Insight from industry Purchasing and supply chain management practices in Botswana

Kabossa A.B. Msimangira

Introduction
The purchasing profession has been gaining recognition in developed countries faster than in the developing countries. Many developing countries have not managed to advance the purchasing profession either because of lack of managers (supervisors) to recognise the profession or because top management does not support the effective development of the purchasing and supply chain function. This paper discusses supply chain management practices with emphasis on purchasing in Botswana (a developing country). The focus is on problems facing business operations and how to improve the situation. In addition, the paper highlights the lessons learned. Purchasing personnel from public and private organisations provided me with their views formally and informally regarding purchasing and supply chain management practices in their organisations while I was working in Botswana, initially as United Nations Technical Adviser and later as a Principal Consultant at the Institute of Development Management (IDM). This paper also highlights the responses from purchasing personnel of the organisations I visited or consulted in Botswana, and other views were expressed by my students in purchasing and supply chain management courses. The majority of participants in supply chain management courses had worked in purchasing and stores sections in their organisations. The responses show that the purchasing and supply chain function is not regarded as a profession in some organisations, and purchasing activities are done by various departments (i.e. purchasing and supply chain function is decentralised). Purchasing has not been recognised as a profession and management does not seem to realise the existence of purchasing professionals. Owing to lack of effective recognition of purchasing professionals, personnel working in purchasing sections are not motivated. This paper also indicates other problems related to purchasing which hinder the development of the supply chain management profession in Botswana.
The author wishes to thank the editor and Angela Moody for their helpful comments on earlier versions of this paper.

The author Kabossa A.B. Msimangira is a Senior Lecturer at The Open Polytechnic of New Zealand, Auckland, New Zealand. Keywords Supply chain management, Botswana Abstract Discusses supply chain management practices, with emphasis on purchasing, in Botswana (a developing country). Focuses on problems facing business operations and how to improve the situation. Presents the views of purchasing personnel from public and private organizations and of students taking purchasing and supply chain management courses. Discovers that purchasing has not been recognized as a profession, which has led to lack of motivation in purchasing sections' personnel. Further, purchasing policies on external relationships and image are non-existent in most organizations. Claims that managers need to change their thinking about the purchasing and supply function ± to see it as strategic and not clerical; and purchasing and supplies personnel require training in supply chain management. Electronic access The Emerald Research Register for this journal is available at http://www.emeraldinsight.com/researchregister The current issue and full text archive of this journal is available at http://www.emeraldinsight.com/1359-8546.htm

Supply Chain Management: An International Journal Volume 8 . Number 1 . 2003 . pp. 7-11 # MCB UP Limited . ISSN 1359-8546 DOI 10.1108/13598540310463305

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1999). Purchasing personnel in the organisations provided the following responses regarding purchasing policies and procedures in their organisations. which have enjoyed democratic political and economic systems since independence in 1966. the public enterprise sector will be restructured through rationalising and downsizing. sales people. Msimangira Supply Chain Management: An International Journal Volume 8 . with mining registering a growth rate of 9. in real terms. one would expect that purchasing policies and procedures that are available in organisations are presented in a manual and is familiar to all personnel involved in purchasing. the external sector had weak performance in 1998. together with a stable democratic system. and reducing income inequality. while General Government grew by 11. as this reflects the efficiency of policies for economic diversification. Number 1 . to a middle-income country in the 1990s'' (GGL.5 per cent. due to the poor performance of the current account for the first time since the early 1980s (GGL. Although there was a growth of the economy. alleviating poverty. (2) Availability of procurement or purchasing procedures.Purchasing and supply chain management practices in Botswana Kabossa A. but unfortunately. 2000). (4) Policies defining purchasing responsibility. (5) Availability of purchasing and supply manual. with particular reference to the organisations in Botswana. (9) Policies on external relationships and image. purchasing and supply chain management activities are also revealed. In practice. The economy grew. The growth in the mining sector's output is attributable to the full-year's impact of continuous operations introduced in all the diamond mines in January 1997. by 8.7 per cent in 1997/1998 (GGL. 2000). The following sections of this paper examine the problems of purchasing in the supply chain facing business operations in Botswana: purchasing policies existing in organisations. (7) Policies on pricing. Problems in performing . Many organisations have purchasing policies and procedures. and major purchasing and supply problems in the organisations. orientation and policy booklets. and the recognition of purchasing as a profession.2 per cent in 1997/1998 compared to a revised growth estimate of 7. in some organisations there are no purchasing policy manuals. and productivity improvements.B. ``Botswana's sound macroeconomic policies and the harnessing of its substantial mineral resources.0 per cent during the year. (8) Policies concerning ethical practices. privatisation. The non-mining sectors of the economy grew by 7. (6) Policies on supply sources. Botswana's strong external position provides considerable flexibility to pursue these objectives in an increasingly liberalised external trade and payments environment. This higher growth rate reflects the continued strong performance of the traditional sectors. However. organisation of purchasing and materials management.g. Of particular significance is the continued strong performance of the non-mining sectors of the economy. information will lead to a clearer picture of the purchasing and supply chain management practices in developing countries. have helped transform Botswana from one of the world's poorest countries in the 1960s and 1970s. It is one of the prosperous countries in Africa. (3) Availability of purchasing policies. etc. this is not the case in all organisations in 8 Purchasing and supply chain management experiences in Botswana This paper focuses on purchasing and supply chain management practices in a developing country. which is considered critical for generating employment. The Eighth National Development Plan (NDP8) covering the 1997/1998-2002/2003 period has economic diversification as its central theme. 7-11 Background information Botswana is one of the African countries (developing countries). Purchasing policies existing in the organisations Purchasing policies in an organisation provide effective guidance on the implementation of purchasing activities. 2003 . samples. Purchasing policies on external relationships and image are non-existent in most organisations. Thus. Their responses are arranged in order of importance: (1) Purchasing or procurement policies and procedures are known to purchasing personnel. which are known to purchasing personnel. In preparation for exposure to greater competition. purchasing personnel in the organisations. e.2 per cent in 1996/1997. World-class performance can be achieved using proper purchasing policies and procedures.

