Supplier Development Awards
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THOUGHT LEADERSHIP ARTICLE
CREATING A LASTING IMPACT THROUGH SUPPLIER DEVELOPMENT By Vusi Fele, Chief Procurement Officer at Absa Group Ltd
The business landscape will be very different post Covid 19 - whenever tha t may be - for everyone, from major corporates to the informal sector. The unprecedented disruption to entire industries means we have to imagine and build a future which is far more resilient and adaptable.
Even before the outbreak of the global pandemic, SMMEs faced numerous challenges, including access to finance; access to domestic and international markets; limited financial and business management skills; stunted innovation; and sometimes tougher regulatory environments. SMMEs will continue to grapple with these challenges. While it may not be possible for corporates to solve all these challenges, there is room for them to provide solutions that will significantly impact SMME development on the continent.
Key to a prosperous and sustainable future will be the small, medium and micro enterprises (SMMEs)
Small businesses frequently lament their lack of
sector, particularly in Africa, and the role of major
access to credible markets. Large corporates, which
corporates in helping to guide, support, and shape
spend billions annually procuring products and
this vital segment.
services, can use their procurement budgets to help SMMEs in this regard.
According to the World Bank, formal SMMEs make up 40% of GDP in emerging economies and this
Corporates are rightly wary of the risks associated
number is significantly higher when informal SMMEs
with engaging SMMEs, from issues around quality,
are factored in. Opening up opportunities for SMMEs
capacity constraints and the inability to deliver
to access corporate supply and deliver y chains is one
on contracts, but the development of the African
Business development support, including business assessment, training, mentoring, advisory and
of the most effective ways to contribute to sustainable
economy demands that corporates get involved to
entrepreneurship development.
address and work through these challenges.
become stronger businesses of the future. When
The ongoing global crisis wrought by the pandemic
Absa has designed innovative financing solutions
compelled to make changes to increase efficiencies.
has forced each of the supplier development value
specifically for the SMME sector. In 2019 alone, for
Being part of corporate supply chains also improves
chain partners, the supply chain practitioners, the
example, we made available about R250 million in
access to information, and demands technical proficiency.
information, is also key to enabling SMMEs to SMMEs interact with large corporates, they are
business strategists, and the economic development
funding specifically for the benefit of SMMEs in South
policy technocrats, to think and act differently,
Africa that supply the organisation with goods and
respond effectively, and build agile yet sustainable
services. Through such provisions, qualifying SMME
programmes going forward.
suppliers in the bank's supply chain are automatically
SMMEs equally have a lot of soul searching to do
favourable interest rates and with no collateral
in order to be co-creators of solutions, and for them
required.
eligible for assistance with cash flow finance at
Investing in entrepreneurship support can no longer be viewed as a corporate social responsibility. It also far transcends compliance to government mandates. Meaningful entrepreneurship support through supply chains deliver material benefits to local economic
to remain relevant and participate constructively in
and social reform and should therefore be seen as
economic rebuilding programmes.
good business.
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EDITORS LETTER Dear colleagues,
Welcome to the Absa Supplier Development Awards Publication, developed in support of the Absa Business Day Supplier Development Awards. The Absa Business Day Supplier Development Awards, hosted in partnership with Fetola, Cold Press Media and Arena Holdings, encourage us to bridge the gap between suppliers and corporates in South Africa. The awards recognise best practice and foster a collaborative ecosystem that lifts all ships as the tide of change comes in.
INDEX
of thought leadership: Absa
Creating a Lasting Impact Through Supplier Development
3
SEDA
ESD Growth Garage
14
SoluGrowth
Contingent Workforce Management in the New World of Work
16
Black Umbrellas
Building Back Better, Together Through ESD
20
Distell
Supporting Existing black Suppliers While Growing Support for New Black Suppliers - A balancing act in uncertain times
26
ATKV
Supporting the Local Value Chain
31
Petroleum Agency
What is Required to Secure Stability and Security of Energy Supplies
34,35
We trust you will find the publication useful and full of practical advice, and that it becomes your ‘go-to guide’ to be kept on your desktop for quick access.
Tiger Brands
ESD: It’s About Real Value, Not Compliance
37
Enjoy the read!
Cova
A Shift in Mindset
40
Trioplus
How Corporates can Support SMES in Rural Areas and bring them into their chain supplies
52
The COVID-19 pandemic has thrown the world a giant curveball and has taught us how interdependent we are, with ripples of change affecting not one, but all vital cogs in a value chain. In particular, this is the situation being faced by suppliers and service providers in the supply chains that form the vital backbone of businesses in South Africa. As a country we need to focus not only on transformation, but on recovery and rebuilding of the economy as well, under the additional threat of global economic disruption. Supplier Development presents a golden opportunity to do just this and calls for a deliberate strategy to • foster collaboration in our ecosystems (within and between sectors, between corporate and small suppliers and with government); • strengthen supply chain and small supplier resilience; • rethink and restructure value chains to maximise opportunities within South Africa; and • innovate to achieve competitive advantage and reignite growth. As a supplement to the third Absa Business Day Supplier Development Awards, this directory brings you excellent thought leadership articles, details of finalists and winners with comments from the judges about what differentiates their programmes, and access to a comprehensive network of South Africa’s leading service providers, industry specialists and corporate game-changers who are passionate about Supplier Development and are doing it right. In short, it contains all the resources you need to manage your Supplier Development needs with confidence.
Cold Press Media Director: Jennifer Potter
Fetola CEO: Catherine Wijnberg
Taryn Westoby Head: Arena Events
Agribusiness Psychological Capital Investment for Better Supplier Sustainability
56
COPYRIGHT: Published by Fetola and Cold Press Media (Pty) Ltd for Arena Holdings. Copyright Fetola and Cold Press Media 2020. All rights reserved. Reproduction in whole or part is prohibited without prior permission of the publisher. All correspondence should be directed to Fetola and Cold Press Media (Pty) Ltd.
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Content
OVERVIEW
OF THE Absa BUSINESS DAY SUPPLIER DEVELOPMENT AWARDS
18 SUPPLY
CHAIN RESILIENCE
22 38
BENCHMARK REPORT
Game changers 7 steps to building
strong, transformed corporate supply chains Publication design: www.gapdesign.co.za
46 2020
WINNERS & FINALISTS
Acknowledging companies that stood out as overall leaders in the Supplier Development arena.
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OVERVIEW of the ABSA Business Day Supplier Development Awards
CELEBRATING BIG BUSINESS DOING IT RIGHT!
T
1 2
he Absa Business Day Supplier Development Awards celebrate companies that are building a better South Africa and an inclusive economy through innovative and impactful Supplier Development initiatives. The awards, conceptualised by Fetola, seek to acknowledge and recognise corporates who go beyond the scorecard, foster learning and build a community of best practice, and encourage a collaborative spirit in industry.
Presented in partnership with Fetola, Cold Press Media and Arena Holdings, this initiative is aimed at corporates, parastatals and government institutions across various sectors, with annual turnover above R10 million, who implement Supplier Development programmes within their own supply chains and are changing the landscape in Supplier Development.
Application Process
This year, a nationwide call for applications was distributed. We received entries from a wide range of participants, including nearly 40 qualifying large organisations. A shortlist of 24 applicants, who met all competition requirements and showed merit, were invited to submit further information about their programmes. These applications were narrowed down through a technical screening process shaped by a specialist Advisory Panel.
Judging Process
The awards focus on Supplier Development itself, the initiatives that are taking place within the corporate/government entity and the suppliers being developed. On careful review, 11 finalists, who clearly demonstrated excellence “beyond the scorecard” were selected to go through to the judging round. These finalists were invited to a pitching session to convince the judges why their programme had the winning edge.
Our judges were looking for winners who have • shown commitment to building thriving and inclusive South African supply chains; • embraced Supplier Development as a long-term strategic priority and driver of competitive advantage; and • found ways to foster industry collaboration and commit to best practice in the ecosystem.
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[ OVERVIE W ]
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Advisory Panel
These key influencers in the Supplier Development and Sustainability space provided guidance and expertise, helping to ensure that the 2020 Absa Business Day Supplier Development Awards lead the sector. They include: • Michael Reddy CEO of Furntech
• Jonathon Hanks Director of Incite
• Carlo Vizzi Head: Enterprise and Supplier Development, the City of Cape Town
• Johan Louw CEO, Aguru Business Solutions
• Christoff Oosthuysen Business Development and Enterprise Development specialist, The EPI and
• Guy Harris Entrepreneurship, education, governance and mentoring specialist.
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The 10 Categories
1.
2.
3.
4.
5.
6.
Newcomer Award
Youth Development Award
Black women Development Award
Rural & Township Development Award -
Skills of the future (4IR)
Local Manufacturing Award -
Acknowledging initiatives that are achieving exceptional results in supporting rural and townshipbased suppliers.
Acknowledging initiatives that are achieving exceptional results in supporting suppliers with cutting â&#x20AC;&#x201C;edge, scarce 4IR skills.
SPONSORED BY ABSA
Acknowledging companies that have recently initiated a new strategic Supplier Development programme or project and show merit in design thinking, innovation and commitment to growth.
10
Acknowledging initiatives that are achieving exceptional results in supporting youth
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SPONSORED BY COLD PRESS MEDIA
Acknowledging initiatives that are achieving exceptional results in supporting black women suppliers.
SPONSORED BY SOLUGROWTH
Acknowledging companies who have developed local South African manufacturers or value add services and products with import-substitution and/or export potential.
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[ OVERVIE W ]
The Judges
The following judges were selected based on their reputation, integrity and experience in the sector:
• Sekai Chiwandamira
• Christoff Oosthuysen
Regional Chapter Manager, ANDE
Business Development and Enterprise Development specialist, The EPI
• Karen Nadasen
• Nosipho Khonkwane
Chairperson, EFSA and CEO, PayU
Executive Manager, SEDA
• Desigan Chetty
• Sebastian Musendo
Chief Operating Officer, Property Point: A Growthpoint Initiative
Head -Supply Chain Strategy & Transformation, Transnet
• Nicola Robins
• David McGluwa – Head: Small
Co-founder and Director, Incite
Business Finance and Regions, IDC
• Dr. Rethabile Melam
• Michal Pillay
General Manager, Green Economy, The Innovation Hub
Supplier Diversity, Absa Group Limited
• Mamosa Motjope Managing Director, Wamobu Consulting
• Vusi Fele Chief Procurement Officer, Absa Group Limited
JUDGES AWARD
JUDGES AWARD
7.
8.
9.
10.
Collaboration Award
Small Supplier Award
Impact Award
Overall Winner
PARTNERSHIP WITH SEDA
SPONSORED BY BUSINESS DAY
SPONSORED BY ABSA
SPONSORED BY FETOLA
Acknowledging companies who have taken strategic action to develop industry relationships and foster cross-sector collaboration for the benefit of the wider ecosystem.
Acknowledging companies who have the exhibited innovation, leadership and authenticity in the promotion of small suppliers.
Acknowledging companies whose Supplier Development initiatives have been shown to substantially impact the value chain, provide evidence of return on investment and scale of impact.
Acknowledgingthe company that stands out as overall leaders in the Supplier Development in South Africa.
SHARING THE LEARNING The Absa Business Day Supplier Development Awards are about more than recognition. The awards showcase best practice and encourage corporate South Africa to collectively advance their Supplier Development initiatives through shared learning and collaboration. The judging process and the reasoning behind their decisions are made public so that the lessons learnt and best practice are shared – and the results are benchmarked for year-on-year comparison and collated in this report with the latest information on practices in South Africa. Together we can do more to make a lasting impact on the South African economy!
