In this article, we sit down with Mpumi and Zola (TPFs best on supplier relationship management), and ask them to give us a few tips on how to build and manage your relationship with suppliers 

We ask them 9 questions, in which they impart a little bit of the wisdom that they’ve obtained over the years, in this brief but insightful article.

1. What qualities make a good supplier?

Mpumi says:

“Their ability to deliver on time is crucial for your business. Make sure that they have VAT registration, a clear (coherent) website, and can be reached whenever you call their phone.”

Zola says:

• A Good communicator
• Reliability when it comes to production
• Reliable provision of quality.
• Someone who understands their buyer, and makes it easier to sell whatever it is they supply according to your needs.

2. What makes a bad supplier?

Mpumi says:

“Any deviation from the first point.”

Zola says:

“Someone who isn’t able to communicate effectively with their clients. Production capability as well, for instance: you take on a job and lie about being able to deliver, or take on a (big) job and you don’t communicate whenever you come across some problems. And poor customer service.” 

3. How important is a supplier in the tendering process?

Mpumi says:

“Extremely important as they use the supplier prices to bid for tenders, once the tender has been awarded, the supplier needs to have the same pricing, if they are unstable on pricing, it chows the profits”

Zola says:

“Very important, suppliers need to deliver quality production/goods/services to the best of their abilities. Their communication must be effective so that there aren’t delays to the project.”

4. What does it take to establish a good relationship with a supplier?

Mpumi says:

“Previous dealings with the supplier are key (once you find a good one, your loyalty goes a long way). Once we pay on time and they deliver on time, a connection is made and we are best buddies.”

Zola says:

• Good communication.
• You as a client must be loyal to your supplier so you’re able to form a great working relationship and bond 
• Give honest feedback to your supplier after every project so that they know the things they need to work on. It will improve your experience with them in future. 
• The more you bring your supplier business, the more discounts you are guaranteed, or even credit so you’re able to buy things from them quicker without having to raise capital. 

5. Where do you find the most reliable suppliers?

Mpumi says:

“From the projects that we (TPF) have successfully funded before, and word of mouth.”

Zola says:

“For me, mostly referrals but I also Google suppliers, for some I check out their ratings on the internet before I use them.”

6. How do you vet suppliers?

Mpumi says:

“First check their website, contact details, status of registration on CIPC, VAT registration and then call them. If you can, visit their offices and confirm that they do exist as they say they do.”

Zola says:

·  Google (to start)

·  CIPC 

·  SARS vet vendor 

·  Phone call 

“Try to converse with them about their business and the quote at hand, to  find out what their timelines are. After the call, do a follow up with an email and see what their turnaround time is like”

7. How do you go about getting discounts from suppliers?

Mpumi says:

“Once we have worked with them before and have developed a level of trust, it becomes easy to negotiate discounts and credit due to the existing relationship.”

Zola says:

“Sometimes it depends on how large the order is, but once you’ve have purchased from a supplier more than twice, you can ask them for a discount or credit, which they will most likely to issue (as a thanks for, and commitment to, your business)”

8. How do you deal with supplier issues once the project has started?

Mpumi says:

“You should liaise directly with the supplier and remind them of the initial promise. If they fail to deliver they are obligated to issue out a refund.”

Zola says:

“Sometimes when a supplier can’t deliver on a project for certain goods they’ve quoted/invoiced you for, they will most likely give you a refund. Some will go out of their way to procure whatever it is that you need. Some won’t be honest, but when a supplier is credible and wants more business from you, they’ll communicate and effectively what they can and cannot provide.” 

9. What’s the best advice regarding supplier procurement and management that you can offer?

Mpumi says:

“Don’t rely solely on Google’s word about suppliers, entrepreneurs need to physically see where suppliers are located to avoid being scammed.”

Zola says:

“Suppliers are people too, treat them with as much respect as you would like to be treated with. Communicate with them and effectively about your capital issues, find out if there aren’t other ways you could explore the working relationship so they can trust you, and you them.”

Thanks to both Zola and Mpumi for their help. We all hope that this information proves to be helpful for you and your business, if not today, then in future.

Not many people seem to be aware of just how lucrative the tender industry can be. Perhaps it’s because in this country it carries an air of controversy around it. Yes the scourge of corruption is economically debilitating. Yes a number of high profile individuals are under investigation for their involvement in corruption. But should we all walk away from the chance to do it right? Absolutely not.