The misconception of management is that purchasing can be done by almost everyone in the organisation. training is imperative. Msimangira Supply Chain Management: An International Journal Volume 8 . Top management does not recognise the purchasing department's contribution to the organisation. Some people in management think that purchasing is where money is wasted because they think purchasing people just buy anything they want and do not have economically viable objectives. in 9 (2) (3) (4) (5) (6) (7) order to make purchasing employees more productive. (5) Existence of department of materials or purchasing. some employees in purchasing departments are not aware that these written purchasing policies and procedures exist within their organisations. the materials management concept is not widely practiced to clear the way for smooth introduction of the supply chain management department. Most of the big organisations in Botswana have purchasing or supplies departments and the purchasing function is centralised. (2) Purchasing function is centralised. 2003 . This is because the majority of senior managers still think the purchasing and supply function is clerical and not strategic. The purchasing function has been ignored in most organisations. The following factors. The majority of managers in the organisations tend to treat purchasing as an extension of the finance department. Materials management organisation Organisation of materials management plays an important role on the smooth operation of the purchasing and supply chain management function. and be efficient and effective. Few organisations have materials management departments. it is not being duly accorded the respect it deserves as a major tool towards reduction of costs to increase profits.Purchasing and supply chain management practices in Botswana Kabossa A. Purchasing is not considered as a profession by top management in many organisations. reflect the nature of purchasing and materials management organisation: (1) Existence of purchasing or supplies department. purchasing is given low status and the finance managers represent purchasing departments/ sections at management meetings. Purchasing personnel in organisations The purchasing personnel in the organisations have different qualities and their performance depends on whether they were trained in purchasing or not. The importance of the purchasing and supply function is realised when items are out of stock. (6) Top management consider purchasing as a profession. The following factors. purchasing contribution towards achieving the corporation's objectives is not directly felt and noticeable as it is being over-shadowed by finance or accounting department activities such as debtors and creditors. Since purchasing and stores fall under finance department (in the current organisation structure of most organisations). That is. However. The following major comments summarize the responses from people I had contact with: (1) Management undermines the purchasing profession. They think it is a simple job and it does not require personnel to undertake further professional training. 7-11 Botswana. Management allocates more resources to other departments. Furthermore. in particular accounting and finance departments. The performance of the purchasing and supply chain function can be enhanced by the role of top management in recognising purchasing and supply chain management as a profession. (3) Purchasing is done by persons in purchasing or supplies section. reflect the nature of purchasing personnel and their activities in the organisation: . because some managers are not familiar with professional purchasing activities and its benefits to the organisation. (4) Purchasing is under finance department. (7) Purchasing and supply management is not a strategic function. Concerning the status of the purchasing department within the organisation structure. arranged in order of importance. Few managers understand what exactly procurement/purchasing involves and the primary role that it plays in the entire organisation.B. as such. Much support is sought from the top management to make the purchasing function operate at the required standard. arranged in order of importance. Number 1 . Management cannot realise the importance of purchasing.

