Regulations relating to supply chain management issued in terms of the Public Finance Management Act and the Local Government: Municipal Finance Management Act require accounting officers and accounting authorities to which these Acts apply to implement within their institutions a supply chain management system that provides for at least the following:

• demand management (i.e. identify demand, establish requirements and determine needs);
• acquisition management (i.e. acquire supplies, services, and engineering and construction works; and take delivery of supplies, project deliverables and engineering and construction works.);
• logistics management (codify items, set inventory levels, place orders, receive and distribute, manage stores / warehouses, expedite orders, manage transport and monitor supplier performance);
• disposal management (i.e. undertake obsolescence planning, identify where all redundant material is kept or located and the identify appropriate disposal strategies; dispose of surplus and redundant assets, materials and equipment);
• risk management (i.e. establish culture, processes and structures that are directed towards the effective management of potential opportunities and adverse effects); and
• regular assessment of supply chain performance (i.e. monitoring processes and perform a retrospective analysis to determine whether or not the proper process was followed and the desired objectives achieved).

The major activities associated with construction acquisition are:

• acquire supplies, services, and engineering and construction works; and
• take delivery of supplies, project deliverables and engineering and construction works.

Supplies and services which are not available within an institution can be sourced from other institutions or procured. Acquisition management as such deals with the decisions that have to be made in order to manage the acquisition of the required supplies or services from within the institution, or through procurement thereof from the open market. Accordingly, the options for acquisition are:

• acquisition of redundant / obsolete material, goods and assets from other institutions;
• sourcing of expertise from other institutions;
• utilisation of transversal contracts administered by others;
• public private partnerships; or
• procurement from the private sector.