FIND OUT MORE:
www.sdawards.co.za Contact 086 111 1690 info@sdawards.co.za W W W.S DAWA RDS .CO. Z A
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THOUGHT LEADERSHIP ARTICLE
10 TIPS FOR BUSINESSES TAKING THE PLUNGE INTO THE DIGITAL DOMAIN
Insights from the Absa Business Day Supplier De(}elopment Dialogue Series hosted on April 21, 2020 By Catherine Wijnberg, CEO of Fetola
There is an awareness creeping
in that "business" as we knew it
b efore C o v i d-19 was not only
are only beginning to understand whether current
models in a responsible and socially conscious way,"
structures work even in this crisis. At the same,
said Wijnberg.
procurement professionals are recognising and
environmentally, but economically
appreciating how interconnected and dependent
Kulla said this is a shared opportunity, and key to
we are on suppliers lower down the tiers," said
SA's next stage of growth is the government, which
Ben Ngobi, panellist and global procurement
needs to last-track the availability of low-cost, highÂ
u nsusta ina b l e . As p opulations
sustainability lead for Accenture. "We are living in
speed data access as an economic priority.
a n d u lti m a te l y e v e n m or a lly,
globally face their personal demons
under lockdown and question their behavioural and purchasing choices ,
many are realising that not only will
things be different, but that they want
them to be different post Covid.
unprecedented times and what's happened over the last few weeks has transformed our normal." The dialogue, titled "Embracing the Digital Domain" grappled with ways to limit Covid-19's impact on the supply chain and drew insights from a panel of leading experts including Aguru Business Solutions CEO Johan Louw, The F ield Institute co-founder
These 10 guidelines were offered by panellists to businesses taking the plunge into the digital domain:
1.
Remember money follows risk: right now customers have more risks than before:
Alison Jacobson, T i ger Brands enterprise and
they have new problems, and you need
This is a critical pivot point for business and business
supplier development director Litha Kulla, anchored
to rethink how you position solutions and
leaders lace a golden opportunity to use this crisis as
by Catherine Wijnberg, Fetola CEO.
value to them. Do not forget customer
a disruption signalling a seismic shift in how things are
engagement: get the right message
done. This was the message from digital specialists
The panel examined the nature of disruption, what
delivered in right way that works for your
participating in the Absa Business Day Supplier
future digital tools and delivery models are needed in
customer.
Development Dialogue Series hosted on April 21
the supply chain to enhance efficiencies and bridge
2020, in partnership with Fetola, Cold Press Media
the digital divide, and how to innovate with purpose
and Arena Holdings, who all agreed that businesses
for a competitive future.
can pivot and rapidly realign using digital tools for a competitive and resilient future.
"It's clear there is a step-change afoot that could level the playing field as the world shifts to digital
"Companies are experiencing supply chain
marketplace, and we have an important role as
disruptions of huge magnitude globally, and some
business leaders to ensure that we develop new
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2.
Shilt your thinking: think systemically and in an integrated manner, jump from lean to agile, from linear to systemic. Get comfortable with experimentation, taking into consideration the ecosystem, and optimise the whole.
3.
Map your value chain end-to-end: focus beyond contracted suppliers, understand dependences, where they source, what their value chain is, and who is essential to
4.
the flow of products and services.
8.
enables your delivery model. Consider new technological architectures: invest i gate ICT as an enabler and
Use the power of data integration: connect
architectures like blockchain as a way to integrate and increase efficiency, establish
both to understand the value chain and
trust, bring trackability /traceability, break
its connectedness, as well as to focus on
silos and enable greater integration.
execute processes.
9.
Collaborate, connect and compliment: bring businesses into platforms for
Move from analogue to digital: enable
communal problem-solving and shared
digitisation, digital offerings, digital market
value creation, investi g a t e supply
access and access to opportunities despite
chain interconnections, find gaps, think
geographical fragmentation. Don't just
partnerships not customer/supplier
focus just on external digital inclusion: look
relationships, partner with complimentary
at measures that can be taken within your
product and service providers to compete
organisation, workforce and management
globally, engage and learn from other
team to allow access to information to
industries/ sectors that could offer tried
execute efficiently.
6.
Ensure your digital footprint is targeted: make sure it aligns with your vision, and
value streams through data integration,
customer centricity and information flow to
5.
7.
''
There are tangible solutions in this sea of challange and a willingness to act quickly that will bring us out stronger in the long run. Collaboration is key though and together we can embrace digital transformation for a better, more resilient future for us all." - Catherine W-jjnberg
and tested solutions, move from linear supply chain models to that of a network, leveraging the collective value offering of
Think about models on how to give customers access to data at your cost: unlock value and ease inclusion in marginalised communities, for small or remote suppliers and future consumers. If you want to enable your market/suppliers, you need to make sure your market/ suppliers can get to you.
the group.
10 â&#x20AC;˘
Learn from the informal economy: it has a low barrier to entry and is alive with agility, digital ingenuity and frugal innovation.
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THOUGHT LEADERSHIP ARTICLE
ESDGROWTH GARAGE By Seda acting CEO:
Ntokozo Majola
There can be no doubt that South African economy needs a strong formal small business sector for it to grow and create the jobs. Despite a plathora of legislations, strategies a n d p r o g r a m m es, e c o n o m i c transformation and participation of black people, women and people living with disabilities remains very low. Enterprise and Supplier development remains an important mechanism for bringing SMMEs, who operate in the peripher y into the mainstream of the South African economy. G overnment has created a fair regul a t o r y environment that enables investment, trade and enterprise development. However, the fragmented nature of implementation has resulted in supplier development efforts making little impact in the economy and the creation of jobs. In some instances, it's the same few beneficiaries benefiting multiple times. The reach to rural and township based SMMEs and those owned by youth and women is still minimal. The d i c h ot o m y of enter p r i s e a n d s u p p l i e r development i n South Africa i s that o n one hand
with government agencies? Is it a lack of trust or confidence in state agencies on the part of the private
Enterprise supplier development is an inexpensive way to implement broad-based black economic empowerment legislation.
partner with Seda, the agency has also embarked on the process to obtain its own B-BBEE status based on the principles contained in the Broad-Based BEE Codes of Good Practice. Seda's current status is BEE compliant and has recently developed a strategy for improving the rating over a period of two (2) years. Seda is currently repositioning itself to be a catalyst and integrator of the small enterprise development ecosystem through a district based model. Through its Enterprise & Supplier Development Programmes, the agency is gearing itself to drive economic transformation and increase par ticipation of SMME's whilst fostering a synergistic relationship between the private and public sector players within the ecosystem to embrace enterprise development as a common vision through the programmes that are implemented through its national footprint of branches and a partnership compact called
"ESD Growth Garage".
The ESD Growth Garage aims to:
• intergraded different parts of Seda's service offerings; • follow an incubation style service flow; and • a holistic and more structured support to a SMME or Co-operative (exempted micro enterprise in terms of a code of good practice on black economic empowerment - EME or qualifying
who are battling access to the opportunities in
small business enterprise - QSE) supplier in the
the private sector and the latter spending millions
core supply chains of a State-Owned-Company
of rands to find SMMEs or build a pipeline of
[SOC], Large Corporate F irms or Multinational
potential suppliers. Ironically, the consultants that
F irms.
are employed by big companies on their supplier development programmes often request the SMMEs on the databases of the state agencies. The question is why do corporate companies do not directly work
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As part of ensuring
maximum benefit for the private sector when they
extensive SMME databases of potential suppliers
Growth
- sheltered space dedicated to repair
and prepare a smme or cooperative (EME or
This is an addition to an enhancement of its technology programmes which are key enablers that can ensure that private sector partners derive maximum impact and return on investment from SMMEs taken on board.
Seda would put to use
its existing agreements with the South African Bureau of Standards [SABS] and other conformity authorities to ensure products and services are of the required standards and meet the regulations of sector. This is with a view to drive import substitution and localisation which will ultimately contribute to increase job opportunities and economic growth we desperately need. The District Ecosystem F acilitation Model will enable Seda improve its reach through Seda's vast touchpoints within its branch and incubation network and therefore, make more impact on both public and private sector initiatives for enterprise and supplier development Lastly, in the no distant future Seda, as the Ecosystem Facilitator, will put its focus on designing development of models, managing national incubation and business advisory standards, market assessments aimed at feeding opportunities to the ecosystem, influence or direct private sector and government future spend accordingly, monitoring and evaluating the entire system including ESD to name a few. We believe our role in the coming future, will not be interference but a betterment of the impact by the ecosystem and greater benefit for the small enterprises.
What sets us apart?
It's our approach to assisting small businesses. It's
The model is underpinned by two core aspects, viz: •
Garage QSE)
sector?
we have government agencies, like Seda with
•
- the process of increasing a smme or
cooperative (EME or QSE) in firm size
what we call the Client Journey Approach because we work with a client over a period of time, which ensures the sustainability of the business and the return on the investment of the private sector partner.
THOUGHT LEADERSHIP ARTICLE
CONTINGENT WORKFORCE MANAGEMENT IN THE NEW WORLD OF WORK By Manqoba Zungu, Client Acquisition Executive at Solugrowth
Internationally, and in South Africa, lockdowns implemented in response to the COVID-19 pandemic have catalyzed change in the workplace. Companies have adapted rapidly, enabling their employees to remain productive, reducing costs and ensuring business continuity.
'' Goodforgiggers,
goodforcompanies
Upwork recently found that 51% of US freelancers wouldn't go back to traditional work for any amount of money. It's not unreasonable to think that freelancing South Africans may also prefer this arrangement. As companies seek sustainable ways to reduce costs to weather the COVID- 19 storm and recover post-pandemic, SoluGrowth expects
The gig economy -freelancers, consultants,
contingent workforces to move up the C-Suite
independent contractors and project contingent
agenda.
employees - provides one possible solution. And it has been gathering steam. In 2019, on-demand
The most sought-after gig economy jobs in 2018
staffing platform Wonolo predicted that over half the
focused on robotics, finance, artificial intelligence
US workforce would participate in the gig economy by 2027. 1 Locally, according to lnvestec2, there were
and marketing. In 2016 the World Economic Forum stated that over one-third of skills (35%) that were
3.9 million "giggers" in South Africa in 2018, up from
considered important in the workforce will have
2.6 million the year before.
changed by 2021 due to the Fourth Industrial Revolution.3 As such, SoluGrowth expects a rise in
Despite difficulties such as pay cuts and retrenchments
contingent workforces as demand for project-based
that have driven people to take on side-hustles
skills increases.
during the pandemic, the longer-term positives of a Aourishing gig economy shouldn't be dismissed. The up sides of this type of work, including improved quality of life, efficient use of time, output or outcome-based evaluations, autonomy, and work from anywhere have long been at the forefront of discussions around employee engagement and productivity.
Companies looking to reap the benefits of a highlyÂ
partner with the right service provider. Key considerations include access to quality skills and the ability to transfer skills. When managed well, contingent workforces translate
showed that freelancers contributed USD 1.28
The key to realising these savings is outsourcing the
trillion to the American economy in 2018, and in
right roles for the company's immediate needs, and
2013 alone, micro-businesses owned by freelancers
upskilling or reskilling fulltime employees towards
generated USD2.4 trillion.1
more valuable contributions.
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add value in the new process, the in-house team should be upskilled to take over system operations or analyse, interpret and present report insights. In so doing, both company and employees get maximum value from engaging a contingent workforce. Appointing contingent workers enables the company to scale up and down with ease, eliminating unnecessary overheads for intermittently required skills. By repurposing our delivery models and protecting the sustainability of our businesses, we can come through this pandemic safely.
employees toward the demands of 4IR, should
It's good for the economy, too. Studies in the US
I
real costs while improving speed and accuracy. To keep outsourcing costs in check and help employees
skilled contingent workforce, while developing
to much needed real and time-related cost savings.
16
For example, a company may employ a contingent team to automate its reporting processes, saving
REFERENCES 7.
