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There are many advantages to using local producers, but it’s important to put contracts in place – and you may need to step in if they can’t keep pace with growth.

But how does procurement affect the workplace and what governs procurement within the workplace? You first need to look first at what is governing procurement in the workplace to understand how it affects the workplace. So the following legislative statutes is what drives procurement in the public sector as well as in the mining sector.

There are, therefore, numerous legislative frameworks that guide procurement practices. These include the:

• Constitution
• Public finance Management Act 1 of 1999
• Municipal finance Management Act No 56 of 2003
• Preferential Procurement Policy framework Act No 5 of 2000
• Broad Based Black Economic Empowerment Act 53 of 2003
• Promotion of administrative Justice Act No 3 of 200
• Promotion of Equality and the Prevention of Unfair Discrimination Act No 4 of 2000
• Construction Industry Development Board Act No 38 of 2000
• Prevention and Combating of Corrupt Activities Act No 12 of 2004, and so on Quoting (Migiro & Ambe, 2008

With regards to the above the public sector in so far is covered under these and it is important to understand that businesses at large is greatly affected by these acts. Not only from a governing standpoint but because the act`s insofar demands application of the rule of law.

What exactly is procurement?

Procurement is the act of obtaining or buying goods and services. The process includes preparation and processing of a demand as well as the end receipt and approval of payment. It often involves:
(1) purchase planning,
(2) standards determination,
(3) specifications development,
(4) supplier research and selection,
(5) value analysis,
(6) financing,
(7) price negotiation,
(8) making the purchase,
(9) supply contract administration,
(10) inventory control and stores, and
(11) disposals and other related functions.
The process of procurement is often part of a company’s strategy because the ability to purchase certain materials will determine if operations will continue.

Why is Procurement important?

In the private sector, procurement is viewed as a strategic function working to improve the organisation’s profitability.  Procurement is seen as helping to streamline processes, reduce raw material prices and costs, and identifying better sources of supply.  In essence, helping to reduce the ‘bottom line’.

Why local Procurement is important?

The Local Procurement Accord was established in 2011 by government with the intention of putting policy in place to develop local suppliers and better utilise local resources in order to achieve the goals of socio-economic development through job creation. Five years on, procurement of locally-produced goods is still low which compromises economic growth and job creation. Locals are still importing the skills, materials and tools needed to complete their products or provide their services. This is because South Africans face tough competition from labour-intensive countries producing goods and services cheaply as well as capital-intensive countries producing advanced products of high quality.