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A division of the Ministry of Trade is designing a Subcontracting and Partnership Exchange (SPX) platform to enable buyers (large scale contractors and LSE’s) to engage suppliers (sub-contractors and SME’s) in an exchange arrangement that ensures that buyer needs are met while supplier capacity is enabled
Details of Challenge
This document gives more background knowledge on the problem and what the Ministry of Trade is trying to achieve
Sub-contracting refers to a situation whereby a contractor, who requires a lot of input to make a good to meet his obligation to a consumer, contracts small and medium size enterprises to acquire these inputs ensuring that they meet his specifications and requirements. This is usually done because the contractor cannot source all inputs himself and require other enterprises to do so.
Details of the SPX Program:
The Ministry of Trade has outlined six key steps would have to happen to ensure that the SPX can facilitate a successful Partnership exchange. They are:
Hosting: Creating the platform that enables buyers, suppliers, LSE’s and SME’s among others to engage for their mutual benefit.
Institutional Capacity Building: In order to obtain the platform described above, institutional capacity would need to be built to ensure the sustainability of the system. This involves understanding the key concepts around sub-contracting and partnership as well as the intricacies of how all interactions in the partnerships would take place and what would be required to make this happen. The institution that does the hosting would need to be built in this way.
Profiling: After the institutional capacity is built, there is a need for information to be collected to be fed into the system. Key and specific information about LSE’s, SME’s, buyers etc. would be needed to build the platform. Information regarding pricing, quantity of goods that can be produced/supplied, location of company, type of company among others are such information.
Enterprise capacity building: This involves building the capacity of SME’s to be able to meet the requirements of the LSE’s. If it identified that SME’s are unable to meet the capacity requirements of the LSE’s, there should be a mechanism to bring SME’s to a level where they can meet LSE capacity requirements.
Bench-marking: Comparing an enterprises processes and performance to industries best practices. Enterprise capacity building in the previous step seeks to build up SME’s such that they can meet industry benchmarks as well as LSE requirements.
Match-making: When bench-marking is done, and requirements of LSE’s are met then enterprises are matched and brought together to begin the partnership exchange.
The supply chain process with Zobolo example:
Breakdown of above image and example:
Zobolo (Sobolo) Fruit international is a Large-Scale Enterprise (LSE) seeks to produce Zobolo Fruit Drink to meet consumer needs. A consumer seeks to sweet Zobolo with mild ginger flavor. To do this he requires 5 key ingredients with special requirements:
• Brown Sugar
• Soft Water
• Zobolo Hibiscus
In order to obtain these economically, Zobolo Fruit International contracts 5 small & medium size enterprises (SME’s) to help source these items:
• Red Velvet Limited – Manufacturers of white and brown sugar
• Adjoa Memuna Enterprises – Distributors of fresh ginger
• Mcnatty Limited – Distributors of a variety of flavorings
• GamSavid Enterprise – Bulk distributors of quality soft water
• BioFlow Company Limited – Retailers of local Zobolo Hibiscus leaves
These five companies contracted by Zobolo Fruit International source and deliver these items for processing and transformation into the Zobolo drink that consumers want. In this process the 5 companies must have the capacity and quality to meet Zobolo Internationals standards and requirements in order to be given the contract.
Partnership Exchange: If the above enterprises are able to meet requirements then a partnership exchange between the enterprise and Zobolo Fruit International is established. The enterprise is able is able to distribute and supply in exchange for money and Zobolo Fruit International is able to obtain the inputs necessary to fulfill its obligation to consumers
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