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Navigating Localization Challenges for SA Incorporated: Ensuring Success in Engineering and Manufacturing

SA Incorporated DCD, an engineering and manufacturing leader since 1911, faces critical localization challenges in heavy engineering supply to coal-fired and hydro power stations. Improperly defined requirements and lack of supplier assessment can lead to project delays, penalties, and potential bankruptcies for smaller suppliers. To mitigate these risks, it's essential to create a tailored approach for local content, determine administrative requirements, assess suppliers, and implement a development plan. Successful localization fosters a stable market and ensures ongoing capacity for local manufacturing.

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Navigating Localization Challenges for SA Incorporated: Ensuring Success in Engineering and Manufacturing

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Presentation Transcript

  1. Localisation The Current Challenge for SA Incorporated

  2. DCD an engineering and manufacturing concern since 1911 with a long history of supplying heavy engineering components to all coal fired & hydro power stations erected in SA and participated in all the nuclear initiatives to date

  3. Localization A balanced approach to the local content for manufacturing Determine local content threshold % No cap on award on assessment for exceeding local content threshold

  4. Scenario

  5. Scenario - Problem • OEM advised customer of successful manufacturer • Customer requires assessment • Customer introduces additional requirements • Outcome • Manufacturer successful in assessment with additional costs • OR • Assessment unsuccessful and project is put on hold until meets requirements • This leads • Project delay • Penalties • Additional costs • Even cancellation in some cases • This will bankrupt smaller suppliers • FAILURE OF LOCALIZATION

  6. Scenario – Root Causes • OEM • Perception is that requirements does not need to be spelled out • Nor did they do a proper supplier assessment • No supplier development takes place • Supplier • Looked at the complexity in terms of technical requirements • Without focus on the admin requirements and upfront qualifications • Customer • Did not recognize that a new approval process was requires • Did not adopt a developmental mind set once the problem was identified

  7. Proposed Solution • Step 1 – Create an SA Inc. approach • Step 2 - Determine administrative requirements for different manufacturing/services • Step 3 – Assess potential suppliers in terms of these requirements • Step 4 – Put a developmental plan in place for each supplier • Step 5 – Then procure

  8. Summary • Determine requirements • Pre approve manufacturers • Create a stable market for localization • Export credits

  9. Thank You

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