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SUPPLY CHAIN CONFERENCE 2019

Presentations from Organised by Supply Chains Connect (SCC)

• n 6th Dec 2019 @ Mensvic Hotel, Accra

This compilation is the work of Supply Chains Connect (SCC) and the content therein are the sole property of the individual speakers who presented at the Supply Chain Conference 2019 on 6th December 2019, in Accra. The knowledge, views and insights shared are the speakers’ individual knowledge, views and insights and not that of the companies they work for. No part(s) of this document is to be reproduced, copied or shared in any form without the express permission from the speakers through SCC.

Evelyn Sam

Frank Mante

Farouk Sai

Benny Atta Dolphyne

Ebo Hammond

Doris Kafui Afanyedey

Cost per participant: Ghȼ 300

6th Dec, 2019 | Mensvic Hotel | 8:30-5:00pm

Farmer’s Day Holiday East Legon, Accra Prompt!

www.expresspaygh.com/SCC

• r through bank payment

A/C Name: Supply Chains Connect Account Number: 6010192188 Bank: Zenith Bank Account Branch: Head office

• r through Mobile Money payment:

MTN Momo: 0553 842 117

Theme :

A Resilient Supply Chain in a Competitive Global Market: The Role of the Practitioner ✓

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Who should attend? Register at:

For additional Info Contact

0540901573

FAROUK SAI

(SUPPLY CHAIN DIRECTOR, COCA COLA BOTTLING COMPANY OF GHANA)

This compilation is the work of Supply Chains Connect (SCC) and the content therein are the sole property of the individual speakers who presented at the Supply Chain Conference 2019 on 6th December 2019, in Accra. The knowledge, views and insights shared are the speakers’ individual knowledge, views and insights and not that of the companies they work for. No part(s) of this document is to be reproduced, copied or shared in any form without the express permission from the speakers through SCC.

A Resilient Supply Chain in A Competitive Global Market: The Role of the Practitioner

6th Dec 2019

Mensvic Hotel

Presenter: Farouk Sai

CONTENT

• WHAT IS SUPPLY CHAIN MANAGEMENT ?
• ROLE OF THE PRACTITIONER IN SUMMARY
• DEMAND FORECASTING
• SUPPLY PLANNING
• PROCUREMENT PRACTICES
• DISTRIBUTION AND WAREHOUSING
• SHE
• SC CAPACITY BUILDING

COMPETITIVE GLOBAL MARKET

The Global Market is Volatile , Uncertain ,Complex and Ambiguous (VUCA)

• V = Volatility: the nature and dynamics of change, and the nature and speed of

change forces and change catalysts.

• U = Uncertainty: the lack of predictability, the prospects for surprise, and the

sense of awareness and understanding of issues and events.

• C = Complexity: the multiplex of forces, the confounding of issues, no cause-and-

effect chain and confusion that surrounds organization.

• A = Ambiguity: the haziness of reality, the potential for misreads, and the mixed

meanings of conditions; cause-and-effect confusion. ✓ Comes together to either confound decisions or sharpen the capacity to look ahead, plan ahead and move ahead

SUPPLY CHAIN MANAGEMENT

• SUPPLY CHAIN MANAGEMENT COMPRISES
• PLAN (DD& SS PLANNING)
• SOURCE (PROCUREMENT)
• MAKE (MANUFACTURING)
• DELIVER (WHSE & DISTRIBUTION)
• CONSTITUTES ABOUT 60-70% OF THE TOTAL

SPEND OF ANY MANUFACTURING COMPANY

• SUPPLY CHAIN MANAGEMENT IS

THE MANAGEMENT OF THE FLOW OF GOODS AND SERVICES. (INVESTOPEDIA)

Demand Supply Inventory Service levels

Balancing customer service, inventory, and cost-to- serve

Different demand scenarios Demand variation levels (core vs.seasonal products) Impact of uncertainty (forecast error) Inventory investment Overall levels Deployment balance Inventory storage points: raw vs. in-process vs. finished goods

Different production scenarios In-house vs.

• utsourced Low-cost vs.

most responsive Supply cycle time sensitivity Supply reliability sensitivity Lead time and fill rate Differentiation By customer By product By time of year Allocation rules

Summaries the role of the practitioner in the competitive market !!!

