2015 Operational Review

PURCO SA’s core mandate of negotiating purchase orders and vetting and approving trustworthy suppliers has grown considerably as we continue to broaden our range of tenders and our supplier base.

But we have also identified several gaps in the landscape where our organisation can play a pivotal role. As a trusted partner to higher educational institutions, a valuable buyer for numerous contractors, and a respected lobbyist to government, we have the opportunity to make a real impact.

Training is a very large concern for us, both for the procurement staff working for our members and for the contractors who supply them. Streamlining the procurement processes even further through the smart use of technology is another area of concern and opportunity.

Our core focus areas for the period remained Quality, Technology and Professional Development. These key performance areas are underpinned by a drive for greater engagement between and with members, suppliers, and other key stakeholders.

Below is a summary of our activities in the past year and an overview of the initiatives we are taking to enhance our value to the higher education sector:

Financial outcomes

More than R1.36 billion of spending has been aggregated through our tenders this year, up 33.4% from R1-billion a year ago. The increase largely comes from a rise in the volume of tenders being channeled through our system as our existing members trust us with more of their purchases. 

Rebates to members increased to R12.6million while direct procurement savings exceeded R119 million.

This is a conservative estimate based on typical market reference prices for our goods and services contracts.

Expanded contract base, deeper expertise

PURCO SA has an overall goal of being able to source and negotiate good discounts on all items or services that our members need to procure.

We already have a very extensive supplier base, and that has increased this year as we add more services. Some of them are unfortunately becoming a requirement, like security surveillance systems for safety on campus and medical emergency services for the students under our care. We have negotiated national contracts for emergency services so our members can summon medical assistance if students get sick on campus. Some of our members have extended this medical support to cover their students when they go home to rural areas in the holidays. 

Training Opportunities

To tackle a lack of skills in the procurement industry, PURCO SA conducted a skills survey with the Chartered Institute of Purchasing and Supply (CIPS) on 178 procurement employees last year. 

The survey allowed us to devise training courses to meet specific areas of need, and this year we ran our first course in finance and procurement. Approximately 80 employees from member organisations in the Eastern and Western Cape, Kwazulu-Natal and the Central region attended the two-day training and all gave very positive feedback. 

PURCO SA paid for this initial course, but a financial model will be structured between our regional branches and the universities so we can continue training their staff. Employees who attend these courses will earn credits towards the globally recognised CIPS accreditation.

Now that PURCO SA has identified the skills gaps and has gained the experience to present the necessary training, we are optimistic of improving the level of professionalism and enhancing the efficiency of procurement operations with our membership.

PURCO SA has also started creating a range of training courses to develop our suppliers, in line with BEE requirements.

The courses cover improving business skills like money management and filling in tender forms.

We have run pilot courses and we must now devise sustainable funding models. That may see PURCO SA run training sessions funded by our members, or help our members establish their own training initiatives.

e-Procurement 

Progress with switching the bulk of our members’ purchasing to electronic procurement is slow but steady. Many members are adopting the PURCO SA Travel tool which allows members to plan, book and confirm their travel arrangements whilst benefiting from the discounts offered by our travel partners.

The Online eProcurement platform is more complex to install as it needs to be integrated with existing ERP systems. PURCO SA Online is now being integrated into the SAP system at the University of Cape Town and the ITS system at Nelson Mandela Metropolitan University. The University of Johannesburg is another early adopter, integrating with its Oracle system.

Our technology partner MyMarket is in discussions with several other universities. 

One delay is a lack of uniformity, with some universities running procurement through a central system and others having separate purchasing processes for each faculty. The online purchasing system will streamline those processes and aggregate orders to create more efficiency, better savings and a higher degree of transparency.

ISO certification 

PURCO SA was the first organisation of its kind worldwide to achieve ISO 9001:2008 certification. This international mark of quality was renewed in 2015 for another three years, after rigorous reassessments to confirm we are maintaining the exacting standards and striving for continuous improvement. 

ISO accreditation is only granted to organisations that achieve world-class standards in customer focus, leadership, management, and supplier relationships. 

Annual conference

The 2014 Conference was premised on the concept of MindShift, and courageously embraced PURCO SA’s drive to encourage greater levels of engagement with and between stakeholders. 

Our Central Region Committee, with event partners AssociationWorks and JoziTown Projects dramatically overhauled the event, and delivered milestone attendance, participation, returns, and kudos.

Social media

The conference was also used as a platform for our social media initiative, implemented this year. 

Social media is an unstoppable, essential force for communication and PURCO SA is eager to ride on this wave. We have quickly built a strong base to engage with our members and suppliers via Twitter, Facebook and other social media platforms. Already we have more than 4500 Facebook and 1600 Twitter followers.

Social media is used to share news and business insights, alert suppliers to new tenders and allow members to collaborate on common issues.

Our efforts to build the online community were supported through the launch of monthly competitions in which suppliers ask questions about their products and provide prizes to members who interact with them.

We believe social media will help to grow our community and give our suppliers exposure, and we are working to entrench the business benefits for all the parties involved.

Internship programme

Our internship programme continues to be a great success for the organisation and for the individuals we mentor. We recruit supply chain management graduates from the University of Pretoria for six months of work experience by shadowing our contract managers. So far every student that has come through our programme has been given full time employment with us at the end of their internship, and we are now turning our sixth intern into a full-time staff member. 

Member satisfaction

Our annual customer satisfaction survey showed a high level of delight with our services. Overall satisfaction has risen from 82% last year to 90%, setting a very high benchmark for the future.

We scored higher results in fourteen of the 15 categories measured. The quality of information we supply and our ability to meet customer expectations showed particularly pleasing improvements.

Previous surveys showed a decline in the number of members who felt they received the most competitive prices from PURCO SA, with only 78% believing that was true. We are glad to report a strong turnaround, with 88% now recognising that our negotiated contracts offer the best prices.

The one area we fell down in was in handling complaints about our suppliers, and we will work to improve our processes there. Another previous area of weakness was with our development of suppliers, and that has also risen to a satisfaction rate of 82%. We hope the additional efforts we are making to improve the business skills of our suppliers will see that category shoot even higher in the coming year.

International consortium

PURCO SA is one of several organisations around the world working as central purchasing bodies in higher education. There is much to be gained by collaborating with our international peers to share ideas and experiences, particularly as many of the suppliers we use are global conglomerates. To do that, we are working towards the creation of an International Association of University Purchasing Consortia.

Source Guide

The Source Guide is a valuable buying resource for Members and promotional tool for our contracted suppliers. The popular publication lists a full range of suppliers, plus the goods and services they offer. The 2015 edition is available as a traditional hard copy publication as well as a searchable online version. 

Meeting Room Hire

We are finalising preparations to make our advanced video conferencing and meeting centre in Midrand available for hire. It is an attractive option for members traveling to Gauteng for meetings, or for groups who want to benefit from the centre’s video conferencing technology.  It seats up to 50 people and we will also apply for accreditation as an examination centre.

Our objective is to maximise our assets while offering our members and suppliers a central and cost-effective meeting space.