T h e Future of Employment - 30 Telling Gig Economy Statistics - https://www.smallbizgenius. net/by-the-numbers/gig-economy-statistics/#gref
2. Rocking the gig economy by Ingrid Booth https://www.investec.com/en_za/focus/ economy/rocking-the-gig-economy.html 3.
https://www.weforum.org/agenda/2016/01I the-10-skills-you-need-to-thrive-in-the-fourth industrial-revolution/
THOUGHT LEADERSHIP ARTICLE
SUPPLY CHAIN RESILIENCE AND PARTNERSHIPS KEY TO ECONOMIC RECOVERY
Now is the time to develop a supplier development strategy to bolster small supplier resilience By Catherine Wijnberg, CEO of Fetola
A key role of the state is to protect
the wellbeing of its people - most impo rtantly and visi bly du ring emergencies such as the recent
outbreak of the Covid-19. However,
amid the growing uncertainty and the fiscal weakness that SA finds its elf in, the state is unable to d o enough t o suppo rt industry and
preserve consumer spending power.
"From spending on health care to stimulus packages to fund business continuity, the government has its task cut out for it, and without the support of our smart and well-managed private sector, there is not much hope of recovery," said Peter Bruce during a panel discussion on recovery strategies for struggling supply chains post-Covid, hosted as part of the Absa Business Day Supplier Development Dialogue Series, presented by Fetola, Cold Press Media and Arena Holdings.
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"It is predicted that government debt will rise to
The IDC has also established a fund for essential
80.5% of GDP in this fiscal year. Without being able
suppliers to assist the medical fraternity with goods,
to cut debt, lend money elsewhere, realise significant
services and PPE, as well as launching the Small
savings or literally print money, the government's
Business Manufacturing Fund, which is offered at
role in softening the economic impact of Covid- 19 is
prime minus 3%.
severely hamstrung," said the former editor-in-chief of Business Day and Financial Mail.
But this is not enough.
"SMEs and the industrial sector have, and will,
Without partnerships between the public and private
continue to be hardest hit," said David M cGluwa,
sectors, the opportunity to rebuild the economy will
head of department: small business finance and
be lost, agreed fellow panellists Vusi Fele, Absa chief
regions for the Industrial Development Corporation
procurement officer, and Barbara Copelovici, SAB
(IDC).
entrepreneurship manager.
A dramatic and sudden loss of revenue for SMEs
Deloitte p ointed out, in a recent publication
severely affects their ability to function, and/ or
"Recovering from Covid- 19 - considering economic
causes severe liquidity shortages. Considering the
scenarios for resilient leaders," that decisions
limited resources of SMEs, and existing obstacles
businesses make in the near term will drive how
in accessing capital, the period over which SMEs
companies sustain themselves in the long term.
can survive the shock is more restricted than for
Leaders need to take decisive action to soften the
larger firms. To help business weather the storm, the
shocks we know are still coming as they prepare for
state has funded a R500bn stimulus package and
what may change in the months ahead.
functional state entities such as the IDC have made a R3bn funding package available to support industrial
So how do we do this? Panellists suggested that
businesses directly affected by the pandemic.
while times are challenging, supplier development
presents a golden opportunity to develop resilience
Access to finance, both relief funding and catalytic
in supply chains and strengthen ecosystems through
growth finance, are critical:
partnerships between the public and private sector as well as to corporates and small suppliers, that will deliver long-term benefits for all.
• share information with suppliers about funding relief schemes and offer support to access these by improving investment-readiness capabilities;
It starts with the development of a deliberate supplier development strategy, that aims to bolster small supplier resilience and bridge the divide.
and • take equity in value -adding small businesses in your supply chain but have an exit strategy to reduce long-term dependency.
Nine strategic imperatives were identified that draw on three levers, namely linkages, support and
Support in forms of non-financial assistance is also
finance.
key:
Linkages are a way to leverage network capital, often at no cost to the corporate:
• help small suppliers to pivot and build lean, agile and resilient operations that can compete in global and local markets;
• build solid partnerships with suppliers and support them in preparing for a competitive future; • enable collaborative market access opportunities by referral of suppliers to other companies; and • help suppliers to discover other networks and rebuild connections with former networks.
• support skills development' upskilling, multiskilling, and reskilling to prepare for the future; • stratify support to match different growth stages of a business ( from, start-up to business maturity, growth and beyond); and • commit to local procurement and support small manufacturers on the supply-and-demand side.
''
This crisis is an opportunity to improve efficiency and competitiveness. Now is the time for a deliberate strategy of strengthening our local ecosystem with meaningful collaboration within and between sectors, and with government. The sooner we realise we are in this together, the quicker our turnaround will be." - Catherine Wfjnberg, CEO of Fetola
WWW.SDAWARDS.CO.ZA
19
THOUGHT LEADERSHIP ARTICLE
BUILDING BACK BETTER, TOGETHERTHROUGH ESD By Mark Frankel - CEO Black Umbrellas N PC
Enterprise and Supplier Development (ESD) is often referred to as a combination of Preferential Procurement, Supplier Diversity, Supplier Development and Enter pr ise Development programs required in terms of the revised B-BBEE Codes of Good Practice. Unfortunately ESD is frequently approached as a "ring-fenced" exercise within supply chains with the aim of minimising disruption to "normal" supply chain activities and maximising the points attainable in terms of the B-BBEE score card. ESD is seldom seen holistically within the context of the broader supply chain activities and an opportunity to add real value. In a pre-Covid-19 world, there was no need to pay attention to de-risking supply chains through the development of local suppliers. Single sourcing from the likes of China worked. While many companies professed to have agile supply chains, a sudden disruption in supply from a handful of international suppliers quickly showed that this was not the case. As devastating as the economic impact of Covid-19 has been, it presents an opportunity to "build back better", a terminology that's often used in recovery activities following a disaster, and ESD provides the ideal tool to do this meaningfully.
decisions are made. CPOs are normally measured on how much they can save but this should rather be on how much value they can generate and risk they can mitigate. ESD is a key enabler of risk mitigation and value creation. South African companies need to think globally but act locally by reducing dependence on single sourced imported items and stimulate and re invigorate local manufacturing and industrialisation. This is almost a non-negotiable in rebuilding the economy and creating jobs following the economic impact of the Covid-19 pandemic. While the global competitive landscape is unequal with significant subsidies provided to manufacturers in some countries, there is a strong will by government to grow local manufacturing. With the right assistance, support and opportunities provided by industry and the corporate sector, there is no reason South Africa can't compete with other global players. In addition to the above, holistic financial (including supply chain financing) and non-financial support needs to be provided to emerging suppliers. This will enable them to scale and grow within a nurturing environment as well as facilitating innovation and increased adoption of new technologies. If carried out properly, ESD is an opportunity to enhance efficiencies and cost effectiveness and does not need to add cost. A balanced scorecard should be used to measure suppliers to include savings, efficiency, continuous improvement and innovation.
So how do we build back better using ESD? ESD needs to be a strategic imperative not only within
The
relationship with suppliers should be based on trust and value and suppliers must be seen as partners in the business.
the procurement function but within the company Too often, CPOs operate within a
If we look honestly at how E S D has b e e n
transactional rather than a strategic space and
implemented since its introduction a s a requirement
as a whole.
procurement and supply chain do not have the trust
within the B-BBEE Codes, I think many will agree
of Exco - supply chain needs "a seat at the table"
that this has been carried out lethargically and the
and must be considered as a factor when strategic
impact is far less than the potential that could have
20
WWW.SDAWARDS.CO.ZA
been achieved. We now have a chance to correct this and at the same time localise supply chains, de risk, increase their resilience, take out waste, reduce inefficiencies and digitise.
The likes of Toyota and
BMW have made it the right way to do business, can you afford not to?
''
Ifcarried out properly,
ESD is an opportunity to enhance efficiencies and cost effectiveness and does not need to add cost.
[ BENCHM A RK REP ORT ]
BENCHMARK REPORT STATISTICS
This report shares information gleaned from the applications submitted for the Absa Business Day Supplier Development Awards and provides valuable insights into Supplier Development programmes and the sector at large. It also serves as a yardstick for year-on-year comparison against which we will measure progress as a sector.
Now in its third year, the Absa Business Day Supplier Development Awards were targeted towards larger companies who implement Supplier Development initiatives in their own supply chains and qualify in the BBBEE scorecard as GEN businesses (i.e. those with a turnover of more than R50 million).
SEMI-FINALISTS 1. 2. 3. 4. 5. 6. 7.
Bigen BTS/Avocado Catalyst For Growth NPC Cova-Advisory Distell Group Empact Group EnviroServ Waste Management (Pty) Ltd 8. Fidelity Services 9. Gibs 10. Goodyear South Africa 11. Mustek 12. PetroSA 13. Pragmaworld 14. SAB 15. Sasol 16. Soldado T Enterprise 17. South African Energy Coal 18. SPAR Group Ltd 19. Telkom 20. Tiger Brands 21. Transformation Legacy 22. Unilever South Africa 23. V&A Waterfront 24. Vhembe College
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W W W.S DAWA RDS .CO. Z A
Finalists 1. Distell Group 2. Empact Group 3. EnviroServ Waste Management (Pty) Ltd 4. Goodyear South Africa 5. PetroSA 6. SAB 7. Sasol 8. SPAR Group Ltd 9. Tiger Brands 10. Unilever SA
Insights:
• Again, there were slightly fewer applications than the previous year, but the calibre was higher, considering the more rigorous entry criteria • 43% of applications received met all qualifying criteria which shows us that the awards are more targeted, and companies are understanding how to articulate the merits and impact of their programmes • 44% of the applications were EME participants, 9% were QSEs, and 40% were GEN businesses - again showing we have hit the sweet spot in terms of targeting and messaging • There was a noted increase in well-established programmes compared to last year, with 25% of entrants confirming that their programmes have been running for 5 or more years • 82% of applicants indicated that Supplier Development is well established in the company as opposed to 23% in 2018, and 27% in 2019 - this is a superb indicator of organisations seeing the value Supplier Development brings
11. V&A Waterfront
43%
MET ALL QUALIFYING CRITERIA
44%
EME participants
25%
PROGRAMMES RUNNING FOR FIVE OR MORE YEARS
[ BENCHM A RK REP ORT ]
% qualifiers in the application process How are corporates implementing Supplier Development?
Applications received year on year
88,89% In-house 5,56% 5,56%
43%
Outsourced
11%
Combination
2018
• 89% of the applicants indicated that they are developing their own supply chains in-house (as opposed to 50% last year), while the rest rely on third party and intermediaries for support in implementing their Supplier Development programmes - this indicates a marked shift in corporates embracing Supplier Development at a strategic level and embedding it within their organisation • 57% of the companies reported that senior leadership steers the process of the Supplier Development strategy, as opposed to 43% in 2019 - this signals a significant uptake in the C-suite embracing Supplier Development within businesses • 32,14% of companies task procurement with implementation of their programme on the ground, with the rest a spread of responsibility • Of the applicants that indicated their total
82% INDICATING THAT SDP’S ARE WELL ESTABLISHED
4%
2019
2019 379 2020
programme value, it was noted that their expenditure on small suppliers ranged from R250 000 to R4.5 billion comprising a combination of cash, in-kind support and other trade-offs • The percentage of spend on Supplier Development as a portion of the total operational budget of companies ranged from 1 to over 70% • 1345 small businesses (comprising QSE’s and EMEs with a turnover of R5-20 million annually) were supported by our finalists • Average size of jobs created per entity ranged from 3 to 100. • 50% of the Supplier Development programmes targeted existing vs new opportunities. • 80% of the finalists’ programmes focused on growing the ecosystem of independent, small suppliers beyond their own supplier
3-10
AVERAGE SIZE JOB CREATED PER ENTITY
2018 409 2020 62*
*Note: 2020 had more rigorous entry criteria
chain with 93% of companies taking action to develop relationships in the ecosystem - evidence that a strong spirit of collaboration is now entrenched in the ecosystem • 80% of the finalists’ programmes/ projects specifically support regional manufacturing businesses and product/ service providers with 47% of businesses actively pursuing import substitution when looking for suppliers • 100% of companies said innovation is an important aspect of their strategy • There was an increase in the use of metrics used for the measurement of impact and year-on-year improvement with a whopping 94% of the applicants showing that they currently track their results through metrics/ success indicators
7 5 %
senior leadership is steering SDI strategy
1345
SMALL BUSINESSES SUPPORTED BY OUR FINALISTS
W W W.S DAWA RDS .CO. Z A
23
[ BENCHM A RK REP ORT ]
Total number of supported small enterprises/ suppliers through our finalists
1345 who are QSE's and EMEs with a turnover of R5-20 million annually.
