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Eskom nuclear generation : risk mitigation through quality management development of small suppliers
Van Reenen, Olaf Pieter
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There is a South African Government initiative to use State-owned Enterprises (SOE’s) to roll out a programme for the development and stimulation of local small businesses in South Africa. The state has requested SOE’s to set targets on a voluntary basis to increase trade with small businesses, with the purpose of developing small enterprises to eventually enhance skills transfer, training and employment. However, when large customers such as Eskom Nuclear Generation require ISO certification as a prerequisite for a supplier to provide goods and/or services to them, most small businesses are unable to comply. The requirement of ISO9000 compliance inhibits the ability of most small businesses to compete with their larger counterparts. Small businesses constitute as much as 90% of most world economies. They have many advantages to offer customers, such as a high level of flexibility, innovation and responsiveness to customer needs. These attributes can introduce healthy competition to the supply chain. Small businesses, by their very nature experience more risks, such as a higher vulnerability to volatile market forces and skills loss. In addition, they are generally less specialised. They are under continuous competitive pressure, and are generally not able to provide assurance of a sustainable product over a longer period. Although there is an imperative to develop and use small suppliers, they introduce higher risk to the supply chain. The primary research objective of this dissertation is to develop a robust model to identify risks inherent to small businesses, and to propose measures to mitigate such risks. A classification of problems with small suppliers that have occurred at Koeberg Nuclear Power Station over a period of 3 years (from June 2005 to May 2008), will form the basis of the research methodology. The anticipated findings of the research include the following. _ Several common critical issues of failure will be identified in the internal processes of small suppliers, with variations between types of suppliers, which will indicate which elements within the context of ISO9000 can be applied to address shortcoming in the suppliers’ processes. _ A matrix will be compiled from this by which the customer can identify the type of supplier, the types of risks inherent to that supplier, and which elements of ISO9000 the customer should insist upon to be adopted into an elementary quality management system of that small supplier. This should be executed as part of a larger supplier development programme.
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