Looking away at the prospect of riches for a second, the tendering system exists in theory and proper practice, to improve the overall state of a country, the quality of life for its people and ultimately its reputation in the international community as a place worth investing in. Think about it for a second – how much better off this land we call home would be if the roads were completed, health issues reduced with the hospitals that were constructed, the improvement in the quality of education if schools were built and supplied competently. We might never have needed to endure a prolonged lockdown to this degree if the PPE scandals had never happened and everybody had delivered as they had promised to.

Housing for the homeless, employment for the jobless, opportunities for the township entrepreneurs to participate more in economic reform. Hell – I wouldn’t have to be typing this in the dark (shout out to Eskom). The tender process done right is essential for not just the survival of a country, but also its potential to thrive.

“The bulk of Tender contracts are for periods of 2 to 3 years, which means companies delivering as per their bid proposal have sustainable contracts upon which to grow their businesses,” – a great source of consistent revenue according to Wynand Cronje in an interview with Company Partners

The government possesses roughly R1.5 Trillion to spend on the procurement of goods – making them the largest customer, and potentially a very lucrative partner for businesses at a small and large scale.

Cronje further adds that there is a misconception surrounding tenders themselves, however the majority of tenders that are awarded are done so fairly, according to the preferential procurement act” which complies with BBBEE.

First let’s look at the advantages of tendering, and why you should be getting in on it as soon as you can.

Consistent revenue/Guaranteed pay

In the event that you win the bid, the public sector (Government) tender  guarantees payment upon completion of the job as they are contractually obligated to do so. Furthermore this is done within a period of around 60 days at most, which you can use to give your supplier peace of mind.

Sustainability

Carrying on from the previous paragraph on consistent revenue, the length of the tender period guarantees the returns over a longer period. This will allow you to sustain your business operations for however long the project is set to last for. Good news for any business owner.

Experience points

One of the biggest benefits is arguably the experience you get from completing a tender competently. Not only does It equip you for future tenders that you take on, but it also allows you to build relationships that boost your reputation as a competent and reliable servant. This allows you to bid for and increase your chances of, winning larger contracts in both scale and potential returns.

Making connections and contacts

As mentioned earlier, the relationships built over the tendering process will allow your business to grow overall without infringing on the preferential procurement act. You’ll be able to work with more buyers and gain even more experience.

Being able to demonstrate previous work done is one thing, it’s even more emphatic if you have a satisfied client talking you up and praising your efforts among their cohorts in industry.

Following the advantages, we hope that you are enticed enough to consider tendering for your business needs. Below are a number of steps that will allow you to get started on your first bid on the right note.

1. Choose tenders that relate to your core business

There are a myriad of places in which you find tenders, from online articles, newspapers, company websites and the government tender bulletin. Look hard enough and there will certainly be one that fits the parameters of your business and your skillset.

If you ever want to get quick updates on tenders that are relevant to you and in your area, then try either of these. Try a Tender Subscription Service with a reliable database.

2. Prepare your company documents

To be eligible to win a tender bid, you need to have your documents in order as a company, otherwise the rest of your efforts will be in vain. You’ll be disqualified before you even have a chance to compete for the tender.

Make sure you read the Tender Document thoughtfully and make sure you get all the required Company documentation in order.

3. Get Central Supplier Database (CSD) registration

Your business has to be registered on the Central Supplier Database (CSD) in order to apply for Government Tenders. The CSD is the comprehensive list of approved suppliers for the government. To register your business on the CSD, click here, fill in the online forms, submit the relevant documents and then wait for the corresponding confirmation – that’s if you’ve done everything properly.

THIS IS FREE. You shouldn’t be made to pay a premium for something that’s readily made accessible to the general public.the process might present itself as tricky at first but a little focus and attention will get you to where you need to be.

4. Be able to do the job

By winning a tender, you effectively position yourself as a potentially reliable supplier, one who knows how to service a client competently and professionally. The job has only just started but you’re well on your way to getting it done!

By the time you bid, it would be best that you already have a staff team, a relevant skill set and the equipment needed to fulfil the service for your client the Government needs at the proposed rate and within the proposed time frame – just like with any other client.

It will do you a lot of good to look to the future when you apply, so have a business plan (You can find one for cheap being advertised by a freelancer on Facebook or download a template) ready to strengthen your bid, and depending on your bid, take into consideration a number of suppliers and have a plan to pay them.

Thankfully The People’s Fund exists for this specific reason. Well fund your purchase order and help get you through the tender completion process swiftly.

