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Universities Excellence Award Program Commences
We have added to our programs a recognition scheme for the best performing students in the Procurement and Supply Chain Management discipline. This award targets students at Bachelor and Master Degree level and has the following categories: 1. Overall best performing student in Procurement and Supply Chain Management at Bachelor level at year 3. The sponsorship is a cash award of Ksh. 10,000, a certificate of excellence issued by the Kenya Institute of Supplies Management and a one-year membership subscription. 2. Best performing graduate in Procurement and Supply Chain Management at Bachelor level. The sponsorship is a cash award of Ksh. 15,000, a certificate of excellence issued by the Kenya Institute of Supplies Management, and a one-year membership subscription.
3. Best performing graduate, specialized in procurement and supply chain management at Master level. The sponsorship is a cash award of Ksh. 25,000 and a certificate of excellence issued by the Kenya Institute of Supplies Management, and one-year membership subscription The above awards are part of the Institutes initiative to promote the Procurement and Supply Chain Management discipline and encourage research. The Institute has formally invited local universities through their Vice Chancellors offices, to participate in this Excellence Award program. University of Nairobi has confirmed its interest in the award program, and students pursuing Bachelors and Masters Degrees in procurement and supply management at UoN, will be the first to receive the award at their upcoming award ceremony.
KISM presentation at the Institute of Certified Public Accountants of Kenya (ICPAK) Conference on Devolution - 25th April 2013
addressed governance and leadership issues both emergent and anticipated in the devolution process, with focus on procurement. The need to engage procurement professionals in the management of resources at county level was underscored, alongside adherence to strategic approaches to procurement. The apparent risk of devolving corruption to the counties was also discussed with a call to professionals to observe ethics while discharging their duties. In closing, the chairman highlighted the interdependence of the various professions and urged all to work together to support the devolution process.
KISM presentation at the Institute of Certified Public Accountants of Kenya (ICPAK) Conference on Devolution - 25th April 2013
KISM Chairman Eng. Chris Oanda, delivered a key note presentation to Finance Officers at their workshop on County Governments Addressing
the Transition Challenges, at the Safari Park Hotel. The presentation titled Public Procurement in the Counties; Responsibilities and Controls
Our Products
Membership
Our focus this year is to add value to our members through a number of membership benefiting activities. As part of our strategy to create dialogue forums with members, KISM in partnership with UN Women successfully organized a 1 day forum on Preference and Reservation Scheme on 19th April 2013, at Hilton hotel, Nairobi. Members shared their experiences and difficulties in implementing the Scheme and a key recommendation is that an implementation framework needs to be developed to guide practitioners. We will devolve this forum and indeed other forums to the counties in order to reach a wider audience. We have also enhanced our job reference benefit to members where we periodically send job alerts via emails; we encourage members to constantly check their inboxes; those who have changed addresses should notify the membership office through membership@kism.or.ke. We have also assisted our young professionals to secure internship opportunities and employment opportunities that will equip them with industry experience to complement their academic knowledge. Members are also encouraged to renew their membership in case they have not done so in order to keep their status in good standing as required by law.
the sessions providing an opportunity for discussions and sharing of experiences. This approach to training will feature in subsequent open workshops, as well as in-house or in-company trainings.
Noticeboard
Membership
1. Membership Forum Role of Supplies Practitioners in implementing Public Procurement and Disposal (Preference and Reservation) Regulation 2011 When: 28th June 2013 Where: Mombasa Time: 8am 5pm CPD Hours: 8 2. Sensitization forums Devolution and Code of Ethics When: 8th -19th July 2013 Where: Mombasa, Kisumu, Nyeri, Nairobi, Kakamega, Nakuru Time: 8pm 5pm (5 Days) CPD Hours: 24
Workshops
1. Workshop Theme: Value for Money in Procurement Dates: 18th 21st June 2013 Venue: Mombasa CPD Hours: 24 2. Workshop Theme: Strategic Procurement Dates: 17th 19th July 2013 Venue: Mombasa CPD Hours: 24 3. Workshop Theme: Procurement Process Documentation & Improvement Dates: 14th 16th Aug 2013 Venue: Embu CPD hrs: 24
However, they are currently facing hostility from some people who are used to the old order of doing things. But we are hopeful that this will change once the devolution process is completed.
procurement process.
What is your take on the notion that Counties will be a source of devolved corruption?
There is that risk considering that the fourth schedule of the Constitution directs County governments to take over all the functions that were performed by the now defunct local authorities. Some of these staff come with fixed mindsets and work-culture - they are used to doing things in their own way and not necessarily within the law. However in Siaya, we are trying to prevent this by incorporating into our system professionals who value integrity, uphold the rule of law and are committed to serve the people of Siaya. Being a procurement practitioner, I understand procurement systems very well and I will ensure that people with vested interest are locked out of the
need for the procurement law to be localized within the respective counties, without conflicting with the national procurement law. In this way individuals at county level will have a higher appreciation and understanding of the laws.
I understand the office of Governor is very busy currently, but Im curious to know whether you really find time to unwind.
