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TABLE OF CONTENT Introduction ………………………………………………………………………………………. 2 The influence of the BEE Policy on performance and workload for procurement professionals in CCF……………………………………. 2 The successful execution of BEE policy through Procurement in CCF………2 Challenges and Shortcomings in the execution of the BEE policy through Procurement in CCF…………………………………………………………………. 3 Conclusion……………………………………………………………………………………………. 4 Bibliography…………………………………………………………………………………………. 4 Broad Based Black Economic Empowerment Through Procurement in Coca Cola Fortune (CCF) 1. Introduction

This assignment will focus Black Economic Empowerment through Procurement in Coca Cola Fortune PTY LTD (CCF) and concentrating on three topics namely – The influence of the BEE Policy on performance and workload f; The successful execution of BEE policy through Procurement; and Challenges and Shortcomings in the execution of the BEE policy through Procurement. Coca Cola Fortune is committed to managing its business with a consistent set of values that represent the highest standards of quality, integrity, excellence, compliance with the South African law and respect for the unique customs and cultures in communities where it operates.

We seek to develop relationships with suppliers that share similar values and conduct business in the above mentioned manner. Further to the above mentioned practice CCF is committed to the implementation and advancement of the government policy and objectives as articulated in the Broad Based Black Economic Empowerment Act of 2003 (BBBEEA), the DTI Strategy for broad-based black economic empowerment, the ICT charter, the Preferential Procurement Policy Framework Act 2000 (PPPFA) as amended from time to time, as well as other legal frameworks. . The influence of the BEE Policy on performance and workload for procurement professionals in CCF BEE Policy has implied responsibilities on performance and workload for procurement professionals in CCF. Responsibilities including: Facilitation, implementation, and monitoring adherence to the policy as approved by the Country Procurement Manager; Certify potential suppliers as BEE suppliers according to the standards set orth in the BEE Policy; Develop and maintain data base of certified BEE suppliers; Maintain monthly statistical data on the availability and utilization of certified BEE suppliers; Establish and review BEE weightings in bids on a case by case basis, prior to awarding any tender, perform due diligence investigation to confirm BEE status of suppliers; Participate in contract negotiations on all matters pertaining to BEE; Inform suppliers on all matters relating to CCF BEE programmes; and Develop and coordinate capacity building programmes for BEE suppliers. 3.

The successful execution of BEE policy through Procurement in CCF CCF as an enterprise with a turnover higher than R35 million applied the Generic Score Card as set out in the code series 100 to 700. The Country Procurement Manager was mandated as the custodian of the CCF BEE Policy and was given full accountability and responsibility to ensure successful implementation of 2 of the 7 BBBEE elements, namely Preferential Procurement and Enterprise Development, while the other Country managers were responsible for the rest of the BBBEE elements namely Ownership; Management; Employment Equity; Skills Development; Socio-economic Development. Page 2 of 4 CCF achieved Preferential Procurement Score of 15. 08 out of 20 and Enterprise Development score of 15 out of 15; this proves that CCF has successfully executed its BEE policy through Procurement. CCF is one of the first company who successfully implemented Preferential Procurement and Enterprise Development at this level in the Coca Cola Business. CCF’s highest spend is its Raw Materials e. g Concentrate which is imported from Atlanta via/distributed by Conco in Swaziland and they are not bound by South African BBBEEA.

CCF had to obtain consent to exclude this commodity when applying Preferential Procurement. CCF proudly promotes economic transformation in order to enable meaningful participation of black people in the economy. The BEE policy has successfully managed to facilitate the access of BEE suppliers to the procurement activities. The policy forged procurement conditions and procedures to be relaxed where necessary to allow previously disadvantaged communities to do business with CCF; e. g.

CCF allows payment in less than 30 days for qualifying previously disadvantaged suppliers whereas our standard payment terms are 30 days after statement date. We give recognition to large business that support BEE suppliers and implement acceptable BEE programmes; and encourage the establishment of value –adding joint venture, sub-contracting, partnership or enterprise development arrangements both directly and indirectly between traditional supplies and BEE suppliers as to give the latter access to the latest technologies and knowledge through matchmaking.

The scope of the BEE policy prescribes manner in which CCF procures goods and services from targeted populations i) Enterprise that comprise PDIs ii)SMEs iii) Regional suppliers. The policy applies to all procurement and contracts issued by CCF, regardless of the value of procurement or contract. 4.

Challenges and Shortcomings in the execution of the BEE policy through Procurement in CCF Challenges experienced in execution of BEE Policy in CCF included unacceptable joint venture/subcontracting/consortium agreements like Pay-when-paid payment procedures where payments to the subcontractor are delayed unnecessarily; Unreasonable retention money percentages and periods, or any other contract conditions which are more onerous than those which exist in the main contract; Surety requirements for contracts where the main contract does not require such sureties from the main contractor; Where formal proceedings exist for dispute resolution.

Since BEE subcontractors can often not afford the high cost of legal proceedings to settle disputes, the contract should make provision for less formal but nevertheless objective and user friendly methods to settle disputes between the employing contractor and the sub-contractor (e. g. an ombudsman or an arbitrator); Where there is significant shareholding but no decision making power on the part of the Historically Disadvantaged Individual (HDI) partner, such a person will be deemed to be fronting and the relevant penalties are applicable.

Penalties may include: Termination of contract; monetary penalty; Black listing; Contract scope reduction. HDI Suppliers often expect to be appointed regardless of the fact that they are not cost comparative just because they are previously disadvantaged groups. There has been repercussions rising from Traditional suppliers staing that they are now experiencing reverse discrimination when a BEE supplier is appointed. We found out that most EME suppliers provide substandard work. The major problems faced by EME’s and SME’s include resource and skills constraints and fear of seeking advice.

Most SME’s are not aware of Page 3 of 4 the benefits and risks of e-business. Many SME are in the early stages of implementing e-commerce, e. g. developing a website. We often have to foster partnerships/joint ventures in order for EME’s to gain access to latest technologies and technical knowledge from traditional suppliers. Most Previously Disadvantaged suppliers have cash flow problems therefore require shorter payment terms than the standard in CCF which is 30 days after statement date. . Conclusion CCF is definitely breaking the economic barriers by introducing and applying the BEE Policy. We aim to maintain the excellent execution of our BEE Policy. 6. Bibliography Sources of information used: Book • • • Website • • www. info. gov. za/view/DownloadFileAction? id=68031 http://mg. co. za/ (Mail&Guardianonline) BBBEE Final Codes Scorecard. Balshaw & Goldberg. Supply Chain Management Logistics in perspective. WMJ Hugo Times Magazine Page 4 of 4