SAQA All qualifications and part qualifications registered on the National Qualifications Framework are public property. Thus the only payment that can be made for them is for service and reproduction. It is illegal to sell this material for profit. If the material is reproduced or quoted, the South African Qualifications Authority (SAQA) should be acknowledged as the source.
SOUTH AFRICAN QUALIFICATIONS AUTHORITY 
REGISTERED UNIT STANDARD THAT HAS PASSED THE END DATE: 

Develop a sourcing strategy 
SAQA US ID UNIT STANDARD TITLE
260097  Develop a sourcing strategy 
ORIGINATOR
Task Team - Treasury 
PRIMARY OR DELEGATED QUALITY ASSURANCE FUNCTIONARY
-  
FIELD SUBFIELD
Field 03 - Business, Commerce and Management Studies Procurement 
ABET BAND UNIT STANDARD TYPE PRE-2009 NQF LEVEL NQF LEVEL CREDITS
Undefined  Regular  Level 6  Level TBA: Pre-2009 was L6  8 
REGISTRATION STATUS REGISTRATION START DATE REGISTRATION END DATE SAQA DECISION NUMBER
Passed the End Date -
Status was "Reregistered" 		 2018-07-01  2023-06-30  SAQA 06120/18 
LAST DATE FOR ENROLMENT LAST DATE FOR ACHIEVEMENT
2024-06-30   2027-06-30  

In all of the tables in this document, both the pre-2009 NQF Level and the NQF Level is shown. In the text (purpose statements, qualification rules, etc), any references to NQF Levels are to the pre-2009 levels unless specifically stated otherwise.  

This unit standard does not replace any other unit standard and is not replaced by any other unit standard. 

PURPOSE OF THE UNIT STANDARD 
This unit standard will enable learners to determine a suitable sourcing strategy for a specific commodity based on data collected. This will allow for the identification of the most appropriate supplier relationship.

A person credited with this unit standard is able to:
  • Mobilise cross-functional team for strategic sourcing.
  • Evaluate business baseline for a commodity.
  • Identify and collect data.
  • Conduct data analysis for different information categories.
  • Determine sourcing strategy.

    This unit standard will contribute to the development of the learner within the context of supply chain management. Learners who have achieved this unit standard will increase their opportunities for further development and employability within the supply chain management environment. 
    		•

    LEARNING ASSUMED TO BE IN PLACE AND RECOGNITION OF PRIOR LEARNING 
    It is assumed that the learner has the following knowledge and skills:
  • Basic principles of supply chain management at NQF Level 5.
  • Conduct initial assessment for strategic sourcing at NQF Level 6. 
    		•

    UNIT STANDARD RANGE 
    Commodities includes goods, works and services. 

    Specific Outcomes and Assessment Criteria: 

    SPECIFIC OUTCOME 1 
    Mobilise cross-functional team for strategic sourcing. 

    ASSESSMENT CRITERIA     

    ASSESSMENT CRITERION 1 
    Project mobilization is implemented and communicated by allocating specific individuals for core and extended functions as identified in plan and time table. 
    ASSESSMENT CRITERION RANGE 
    Mobilisation includes infra-structure preparation, communication and task allocation.
     

    ASSESSMENT CRITERION 2 
    Individuals are identified to fulfill the functions of the core and extended teams as defined in the initial assessment processes. 
    ASSESSMENT CRITERION RANGE 
  • Core team refers to those individuals who are dedicated resources to the project.
  • Extended team refers to those individuals who are co-opted on a consultative basis to the project.
     
    		•

    ASSESSMENT CRITERION 3 
    An operating model for the cross-functional team is established in order to allocate the roles and responsibilities. 
    ASSESSMENT CRITERION RANGE 
    Operating model includes but is not limited to templates, governance structure, reporting and communication lines, leadership.
     

    ASSESSMENT CRITERION 4 
    A working infrastructure is set up to facilitate and support project operations. 
    ASSESSMENT CRITERION RANGE 
    Working infrastructure includes but is not limited to project room identification, network set-up where applicable, building, parking access.
     