Yes I do. I am a teetotaler and a family man I enjoy spending time with my family. Also, I like watching football, particularly local teams and I believe we have a lot of talent in the country which needs to be nurtured. I do like reading widely, mostly early in the morning because as you grow old, you sleep less and therefore by 2am Im up doing my personal reading.
Thank you for your time Governor and congratulations for winning the election
Many thanks and wish KISM well.
Brand?
take the test!
NO
Do you have a Brand Strategy?
We have some good artwork from last year. Well just re-run that.
NO
YES
"Creative without strategy is called 'art.' Creative with strategy is called 'advertising.' Does your strategy include Social and E- Marketing?
Branding Strategy
ketin g Anidocs
E-Ma r
NO YES
Brilliant! Thats a good initiative. Feel like you need a tweak?
Aplin Print
NO
WHY?
New media isnt working for us!
Tel:
Advertisin PR
Digital
Events
YES
We dont even have a website or domain
YES
Phew! Humor! We like that in our clients. Care to hear a funny quote?
YES
Stopping advertising to save money is like stopping your watch to save time.
NO
NO
YES
Very well. Lets get back to business. Cutting back on advertising this year to save costs? We are going all out this year and need a dedicated agency?
NO
awarded contracts for critical supplies and fail to deliver. To safeguard against this occurrence, the regulations stipulate that any youth enterprise that fails to adhere to the tender conditions will be liable to debarment. The problem is that the PPOA has not debarred any firm since the procurement laws came into effect in 2006. Therefore, procurement experts wont have any assurance that youth enterprises that do not perform will be debarred. The net effect is a risk averse posture that would slowly bring YAGPO to a grinding halt. An interesting provision in the regulations is the recommendation to reserve specific categories of procurements to the youth. The list includes supply of flowers, newspapers, etc. It also has cleaning services painting and bush clearing. There is no information how the government drew up this list, but it seems to be based on low-level jobs being preserved for the youth. Surely, it is not the intension of Government to keep the youth businesses preoccupied with low value supplies, leaving the older generation to deal with the real money. There is a requirement to unbundle procurement packages to smaller quantities to enable youth firms to bid for business. This is a reasonable idea that would have more Kenyan youth access to business. To the procurement expert however, it means more contracts and more procurement staff required to manage the large number of procurement contracts. The positive effect is that there would be more jobs for qualified procurement recruits. The negative effect is a larger wage bill across the public sector. The implementation structures are provided in the regulations. The YAGPO Secretariat is established under the Directorate of Supply Chain Management Services at the Ministry of Finance in Nairobi. The functions of the Secretariat have been laid out in the regulations, including recommending action to be taken against procuring entities that are not conforming to the regulations. The secretariat shall also agree with the procuring entities on the list of goods, works, and services to be reserved for the youth. This proposed system is likely to be cumbersome and bureaucratic in this era of devolved county system. The
main reason is that this program focuses on which items should be reserved for the youth. It is impossible to list all categories of items that the public sector will ever buy. Instead, the focus should be on the process to be put in place to enable procuring entities legally evaluate and award contracts to the youth. That way the youth would also benefit from high value government business. The regulations require procuring entities to submit detailed reports to the Ministry of Finance about the contracts awarded to youth enterprises. However, the Ministry neither has a system nor the capacity to efficiently process the large amounts of data. The system is likely to fail as a monitoring tool for compliance. Any entity that does not comply with the regulations shall be subject to sanctions of the Ministry of Finance. However, no sanctions can be made against a procuring entity if it is not contained in the Public Procurement and Disposal Act. This is because where there is a conflict between the regulations and the procurement act, the act prevails. Lack of an effective compliance system in the YAGPO program is the Achilles heel of this program. There is no assurance that the entities will follow these regulations. Therefore, the benefits to the youth are far from being realized. Government is better off with an overhaul of the current public procurement system. A public procurement process is conducted by nine committees. Hence to promote efficiency, the first to delete digitally is eight of the nine committees that hinder effective public procurement. From a professionals point of view it is only the evaluation committee that adds real value to the procurement process and should be retained, all functions handle by the other committees should be handle by the procurement professional. Dr. Joseph Ogachi is the Vice President Africa Region of the International Federation of Purchasing and Supply Management. He serves on the Council of the Kenya Institute of Supplies Management.