-100
3
Range of average size of jobs created per entity.
Size of businesses applying year on year
Parties responsible for implementing the Supplier Development Programme on the ground
50 40 30
32,14%
20 10 0
3,57% 2018
2019 GEN QSE
2020
14,29%
EME BLANK
Strategic support
Leadership (Strategy - Executive) Leadership (Strategy - Executive/ Operations â&#x20AC;&#x201C; Management) Other
2018
36%
7,14% 10,71%
Procurement Department Marketing Department Sustainability Department CSI Department Intermediary Other
Age of programmes
10%
Suppliersâ&#x20AC;&#x2122; greatest areas of challenge
32,14%
25%
52%
23,08%
Scale/volumes Lack of experience
51,92%
Price
Less than 2 years (NEW) 2-5 years 5 years plus
26%
Quality Reliability
2019
Lack of funding Access to markets
43%
Companies that currently track their results through metrics/ success indicators
30%
Competition Lack of commitment
11%
Lack of equipment Basic business compliance
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W W W.S DAWA RDS .CO. Z A
32%
2020
57%
NO
YES
6%
94%
[ BENCHM A RK REP ORT ]
9,41%
7,06%
4,71%
5,88%
7,06%
PEER SUPPORT
DESIGN THINKING
LEADERSHIP
OTHER (SPECIFY)
Performance measurement
GAP ANALYSIS
16,47%
NO
7,14%
20%
80% YES
YES
53,33%
92.86% YES
46,67% 19,05%
PROGRAMMES/ PROJECTS SPECIFICALLY SUPPORTING REGIONAL MANUFACTURING BUSINESSES AND PRODUCT/SERVICE PROVIDERS
2018
27% 50%
25%
2019 24%
18%
ROI Jobs created Jobs sustained Business growth Increase in turnover Other
Reporting cycles
2020 82%
WELL ESTABLISHED IN THE COMPANY
WELL ESTABLISHED IN THE COMPANY
WELL ESTABLISHED IN THE COMPANY
WELL ESTABLISHED, BUT TRYING SOMETHING NEW AND INNOVATIVE
WELL ESTABLISHED, BUT TRYING SOMETHING NEW AND INNOVATIVE
WELL ESTABLISHED, BUT TRYING SOMETHING NEW AND INNOVATIVE
JUST STARTING OUT
JUST STARTING OUT
JUST STARTING OUT
50,00%
23%
14,29%
ANNUALLY
BUSINESSES ACTIVELY PURSUING IMPORT SUBSTITUTION WHEN LOOKING FOR SUPPLIERS
COMPANIES THAT HAVE TAKEN ACTION TO DEVELOP RELATIONSHIPS IN THE ECOSYSTEM
OPPORTUNITIES TARGETED
PROGRAMMES GROWING THE ECOSYSTEM OF INDEPENDENT SMALL SUPPLIERS BEYOND THEIR OWN SUPPLIER CHAIN
NEW
YES
Level of establishment of Supplier Development
52%
26,19%
21,43%
28,57%
50% 50%
80%
NO
7,14% 11,90%
QUARTERLY
EXISTING
NO
The spread of metrics or success indicators used to track results
21,43%
NO
20%
There was an increased reporting in the use of metrics measuring the impact and year on year improvement. It was promising to note that a number of businesses are tailoring their indicators or using common measures of performance (jobs created, jobs sustained and cost per job, and financial questions to measure grants, loans and direct investment) to rigorously gauge their impact.
MONTHLY
11,76% MARKET READINESS
MARKET ACCESS
15,29% MENTORSHIP
2,35%
11,76% GRANTS & LOANS
MEDIA & COMMUNICATIONS SUPPORT
8,24%
Spread of support interventions on offer to suppliers
FINANCE TERMS
17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 0
W W W.S DAWA RDS .CO. Z A
25
THOUGHT LEADERSHIP ARTICLE
SUPPORTING EXISTING BLACK SUPPLIERS WHILE GROWING SUPPORT FOR NEW BLACK SUPPLIERS: A BALANCING ACT IN UNCERTAIN TIMES By Charles Wyeth, LED manager at Distell
In an ideal world, every procurement and enterprise and supplier devel opment champion will always have enough procurement opportunities to offer their existing suppliers, whilst maintaining a healthy stream of new procurement opportunities for new targeted groups, eg. youth-owned businesses and black women-owned businesses. Unfortunately, the shrinking economy, prior to the impact of COVID-19, has meant that procurement opportunities have become much more limited, both in total value or size, as well as the total number of contracts that are available. As companies continue
we procure goods and services, a key decision often arises: Do we award the limited number of procurement opportunities available to existing qualifying suppliers, or do we invite new businesses that are still struggling to enter your supply chain, to compete for those opportunities? Speaking to SME-owners, the one thing most of them will tell you is that their biggest challenge is securing more business with their main clients. Often SMEs have the capacity and the competence to do additional volumes of work and in the process grow their businesses. The issue however, is that they are just not invited to tender for the extra work they need to achieve that growth. This is where procurement managers need to prevent themselves from falling into the trap of wanting to help numerous new businesses, at the expense of their existing qualifying suppliers.
to innovate and rethink the way they do business, become more efficient and streamlined, their need
In an era where the Department of Trade and
At Distel I our focus over the past year has been on helping our existing black suppliers in dealing with the challenges of reduced supplier opportunities and efficiency improvements within their operations. This we achieve through our 3-pronged Enterprise Development Model, focusing on ( l) facilitating access to markets, eg. the Distell supply chain, (2) promoting financial inclusion, eg: provision of zero interest loans, and (3) facilitating access to other Business Development Support (BDS) services. As Africa's leading producer and marketer of spirits, fine wines, ciders and ready-to-drink beverages, we craft distinctive alcoholic beverage brands, enhance
for more products and services will more than likely
Industry itself has been trying to help create the next
continue to shrink. This further reduces the need to
generation of (mega) black industrialists, SMEs need
go out into the market to find service providers.
more opportunities to grow from survivalist micro
Invariably, this also results in fewer opportunities for
of our people, shareholders and the communities
enterprises to growing into profitable businesses with
within which we live and work. As part of this aim,
ever-increasing revenues. In the current climate, the
we believe that supporting our existing black-owned
one thing the procurement staff in large Corporates
suppliers in securing more business with us, which
existing suppliers.
memorable moments and ins pire responsible enjoyment. The value we create enriches the lives
As Distell continues to increase the number of blackÂ
can do for their existing black suppliers - is to help
is one the most valuable things we can do for them
owned and women-owned enterprises from which
them secure more business with you!
during this challenging time.
26
WWW.S0WAR0S.CO.ZA
DISTELL
www.distell.co.za I info@distell.co.za I Tel: 021 809 7000 Aan-de-Wagenweg, Stellenbosch, 7600
DISTELL
CRAFTING
BRANDS SINCE
1925
Creating memorable moments. Crafting a better future•••
We are therefore working very hard to transform our supply chain and contribute to meaningful development that supports a more equitable and sustainable society. We are doing this by increasing the number of black-owned and black women owned enterprises from which we procure goods and services. We are also empowering small business owners with the tools they need to become key partners to our business.
Our Programmes: E+Scalator and the Agri+Gator As it was a challenge to scale up the inclusion of Distell is Africa's leading producer and marketer
SM Es in our core business value chain, in 2016 we
of spirits, fine wines, ciders and ready-to-drink
launched our E+Scalator Programme, with six key
beverages. We craft distinctive alcoholic beverage
objectives in mind:
brands, enhance memorable moments and inspire responsible enjoyment. The value we create enriches the lives of our people, shareholders and the communities within which we live and work. Distell's aim is to lead supplier excellence by delighting our customers, improving product quality and optimising our supply network for scale efficiency through sustainable cost-effective sourcing. This creates truly transformed and inclusive value chains that realise a genuine shared relationship between Distell and its suppliers. We believe that Enterprise and Supplier Development
1. To incubate black-owned and black women-owned businesses 2. To discover and develop new empowered suppliers 3. To provide market access by awarding off-take agreements 4. To secure and incest enterprise and supplier development funding
company that is also 30% owned by women. The company forms part of the Bosman Adamo Group,
and has a rich history of co-operation, living and
working together for more than 5 generations on the
same land. Together, the families have implemented an innovative, progressive and profitable business model.
In 2019, Adamo Wines needed working capital
to help the newly established company with its
operational expenses during its early establishment phase. Distel/ provided Adamo Wines with a R31
million zero interest production loan, which allowed
the company the opportunity to finance its operating expenses without having to incur additional debt
during its early establishment phase. This financial support has helped the company through a ma;or
hurdle, which could have severely impacted its
balance sheet at a time when companies are their most vulnerable. In addition to the financial support, Distel/
has helped Adamo during the structuring of its deal with the Bosman family, offering, technical, financial
and business development support during that critical phase.
The establishment of Adamo Wines was born out
of trust and respect, and is the largest land reform
transaction to date in the history of the South African Wine industry. The transaction is viewed as a leading
example of successfully transforming the South African
Agricultural Landscape.
services that grow suppliers
SUCCESS STORY 2: LOUFONTEIN BOERDERY
6. To create meaningful employment opportunities This programme focused on the delivery of support
Development, as it is businesses that create
to non-agriculture clients, and in 2018, we launched
sustainable jobs and wealth creation opportunities
our Agri+Gator Programme. This programme aims to
in society. The Distell strategy is therefore based on
provide structured engagement and direct support
providing businesses with the services and support
to improve the yield, output, participation, access
that they require to help them overcome the many
to markets and growth of empowered apple and
challenges that prevent them from growing their
grape farmers within our value chain. We plan to
businesses. As part of Distell's contribution to South
scale up investment into our Agri+Gator Programme
Africa's National Development Plan, we help
in the upcoming financial year and have already
businesses to increase their capacity to create wealth
on-boarded eight new producers as part of this
and jobs.
programme.
In South Africa, entrepreneurship and the growth
The total value of our E+Scalator and Agri+Gator
of small- and medium-sized enterprises (SM Es) are
programmes by the end of March 2020 was R99.4
widely recognised as critical to achieve inclusive
million. This comprised R 6 4.3 million in interest-free
economic growth and development and stimulate
loans, R21.4 million in equity investments and R 13.7
job creation.
million in in-kind support.
DistellGroup
Adamo Wines is a ma;ority black-owned wine
5. To deliver targeted and relevant support
is the most important component of Local Economic
0
SUCCESS STORY 1: ADAMA WINES
Loulontein Boerdery is a 100% black-owned fruit
farming business that is being supported by both
Distel/ and Two-A-Day (TAD/. Loulontein Farm was
acquired through the Proactive
Land Acquisition
Strategy {PLAS/ programme of the then Department
of Rural Development and Land Reform (DR DLR/, and leased to Sewis van der Horst on a 30-year contract
basis.
The property is 132ha in extent with about 60ha of
pears, apples and nectarines. Due to the !act that
the !arm had a large percentage of old orchards, its
yields and sales income were severely compromised relatively to similar orchards in the Grabouw
Villiersdorp region. As a result of the support provided
by Distel/ and TAD, the company has been able to
reduce its debt levels, increase productivity and overall profitability, in so doing guaranteeing the employment
of the 22 lull-time workers and over 60 seasonal
workers.
