Department of Defence Annual Report 2008-2009

| Department of Defence |
| Programme 1: Defence Administration |
SUBPROGRAMME: DEFENCE SUPPLY-
CHAIN INTEGRATION (MATÉRIEL
GOVERNANCE)
Overview
The mandate of the Defence Supply-Chain
Integration Division is to acquire matériel and
services for the DOD through ARMSCOR,
according to the applicable DOD and government
policies. This Division reports directly to, and is
accountable to the Sec Def. In order to assist the Sec
Def to full the task of Accounting Ofcer for the
DOD, this Division serves as the nodal point for all
interactions between the DOD and ARMSCOR, as
well as related-engagements with foreign countries.
The Supply-Chain Integration Division satises the
day-to-day procurement requirements of the DOD.
In doing so, the Division utilises the allocated funds
according to corporate priorities to ensure costeffective
solutions to requirements. In order to
support the SANDF in armament and armamentsupport
capability, this Division and ARMSCOR
have embarked on efforts to enhance cost-effective
and meaningful technology development in the local
industry.
The identication of the DOD strategic capabilities
and the ability of the local defence industry to
support such capabilities is an area that this Division
has championed vigorously in the period under
review. The development of the local defence
industry to support the DOD adequately stands to
be greatly enhanced by co-operation between South
Africa and other countries in areas of technology.
The India, Brazil and South Africa (IBSA) cooperation
arrangement is one such mechanism.
In the period under review, this Division has paid
particular attention to this area.
In order to strengthen procurement governance
in the DOD, this Division has sought to inculcate
the provision of professional service to the DOD
in a manner that upholds adherence to procedure,
transparency, integrity, zero-resource wastage and
client orientation. In the period under review, the
Supply-Chain Integration Division was able to
achieve the following successes:
• Development of a new procurement framework
for the DOD to migrate the procurement
function from the jurisdiction of the Sec Def,
to that of the C SANDF. In line with this
framework, the DOD Corporate Procurement
Centres in Thaba Tshwane and Simon’s Town
were successfully transferred to the Chief of
Logistics with effect 1 February 2009.
• Through the Logistics Intervention and
Realignment Programme (LIRP), the Division
has designed and implemented a comprehensive
supply-chain management framework.
This framework has, inter alia, achieved the
integration of activities and exploitation of
synergies throughout the Logistics/Matériel
Value Chain. Furthermore, this framework has
achieved compliance with good governance and
balanced approach logistics-related risks and
benets.
• Provided support for peacekeeping missions
abroad through placement of contracts for
operations in countries like Central African
Republic, Democratic Republic of Congo and
Burundi.
• In collaboration with ARMSCOR, processed the
disposal of various phased-out and redundant
defence equipment.
• Notwithstanding the achievement indicated
above, the Division was confronted with a
number of challenges which include:
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As a new establishment, the staff
compliment of the Division is still at a
critical level of 55%. This situation has
resulted in overburdening of the existing
human resource capacity. In dealing with
this situation, the Division has made a
request to the Sec Def and the C SANDF
to intervene, in order to ll the vacancies.
E-Proqure (electronic procurement) system
has been rolled out at Units with selfaccounting
status. However, the challenge
on implementation is due to understafng
of procurement positions. Utilisation of
the system currently stands at 65%. In
order to address this situation, the Division
has issued guidelines for supply-chain
management and structuring to Service
Chiefs.
Delays in getting suppliers timeously
allocated with codes through the National
Codication Bureau, hampers urgent
placement of orders and the ability to
pay suppliers within the 30-day period.
Challenges encountered about the National
Codication Bureau capability are however,
addressed through the LIRP.
Annual Report FY 2008 - 2009
44