5. Stay ahead of the deadline

Nothing kills your momentum and your prospects more than a last minute hash up of an application. You’re much better off submitting earlier than the deadline requires. That way you have ample time to organise the documents accordingly, do the necessary research to boost your chances of winning the bid, line up payment plans and delivery processes to the exact T, so that whenever life happens you’ll be prepared to make whatever plan is necessary.

6. Assess the profitability of the Tender

It can be easy to get overly excited by the prospect of qualifying for a tender that you ultimately rush into without considering the ramifications of getting involved in the first place. Before you even apply, you need to do the necessary research on the tender including how much you stand to make from it. While the budget may be appealing at first, remember that the money you get will only happen once you’ve delivered on the tender competently. Factor in the costs of the delivery, the material and services required, as well as the expense to your business itself – to ensure that you know what you are getting yourself into, and avoid wasting your own time and energy on a project that leaves you worse off than when you started.

Final thoughts

Despite what social media might have you believe, winning tenders tends to be a numbers game. It’s important that you don’t let minor setbacks keep you down. Keep at it, improving on every attempt and eventually you’ll win. The relationships that you form after you’ve done a good enough job can come in handy in the future, but always remember to keep doing the work, in the right way. That will guarantee your success.

Once you manage to secure that tender and you get to that procurement stage where you’re handed a purchase order, don’t hesitate to give us a call. Whenever and wherever we can help, we will.

Have you ever wondered how you can get into tendering and get yourself that V class? Or why you’ve struggled to get tenders and that V class? Whether you’re a complete beginner AKA “First timer”, or a seasoned veteran looking to brush up on the basics and improve efficiency, this article is for you.

First, a little background into why we’re doing this. The primary risk in working with first timers, is not knowing whether this person will be able to deliver. So to minimise that risk and get you firmly planted in the game, we guide you through the process as a partner. In a true partnering sense, we’ll be training you while strengthening our relationship, meaning in future we’ll be able to trust you in taking on bigger deals.

Now let’s run you through some key terms:

1) The Central Supplier Database (CSD)

The Central Supplier Database (CSD), is as the name suggests – all supplier information for every level of government, can be found in the CSD. Major government and corporate bodies, such as SARS, the National Departments of government including home Affairs, and CIPC, verify it, to simplify the process of registration. (Click on this link to find out more on supplier registration)

By now you’re wondering why we’ve explained the various terms and meanings in tendering. It’s because the scammer prevention tactics can be applied across all spheres of the tendering process so it’s crucial to stay vigilant from start to finish.

2) What is a tender?

A tender is an invitation or offer to provide goods or services at a fixed price – set by the company issuing the tender. The process of bidding for a tender is built in a way that allows all bidders to challenge for the tender fairly. Scammers capitalise on an over eagerness to compete.

A tender notice or advert will usually give the following information:

·     Type of item/work in question;

·     Name and address of the tender authority;

·     The tender enquiry reference number and/or date;

·     The cost of and the last date for collection of bid document; 

·     Due date and/or time for submission of tender papers;

·     Information on how to obtain the tender documents;

·     Any other Instructions or information

The following section outlines, are terms of the documents involved in the tender application and procurement process.

3) What is a Request For Quotation (RFQ)?

Also known as an invitation for bid (IFB), it’s the process where a company requesting services/goods invites select suppliers and contractors to submit price quotes and bids for the chance to fulfill the project or parts of it. … RFQs can be sent alone but usually they come before a request for proposal (RFP). RFQ responses detail the cost of fulfilling the project’s needs

4) What is a Request For Proposal (RFP)?

The RFP is the document that announces the tender and provides details about a project that needs fulfilling. It’s sometimes seen as an invitation to bid by contractors who can complete the project. Government is known to use RFPs a lot to try and get lower bids. A request for proposal requires the interested companies to consider bidding based on whether the project is worth it, and whether the company can actually do what is proposed. RFP responses compare which vendors are best for  completing the project

5) What is a Request For Information (RFI)?

The RFI is a document used by companies that require information about the nature of the project, the industry/market it belongs to and some of the general questions surrounding things like the challenges and tasks that define the project. The RFI is a document that offers a platform to gain the facts of the project where the vendor will explain their offerings. RFI responses detail how each bidder would go about fulfilling the project.

6) What is a Purchase Order (PO)?

A purchase order is a commercial document that details an official order placed by a buyer (from either corporate or government) to a seller indicating types, quantities, and agreed-upon prices for products or services required. After the fulfilment of that order, the seller is then paid by the buyer’s organization that issued the order.

