Updated UNIT 2 .docx

**UNIT 2: DEMAND MANAGEMENT** **SELF-ASSESSMENT QUESTIONS:** 1. **What is the objective of demand management? (3)** 2. **Briefly explain the process of demand management. (5)** 3. **List any 5 demand considerations that be taken into account by the accounting officers/authorities. (5)**...

**UNIT 2: DEMAND MANAGEMENT** **SELF-ASSESSMENT QUESTIONS:** 1. **What is the objective of demand management? (3)** 2. **Briefly explain the process of demand management. (5)** 3. **List any 5 demand considerations that be taken into account by the accounting officers/authorities. (5)** 4. **Explain why the specification of goods/works or services is important. (8)** **\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_** **UNIT 2: DEMAND MANAGEMENT** 1. **INTRODUCTION** - - 2. - Is the [1^st^ phase] of SCM. - [Objective] = to ensure that [resources required] (to fulfill needs identified in strategic plan of institution) are delivered at [right time, price & place] AND that [quantity & quality] will satisfy those needs. - Therefore, a total [needs assessment] should be undertaken & should be included as [part of strategic planning] process of institution and incorporate future needs. - Demand management is beginning of supply chain where: - needs assessment (to ensure that goods/services are acquired in order to deliver agreed service) is done; - [specifications] are precisely determined; - requirements are [linked to budget]; and - [supplying industry] has been analysed. - - - 3. **Demand management as part of integrated planning & budgeting process** - Crucial that demand management forms part of annual strategic planning & budgeting process within public institution to ensure that annual SCM plan can be developed from it. 4. **Demand considerations** - Accounting officers/authorities should ensure that: - future as well as current [needs are understood]; - requirements are [linked to budget]; - [specifications] are determined; - needs form [part of strategic plan] of institution; - analysis of [previous expenditures] can assist them when determining manner in which institution fulfilled this need in past; - - optimum method to satisfy need is considered, including possibility of procuring goods, works/services from other institutions (e.g. stationery, printing & related supplies from Govt Printer), or on transversal/ad hoc contracts; - frequency of requirement is specified; - economic order quantity is calculated; - lead & delivery times are identified; and - industry & commodity analysis is conducted. 5. **Preferential procurement strategy** - Aspects such as enhancing Black Economic Empowerment (BEE) as required in Preferential Procurement Regulations, 2001 should be taken into account. - Goals to be attained should be identified for each contract individually after relevant industries & communities have been consulted. 6. **Specification of goods/works or services** - [Standards (e.g. SABS) & technical specifications and/or terms of reference] quoted in bidding documents should [promote broadest possible competition], while [assuring that critical elements of performance/other requirements (quality)] for goods, services and/or works being procured are achieved. - Recommended that as far as possible, institution should specify accepted standards such as those issued by [Standards South Africa (division of SABS responsible for standards]), International Standards Organisation or authority recognized by [SA National Accreditation System] with which equipment or materials, or workmanship should comply. For example, construction companies that must be registered with the CIBD (Construction Industry Development Board). - References to brand names (e.g. Bic pens; rather only specify type of pen and colour of pen), catalogue numbers, or similar classifications [should be avoided]. - If it is necessary to quote brand name/catalogue number of particular manufacturer to clarify otherwise incomplete specification, words ["or equivalent" should be added] after such reference. - Specification should permit acceptance of offers for goods which have [similar characteristics] & which provide performance at least equivalent to those specified. - Quality of goods/services required should, however, [not be over-specified] to extent that it will be impossible for others to offer such product.