• Distell
WWW.SDAWARDS.CO.ZA
27
www.petroleumagencysa.com
I
info@petroleumagency.com
I
Tel: 21 938 3500
Tygerpoort Building, 7 Mispel Street, Bellville, 7530
To promote, facilitate and regulate exploration and sustainable development of oil and gas in South Africa etroleum Agency SA is a world c l a s s
Porganisation that promotes t h e o i l & gas potential of SA and regulates the upstream oil
and gas sector on behalf of government. The Agency
is state owned and reports to the Department of
Mineral Resources and Energy. It is the custodian of
the national petroleum E&P database The Agency
is designated in term of Section 70 of the Mineral
and Petroleum Resources Development Act of 2002,
and aims to create a vibrant environment through
its promotional activities that attract both local and
foreign investment.
PETROLEUM AGENCY HAS THREE MAIN ROLES: • To promote oil and gas exploration and production in South Africa
• To regulate the oil and gas exploration and production industry in our country
• To archive all gee-technical data produced through oil and gas exploration
direct presentations to exploration companies
and through advertisements. Part of our role is to
These roles apply to both conventional and
ensure that explorers understand the regulatory
The Agency must also advise government on issues
international norms.
unconventional resources.
regarding oil and gas exploration and production,
and carry out special projects at the request of the
regime of our country and to advise government in
The office of the Company Secretary is responsible
for providing secretariat services to the Board and
ensuring statutory and corporate governance
complian ce. The Agency subscribes to the
the formulation of regulations that are in line with
principles of "good governance" and the highest
Compliance with all applicable legislation in place to
management.
the environmental management plan. Explorers must
Responsibility (CSR) initiatives both indirectly
standard of ethics. It delivers on this mandate by
ensuring transparency, accountability and sound
Minister.
protect the environment is very important to us, and
gas sector by assessing South Africa's oil and gas
also prove financial and technical ability to meet their
through its operators, as well as directly through
Programme process requires public consultation
previously marginalised sectors of the population in
national authorities.
Agency also administers the Upstream Training Trust
The Agency encourages investment in the oil and
resources, and presenting these opportunities
for exploration to oil and gas exploration and
production companies. Our team of geoscientists study existing data to identify prospective resources.
These are then presented to investors at local and
international conferences and exhibitions, through
28
WWW.SDAWARDS.CO.ZA
rights cannot be granted unless we are satisfied with
commitments in safe-guarding and rehabilitation of
the environment. The Environmental Management
and a clear demonstration that valid concerns will
be addressed, and must satisfy both provincial and
The Agency is involved in Corporate Social
its own programmes. Production right holders must
put a social and labour plan in place that involves
the benefits Aowing from development. These plans
are approved and monitored by the Agency. The
PETROLEUM AGENCY SA
for the development of specialist skills in the natural
in disadvantaged communities and Crisis Relief
parties may view all data available including a
sciences, engineering and technology.
& Prevention Programme in the form of hampers
viewing set consisting of selected reports, seismic
distributed amongst Families in times of crisis. Through
data and associated results.
The Agency has its own CSR programme that includes
a partnership with Habitat for Humanity, the Agency
development of skills through internships, while staff
donated funds and employees participated in
The Information Services d epart ment is also
have been involved in social outreach events such as
building houses at Emfuleni in the Western Cape.
responsible for IT by providing the operating parameters for individuals and supporting use of the
house-building with Habitat for Humanity. Petroleum Agency SA invites all parties interested in becoming
The continental shelf of the Republic of South
IT systems, networks and architecture. This includes
involved in South Africa's upstream industry t o
Africa covers some 200 000km2 and the country
responsibility for conventional IT security and data
contact u s directly.
has a coastline of approximately 3 000km in
assurance. The IT D epartment ensures suitable
length. Petroleum Agency SA is responsible for
infrastructure by providing the operating network, circuitry and all equipment needed to make the IT
CSR at Petroleum Agency SA is the demonstration
the archiving and management of the national
of the values of the organisation. The initiatives
exploration database and has catalogued all of the
system work in accordance with an established
of Petroleum Agency SA's c or p ora t e social
data and reports resulting from the drilling of some
operating standard and system size.
responsibility is t o improve the quality of life of
300 boreholes and the acquisition of 22 700 line
historically disadvantaged South Africans through
km of 2-D and 9 700km of 3-D seismic data. All
Functionality is catered for by providing the capacity
skills development and educational programmes with
hydrocarbon exploration data belongs to the state.
for operating applications, storing and securing the
Licensees that carry out ex ploration activities are
electronic information the organization owns, and
required to supply all new and reprocessed data on
providing direct operating assistance in software use
As an organisation, we are deeply committed to
relinquishment to the Agency for incorporation into
and data management to all functional areas in the
conducting business in a socially responsible way.
the National Database.
organisation.
an emphasis on youth.
It is important that we contribute in establishing a foundation of skills required for our industry as well
A new block naming system has been in use since
as our country. In order to achieve this, Petroleum
1994. For convenience of reference to existing data,
Agency SA focuses on the educational projects that
the old ( 1965) licence blocks are also used since
promote Maths, Science and Technology such as:
borehole and seismic line designations refer to them. The latest degree licence block system definitions are
• Career/Science Exhibitions targeting educators
also defined as an overlay on our maps.
and learners. • Career presentations at Tertiary level on the petroleum industry. • 3-year Internship programme within the organisation that provides an opportunity for training to South African graduates. • A 3-year contribution to the University of Fort Hare for a Geological Chair.
Although data catalogues can be generated for any offshore geographical defined area, including listings of all the data available that is relevant to the assessment of each area, the data is conveniently organised into geological basins and features below: • Summary of wells by basin • Summary of seismic by basin
Petroleum Agency SA as a corporate citizen
• Generalised location maps
has an interest in the lives of the South African community at large. Other programmes chosen to
All data can be browsed and purchased through the
invest in have been: Provision of skills/ education
online portal. A Data Room has been established at
on Disaster Management to unemployed youth
Petroleum Agency SA in Cape Town where interested
0
Petroleum Agency SA
0
@sa_petroleum
VISION:
To create a diverse upstream industry contributing to energy security through sustainable growth in
exploration and development of oil and gas.
MISSION:
To promote, facilitate and regulate exploration and sustainable development of oil and gas contributing to energy security in South Africa.
OUR STRATEGY: To increase exploration and production activities in South Africa. To regulate the exploration and production environment. To acquire, archive and enhance all petroleum exploration and production data. To ensure a viable and sustainable Agency.
• Petroleum Agency SA
WWW.SDAWARDS.CO.ZA
29
THOUGHT LEADERSHIP ARTICLE
SUPPORTING THE LOCAL VALUE CHAIN Henlo Lindeque, Head of Business Events at Goudini Spa
Nestled among the spectacular Boland Mountains and magnificent vineyards, ATKV Goudini Spa is one of the Western Cape's most sought-after holiday, conference and tourist destinations with a wide variety of accommodation options, recreational - and business event facilities.
Rawsonville and Paarl has a flourish of businesses that are able to assist in the needs of the resort. Catering for 800 delegates is no small feat, thus it is vital that local suppliers understand the business and are able to assist quickly and accurately ensuring guests are kept happy and conferences can run smoothly and without interruption. With an abundance of local tourism activities around Goudini Spa, not to mention the more than dozen wine farms with some of the best wine South Africa has to offer, the resort have partnered with local tourism bodies and local establishments ensuring guests get the best experience the Breede Valley has to offer. Goudini Spa also gets involved with community projects, both large and small in scale. Goudini Spa hosts hundreds of avid mountain bike riders during the annual Gravel and Grape Mountain Bike Race, in itself a massive project which injects money into the local economy. Lastly, we also strongly believe in supporting community development projects and institutions.
With a capacity of 1300 plus guests and MICE facilities for approximately 800 delegates, Goudini Spa plays an important role in the local community p r o viding employment and other business opportunities for local businesses. Our cleaning and security services are just two of the close partnerships that have developed over the years helping Goudini Spa achieve its ambitious goals annually. A key focus of management is to ensure that where ever possible, local suppliers are
To this end, Goudini Spa is heavily involved in supporting the Breede Valley Skills Development School, where young adults and those who never finished their schooling, are trained in valuable skills such as wood working, metal working as well as vocations such as electrician to enable them to find employment. Also, the resort supports the Pioneer School for the Blind through financial assistance as well as hosting the Pioneer Rally Gala evening
''
Goudini Spa plays an important role in the local community, pro(Jiding employment and other business opportunities for local businesses
(held annually for the last 21 years, but unfortunately cancelled in 2020 due to the Covid- 19 pandemic).
utilised. The resort contracts with local suppliers and businesses for day-to-day maintenance and repairs,
Goudini Spa, and the ATKV Resorts Group, are
as well as for construction projects on the resort.
ardent believers of local supplier support and
From signage to builders to fresh produce all
help build a sustainable future in all the communities
contributing as local towns in the form of Worcester,
we do business in.
development, and we will continue to do so as we
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THOUGHT LEADERSHIP ARTICLE
WHAT IS REQUIRED TO SECURE STABILITY AND SECURITY OF ENERGY SUPPLIES By Dr Phindile Masangane, CEO of the Petroleum Agency of South Africa (PASA)
A bs a b u s i ness da y s up p l i e r
organisations enter into contracts with the state
especially long-term stability and consistency
to explore for oil and gas.
in contractual terms together with political and
Dr Phindile Masangane, CEO of
The third function is to act as the national archive
development magazine sp oke to
the South African upstream oil and gas regulatory authority, Petroleum
Agency South Africa (PASA), about
what is required to secure stability
and security of energy supply.
1 Brief/,y, the role of PetroleumAgency SA, its mission and vision
and gas exploration and production in South Africa, and to curate and maintain this data for use and distribution. Other functions include advising government on any issues pertinent to oil and gas as well as carrying out any special projects, as directed by government. Mission - To promote, facilitate and regulate
Petroleum Agency SA is South Africa's national
exploration and sustainable development of oil
regulator for the upstream oil and gas industry in
and gas contributing to energy security in South
South Africa, i.e. exploration for and production
Africa
of oil and gas both onshore and offshore.
Vision - A diverse upstream industry contributing
PASA has three main functions, as follows. The
to energy security through sustainable growth in
first is to attract investment to South Africa's oil
exploration and development of oil and gas
and gas upstream industry, in other words, investment into exploration and production of oil and gas in South Africa. We have a team
2 What is required to secure stability and security in the sector?
of geologists and geophysicists who interpret
The oil and gas exploration industry has always
data gathered through past exploration activity
been extremely volatile, being subject to global
to determine prospectivity, and use this to attract
economic forces and highly dependent on
exploration companies to South Africa.
the fluctuating oil price. In addition, oil and
The second function of PASA is to regulate the upstream industry in terms of the Mineral and Petroleum Resources Development Act, its regulations and other applicable legislation. The
34
for all data and information produced during oil
gas exploration is exceptionally risky in terms of initial, upfront capital investment with long periods before any return on investment and profit generation.
Agency has staff responsible for ensuring legal,
To counter this, oil and gas exploration
technical and environmental compliance as
companies require equitable terms, and
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independent judicial stability. Coupled with this would be a government that is committed to ease of doing business and to facilitating entry into the upstream space. Local expertise in servicing the industry's requirements in terms of human resources and services is also a strong advantage. A developed industrial economy offering opportunities for local monetisation of gas discoveries would also assist.
3 Where are the opportunities? Current opportunities lie in the development of the stand-alone Upstream Petroleum Resources Development Act, and its accompanying regulations. This rewriting of the legislation governing oil and gas e x p loration and production gives South Africa a chance to address the requirements of the industry (as above) while also ensuring an equitable deal for the South African state and meaningful participation of South Africans in the industry. The recent Brulpadda discovery and ongoing exploration in the area, as well as the potential for shale gas have both put SA on the international map in terms of a destination for investment. The oil price is making a slow but steady recovery from the 2014 crash. These factors are all opportunities for SA to move forward in developing the upstream industry.