B. with particular reference to the organisations in Botswana. due to lack of recognition. Most organisations evaluate suppliers regularly. (8) Poor inventory management. the existing purchasing problems in the organisations. For example. Botswana purchasing and supply personnel. more recently. implement supply chain management philosophy in their organisations. 2003 . (5) Top management (excluding purchasing) is responsible for purchasing and supply planning. 7-11 (1) Regular evaluation of suppliers. some of which are caused by lack of trained personnel in purchasing and supply and. there is need for top management to provide the purchasing departments or sections with a clear mandate or authority to operate professionally and encourage cross-section team work with other departments to complete purchasing and supply chain management activities efficiently and effectively. Purchasing and supply function is not considered as a profession in some organisations and purchasing activities are sometimes performed by people who are not trained in purchasing and supply. Few organisations have trained Heads of Purchasing or supply departments. lack of professional purchasing and supply training and the recognition of purchasing as a profession has contributed to most of the above-mentioned problems in the organisations. (4) Organisations conduct market and supplier surveys. The majority of respondents I had contact with stated that their Heads of Purchasing departments are not professionally trained in purchasing. purchasing respondents indicated a high usage of ``right quantity'' purchasing objective compared to ``right quality'' purchasing . (4) Market survey is not done before purchasing. These problems need to be solved first before the organisations can achieve their purchasing goals and. In order for the organisation to benefit from the operations of the purchasing and supply function. There was clear evidence that some organisations do not have purchasing policies clearly documented and known to the employees working in purchasing and stores. (2) Purchasing personnel are not trained in purchasing and supply. (2) Trained personnel are managing purchasing and supply activities in big organisations. As pointed out earlier. In addition. (3) Purchasing and supply function is not recognised as a profession. like their counterparts in other developing countries. Number 1 . There are numerous purchasing problems facing organisations in developing countries like Botswana. Such response supports the argument that purchasing is not a profession and does not necessarily require training. materials management or supply chain management. market and supplier surveys are not done. Lessons learned This paper highlights purchasing practices in developing countries. The major purchasing and supply problems arranged in order of severity facing organisations in Botswana are as follows: (1) Organisations do not critically evaluate suppliers/vendors. effective performance can only be realised if top management recognises the purchasing function and supports purchasing personnel in meeting their requirements such as training. (7) Poor location of the purchasing and supply function. Msimangira Supply Chain Management: An International Journal Volume 8 . (5) Head of purchasing and supply department is trained in purchasing and supply chain management.Purchasing and supply chain management practices in Botswana Kabossa A. Although organisation of purchasing and materials management is crucial for an organisation. therefore. 10 (6) Some officers do not complete stores requisition forms. Some of the organisations do not make an effort to arrange training for purchasing personnel and. Major purchasing and supply problems in organisations An effective and efficient purchasing and supply function in organisations depends on management's efforts to eliminate or reduce purchasing problems. (3) An organisation makes the effort to arrange training for purchasing personnel. can learn from the experiences of supply chain management philosophy users in developed countries. most importantly.

Purchasing personnel.asp GGL (2000). ``Botswana economic development and indicators''. the purchasing and stores sections will stop being the dumping places for manpower which do not fit in other departments. The complexity of purchasing and supply chain management in a global market requires every organisation to have purchasing professionals who can contribute significantly to organisational objectives and suggest strategies to gain a competitive position. The importance of purchasing and supply chain management in the organisation can be enhanced by both top management and purchasing personnel. which will educate employers and other employees on the importance of trained personnel in supply chain management in the organisations and development of the country's economy.asp . available at: www. References GGL (1999).com/ economy/botswana. should work hard to justify the importance of the role in the functioning of the organisation. though quality is considered the most competitive factor in present global business practices. An in-depth study of supply chain management is required in Botswana to determine hard evidence of the level of practices in the organisations. 7-11 objective. Top management should recognise the purchasing and supply function as a profession which needs special attention to make the organisation competitive. (CIPS (UK)) in Botswana. However. With the introduction of the materials/supply chain management department. and add value. ``Botswana budget speech 1999/2000''. Training in supply chain management will depend on the support and commitment from top management in organisations. 2003 . after being provided with the necessary incentives and training.com/economy/ botswana. then the organisation will reduce costs and ultimately pass these savings on to the customers by offering products/services at competitive prices as a result of wise purchasing. some of the organisations are still not sending their purchasing and supply personnel for training. The materials or supply chain manager will be able to educate other senior managers who do not have any knowledge regarding the purchasing and supply function.Purchasing and supply chain management practices in Botswana Kabossa A. purchasing and supply chain management training has been recently increased in Botswana at two training institutions. If top management recognises purchasing and supply chain as a profession and a strategic function. the Institute of Development Management (IDM) and the Botswana Institute of Administration and Commerce (BIAC). Employers should be educated on the importance of supply chain management in their organisations. 11 The most important factor to improve the situation in Botswana is training purchasing and supplies personnel in supply chain management. members of the Chartered Institute of Purchasing and Supply. This paper has provided an insight for further research in Botswana and other similar developing countries. formed an association of purchasing and supply. The materials management or supply chain department will be under the materials or supply chain manager. What should be done to improve the organisation of the purchasing and supply The establishment of materials management or supply chain departments in the organisations will be a step forward to expedite the recognition of the purchasing and supply profession by the top management. The right quality objective was given the lowest rating.newafrica. Number 1 . available at: www. as some organisations have been engaging in this practice. namely. increasing efficiency in providing services and quick delivery of products to customers.B. Effective supply chain management implementation depends on the development of well-trained purchasing and supply chain personnel. In order to alleviate the situation. Finally. improving productivity and profitability. who will be part of the top management team (at strategic level) and reports to the chief executive officer. Trained purchasing and supply chain personnel will make a major contribution to the organisations by reducing operational costs.newafrica. Msimangira Supply Chain Management: An International Journal Volume 8 . Recently. purchasing and supply personnel must work in a cross-sectional teamwork approach in order to achieve high efficiency and productivity in the supply chain environment.