DEMAND FORECASTING

• Do we understand the consumer needs for the next 3-5 years?
• Are the forecasts short-term and medium-long term forecasting?
• How reliable are the forecasts from Sales & Marketing? Are the

numbers guess work or based on scientific/statistical analysis?

• Do we have the tools to capture the consumer insights and translate

them into realistic demands/forecast?

• How much growth in demand is baseline-related and activity-

induced?

• What are the economic and social under-pinings of the forecasts?

(population growth , inflation , interest rate ,GDP growth rate)

• Are we measuring the deviations from the forecast and correcting

them? E.g. Forecast Accuracy and Bias , ROI on promos.

SUPPLY PLANNING

• Do we make or buy ?
• Are we flexible and agile to produce quality products to meet

customers orders in-time and in-full?

• Do we have enough inventory to meet customer orders in full and
• n-time?
• Are we keeping working capital levels within industry levels ?
• Do we have long –term investments in plants and machinery to meet

future demand

• Are we using latest tech to produce efficiently?
• Do we have quality culture embedded in the minds of the people in

the organization? Quality first time right!!

SOURCE (PROCUREMENT)

• Are we sourcing competitively to derive value for money as well as

sustainably?

• Are we working with and developing our suppliers to ensure win-win

situation?

• Are we using vendor managed inventory (VMI) to reduce warehouse

cost?

• Are we using tendering/bids strategy in sourcing to ensure

transparency?

• Do we have conflict of interest situations in awarding contracts?
• Are the procurement managers honest enough or transparent?
• Do we apply the ethics of the procurement profession?
• Are we sourcing all materials abroad or considering local purchases

to minimize FX impact on the P&L?

DELIVER (DISTRIBUTION & WAREHOUSE MGT)

• Are we using the distributor model or direct sales?
• Are we measuring how satisfied our customers are satisfied with

deliveries? Case-fill & on-time deliveries!!

• Are our cost-to-serve comparably favorable to industry bench marks?
• Have we outsourced the distribution or we do it ourselves?
• Are we using or exploring e-commerce?
• Are we analysing the warehouse capacities in line with growing

consumer demands in the medium to long term?

• Are we practicing FIFO/FEFO in the warehouse to minimise
• bsolescence/write-offs?
• Are we taking inventory everyday to improve stock accuracy and reduce

theft?

• Are we using technology to track 02C cycle?
• Are the warehouses clearly segregated for easy location of skus?

SAFETY,HEALTH AND ENVIRONMENT(SHE)

• Is SHE embedded as a way of life in the organization? Are the top

management committed to ensure adherence by all employees.

• Are we recording too many over-time leading to exhaustion and

accidents at the workplace?

• Do we have enough signages in the plant clearly highlighting unsafe
• r hazardous areas to be avoided?
• Do we have floor markings at your plant clearly separating vehicular

movement from people or pedestrian movement?

• Have we provided the right PPE to be used by persons to work?
• Are the employees taking their leave in supply chain?
• Are we treating our waste or by-products from our plants before

disposing them into the environment

• Are we using environmentally-friendly technology to produce?

SUPPLY CHAIN KEY PERFORMANCE INDICATORS

• Are we using the forecast bias & accuracy to drive behavioral

change in demand forecasting?

• Do we keep too much stocks than needed thereby locking capital

in the warehouse?

• Are we using the inventory turn ratio to highlight to the business

the harm over-stocking /over- production is doing to the P&L?

• Are we high-lighting the persistent low sales/demand and its

corresponding building of stocks which may lead to write-offs.

• Are we using the DOH ratio to drive improvement in stock holding?

SUPPLY CHAIN CAPABILITY BUILDING

• Are we developing a SC talent pool to meet future supply chain

requirements? We will need demand & supply planners , procurement managers/buyers, manufacturing managers, SHE managers ,supply chain professionals etc.

• Are we coaching and mentoring our direct reports to take-over from

us? Succession plan?

• Are we exposing our key persons to effective decision-making and

analytical skills?

• Are we changing the thought process of our direct reports to move

from short-term to medium-long term planning?