    ASSESSMENT CRITERION 5 
    The project plan is communicated and refined in accordance with the in-puts from cross-functional team members. 
    ASSESSMENT CRITERION RANGE 
    Refined includes but is not limited to the amendments to assigned actions, timeframes and method of engagement with different stakeholders.
     

    SPECIFIC OUTCOME 2 
    Evaluate business baseline for a commodity. 

    ASSESSMENT CRITERIA     

    ASSESSMENT CRITERION 1 
    The identified commodity is categorised into functional and logical groupings. 
    ASSESSMENT CRITERION RANGE 
    Categorisation includes but is not limited to specifications, spend, characteristics, function.
     

    ASSESSMENT CRITERION 2 
    The geographical dispersion of suppliers and end users is determined in order to understand the business landscape. 
    ASSESSMENT CRITERION RANGE 
    Business landscape includes but is not limited to geographical footprint, end user's level of autonomy, organisational structures, infrastructure, use/availability of information technology.
     

    ASSESSMENT CRITERION 3 
    Current supply chain practices and challenges are analysed in order to profile a specific commodity. 
    ASSESSMENT CRITERION RANGE 
    Practices and challenges include but are not limited to forecasting, procurement, distribution and storage, disposal, process inefficiencies, cost drivers, supply landscape.
     

    ASSESSMENT CRITERION 4 
    Current contracts are analysed to determine the impact of the terms and conditions on future contracts. 
    ASSESSMENT CRITERION RANGE 
    Terms and conditions include but are not limited to duration, constraints, pricing, volumes, service level agreements.
     

    ASSESSMENT CRITERION 5 
    Information is gathered and analysed to determine the implications of specific legislation and policies on the sourcing of a commodity. 

    SPECIFIC OUTCOME 3 
    Identify and collect data. 

    ASSESSMENT CRITERIA     

    ASSESSMENT CRITERION 1 
    Information required for the planning process is identified and defined in order to collect data fit for purpose. 
    ASSESSMENT CRITERION RANGE 
    Information includes but is not limited to data type, sources of data (suppliers, purchasing systems, contract management department, budgets), depth/level of spend and volume information (invoice or consolidated data).
     

    ASSESSMENT CRITERION 2 
    Data collection plan is compiled to define the ideal data requirements and standards for the purpose of analysis. 
    ASSESSMENT CRITERION RANGE 
    Data requirements and standards include but are not limited to current contract/commodity dynamic, establish type and source of data, standardise data requirements, preparation of data for analysis.
     

    ASSESSMENT CRITERION 3 
    Specific methods are identified and templates are developed to facilitate stakeholder in-puts. 

    ASSESSMENT CRITERION 4 
    Specific methods and templates are utilised to facilitate the process of gathering information and data through engagement with sources of information. 

    ASSESSMENT CRITERION 5 
    Data received is consolidated and cleaned in order to extract required information in accordance with the data requirements and standards. 
    ASSESSMENT CRITERION RANGE 
    Consolidated and cleaned include but are not limited to validate, refine, formatting, completeness, accuracy.
     

    ASSESSMENT CRITERION 6 
    Data is stored and recorded in accordance with organisational procedures. 

    SPECIFIC OUTCOME 4 
    Conduct data analysis for different information categories. 
    OUTCOME RANGE 
    Information categories include but are not limited to demand analysis, market analysis, spend analysis and cost analysis. 

    ASSESSMENT CRITERIA     

    ASSESSMENT CRITERION 1 
    Information requirements are specified from the data collected per category. 
    ASSESSMENT CRITERION RANGE 
  • Information requirements for demand analysis include but are not limited to product specification, historical, current and forecasting future demand patterns.
  • Information requirements for market analysis include but are not limited to the tools utilised such as SWOT analysis, Porter's 5 Forces Model, PEST (political, economic, social, technological) analysis.
  • Information requirements for spend analysis includes but is not limited to current and historical spend (value) and current and historical volume.
  • Information requirements for Total Cost Analysis include but are not limited to Product Lifecylcle, Cost Components, Cost Elements and Drivers of Cost.
     