You can watch the following video to get more clarity https://www.youtube.com/watch?v=nw9GqfSmI6E

Now it’s time to pop that Tender Cherry. *Rubs hands

1.   Tender Procurement

Preparing the tender itself can be a challenging process at first but you need not be discouraged. The process as a whole could cost you time, money and energy – especially if you end up not getting the contract. The first thing that’s important to note is that you need to be resilient. The moment one obstacle is enough to keep you down; you’re going to have to come to terms with the fact that you don’t want it bad enough. Before you attempt to bid, spend some time considering whether it’s worth it or not.

When you obtain the bid documents, analyse them carefully, and ensure that you can provide the skills that will ultimately lead you to a successful fulfillment. Consider how much it will cost you to prepare the bid and would the work itself fit in with the positioning of your business as well as future aspirations. Then estimate the cost it would take to fulfill the contracts and consider if it would be worth the potential earnings and your final profit once everyone has been paid. From there, figure out the team you’d need to assemble and what each member would need to fulfill his or her role.

Collection

Check the tender advert and contact the person awarding the tender to confirm that it’s legitimate. A call would be best as you’ll also have an opportunity to discuss the details of the tender, how the documents will be collected and if they are willing you might ask some questions that will reveal tips as to how you can increase your chances of procuring it

Insights from the client

Following up on the last line about asking questions that get you ahead, it isn’t uncommon to informally talk to the client via phone or meeting. It’s best to ask questions, anything from how long the process is expected to take, what the deadlines are and, all the way to when and how you’ll be paid. While many clients want you to come up with a creative solution to solve their problem, be weary of over sharing in the event that a client might take your naivety as a first timer as an opportunity to steal your idea.

If the client hosts a site inspection, be sure to attend as absence may disqualify you.

Contents of the tender

Once you have a document telling you about the tender. Focus on what the client wants, try to adopt their perspective and imagine how you would solve the problem. Just make sure you keep your imagination in check and you deliver on what is requested and not what you imagine would be ideal off the bat. Look into their wants and needs. Focus on how you will go about meeting them while pitching your skills and how they’ll ensure that fulfillment of the client’s requirements.

Come up with ideas using the creative thinking that we mentioned earlier. Talk about how you’ll tackle the problem to ease their worries and deliver in the present with the future in mind (solving the problem long term will increase your chances). Consider the maintenance required to keep your solution viable and cover every element of the document. Show that you have the resources to actually do the work needed to fulfill the tender. Make sure that it all presents as cost effective.

It’s worth noting that value for money sets you apart. Not just to save the client money now, but in future – look into possibly making the client more money by positioning yourself as an ideal long-term partner. Bring a solution that hasn’t been done by the client, or a process that the client might not have considered.

Some points to emphasise are: reliability, value for money, low maintenance, reduced risks and future benefits

Do not overlook the pricing factors and costing in the document. Keep staff wages in mind, and anticipate the need for an emergency fund in case there’s a delay on an issue that costs money to remedy – not bribes. It would do you a lot of good to show that you’ve anticipated legal and commercial risks that could cause failure. When mentioning your team, highlight strengths and successes in their previous experiences if they have them.

Make sure you can meet deadlines (sooner is better than later) and be able to adapt or showcase flexibility to changing situations. As COVID-19 has demonstrated, life happens but work needs to get done regardless. Make means not excuses.

To close off this section here are some documents to keep up to date and on stand by for tender application.

The forms usually required for national and provincial business tenders in South Africa are the following:

1. The Bid

In this document you agree to be bound by the terms and conditions of the tender or bid.

2. Tax Clearance Requirement

Your taxes must be in order to be successful with your tender or bid. This document has an ‘Application for tax clearance certificate’ form attached to it. Complete the form and submit it to a South African Revenue Services (SARS) office, then get a tax clearance certificate. Attach the original tax clearance certificate from SARS, to the tender bid documents. The certificate proves that there are no arrears with your tax payments.

3. Price and motivation

Which of these documents you complete depends on the subject of the tender. In this form, you motivate your price, by describing the product you will supply or the experience of the person who will perform the service. 

4. Declaration of Interest

This is the document in which you declare whether or not you have a relationship with anyone who works for the government (friend, family, business leads). This is so that those people are not involved in awarding the tender in any way, to avoid accusations of nepotism and corruption.

5. Preference certificate

Fill in the form for tenders even if you are not claiming any of the preference points.

6. Contact form

TShould the bid be successful, this document binds the agreement between both parties.