CHALLENGES

• Lack of understanding of supply chain management . Procurement is a

subset of supply chain management

• Dynamic changes in the market (demand variability)
• Lack of skilled personnel e.g. Demand/Supply planners
• Foreign exchange volatility on material pricing
• Long lead times (Asia ,Europe ,Americas)
• Rising warehousing & transportation costs
• High freight cost especially across West Africa
• High imports

THE BENEFITS OF SUSTAINABLE SCM

• Better forecasting to meet customer demands (keal and herbert 2010)
• Revenue improvements from 2%-5% . (amr research)
• Improve customer service improvement (stock availability loss reduction)
• Balanced inventory across product lines and customers
• More stable production rates and higher productivity
• More co-operation across the entire operations
• Improve in working capital through inventory reduction
• Typically, operating units can achieve 7-15% reduction in inventory.
• More efficient decision-making
• Greater focus on long-term horizon (smiths and kipala 2012)

THANKS ... Q&A

BENNY ATTA DOLPHYNE

(SEAFREIGHT SOLUTIONS MANAGER, BOLORE GHANA)

This compilation is the work of Supply Chains Connect (SCC) and the content therein are the sole property of the individual speakers who presented at the Supply Chain Conference 2019 on 6th December 2019, in Accra. The knowledge, views and insights shared are the speakers’ individual knowledge, views and insights and not that of the companies they work for. No part(s) of this document is to be reproduced, copied or shared in any form without the express permission from the speakers through SCC.

Benny Atta Dolphyne SCC Conference Mensvic Hotel,Accra 06-12-2019

EMOTIONAL INTELLIGENCE(EI): PRACTICE, REALITIES AND IMPACT ON SUPPLY CHAIN.

3NAM OBI SO

‘It is the human being that counts, I call gold; it does not answer. I call cloth; it does not answer. It is the human being that counts.’ Ghanaian Proverb

KEY DISCUSSION AREAS

COMPLEXITY OF SCM

▪Ethical & Moral

Considerations

▪Authority & Power ▪Alliances &

Partnerships

▪Family & Cultural

Ties

▪Politics & Benefits

SCM

Supply Chain Management

Logistic Analysis Time to Market Plan Distribution Procurement Profit Management

CONCEPT OF EI

▪What? ▪Why? ▪How? ▪When? ▪Where?

PRACTICE OF EI: DOMAINS & COMPETENCIES

▪Self Awareness ▪Self Management ▪Social Awareness ▪Relationship

Management

▪Effective

Communication

IMPACT OF EI ON SUPPLY CHAIN

CONSIDERATIONS FOR SUPPLY CHAIN PRACTITIONERS

THANK YOU

REFERENCES

1.

Slide 2, Image : https://www.alamy.com/stock-photo-back-view-of-accra- public-transport-in-ghana-a-so-called-mammy-wagon-30142765.html (Marion Kaplan) accessed 28 November 2019

2.

Slide 6 ,Image : https://news.artnet.com/exhibitions/this-artist-is-bottling- and-selling-emotions-52407(Taylor Kinser, Bottled Emotions (2014) accessed 28 November 2019

3.

Slides 7-9, Images: http://pjkradolfer.com/portraits-of-ghana accessed 28 November 2019

4.

Goleman D (2009) Working with Emotional Intelligence. Bloomsbury

DORIS KAFUI AFANYEDEY

(GENERAL MANAGER CUMMINS GHANA)

This compilation is the work of Supply Chains Connect (SCC) and the content therein are the sole property of the individual speakers who presented at the Supply Chain Conference 2019 on 6th December 2019, in Accra. The knowledge, views and insights shared are the speakers’ individual knowledge, views and insights and not that of the companies they work for. No part(s) of this document is to be reproduced, copied or shared in any form without the express permission from the speakers through SCC.

Doris Kafui Afanyedey General Manager Cummins Ghana

How businesses can achieve greater success with resilient Supply Chain management

Case Study

When Boeing announced plans to assemble the 787 Dreamliner in late 2003, it introduced a new concept to the assembly of a commercial aircraft. Instead of building the plane from the ground up, subcontractors from around the globe would deliver completed subassemblies to Boeing’s factory in Everett,

• Wash. for final assembly.

The approach was intended to create a leaner manufacturing process however,-

▪ Development of the new aircraft was beset by numerous supply chain related disruptions ▪ Events that interrupted the flow of products and information between raw materials, production, and the end customer.

One of those disruptions occurred in January 2013, when the Dreamliner was grounded by the FAA due to overheating of its new lithium-ion battery.