    		•

    ASSESSMENT CRITERION 2 
    Reports are generated in accordance with information requirements. 

    ASSESSMENT CRITERION 3 
    Reports are analysed in accordance with the requirements of the different information categories. 

    ASSESSMENT CRITERION 4 
    The outcomes of the analysis are summarised to assist with the identification of the sourcing strategy. 
    ASSESSMENT CRITERION RANGE 
    Summary includes but is not limited to impact on organisation, commodity status (leverage, strategic, non-critical and bottle-neck), market complexity (risks), value of spend, opportunities for Black Economic Empowerment (BEE).
     

    SPECIFIC OUTCOME 5 
    Determine sourcing strategy. 
    OUTCOME NOTES 
    Determine refers to identification, decision on options, planning for implementation. 

    ASSESSMENT CRITERIA     

    ASSESSMENT CRITERION 1 
    The information yielded in the analysis process is utilised to determine the different sourcing options. 

    ASSESSMENT CRITERION 2 
    Instruments and tools are used to assist in the determination of the different sourcing options. 
    ASSESSMENT CRITERION RANGE 
    Instruments and tools include but are not limited to Kraljic's strategic sourcing model.
     

    ASSESSMENT CRITERION 3 
    Sourcing options are evaluated to determine their feasibility in terms of organisational context. 
    ASSESSMENT CRITERION RANGE 
    Organisational context includes but is not limited to policies, legislation, strategic objectives, resource requirements.
     

    ASSESSMENT CRITERION 4 
    A decision is made on the specific sourcing strategy in order to facilitate approval for implementation. 

    ASSESSMENT CRITERION 5 
    An implementation plan is developed to execute the sourcing strategy as determined by the decision on the sourcing strategy. 
    ASSESSMENT CRITERION RANGE 
    Implementation plan includes but is not limited to tasks and activities, timelines, deliverables, milestones, resource allocation, planning for bid/negotiation, quality management, team management.
     


    UNIT STANDARD ACCREDITATION AND MODERATION OPTIONS 
  • The assessment will be governed by the policies and guidelines of the relevant Education and Training Quality Assuror (ETQA) that has jurisdiction over this field of learning.
  • The assessor will (at the very least) be accredited and have a relevant qualification and be a subject matter expert in this learning area and at least have 3 years experience in the skills specific area.
  • The learner can be assessed against this unit standard to obtain credits or as part of an integrated assessment for a qualification:
    > Internal moderation.
    > External moderation.
    > An assessor, accredited by the relevant ETQA, will assess the learner's competency.
    > Assessment procedures will be supplied by the ETQA in alignment with NSB requirements.
    > All assessment activities must be fair, so that all candidates have equal opportunities. Activities must be free of gender, ethnic or other bias.
    > Assessment and moderation procedures, activities and tools must be transparent, affordable and support development within the field, sub-field and NQF.
    > Questions and answers to determine theoretical knowledge are expected.
    > Assessment of a portfolio of evidence.
    > Direct observation in simulated and/or controlled work conditions. 
    		•

    UNIT STANDARD ESSENTIAL EMBEDDED KNOWLEDGE 
    Commodity Categorisation:

    Group the commodity into applicable groups and sub-groups:
  • Spend.
  • Characteristics.
  • Function.
  • Strategic importance.
  • Usage profiles.
  • Cost.

    Business Landscape:
  • Understanding of the geographical dispersion of all stakeholders for the commodity group in question.
  • Identify the level of autonomy of the end-user base.
  • Understanding of the organisational structures applicable to this process.

    Supply Chain Processes:

    The supply chain process identification will entail an understanding of the following areas listed below via interviews (with suppliers and relevant end-users) and contract information where relevant:
  • Forecasting/estimating quantity practices and procedures.
  • Procurement/purchasing practices.
  • Distribution and storage practices.
  • Disposal practices.
  • Problems faced by end-user with suppliers/commodities under question and vice versa.
  • Cost drivers and bottlenecks along the value/supply chain for the commodity in question.
  • Manufacturing landscape (imported, fully or semi manufactured locally).