2.   Suppliers

When most people look into identifying a new supplier, they are usually tempted to focus on the best price. But focusing on present cost cutting can hurt you in the long term. A relationship built on sustainability promises better rates, higher discounts and even favourable information on prospective buyers or recommendations as a client. In line with the scammers awareness campaign, it’s crucial that you verify supplier certification. You are also better off steering clear from suppliers involved in any negative political affairs, alla PPE scandal.

Depending on your manufacturing requirements, determine the logistic capabilities of the supplier so you would know how to go about transporting products. Are they local, are they multinational? Do they have multiple warehouses or a single warehouse? Depending on the nature of the tender and the client you might have to look into shipping capabilities and associated costs relative to the number of locations a supplier has to offer. Fortunately a lot of these technicalities can be negotiated in order to get a better price.

When picking suppliers, factor in the requirements of your tender in terms of fulfilment. Delivery performance is key to industrial buyers. Ask for their lead time projections compared to on-time delivery rates, averages in distance compared to time based on previous deliveries and vehicle reliability. If these cannot be provided, then it is a good sign that they are not tracked or are not very good. Either reason is cause for you to start considering other options that are better suited to your needs.

Establish payment terms early

Identify the suppliers that are willing to work with your payment requirements. Clarify the penalties that come with being unable to operate on agreed upon times. To build a good relationship, concede leighway but don’t get too comfortable with mediocrity. Successful businesses are defined by efficiency. As a first timer don’t be afraid to ask for what you need to run your business appropriately. But do your research so that you don’t come across as a rookie who’s there to be taken advantage of.

Contact References

Testimonial, reviews and any opinion pieces exist for a reason! A vote of approval from another business that has worked with the supplier speaks volumes about their true abilities, it could also save you a lot of time and money. While NDAs can cause difficulties in this area, some form of opinion exists out there and you’re better off finding it sooner rather than later through experience

3.   Financing

Generally speaking, price is the number one consideration in the awarding of tenders. There are of course other factors that need to be focused on to increase the chances of success these are; demonstrating innovativeness, capacity to deliver by submitting a picture gallery of your previous work, or testimonials of satisfied customers.

Make sure that you show proof of your ability to deliver on the work you have tendered for.

Have to put this in there – if you need the purchase funded then your friendly neighbourhood TPF is here for you.

4.   Following through

Confirm that your tender documents have been received follow through

It is not unheard of for tender boxes to have been tampered with. Our recommendation is to call and ensure that the right person gets their hands on the right documents, then follow your call up with a confirmation email. You can’t be too thorough on this one.

You should follow through on the status of your application. Do it in a way that demonstrates an eagerness to win the contract, and not incessant probing that will annoy the person on the other side. Prepare well for any presentation in the event that you win the tender.

If you win the tender, respond to the client and confirm your letter of appointment. Part of the process will mean setting up a meeting with the client. Always take initiative when you have the option to. Be proactive, take charge and show your client that you are confident, know what you are doing and you are committed to deliver a quality project on time and within budget.

If you don’t land the project, try and find out the reasons why you were not selected. This will help you correct errors and be better prepared for future tenders. For peace of mind,  keep in mind that you will not win every single tender that you respond to, so having grit and being resilient are definitely qualities that will keep you steadfast in the journey.

Avoiding common mistakes

Below is a list of some of the common mistakes that hinder your chances of winning the tender.

·  Don’t neglect to include all the information stated by the tender document – if you can include a little more to boost your credibility. FORGET NOTHING

·  Fill in all forms completely

·  Make sure that your calculated costs and the tender prices are well calculated. Again, an emergency fund would cover such a problem

·  Be sure to ask and clarify points you don’t understand. It’s better to ask than to misinterpret and misunderstand something that will affect the tender process at a later stage.

·  Understand the scope of the work so you know exactly what you’re getting into

·  Sign all your documents to authenticate

·  It’s very important that the tender is directed to the right place. Follow the law and don’t be late.

Final points

Congratulations on making it this far. There isn’t much left to be said so we’ll leave you with a list of the key points that you should take away.

·  Don’t request unnecessary information

·  Establish costs

·  If you’re doing the tender, do it with the intent to finish it.

·  State the purpose of your bid

·  Summarize your work as the contractor

·  State your process of fulfilling the tender

·  State how the client needs will be met

·  Present value for money – what distinguishes you from the crowd?

·  State when and how goods/services will be delivered

·  Showcase your team’s skills

·  Detail your role in managing the project

·  Include the problem that you’re solving and be practical

And that’s it. All you need to know to make your first time a good time.