• As a result, Boeing needed to slow production
• f this innovative aircraft until it determined

the source of the overheating - a source that appeared to lie within in its supply chain, according to news reports.

• The question for Boeing was how quickly it

could identify the source of the overheating and recover from the disruption

• At bottom, that was a question of how

resilient the Dreamliner supply chain was. Boeing is not alone.

“Resilience is at the heart of current supply chain management thinking, and understanding the concept, and where to invest in resilience, can lead to supply chains that quickly respond to and recover from costly disruptions.” Supply Chain 24/7

Resilience in Supply Chain Management

Supply chain resilience is “the ability of a supply chain to both resist disruptions and recover operational capability after disruptions occur.” Viewed from this perspective, resilience consists of two critical but complementary system components: the capacity for resistance and the capacity for recovery

• Resistance capacity is the ability of a system to

minimize the impact of a disruption by:

• evading it entirely (avoidance)
• minimizing the time between disruption and

recovery

• Recovery capacity is the ability of a system to return

to functionality once a disruption has occurred. Usually characterized by:

• stabilization phase after which a return to a

steady state of performance can be pursued. Both capacities are based on the resilience of an entity’s Supply chain structure

Statistics

• According to a survey by Deloitte from 2014, 79% of companies

with high-performing supply chains achieve revenue growth superior to the average within their industries.

• Conversely, just 8% of businesses with less capable supply

chains report above-average growth. That figure highlights like no other how critical the interrelations are between an entity and its supply chain.

• Given that something like 50% of businesses, regardless of their

size, fail or close down within five years of launch, it can be deduced that poor supply chain performance commonly contributes to corporate or business failure. Similarly, one can assume that in many cases, businesses that fail do so because of financial problems—a fact that makes the following statistic also worthy of consideration:

• In Ghana and across Africa, Supply Chain in many indigenous

businesses, have not been subject to a design process, but has instead just … evolved.

• 44% of businesses in fail because of poor strategic
• management. Supply chain strategy is critical to business

success, but companies often underestimate its importance and hence pay it less leadership attention than other areas

• f operation.
• It is also common for the supply chain to be the least

understood area of strategic business management, which for an activity generating up to 90% of overall business costs, is alarming indeed.

Supply Chain Management in Ghana

What does this mean Supply chain and its management are essential to the success of any businesses operating in today’s local and global markets.

• “Supply Chain Resilience is at the heart of

current supply chain management thinking. Understanding the concept, and where to invest in resilience, can lead to supply chain that quickly respond to and recover from costly disruptions”

Source : Understanding Supply by by Steven A. Melnyk, David J. Closs, Stanley E. Griffis, Christopher W. Zobel, and John R. Macdonald

• 1. Supply Chain Strategy/Design
• A properly designed supply chain strategy is an

enabler for achieving commercial goals and consequently, corporate success.

• Your supply chain strategy should support the
• verall strategy of your business
• Designing and implementing supply chain that

can be configured and quickly respond to changes (especially the part dealing with

• utbound distribution from plants or

warehouses)

– Strategies to better manage suppliers at all levels – Supply base configuration – Choosing flexible partners

• 2. Discovery

Invest in the ability of the firm to identify problems in the Supply Chain

– Improved IT and Information sharing – Early warning by supply chain partners – Forecasting – Demand sensing – Monitoring of performance in supply chain including ethics

• 3. Information

Investment in improving the quantity, speed and quality of information flowing within the supply chain

– IT dashboard monitoring – Effective Communication between teams – Information visibility pop ups - research

4.Buffer

Creation of excess cushions in the form of inventory, capacity and lead time

– Inventory management – Excess operating capacity – Safety stock

• 5. Operating Flexibility

Changing flows or product specifications in response to supply chain problems

– Transportation alternatives – Variable bill of materials

• 6. Security

Protecting the system from supply chain shocks in the form of theft, damage or counterfeiting

– Firewalls – Quarantine – Strengthening physical systems

7.Preparedness

Designing contingency plans for supply chain shocks and testing of plans so the various groups know what their specific responsibility are