    Current Contracts:

    Obtain copies of current contracts for the commodity group in question. Analyse contract details:
  • Suppliers engaged with the contract.
  • Contract duration.
  • Constraints, e.g. exit clauses.
  • Items/commodity groups specified within the contracts.
  • Volumes and prices specified within the contracts.

    Legislation/Policy:

    Identify legislation or policy that may influence:
  • The organisation's purchasing practices.
  • The commodity groups/sub-groups/items.

    Market Analysis:

    In this context, market analysis includes supplier and industry analysis.

    Examples of the tools and instruments for analysis:

    PEST Analysis: Identifying key influences affecting the industry players, examples may include:

    Political issues:
  • Industry specific legislation regulating the industry.
  • The relationships between organisation and industry.
  • Organisation control/ownership of industry etc.
  • Industry Charters.

    Economic issues:
  • Currency fluctuations, inflation, etc.

    Socio-cultural issues:
  • Social/cultural constraints regarding the commodity/industry.
  • BEE requirements.

    Technological issues:
  • Patents, future trends etc.

    Porter's Five Force Model:

    Conduct industry analysis:
  • Identify universe of suppliers (threat of new entry, barriers to entry).
  • Understand industry dynamics (competitive rivalry amongst suppliers).
  • Analyse the organisation's purchasing power in the industry (Buyer power).
  • Analyse the bargaining power of the industry (Supplier power).
  • Product/service dynamics (threat of substitution, cost of change).

    Methods to Obtain Information for Porter's Five Force Model:

    Organisation Impact:
  • Interview industry experts, internal buyers, commodity experts, suppliers etc.

    Supplier Complexity:
  • Pricing structures of each supplier.
  • Cost drivers per supplier.
  • Suppliers BEE status and contribution to government goals.

    Consolidate Information:
  • Supply market/industry information obtained.
  • Supply market complexity determination and consolidation when plotting the 'Sourcing Category Positioning Matrix' (Kraljic).
  • Strategy option selection.

    Spend analysis:

    Current and Historical Spend Analysis:
  • Historical and current spend per:
    > Grouping/sub-category.
    > Supplier.
    > User.
    > Time period e.g. Monthly.

    Current and Historical Volume Analysis:
  • Historical and current volume per:
    > Grouping/sub-category.
    > Supplier.
    > User.
    > Time period e.g. Monthly.

    Total Cost analysis:

    Analyse the cost throughout the lifecycle of the commodity:
  • Identify commodity lifecycle.
  • Identify Cost Components.
  • Identify Cost Elements.
  • Identify and interpret Cost Drivers.
  • Create a Total Cost Model. 
    		•

    UNIT STANDARD DEVELOPMENTAL OUTCOME 
    N/A 

    UNIT STANDARD LINKAGES 
    N/A 


    Critical Cross-field Outcomes (CCFO): 

    UNIT STANDARD CCFO IDENTIFYING 
    Identifying and solving problems in which responses display that responsible decisions using critical and creative thinking have been made when:
  • Analysing data. 
    		•

    UNIT STANDARD CCFO WORKING 
    Working effectively with others as a member of a team, group, organisation, and community during:
  • Participation in a cross-functional sourcing team.
  • Interactions with end users and suppliers at various levels. 
    		•

    UNIT STANDARD CCFO ORGANISING 
    Organising and managing oneself and one's activities responsibly and effectively through:
  • Planning activities.
  • Gathering information and data. 
    		•

    UNIT STANDARD CCFO COLLECTING 
    Collecting, analysing, organising and critically evaluating information during:
  • Developing strategic sourcing plan.
  • Collecting data.
  • Making decisions on options. 
    		•

    UNIT STANDARD CCFO COMMUNICATING 
    Communicating effectively using visual, mathematical and/or language skills in the modes of oral and/or written persuasion when:
  • Developing plans.
  • Engaging with stakeholders.
  • Approval of strategy. 
    		•