4 What are the challenges? Challenges facing the South African upstream industry include the low oil price( now steadily recovering), uncertainty regarding terms and legislation(now being addressed through the UPRDA), environmental concerns and public negativity regarding fossil fuels, lack of local skills and public pressure on government to nationalise
Norway, and should arrive around the 12th of
be discovered. Onshore, the Agency's estimate
the Luiperdpadda) prospect which is the second
for shale gas are 205Tcf recoverable while coal
of five prospects in the group. There is an option
bed methane and biogenic gas represent a
to retain the rig in South Africa for further drilling.
further multi-Td potential resource.
The Brulpadda well discovered light oil and gas condensate, but the phase in the other prospects can only be determined through drilling. Future development of the discovery is highly
South Africa's assets.
dependent on the success of this further drilling.
A further challenge is to diversify the industry and
Possible development could see gas condensate
make it more inclusive in terms of the companies undertaking exploration in South Africa.
5 How big a role does the Agency play in the renewable energy sector; and how will you be advancing this agenda? Oil and gas are fossil fuels and by definition, not part of the renewable energy sector. Having said that, South Africa has committed to reducing its carbon foot print and natural gas can play a role in this. South Africa is currently heavily dependent on coal as a primary energy source and the substitution of natural gas for some percentage of electricity generation, as envisaged in the National Development Plan, could assist with SA reaching its goals in terms of carbon emissions. The Agency's main role in this is to attract and facilitate the activities of explorers for indigenous gas.
6 Flow important is policy- and legislation decision-making in informing how the Agency undertakes its operations? Policy and legislation are of utmost importance in how the Agency operates. The main purpose of the Agency is to implement and apply policy and applicable legislation to the upstream industry on behalf of government. The Agency's mandate is l 00% driven by policy and legislation. Its close contact with the diversity of exploration companies puts the Agency in a unique position to be able to advise government in the formulation of policy.
7 Where are the new SA O& C explorations, and can you provide details around those (such as what we can expect f,-om those, when they come onboard etc, Mossel Bay?) Offshore, there is currently ongoing exploration of the prospects close to the Brulpadda discovery. Odfjell's DeepSea Stavanger oil rig has recently arrived in South Africa from
billions of barrels of oil and multi Tcf of gas yet to
August. It will drill the Luiperd (more correctly
being piped to the PetroSA facility in Mossel Bay, but these decisions are ultimately up to the operator, Total, and its partners. Other exploration coming up offshore is the planned drilling of the Gazania -1 well off the west coast, to test a prospect close to the A-J l oil discovery made in 1988. African Energy Corporation has entered into a partnership with Azinam and Panoro in this block (still to be approved by the ministry) and have identified numerous prospects in the block. Aziman will become the operator. The well will test the gazania and Namaqua prospects. Drilling is expected in Q l 2021. Off the east coast, ENI and partner Sasol, have identified potential drill prospects in deep water, but the testing of these by drilling has been delayed due to various issues including Covid and its effect on the oil price. Once the UPRDA and its accompanying regulations are finalised, we can expect the initiation of active exploration for shale gas onshore. The true potential of this resource will only become known through drilling and production testing, but this may certainly
9 What skills and upskilling ofexpertise is still required to be manifest in SA to ensure stable and thriving on- and offshore exploration? South Africa already has the ability to provide a vast array of skills and services to the upstream industry, as represented by the membership of SAOGA. What SA does not have is specialised skills such as qualified rig crews, as the local industry is too small to sustain such specialisation. Specialised crew and t radesman trained to service the upstream industry have to be equipped with skills that can be applied cross industry to ensure sustainability. Professional skills such as reservoir engineers, petroleum geologists and geophysicist are also in very short supply locally, for the same reasons.
10 What is the future for gas-fired power stations... will this provide more stable power generation, and howJar away is SAJi-om introducing such? Gas to power is an integral part of South Africa's IRP2019 (the electricity supply infrastructure plan for the country to 2030). The country wants to build as much as 3000MW of gas to power ac cording to this plan. Additionally, the 2000MW emergency power procurement to be issued with in the next few weeks can also be supplied by gas-to-power.
represent a major economic boost for the economy of South Africa.
8 Do we know what the onshore and f offihore potential is, and i not what are the estimates? T h e P e t r o l e u m A g e n c y h a s a t e am of geoscientist s . Among their duties i s the determination of potential, to attract explorers, ensure that exploration is properly managed, and advise government on the potential indigenous resource to help develop energy and development policy. The offshore is for the most part underexplored, for eg there are only 4 wells drilled off SA's east coast. Current estimates indicate potential for
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I
TIGERBRANDS
I
www.tigerbrands.com esd@tigerbrands.com Tel: 011 840 4000 31 0 William Nicol Drive, Bryanston, Johannesburg
TIGER BRANDS
We nourish and nurture more lives everyday TIGER BRANDS DIPUNO FUND IMPACT M any black smallholder farmers are still excluded from larger agricultural supply chains in 2020. Tiger Brands,
through its R 1OOm Dipuno Fund, is helping to change that by encouraging smallholders to form farming collectives like the Baphuduhucwana Production Incubator (BPI) and then placing large orders for harvesting.
One success story is Kedidimetse Radebe, who took over her
family's farmer in Taung, North West after a marriage, 15
years as a professional nurse in Johannesburg, and three
children. Through training and funding interventions, the BPI
iger Brands is one of Africa's largest, listed
Tmanufacturers of fast-moving consumer goods (FMCG). Our core business is manufacturing,
marketing and distributing everyday branded food products to middle-income consumers. We also
just supplied over 3 000 tons of wheat to Tiger Brands.
With her success, Mrs Radebe has built a house, started a legacy for her children, and beams when she shows off the
brand new Toyota Hilux in her driveway.
distribute leading brands in the Home, Personal Care
and Baby sectors. We are committed to creating
shared value across our diverse stakeholder base.
Tiger Brands prides itself being a world-class
manufacturer and marketer in the FMCG categories
in which it operates and strives to consistently deliver
quality products with which consumers can have a
positive experience and enjoy.
We believe that our communities should be better
off because we are there and take an active role
in driving food and nutrition security, consumer education and food safety imperatives, in addition
to supporting the development of small suppliers to
actively compete within our supply chain.
Khayelitsha Cookies was started by 2005 as an initiative to empower women in Khayelitsha to
be entrepreneurs and hand-bake, pack and sell cookies to their communities and other local
businesses. Based on the recognition that every woman baker supports up to seven dependants in
their households, Khayelitsha Cookies has resisted the option to mechanise its biscuit production
because this would downsize the number of bakers who depend on this business to earn an
income.
Since 2009, Tiger Brands has helped ensure Khayelitsha Cookies complies with all legislative
requirements in term of food manufacturing, offered interest-free loans so the business could move to larger, more efficient facilities, and now orders hand-baked products for its Purity brand.
0 36
@TigerBrandsFMCG
0
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@TigerBrands
â&#x20AC;˘ Tiger Brands
THOUGHT LEADERSHIP ARTICLE
ESD: IT'S ABOUT REAL VALUE, NOT COMPLIANCE By Neva sh nee Naicker, Director: Corporate Communications at Tiger Brands
A genuine commitment to enterprise and supplier development (ESD) is am ong the m ost powerful and sustainable way s of trans forming South Africa's economy. Note that I said powerful and sustainable, not quick, cheap and without its challen ges. This is where many organisations lose sight of the larger goal of ESD.
and intellectual capital through workshops and training. Even then, you need to build something beyond just a transactional relationship and create an active partnership that doesn't just change the lives of your suppliers but positively impacts the way you do business.
In an effort to comply with legislation, satisfy shareholders and tell a good story, ESD programmes can quickly deteriorate into compliance exercises that no one really owns in the company.
of 2019. On the back of such sterling success, we reinvested the capital repayment back in the farming
The problem with this approach is that it defeats especially where an ESD initiative lacks proper planning and is not linked to a defined and agreed upon strategy that everyone in the organisation understands and believes in. Does it still have merit? Absolutely - even incremental improvements make
At Tiger Brands, we don't just find suppliers and
a difference. But the impact simply isn't what it
throw money at them. We invest in our relationships
could be. And since ESD is premised on transferring
with them, offering assistance where we can, and
opportunities into the hands of those who have
creating space for long-term economic growth. A
historically been left out of the mainstream economy,
case in point is our investment into black smallholder
we have a responsibility to do it right.
''
collective for future projects.
the underlying purpose of genuine transformation,
wheat farmers in Taung, North West, as part of our drive to reduce South Africa's reliance on imported
It's more than just preferential procurement and
produce. One smallholder cannot meet a large
loading "empowered" vendors onto your system. It's
order, but a collective of smallholders can, so
about creating value wherever you can: sometimes
much so that this farming collective - known as the
that's through an interest-free loan with generous
Baphuduhucwana Production Incubator- delivered a
payment terms, sometimes it's offering free expertise
100 % crop yield of 5 000 tons of wheat at the end
Compliance is important, but let it be the happy consequence ofan open-handed, active and practical commitment to driving real change in South Africa. You'llfind it doesn't only impact your suppliers but changes your entire organisations culture for the better.
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37
THOUGHT LEADERSHIP ARTICLE
7 GAME-CHANGERS FOR THE PATH TO ECONOMIC RECOVERY
Insights from the Absa Business Day Supplier De(}elopment Dialogue Series hosted on May 26, 2020 The Covid-19 pandemic is the biggest disruption to the global economy and has forever changed the business landscape. Experts agree that a global recession is imminent and is due to last for a while. Even the world's healthiest econ omies n ow face negative gr owth rates, and developing econ omies find the y lack the financial resources to accelerate recoveries.
This was debated by leading specialists Hilary Joffe,
don't make us competitive, to foster a conducive
T imes; Mariette du Toit-Helmbold, Chief Destineer of
environment for business and the private sector
Destinate; Jacob Maphuta, Chief Director of BroadÂ
to invest, innovate and thrive, and to support and
Based BEE of the Department of Trade & Industry;
reignite growth. The collective sense was that the crisis
and Gaylor Montmasson-Clair, Senior Economist
yields unique opportunities.
of Trade & Industrial Policy Strategies, at the Absa Business Day Supplier Development Dialogue series
Montmasson-Clair advocated for a paradigm shift
hosted on May 26 2020, in partnership with Fetola,
in favour of a green and just economic recovery
Cold Press Media and Arena Holdings.
strategy and a need to start setting up capacity and systems to build a more resilient economy and "build
Panellists agreed that our growth outlook shows a decline and that SA will come out of the Covid-19 crisis poorer, with much sharper ine quality and unemployment, and public finances depleted, leaving us reliant on limited resources to support the
SA, in particular, is already experiencing a recession
social needs of society.
du e to pre -existing financial stress, and the SA Reserve Bank forecasts that the economy will shrink
"There is no precedent for the recession and we won't
by 7% in 2020. Bleaker estimates from Business 4
get back to where we were before 2023. Our future
SA have said the decline could be between 10% and
economic prospects depend largely on how quickly
16.7%, depending on how quickly SA's economy
we come out of lockdown, how we navigate our way out, how much damage is permanent and capacity
reopens.
SO, WHAT DOES OUR ECONOMIC FUTURE LOOK LIKE IN THE FACE OF COVID-19?
38
WWW.SDAWARDS.CO.ZA
enabling environment to unblock blockages that
contributing editor of the Business T imes and Sunday
lost, and essentially on our ability to recover," said Joffe.
''
back better" in the post-pandemic future.
The positive thing about the crisis is that it has brought us closer together - across sectors to focus more sharply on some of the things that need . . . . '' reprwrztzzzng. -Jacob Maphuta
"Recovery will also depend on how much attention we give to policy and fiscal reforms we have spoken
The seven potential game-changers for our path to
about for so long. The government must create an
recovery identified by panellists included:
COLLABORATION: Building partnerships and platforms for co-operation between the government, small business and the private sector, such as the Absa Business Day Supplier Development Awards.