– Contingency planning – Training/Rehearsals – Risk Assessment – Risk Insurance

• 8. Indirect Investments

Applying investments in other areas that can be drawn

• n when shocks occur. Typically these create goodwill or

a willingness to let the firm address its supply chain problems

– Market positioning/Brand equity – Supply Chain capital – Relationship with Supplier – Relationship with customers – Supplier loyalty – Customer loyalty – Support for Innovation – Support for Dynamic partnerships – Revenue management

MRS EVELYN SAM

(CHIEF SUPPLY CHAIN OFFICER, AIRTELTIGO)

This compilation is the work of Supply Chains Connect (SCC) and the content therein are the sole property of the individual speakers who presented at the Supply Chain Conference 2019 on 6th December 2019, in Accra. The knowledge, views and insights shared are the speakers’ individual knowledge, views and insights and not that of the companies they work for. No part(s) of this document is to be reproduced, copied or shared in any form without the express permission from the speakers through SCC.

THE ETHICAL SUPPLY CHAIN

Mrs Evelyn Sam

CONTENTS

• Mrs Evelyn Sam

What is Ethics ? Why is there a need to discuss Ethics ? Ethics in the SCM environment Setting the right tone Principles of Supply chain Ethics Benefits of an ethical Supply chain Risks of unethical behaviour Way forward Conclusion

Mrs Evelyn Sam

Ethics ???

Difference between having the right to do something & doing what is right

Mrs Evelyn Sam

Ethics ???

What is good or right in human relations.

Mrs Evelyn Sam

Mrs Evelyn Sam

Ethics ???

➢ Moral principles that govern a person's behavior. ➢ The way we do things …even when no-one is looking.

57

What is Ethics ? Mrs Evelyn Sam

Consider the followin ing questions . . . . . . . . .

• 1. Can one be an unethical person

at home and still be ethically effective at work?

• 2. Is being an ethical person

sufficient for being an ethical leader?

• 3. Can ethics be “managed” ?

58

Mrs Evelyn Sam

RIGHT, WRONG & DILEMMAS

Ethics is often perceived as a GREY AREA where there is little clarity about what is right or wrong Right Dilemma Wrong

√ ? X

Mrs Evelyn Sam

Basic ic test for r decision-making

QUICK TEST : ➢ Is it legal / procedural ? ➢ How will it look like in a newspaper? ➢ Is it consistent with my organizational / professional values? ➢ Is it fair to all? ➢ If I do it, will I feel bad?

60

Mrs Evelyn Sam

There are ethical challenges in Supply chain making it difficult for some individuals to be ethical

61

Why Ethics ? Mrs Evelyn Sam

There is is a need to dis iscuss Ethic ics . . . . . . ➢ Equip teams with a way of ‘thinking’ about

ethics in all transactions ➢ Give the teams some exposure to what is required in terms of ethics in Supply chain… ➢ Help teams to understand their role as Supply chain staff promoting an Ethical culture

62

Mrs Evelyn Sam

“Ethics can’t manage itself”

structures

Building an Ethical Supply chain requires:

➢Structures , Processes, Policies & Procedures ➢ Staff with ethics expertise ➢Continuous training ➢Awareness creation

63

Mrs Evelyn Sam

Ethic ics at the workp kplace

The right choice isn’t always clear in today’s

• business. One cannot assume employees will make

the right decisions. Employees perform a delicate ethical balancing act every day. Ethics form a crucial part of employment

➢affecting profitability ➢high morale and teamwork.

64

Mrs Evelyn Sam

Ethics in Supply chain

➢ Supply chain has taken on a more critical role in the corporate world. It’s no longer a back-office function ➢ Activities must be conducted according to signed off procedures ➢ Today SCM is a strategic and a competitive differentiator that has become part of the business model.

Mrs Evelyn Sam

Engaging vendors

It is expected that Suppliers must be able to demonstrate their alignment to the Code of conduct to ensure responsible business practice

➢ Workers’ Rights & Protection ➢ Prohibition of Child Labour ➢ Environmental Protection ➢ Transparency ➢ Whistleblower Policy

66

Mrs Evelyn Sam

Conflict of interest

• A conflict of interest may

arise when personal interests, activities, or relationships affect an individual’s responsibilities and loyalty to the Company

67

Mrs Evelyn Sam

Setting the right tone for an Ethical Supply chain environment.

