supply chain features which require a Lumus
membership contribution to sustain the platform
The ability of buyers to view the data of
suppliers through the Lumus methodologies
Suppliers ability to view the requirements of
participating buyers through the Lumus
methodologies
Service providers (Consulting companies) who wish
to track the performance of participating
companies
Supplier Development Platform
Financial institutions who wish to track the
development of their clients making use of the
dev tracking methodologies
These features are however made available to
UNIDO SPX members smaller than 50 people, on a
free-of-charge basis. (For the rest of Africa
this would be less than 100 people)