At St Jude’s, the support of local suppliers is unwavering. There are many reasons for this, with the predominating motivation being the wish to support and contribute to the economic growth of the local economy. The rippling effect of supporting our local suppliers impacts an additional 3,000 Tanzanians each year!
The Local Supplier Strategy
St Jude’s commitment to positively impacting the local economy can be seen through the school’s local supplier strategy. This strategy has been designed and adjusted to the school’s needs since its inception in 2002.
The first part of the localization strategy involves building the local supplier database. The database is looked after by the school’s Finance and Purchasing departments. It is currently made up of around 300 local suppliers. It includes around 200 locally sourced suppliers that provide the school with services, such as delivering food products or spare parts for vehicles. On top of this, there are also around 100 contracted suppliers who are specific to the Beyond St Jude’s department such as scholar’s landlords and universities. The suppliers come from regions ranging from Arusha, Babati, Tanga, Moshi, and Kahama.
The policies to build the database include sending a staff member from the Purchasing Department to Moshi to seek out new potential suppliers that offer high-quality services or products for reasonable prices. The other method includes advertising the need for specific suppliers on popular job boards, the school website, and other media. Suppliers are then given two weeks to file the appropriate documents and apply. The procedure of acquisition was designed in a manner that ensures a fair and equal chance for all the suppliers that wish to apply. For procurement of goods or services over TZS15 million (just over $6,000), the contract is put out to tender. In accordance with transparency procedures, all tenders are opened at the tender opening ceremony in front of all potential suppliers. For the winning supplier, this is the beginning of a fruitful partnership.
Once a partnership has been established, the retention of the school’s best supplier becomes the priority. The primary strategy of retention is to ensure that the supplier invoices are being paid in a timely manner.
In Tanzania, there are complex issues surrounding cash flow, and so it is often the case that supplier bills are not paid anywhere from three to nine months. This causes further issues with a lack of supply due to supplier's hesitation to enter into further agreements with businesses that have not yet paid for their previous services.
St Jude’s values transparency and confidence in business agreements with local suppliers. So, to ensure fairness there is a non-negotiable policy that all supplier invoices are paid within one to two weeks, which is approximately three times faster than the average business payment.
Who are our local suppliers?
St Jude’s network of local suppliers is invaluable to the school’s ability to operational efficiently. The supplier's contributions include fresh fruits and vegetables, daily bites for snacks, school supplies like uniforms, stationery, or books, and fuel or spare parts for the fleet of school buses, just to name a few.
St Jude’s provides a stable and reliable source of income for the local school suppliers with around AU$10M annually going directly into the local economy, not just through suppliers, but including our staff who also spend locally and support local businesses.
Thus, St Jude’s local supplier strategy is key to contributing to the sustainable economic growth of the community and the nation at large.