➢ Structure to support the supply chain function

• Due diligence
• Contracts
• Procurement
• Inventory management

➢ Sign off all agreed policies with key stakeholders ➢ Regular Roadshows for all internal & external stakeholders ➢ Cross functional Committees set up to select vendors ➢ Periodic audit reviews

68

Mrs Evelyn Sam

The impact of supply chain ethics on business

➢ Even just a one-time lapse can harm both reputation and the bottom line. ➢ Today’s consumers demand to know that the products they purchase are made in social, ethical and environmental ways.

Mrs Evelyn Sam

Examples close to home . . . .

➢ A supplier offers to give you and your

manager tickets to attend the opening ceremony of the World Cup. ➢ Your manager says that he intends using the ticket. ➢ The supplier has provided you with good products for three years

➢What do you do?

70

Mrs Evelyn Sam

Statistics on Ethical Supply chains

➢ Many companies need to focus on taking real action to improve their ethical supply chain practices. ➢ When respondents to a survey were asked how much progress their company has made in creating an ethical supply chain over the past two years, less than a third – 31% said they had advanced their initiative. ➢ And despite supply chain ethics being stated as important, nearly four in 10 organizations (38 percent) aren’t actively monitoring their supply chains for ethical practices.

Mrs Evelyn Sam

Expectations of the Supply chain team

➢ Conduct oneself in such a manner as to maintain trust and confidence in the integrity of the acquisition process. ➢ Avoid “clever” practices intended to take undue advantage of others or the system. ➢ Uphold the organization’s standards and policies and all relevant legislation. ➢ Avoid conflicts of interest.

Mrs Evelyn Sam

73

Mrs Evelyn Sam

Ethical sourcing

➢ Ensuring products being sourced are

• btained in a fair, responsible and

sustainable way ➢ Ensure workers involved in making products are safe and treated fairly ➢ Ensure that environmental and social impacts are taken into consideration during the sourcing process.

Mrs Evelyn Sam

Pri rinciples of f Supply chain Ethics

➢Avoid unfair trade practices ➢Avoid exploitation of consumers ➢Fair treatment to all Employees ➢Avoid payment of bribes ➢Do not accept kick backs ➢Accept social responsibility ➢Respect consumer rights

Mrs Evelyn Sam

Features of Business Ethics

➢ Basic framework ➢ Code of Conduct ➢ Conflict of interest declaration ➢ Policies, Procedures & Processes ➢ Nominating an Ethics champion ➢ Anti Bribery & Corruption training ➢ Regular governance meetings

Mrs Evelyn Sam

Eth thical concepts & & pri rinciples th that relate to Supply chain

Transparency Confidentiality Due

diligence Fairness Impartiality Integrity Loyalty Respect

Mrs Evelyn Sam

Benefits of an Ethical Culture

78

Reputation Stakeholder trust Investor confidence Access to discerning markets Attract and retain talented staff Loyalty of Suppliers / Customers

Mrs Evelyn Sam

Benefits of an Ethical Supply chain

➢ Better control of violation. ➢ Adherences to guidelines. ➢ Cultivates an atmosphere of teamwork. ➢ Provides higher productivity ➢ Protects the organization against legal actions ➢ Builds openness & integrity

79

Mrs Evelyn Sam

Risks of f unethical behaviour

➢Scandal ➢Losses due to fraud, theft & corruption ➢Stakeholder alienation ➢High staff turnover ➢Stifle innovation ➢Litigation / claims against company ➢Liability of directors

80

Risks of unethical behavior

Mrs Evelyn Sam

Way forward

It is the obligation of managers to ensure that their team members comply with rules and regulations by creating and maintaining an Ethical Environment. To do this, managers must :- 1. Demonstrate the characteristics of an ethical manager 2. Communicate the Ethical Standards 3. Establish and Encourage Ethical Communication 4. Correct Unethical Behavior 5. Resolve Conflicting Ethical issues Mrs Evelyn Sam

Summary

By embedding an ethical strategy, adopting ethical and social sourcing practices, companies can begin to feel confident that their sourcing processes are fair, not contributing to labour exploitation but enhancing supplier relationships and avoiding reputational risk.

Mrs Evelyn Sam

In Conclusion . . . .