    UNIT STANDARD CCFO SCIENCE 
    Using science, technology and indigenous knowledge effectively and critically, showing responsibility towards the environment and health of others through:
  • Gathering information and data.
  • Analysing information and data. 
    		•

    UNIT STANDARD CCFO DEMONSTRATING 
    Demonstrating an understanding of the world as a set of related systems by recognising that problem-solving contexts do not exist in isolation when:
  • Determining best options for specific strategies.
  • The relationship between the sourcing strategy and the relevant policies and legislation. 
    		•

    UNIT STANDARD ASSESSOR CRITERIA 
    N/A 

    REREGISTRATION HISTORY 
    As per the SAQA Board decision/s at that time, this unit standard was Reregistered in 2012; 2015. 

    UNIT STANDARD NOTES 
    N/A 

    QUALIFICATIONS UTILISING THIS UNIT STANDARD: 
      ID QUALIFICATION TITLE PRE-2009 NQF LEVEL NQF LEVEL STATUS END DATE PRIMARY OR DELEGATED QA FUNCTIONARY
    Elective  50060   National Certificate: Public Administration  Level 5  Level TBA: Pre-2009 was L5  Passed the End Date -
    Status was "Reregistered"     		 2023-06-30  PSETA 
    Elective  74149   National Certificate: Supply Chain Management  Level 5  NQF Level 05  Passed the End Date -
    Status was "Reregistered"     		 2023-06-30  TETA 
    Elective  67460   National Diploma: Public Administration  Level 6  NQF Level 06  Passed the End Date -
    Status was "Reregistered"     		 2023-06-30  As per Learning Programmes recorded against this Qual 


    PROVIDERS CURRENTLY ACCREDITED TO OFFER THIS UNIT STANDARD: 
    This information shows the current accreditations (i.e. those not past their accreditation end dates), and is the most complete record available to SAQA as of today. Some Primary or Delegated Quality Assurance Functionaries have a lag in their recording systems for provider accreditation, in turn leading to a lag in notifying SAQA of all the providers that they have accredited to offer qualifications and unit standards, as well as any extensions to accreditation end dates. The relevant Primary or Delegated Quality Assurance Functionary should be notified if a record appears to be missing from here.
     
    1. Academics Dynamics (Pty) Ltd 
    2. Aldabri 106 Institute for Quality Pty Ltd 
    3. Alika Investment CC 
    4. BPL Academy 
    5. Centre for Logistics Excellence (Pty) Ltd 
    6. Circleway College 
    7. DB Schenker Logistics Campus MEA Pty Ltd 
    8. DEMISIZE ACADEMY (PTY) LTD 
    9. Diversity technology Training Institute 
    10. Edu Wize Group Pty Ltd 
    11. End 2 End Supply Chain Academy 
    12. Gauteng City College 
    13. Global Maritime Legal Solutions Pty Ltd 
    14. HarvestHouse Consulting and Training South Africa PTY LTD 
    15. HDPSA GROUP PTY LTD 
    16. kholwa management and training consultancy (pty) Ltd 
    17. Khulani HR Consultancy (Pty) Ltd 
    18. KPI Consulting Pty LTD 
    19. Learning Exchange Pty (Ltd) 
    20. Madidi Supply Chain Institute & Business Institute 
    21. Makwedeng Training 
    22. Metro Minds 
    23. Open Learning Group 
    24. Phephani Learnerships cc 
    25. PMA Holding (Pty) Ltd 
    26. Quantum Leap College Pty Ltd 
    27. Royal Impression Academy 
    28. SA Maritime School and Transport College 
    29. School of Shipping 
    30. TEST 3_18 March 2019 
    31. THE SKILLS COLLEGE FOR DEVELOPMENT AND TRAINING(PTY) LTD 
    32. Thobologo Training and Education Group 
    33. Velile Supply Chain Consulting 
    34. VSL General Trading CC 


    All qualifications and part qualifications registered on the National Qualifications Framework are public property. Thus the only payment that can be made for them is for service and reproduction. It is illegal to sell this material for profit. If the material is reproduced or quoted, the South African Qualifications Authority (SAQA) should be acknowledged as the source.