LOCALISATION: Rethinking and restructuring of our value chains to maximise resources and value within SA. Localisation of production/manufacturing, vertical integration of supply chains, and linkages for rural and informal economic development.
INCLUSIVITY: Stimulating economic activities in marginalised areas and rural and township economies to address inequality, transformation and the participation of small businesses and black industrialists in the economy.
COMPETITIVE EDGE:
SMART INFRASTRUCTURE: Building smart systems, smart grids, rail networks, smart water and sanitation systems, and networks of infrastructure systems to meet local demand and drive job creation.
SUSTAINABILITY, CLIMATE RESILIENCE AND LOW CARBON PRODUCTION: Protecting our ecological infrastructure and communities, including access to sustainable services,
''
While there is no silver bullet and that we can't afford to go back to business as usual, the crisis presents an opportunityfor us to create a differentfuture. Key would be to build trust, be agile, efficient and effective. This is our recovery!" - Catherine W-jjnberg
such as water, sanitation and public transport; low-carbon production and renewable energy technologies, which stimulate local manufacturing and the development of local supply chains.
Being ruthlessly price efficient by reducing the cost of
DIGITAL:
production, and seizing export opportunities through
Maximising the online economy and addressing
proactive identification of demand and market gaps
the digital divide with rapid deploym ent of
to capitalise on our weak exchange rate. Link this
broadband to stimulate innovation and growth,
to sustainability and "green production" to meet
capacitate emerging businesses and fast-track equal
growing post-Covid- 19 global pressure for climateÂ
opportunities.
friendly production.
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THOUGHT LEADERSHIP ARTICLE
A SHIFT IN MINDSET By Fungai Makani, Cova Manager
It is clear that in the South African context it is ver y difficult for the majority of companies, particularly those o perating in the business to b usiness s pa c e, to remain competitive and grow without being transformed. Our experience is that many companies are under pressure from their customer s to reach specific levels of Broad-Based Black Economic Empowerment (B-BBEE) comp liance, g enerally a level 4 and above, to retain their business. Therefore, Enter prise S up p lier Development (ESD) being one of the 5 elements of the B-BBEE codes, is very much a business imperative.
and meaningful difference in what is undoubtedly a
infrastructure and business development costs that are
difficult economic environment. The purpose, meaning
necessary in the mentorship of suppliers. It provides
and impact of their ESD programmes are the drivers
support of up to R 15m per annum for a period of 3
of their actions, so much so that they do not limit their
years. In the current context of a constrained fiscus,
ESD budget to the mandatory 2% and l % of Net
the SPP grant is generous and can go a long way
Profit After Tax.
to scale the ESD efforts in the economy and it is
Corporate South Africa can play a key role in
due to a lack of knowledge.
unfortunate that such a tool is being under-utilised spearheading inclusive and sustainable ESD. Through a focus on supplier development, companies
To achieve maximum impact through ESD, it is
are able to create many mutually ben eficial
important for corporates to shift their mindsets from
opportunities which include, but are not limited to,
compliance and short-term cost savings, but to rather
increased competitiveness and innovation, continuous
focus on the bigger picture. Through intentional and
improvement and customer satisfaction, as well
well thought through ESD programmes, companies
as showcasing their commitment to South Africa's
can in fact enjoy an enormous positive impact on
economic growth and driving much needed job
their bottom-lines.
creation. The success of any ESD programme will be The government has recognized the role that
dependent on the attitude and leadership of the
corporates can play and aims to support B-BBEE
executives. It is crucial that the programmes have
policy by encouraging businesses to strengthen
the backing and support of the top echelons of the
the ESD element of the codes. To this end, they
company. Securing the buy-in of the personnel
have made available a grant called the Strategic
responsible for implementation is also key, and to
Development of a large South African corporate
Partnership Programme (SPP), which is administered
this end procurement teams should be incentivised to
and though our discussion covered a broad range
by the Department of Trade, I ndustry and
develop suppliers and ESD needs to be an integral
of issues, what resonated with me the most was
Competition (DTIC). The programme's objective is to
part of their KPls. Providing crucial business support
their refreshingly different attitude towards ESD. She
support large private sector companies in developing
is also important, as many SMEs struggle with issues
explained how they do not view ESD as merely a
and nurturing SM Es within their supply chain. The
such as access to funding and technical expertise.
compliance issue but rather as a way to make a real
incentive is a cost-sharing grant and is available for
I recently met with the head of Enterprise
Government is also making efforts to address the issue of funding faced by most SM Es, by making available a blended finance product through the Small Enterprise Finance Agency (SEFA), which will assist them in acquiring plant and machinery as well
''
as other development services.
This shift in mindsets and concerted effort by Corporate South Africa will, with time, bring about the de(Jelopment and change that is desperately needed and that we can all be proud of
40
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www.cova-advisory.co.za I info@cova-advisory.co.za I Tel: 011 568 3340 Magwa Crescent West, Maxwell Office Park, Building 1, Waterfall City, Midrand
The trusted advisor on government programmes
C
COVA ADVISORY
• Trade Agreement advisory (including Rules of Origin) • Rebate compliance
Energy and Carbon advisory services Cova is i deally placed to help companies t o understand the challenges related to going green,
o v a A dv i s o r y is a 51 % b l a c k o w n e d
• Jobs Fund
company with a specific focus o n government
• Suppor t Programme for Industrial Innovation
p ro g rammes includi n g grants and t ax
• Section 11 D Tax Allowance Incentive (for
incentives and is a proud member of the South African Supplier Diversity Council.
research and development) • Strategic Partnership Programme
and to reap the rewards of adopting a green strategy.
Accreditation: Cova Advisory is one of only 7 active inspection bodies authorised by the South African National Accreditation System (SANAS) to measure and
Cova has positioned itself as an independent
Cova offers a comprehensive service to companies
advisor on m a t t e r s ranging from Customs and
on the grants and incentives offered by the South
professionals to do this inspection work in energy
E x cise, Carbon and E n e r g y s t r a t e gy, g r ee n
African government to various sectors. This includes
Measurement and Verification (M&V) professionals
related funds, Carbon Tax a n d carbon policies,
the assessment of projects to determine the best
to do this inspection work.
and renewable energy. Cova has set up a strong
support scheme(s) available and assistance with the
local network within the private and government
preparation of applications, liaison with government
sectors. To offer a comprehensive service our team
a gencies and the vital follow-up on successful
is made up of engineers, accountants and lawyers.
applications to ensure all criteria for sustained support are met.
What we do Cova A dvisory has unrivalled expertise in 4 key
Business advisors on Customs matters
areas:
Cova plays an integral role in facilitating inward
• Providing advice on tax incentives and government grants, such as those offered
and outward investment by providing Customs and Excise advisory services to companies operating in
under the Black Industrialists Scheme and
various sectors. Our aim is to assist companies with
Strategic Partnership Programme and finance
navigating their way through the process of entering
raising which the South African Government has
new markets as well as mitigating Customs and
on offer for new projects.
Excise risks and ensuring compliance.
• Providing advice on the green landscape and government measures to encourage firms to become more energy efficient. • Customs and Excise advisory work. • Corporate finance advisory and finance raising.
Incentive advisory services Some of the incentives available to South African enterprises include: • Agro-Processing Suppor t Scheme • Automotive Investment Scheme
Our Customs and Excise services include: • Registrations with the International Trade Administrations Commission of South Africa (ITAC). • Customs dispute resolution • Customs valuation opinions • Customs registrations • Stage consignment rulings • SARS preferred trader programme
verify energy savings. Our team comprises cer tified
Our energy advisory services include: • Measurement and Verification services for the Section 121 and Section 12L Tax Allowance Incentives. • Energy audits. • Drafting of energy management plans. • Carbon related services including carbon emissions reporting and carbon policy assistance. • Carbon Tax advisory, including Carbon Tax calculations and Carbon Tax registration with government. • Carbon offset advisory.
Corporate Finance advisory Cova A dvisory can assi s t companies in the automotive sector with raising a mix of development finance and commercial funding (debt and equity) through a process of: • Opportunity assessments: Assessing the availability of development and commercial funding. • Funding strategy and deal structuring:
• Black Industrialists Scheme
• IDZ / SEZ advisory
Structuring the opportunity, project or business to
• Critical Infrastructure Programme
• Tariff opinion
access the available funding. • Project preparation (if required): Drafting business plans and compiling the associated financial models. • Raising funding: Preparing the marketing documents (pitch decks), sourcing, managing and driving negotiations with funders through to closure.
c� oov1sor8 TM
your sustarnbke serv,::e prcMder
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41
THOUGHT LEADERSHIP ARTICLE
7 TIPS FROM WOMEN LEADERS IN SUPPLIER DEVELOPMENT
Women need to raise each other up and channel the power ofcollaboration to amp lify success and imp act "Women play a vital role in achieving sustainable development through promoting gender equality and wom e n's emp owerm e n t , we of ten stand at the front line
Seyuba Kombe, head, enterprise and supplier
of women who have come before us, raise each
expert in the EU-funded Ecosystem Development
other up and channel the power of collaboration to
for Small Enterprise programme; and Sekai
amplify success and impact.
Chiwandamira, regional chapter manager of Aspen Network of Development Entrepreneurs (ANDE) SA.
communities," said Cecilia Njenga, head of the UN environment office in SA during a panel discussion considering supporting the livelihoods of women in supplier development programmes. The discussion was hosted as part of the Absa Business Day Supplier Development Dialogue Series on August 11 2020, presented by Fetola, Cold Press Media and Arena Holdings. "Traditionally we have been taught to be competitive with one another, in a man's world. That strategy doesn't work," said Fetola CEO Catherine Wijnberg, who chaired the women-led panel comprising Mamoroke Lehobye, MD of MyCFO; Mishinga
42
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Whether you are a corporate running a programme, an enterprise and supplier development (ESD) service
in terms of poverty, yet provide invaluable contributions to sustaining
They agreed that we need to stand on the shoulders
development at Pick n Pay; Tamiko Sher, senior
provider, a woman entrepreneur or beneficiary of a programme, here are seven fabulous tips
'' For many years, I
was not in favour of not promoting women-led businesses, but now that I look more deeply, it's evident that women run businesses in a way that has deeper and longer term impact in communities. The change women can bring about, especially in our informal economies, is immense - Catherine W-jjnberg, CEO ofFetola
from women leaders in the supplier development ecosystem realise our unique strengths to transform and enhance the ESD ecosystem:
1.
REVERSE THE STEREOTYPE THAT WOMEN DON'T SUPPORT OTHER WOMEN Research shows women in particular benefit from collaboration over competition, and women who support one another are more successful in business. Be conscious and tackle the cultural and systemic hurdles that make it harder for you to advance, such as unconscious bias. Overcoming these hurdles is to form close connections with other women, who can share experiences from women who have been there, done that.
;.-
2.
FIND YOUR VOICE
5.
Unashamedly self-promote, bringing your talents to the table, but also know your
To sustainably participate in building needsÂ
limitations. Know what you can do best and
based solutions for yourself and other
look outward for collaboration opportunities
businesses.
to amplify your efforts.
3.
PRIORITISE RELATIONSHIP-BUILDING
6.
are mutually beneficial to both parties, in
those experiencing similar hurdles; draw on
wealth, closing the economic gender gap,
people who understand your space - to get
and establishing generational legacies.
the support, guidance and mutual learning
CONNECT OPPORTUNITIES Whenever one of us comes across a great opportunity, whether it be around market
''
We are being given the opportunity to stitch a new garment: one thatfits all humanity and nature, one that betterfits women in this post Corid recovery period. " - CeciliaNjenga, Head ofthe UN Environmental Office in South Africa
particular when creating value, building
each other as mentors and sponsors; and find
you need.
HAVE A SHARED DEFINITION OF SUCCESS Ensure that the benefits of ESD programmes
Form circles of trust with one another and with
4.
UNDERSTAND YOUR VALUE CHAIN
7.