➢ A company’s ethics will determine its reputation ➢ Good business ethics are essential for the long- term success of an organization

83

Mrs Evelyn Sam

Mrs Evelyn Sam

FRANK MANTE

(ACTING CEO, PUBLIC PROCUREMENT AUTHORITY, GHANA)

This compilation is the work of Supply Chains Connect (SCC) and the content therein are the sole property of the individual speakers who presented at the Supply Chain Conference 2019 on 6th December 2019, in Accra. The knowledge, views and insights shared are the speakers’ individual knowledge, views and insights and not that of the companies they work for. No part(s) of this document is to be reproduced, copied or shared in any form without the express permission from the speakers through SCC.

Improving Efficiency and Transparency in Public Procurement

FRANK MANTE – AG. CEO, PPA MENSVIC HOTEL, EAST LEGON 6TH DECEMBER, 2019

HIGHLIGHTS OF AMENDMENTS TO PUBLIC PROCUREMENT (AMENDMENT) ACT, 2016 (ACT 914)

OUTLINE OF PRESENTATION

87

By the end of the seminar, participants should be able to:

• Understand the rationale for the introduction of Act 914
• Identify and appreciate the importance of some new provisions

pertaining to Act 914

RATIONALE FOR ACT 914

88

• To take into account current international best practices aimed at

enhancing the effectiveness in Ghana’s public procurement system.

• To address the major weaknesses identified in Act 663 in relation to the

categorization, membership and functions of entity tender committees.

• To cede the functions of the Tender Review Boards to the Entity Tender

Committees to ease concurrent approval process.

RATIONALE FOR ACT 914: CONT

89

• To increase the thresholds for state owned enterprises who are mostly

independent from government oversight and have to compete in a private sector.

• To also increase threshold for high spending public institutions, e.g.

BOG, Ministries, Departments and Agencies, Metropolitan, Municipal and District Assemblies etc.

• Introduce additional methods of procurement/contracting such as

Framework Contracting and procurement procedures such as e- procurement.

KEY SECTIONS AMENDED

90

• S. 2 of Act 663 has been amended to include sustainability objectives in

the nature of environmentally and socially sustainable objectives. Thus, any procurement should take cognisance of this very important policy

• bjective of public procurement
• S. 3 of Act 663 has been amended and MMDAs have been given a

special mention under S.3 (l) as one of the bodies to be advised by the PPA.

KEY SECTIONS AMENDED: CONT.

91

• S.10 of Act 663 has been amended to expand the scope of sources of

funds available to the PPA.

• S.13 provides a new section i.e. S.13(3) which requires the PPA to

submit relevant reports affecting specific MMDAs for these to be debated.

• The whole of Part Two of Act 663 which deals with Procurement

Structures has been amended.

• S.14(3) makes mention of Contract Administration as a critical aspect
• f Public Procurement

KEY SECTIONS AMENDED: CONT.

92

• S.14(4) provides that the PPA may recommend new methods of

procurement to the Minister where required

• S.19 of Act 914 provides for a Procurement Unit to be headed by a

qualified Procurement Personnel who should serve as the Secretary to ETC.

• S.20 of Act 914 provides that ETCs shall be constituted in line with

the Categories in the First Schedule p.g. 42

KEY SECTIONS AMENDED: CONT.

93

• S.20A of Act 914 is a new section which provides for the functions of

the ETC

• S.20A(2) provides that any delegation by the Chairman and Member of

ETC or TRC shall be made in writing

• S20B provides for the functions of Central Mgt Agencies, MDAs,

Subvented Agencies to include: ✓Approval of procurement plans ✓Review specifications ✓Assist Head of Entities in disposal in line with the Acts

KEY SECTIONS AMENDED: CONT.

94

• S.20C provides for the applicable thresholds limits for ETCs provided

for in the 2nd & 3rd Schedules

• S.20D provides that meetings of ETC shall be held at least once every

quarter

• S.20E provides for he establishment of a Tender Evaluation Panel
• S.20F(2) provides that Tender Review Committee for MDAs is the

Central Tender Review Committee

• S.20F(3) provides that the Tender Review Committee for MMDAs is the

Regional Tender Review Committee

KEY SECTIONS AMENDED: CONT.

95

• S.20G (1)provides that a PE or Tenderer aggrieved by the decisions of the

ETC can seek a review of this decision from PPA.

• S.20G(3) a PE or Tenderer not satisfied with PPA’s decision can seek

redress in Court. This has found expression again under S.78 (5)

• The words Description and Lot have found expression under S.21 (a).
• S.22(1)(a) has been amended to include professional, technical and

environmental qualifications. Once again sustainability has been introduced.

