localisation the current challenge for sa incorporated
TRANSCRIPT
LocalisationThe Current Challenge for SA Incorporated
DCD an engineering and manufacturing concern since 1911
with a long history of supplying heavy engineering components to
all coal fired & hydro power stations erected in SA and
participated in all the nuclear initiatives
to date
A balanced approach to the local content for manufacturing
• Determine local content threshold %
• No cap on award on assessment for exceeding local content threshold
Localization
Scenario
Customer identify
project that needs to have
localization
OEM starts tender process
OEM awards tender based on standard terms and conditions.
Manufacturer accepts
tender based on agreed
T&C
• OEM advised customer of successful manufacturer• Customer requires assessment• Customer introduces additional requirements
• Outcome• Manufacturer successful in assessment with additional costsOR• Assessment unsuccessful and project is put on hold until meets
requirements
• This leads• Project delay• Penalties• Additional costs• Even cancellation in some cases• This will bankrupt smaller suppliers• FAILURE OF LOCALIZATION
Scenario - Problem
Scenario – Root Causes
• OEM• Perception is that requirements does not need to be spelled out• Nor did they do a proper supplier assessment• No supplier development takes place
• Supplier• Looked at the complexity in terms of technical requirements• Without focus on the admin requirements and upfront qualifications
• Customer• Did not recognize that a new approval process was requires• Did not adopt a developmental mind set once the problem was identified
Step 1 – Create an SA Inc. approach
Step 2 - Determine administrative requirements for different manufacturing/services
Step 3 – Assess potential suppliers in terms of these requirements
Step 4 – Put a developmental plan in place for each supplier
Step 5 – Then procure
Proposed Solution
Determine requirements
Pre approve manufacturers
Create a stable market for localization
Export credits
Summary
Thank You