Purchasing professionals very frequently tell suppliers: Well save the terms and conditions (Ts and Cs) for last, or Our legal department will handle the Ts and Cs after we are done . This practice is a deal killer for purchasing. What happens is the supplier will mark up the contract heavily because by that time, there will be nothing left to lose. Price will have already been agreed upon, and from their perspective, you will have already made commitment to do business with them after all, you already spent the time to negotiate everything else with them. The heavily marked-up contract then goes to the understaffed and overwhelmed legal department, where it sits for sometimes weeks before you get it back. Instead, weave the Ts and Cs into the negotiations upfront and make it clear the suppliers ability to secure the business is contingent upon adherence to your standard terms and conditions. Develop some purchasing contract law expertise, and reduce your reliance on the legal department. Remember, a contract approved by legal doesnt mean its a good business contract it might be a terrible contract for the business. Legal is looking for different things than you are. Empower yourself with knowledge and negotiate Ts and Cs up-front like the pros. 2. Ask for the suppliers proposal before negotiations
Your time is valuable, and you cant afford to spend it in unproductive negotiations. Suppliers need to know before negotiations start exactly what positions you will, and will not, be negotiating, and this is your choice, not theirs. Purchasing professionals cannot afford to have a supplier
Suppliers are trained to act as if they can walk away from the business. This is rarely actually the case, but sometimes it is. Purchasing professionals need to know the difference, and there are a few questions that must be asked in order
to do this. One is are you currently operating at or near full capacity? . That singular question will tell you if they can walk or not. If they say yes , then not only is it clear they may in fact be able to walk from the deal, but it is also clear this is a high-risk supplier who could present supply line interruptions. Another question to ask is where would this level of proposed spending put us relative to your other top customers? . If the answer is anywhere in the top 10 - or especially the top five - then the purchasing professional can be confident that the supplier needs this business and cannot walk from the deal. Always know where you stand in importance to the suppliers business and negotiate accordingly. 4. Always include data-based negotiation tactics
There are several different types of cost models which purchasing professionals should get training on (should cost, total cost, must cost). Remember, it doesnt matter how big a player you are on the block, you still need to build a rock-solid case to achieve world-class results, and that starts with data analysis. 5. Focus on the Win for the Supplier
Years ago, I mentored a first-time buyer who was working in a Fortune 50 company. He thought he could use his companys strength, leverage, and huge spending levels to quickly get what he wanted in negotiations, after all, his company was the big gorilla in that industry. He met with his targeted supplier and confidently demanded an increase in discount schedule from 12 per cent to 18 per cent. The supplier calmly responded why 18 per cent? Why not 20 per cent or 25 per cent? . Not expecting this response, the buyer was stunned and speechless, and he was forced to discontinue negotiations until he could regroup. He never did get 18 per cent. The moral of the story is negotiations are won or lost before they ever start, and that foundation is all built on data-driven analysis. This involves some logical basis to leverage to influence and achieve your objectives, usually related to pricing. This can be benchmarking data or it can be from cost modelling data, but it cannot be based on nothing, as the individual above attempted to do. The best benchmarking data comes from RFQ/RFP data. Absent that information, the purchasing professional should do a cost model to build their case.
Negotiating is both an art and a science. Rookie negotiators use win/lose pressure tactics to get the upper hand or they use their authority to achieve their negotiation objectives. Savvy negotiators look to use their ability to influence and recognise that true win/win is only achieved when both parties feel good about the deal. Even still, some negotiators will sacrifice on price objectives to help make it a win/win deal another rookie mistake. The purchasing pros know how to do this right. The key to doing this is identifying supplier objectives that have high value to them (the supplier), but low TCO implications to the purchasing professional. For instance, allowing the supplier to use the purchasing professionals company name in advertising (if allowed) will cost the purchasing professional little to nothing in TCO, but may have tremendous payback in terms of negotiation objectives achieved in return for this concession. Another example is to expedite a deal so that the supplier can report it on this quarters revenue report which may mean a bonus for the sales personnel involved. This costs the purchasing professional little in terms of TCO, but this concession should only be given in return for helping the purchasing professional meet their most aggressive pricing and TCO-related objectives. Always focus on the win for the supplier just make sure you are doing so in a way that helps you meet or exceed your TCO and pricing objectives, while making the supplier feel good about the deal. That is the art and science of negotiating, and that is the only true definition of win/win for purchasing. Omid Ghamami is president of training and solutions provider Purchasing Advantage, and can be reached at omid@purchasingadvantage.com
all candidates and apples-to-apples pricing comparisons. When potential bidders under consideration do not follow these requested formats, evaluation teams often deduct points and may even generalise this is a characteristic of the suppliers daily working style.
An RFPs written response qualities, including style and tone, can affect selection progress considerations and a supplier could miss business its ideally suited to provide. Its not always just about what is written, but how aptly and convincingly your companys culture and work style is conveyed. Cultural compatibility and style isnt always a conscious evaluation element within RFPs, but could play a key role in a final decision, so materials should not send unintended messages. All other criteria being equal, buyers are likely to select the service provider they most comfortably envision working with. Peg Guinta is projects director at RIS Consulting Group
Woes of a Buyer
A purchaser coming from Homa Bay from suppliers sourced all he could buy With lead times too long most forecasts went wrong And unsellable stock turned high With tension rising high And the costs soaring high The delivery hour becoming nigh A lift-truck driver from Naivesha, Loyal to him and with suave, And whose name was Dave, Up he was sent with verve, made up his own replenish wave. Filled the aisles with stuff, thought pickers had enough. Now they call him congestion Dave. M. J Ratemo
Materials should be physically easy for readers to use, too. Difficult-toread fonts, dense text and missing navigational tools, (i.e., content tables, divider tabs) can limit focus and reader absorption.