• NOTE: S.21(5) of Act 663 which provides against splitting or bulk

breaking has not been repealed.

• S.22A is a new section which provides for suspension of a supplier or

Consultant on grounds of unsatisfactory performance, corruption or debarment

KEY SECTIONS AMENDED: CONT.

96

• S 26 has been expanded to include the form of procurement

proceeding and only such procedures as provided shall be used during the procurement proceedings

• S.28 has been expanded to include additional subsections o-y
• S.28(4A) is a new section which provides for nondisclosure of

records of procurement proceedings particularly with respect to evaluation of tenders

KEY SECTIONS AMENDED: CONT.

97

• S.28A is a new section which provides under S.28A(1) for reasons for

PE cancelling tenders before deadline for tender submission.

• S.28A(2) provides for reasons that a PE can cancel tenders after

deadline for tender submission.

• How does S.28A and S. 29 in Act 663 differ?
• S.32A is a new section which provides for confidentiality of

procurement proceedings.

• S.34A is a new section that has been introduced. It provides for the

methods

• f

procurement and in particular, Framework

• Contracting. What issues come to mind?

KEY SECTIONS AMENDED: CONT.

98

• S.38(2) provides for PPA to charge fees for granting approvals for

single source and restricted tendering.

• S.38(1)(c) is a new section that has been introduced to add to the

reasons giving rise to the use of Restricted Tendering. This focuses

• n using RT when no tenders are received by the deadline for the

receipt of tenders.

• S.40 (2) is amended to include socio-economic policy after S. 69(2)

(c) (i).

• S.44 (7) has amended the period for submission of tenders from 2

weeks to 6 weeks. This is confirmed by the repeal of S.53(2).

KEY SECTIONS AMENDED: CONT.

99

• S.47 (1) provides that it is permissible to cause an advert to be

published on the PPA’s website or Bulletin. Note at a fee to be set by PPA

• S.47(2) ITT to be published in at least 1 daily newspaper of wide

national circulation

• S.49 has been amended to introduce electronic procedures (e-

procurement). Note: PPA to determine the price of tender documents See 49(4)

KEY SECTIONS AMENDED: CONT.

100

• S.59(2)(g) of Act 914 introduces environmental factor as part
• f SPP. Note S.59 has been largely amended.
• S.74(4) is a new subsection that has been introduced. It clarifies the

need for financial proposals being opened only subject to approval

• f technical evaluation results by the entity (ETC).
• S.78 (a) improves and expands the wording for review by the

inclusion of Complaints or Administrative review

KEY SECTIONS AMENDED: CONT.

101

• S.83A is a new section which has been expanded to include guidelines

for disposal of vehicles. Note that vehicles were not specifically mentioned under S. 83 of Act 663

• S.92 increases the penalty for any contravention of the provisions of

the Acts from 1000 penalty units to 2500 penal units

• S.96 is amended to mandate the PPA to grant prior review or no-
• bjection on such contracts.

SECHEDULES

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The new schedules 1- 6 of Act 914 replaces schedules 1-4 of Act 663.

• FIRST SCHEDULE –

▪ SCEHEDULE 1A Categories of Entity Tender Committees pg 42. ▪ SCEHEDULE 1B: Composition of ETC for MDAs pgs 43-47

• SCEHEDULE 1B: Composition of ETC for MMDAs pg 48
• SECOND SCHEDULE: Thresholds for MDAs pg 49
• THIRD SCHEDULE: Thresholds for MMDAs pg 50
• FOUR SCHEDULE: Composition of CTRC and RTRC pg 51
• FIFTH SCHEDULE: Thresholds for Procurement Methods pg 52. Note that no

thresholds for selection methods???

• SIXTH SCHEDULE: STDs/SRPDs

THANK YOU

103

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This compilation is the work of Supply Chains Connect (SCC) and the content therein are the sole property of the individual speakers who presented at the Supply Chain Conference 2019 on 6th December 2019, in Accra. The knowledge, views and insights shared are the speakers’ individual knowledge, views and insights and not that of the companies they work for. No part(s) of this document is to be reproduced, copied or shared in any form without the express permission from the speakers through SCC.

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