BE KIND Cut yourself and others some slack and remember that as women we have the gift of gentleness.
access, funding opportunities or linkages to leverage network capital, we immediately need to share it with one another.
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43
2020 WINNERS
[ WINNERS ]
Now in its third year, the Absa Business Day Supplier Development Awards celebrate businesses that are contributing to the growth and transformation of the economy through meaningful Supplier Development, building a better South Africa for all. The judges were searching for businesses that position Supplier Development as a long-term strategic priority and driver of transformation and competitive advantage, that direct Supplier Development from the C-Suite, that embrace innovation and collaboration and strive to make a lasting impact.
Absa Business Day Supplier Development Awards
NEWCOMER AWARD
Winner: V&A Waterfront - Joy from Africa to the World Programme
Sponsored by Absa Acknowledging companies that have recently initiated a new strategic Supplier Development programme or project and show merit in design thinking, innovation and commitment to growth. The V&A Waterfront is an iconic destination located in the oldest, working harbour in the Southern Hemisphere. This 123-hectare, mixed-use development comprises residential and commercial property, hotels, retail districts, and extensive dining - to leisure and entertainment facilities. It is also the operator of the newly upgraded Cape Town Cruise Terminal.
The judges were impressed with • how the V&A embedded the concept of shared value in their operating model, showing brand commitment beyond simply making a profit • their dedication to creating jobs,
The V&A Waterfront, which has over 250 SMME tenants and about 300 SMME suppliers, place huge emphasis on Supplier Development that plays a role in harnessing entrepreneurship and in creating employment. The V&A Waterfront has re-imagined the festive season into a celebration of local talent and environmental sustainability. Themed, Joy from Africa to the World, the V&A is representing an experience aligned to its purpose to collectively create the world’s most inspiring waterfront neighbourhood. They have partnered with over 140 artisans to create a vibrant wonderland made from craft, design and upcycled materials. In doing so, they aim to tell a uniquely African story that’s joyful, inspiring and shows what an African festive season is all about. They actively partnered with a number of industry stakeholders such as The Craft & Design Institute and Music Exchange, PWC and the Western Cape Department of Economic Development and Tourism who provided skills and enterprise development support and supported them in the creation and curation of the Festive showcase. Boasting, in its first year, a spend of R336 million on small suppliers representing 38% of their overall total procurement spend, an average spend of R1,1 million per small supplier.
supporting and integrating many smaller suppliers into every level of the supply chain and boosting the local ‘making’ economy • their collaborative approach to working with various ecosystem players to deliver a unique programme • how the V&A are leveraging the suppliers’ ecosystem and promoting market access beyond the retail precinct itself The V&A is well placed to use its influence and footprint to build a socially inclusive business that invests in local communities and leverages its own assets and resources to create new opportunities for the economically excluded. It’s because of this inspired, well-developed thinking that the judges felt confident that in years to come this programme will
> Runner-up: Goodyear 46
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thrive and deliver!
[ WINNERS ]
IMPACT AWARD In partnership with Business Day Acknowledging the company whose Supplier Development initiatives have been shown to substantially impact the value chain, provide evidence of return on investment and scale of impact.
Winner: Tiger Brands Tiger Brands is a leading, branded FMCG company. It is one of the largest food manufacturers and leading marketers of FMCG products in Africa and a Top 40, JSElisted company with leading brands in the food, beverages, personal care and home care categories. At Tiger Brands, Enterprise and Supplier Development is embedded in the corporate strategy of the company whose objective is to be the leading food manufacturer, driving supply chain transformation, impactful development and support of commercially sustainable black-owned enterprises in the food supply and distribution chain. Tiger Brands only set up an ESD Division in April 2018 and has since finalised an ESD Strategy that embeds (1) unlocking procurement for black-owned enterprises, (2) developing support instruments that enable building of operational and financial capacity of black businesses, (3) driving meaningful participation of black-owned farmers into agricultural supply chain, and (4) building and strengthening distribution capabilities of black distributors to drive distribution of Tiger Brands products into new markets. They have initiated a Market Access programme which supports the Tiger Brands sourcing team by providing a channel to source goods and services from black-owned, small enterprises and boast more than R150m worth of contracts to small, black businesses in 18 months since the approval of the strategy. They recently rolled out a Smallholder Farmer Development programme that champions supporting more than 50 emerging, black farmers by integrating them into Tiger Brands supply and value chain, provision of technical and business skills, and access to funding with their R100m ESD Fund. They currently spend R1,8bn on small suppliers, representing 8,5% of their overall total procurement spend, supporting 127 businesses with an average size turnover of R1 000 000.
The judges were particularly impressed with:
1. how Tiger Brands articulated and provided evidence of the impact of this new programme (including detailed results, a mature set of metrics of success and effective return on investment) 2. evidence of end-toend integration, the scale of impact and potential scalability of the model 3. how Tiger Brands use their extensive influence and sizeable position in the market to be the drivers of progress in opening of the economy to small suppliers, especially those in the Agri/ Agri-processing 4. their demonstration of how an SD programme with intention could impact across all areas of economic transformation, public-private collaboration, and nation building
YOUTH DEVELOPMENT AWARD For initiatives that are achieving exceptional results in supporting youth suppliers.
Winner: Distell In 2019/20, the focus of the Distell ESD team has been almost exclusively on helping to keep all their existing ESD beneficiaries in business and profitable. They continue to focus on the creation of healthy, symbiotic relationships, necessary for the economy to grow, and that speak to the authenticity of a brand that is committed to shared value. The judges felt that Distell particularly showed merit in their approach in transforming the youth target market through their rural development initiatives and in pushing the local manufacturing agenda quite strongly. They saw evidence of a strong, value chain focus â&#x20AC;&#x201C; on the customer-facing tavern side and farming side. Amongst others and notably, Distellâ&#x20AC;&#x2122;s Bansela Taverner Programme has 393 taverns enlisted, creating an estimated 197 jobs and their Green Up Recycling Programme boasts 124 Environmental Assistants/waste-pickers who are largely youth.
> Runner-up: Tiger Brands
> Runner-up: The Distell Group W W W.S DAWA RDS .CO. Z A
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[ WINNERS ]
RURAL AND TOWNSHIP DEVELOPMENT AWARD For initiatives that are achieving exceptional results in supporting rural and township-based suppliers.
BLACK WOMEN DEVELOPMENT AWARD Sponsored by Cold Press Media For initiatives that are achieving exceptional results in supporting black women suppliers.
Winner: the Empact Group With over 30 years of experience, the Empact Group specialise in providing quality food services and support solutions in catering, cleaning, hygiene, pest control and facilities management. The Empact Group aim to “Empact” the lives of people they touch in a world where just meeting expectations is not enough. They further believe that Supplier Development initiatives, if properly executed, can lead to meaningful business wins, in the short, medium and longer term. These wins could include any or a combination of: improved performance, reduced costs, increase in quality, innovation and establishment of best practice. Transformation is embedded in the strategy of Empact. At a programme level, they set milestones in place and measure themselves against the achievement of supplier demographic targets. They actively aim to increase the number of, and value of the business allocated to black women-owned suppliers in their supply chain. The approach is to explore, harness and complement the advantages and inherent qualities that women entrepreneurs bring to the table to mitigate the challenges experienced by them. The activities include access to resources (financial and other), market access opportunities and mentorship to help women to grow their businesses to the next level. The judges were impressed by their 30% of total procurement spend on SMMEs of which 39% is with black women-owned suppliers. They were also excited by the overall merit/ potential impact of the approach in transforming this target market and the demonstrated impact this program has had on womenowned business.
> Runner-up: V&A Waterfront
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Winner: SPAR Group Ltd for their SPAR Rural Hub programme The SPAR Rural Hub supports small-scale farmers and creates markets for their products. This contributes to job creation, income generation, infrastructure development, skills transfer and empowerment, while creating a food system that provides affordable, nutritious, fresh produce. Their first rural hub was established in 2016 with five small-scale farmers producing on 22 hectares of farmland. The rural hub has since expanded to 12 farmers and 122 ha of vegetable production. All participating small-scale farmers receive training covering all aspects of farm management and food safety, provided by an in-house team of qualified agronomists.
The judges felt that SPAR Rural Hub model was intentionally focused on rural community development and was different to other programmes in that it addresses a systemic issue such as food security. They were further impressed by • the demonstrated impact of the approach in transforming this target market – in a very impoverished sector of society • the focus on shortening the supply chain and developing suppliers of products in rural areas through a localised distribution platform • the implementation of local gap standards for small businesses • their collaboration with Food Lovers market (a competitor) for market access for emerging farmers As deserving winners of the Rural Award, the judges believe that the SPAR Rural Hub can be scaled and duplicated, and could impact across all areas of economic transformation in the long run, improving food security and contributing positively to health and wellbeing in rural communities across South Africa.
> Runner-up: Distell
[ WINNERS ]
SKILLS OF THE FUTURE (4IR) AWARD Sponsored by SoluGrowth For initiatives that are achieving exceptional results in supporting suppliers with cutting-edge, scarce, 4IR skills.
Winner: Unilever Unilever is a multinational corporation selling consumer goods including foods, beverages, cleaning agents and personal care products. Unilever are one of the few finalists who showed a strong focus on supply chain innovation, sustainability and implementing 4IR solutions for supply chains of the future and in meeting consumer and market demands. In particular, through their Isazi Farming Technology project, Unilever are providing technological solutions in the agriculture sector through the use of artificial intelligence and machine learning. If funded well, these solutions could be scalable and could contribute to further impacts in the agricultural sector. Unilever also uses an innovative, internal, online talent marketplace, which helps employees push the boundaries of their career by using an AI-powered platform to identify personalised, open opportunities across the business, in real time.
> Runner-up: Distell
SMALL SUPPLIER AWARD In partnership with Seda Acknowledging companies who have the exhibited innovation, leadership and authenticity in the promotion of small suppliers.
Winner: SAB Founded in 1895, The South African Breweries (Pty) Ltd (SAB) is part of AB Inbev, the world’s biggest brewer with more than 400 brands and brewing interests around the world. SAB recognizes that one of the major hurdles for SMEs in South Africa is the ability to gain entry into big business and form part of their supply chains. This requires a symbiotic relationship with big business working alongside smaller suppliers. The SAB Accelerator was established to develop black-owned and black women-owned suppliers. The programme is geared towards fast-tracking participants’ growth, the programme employs ten highly-experienced business coaches and ten engineers, offering tailored, business and deep technical coaching to the participants. The desired impact is transforming of SAB’s supply chain in alignment with procurement targets, improving competitiveness and sustainability of SMEs to operate in an everchanging market and contributing towards the creation of jobs. SAB’s Supplier Development strategy has an end goal of developing enterprises and suppliers to maximise exports from South Africa and minimise imports. They currently spend R125 million in supporting small suppliers, comprising 100 businesses with an average size (turnover) of R12 million. The programmes specifically identify localization opportunities within SAB’s supply chain with 97% of their ingredients sourced locally. Building on their MAP to encourage wider access to markets rather than dependency on the SAB markets alone will further increase the long-term impact within the suppliers. The judges were particularly impressed by SAB’s • highly collaborative, mature approach based on a value chain perspective • leadership and authenticity in the promotion of small suppliers in the “entrepreneurial ecosystem” • high level commitment to their 10 000 jobs target • integration of SAB Foundation efforts i.e. using social investment to spur innovation and multiple innovation models in their approach (accelerator, coaching, funding, digital, etc) • their deliberate strategy to protect the long-term success and profitability of small suppliers, especially in vulnerable, rural and women-led organisations over this post-Covid period
> Runner-up: Goodyear W W W.S DAWA RDS .CO. Z A
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[ WINNERS ]
LOCAL MANUFACTURING AWARD
Winner: V&A Waterfront
Acknowledging companies who have developed local South African manufacturers or value add services and products with import-substitution and/or export potential. The V&A Waterfront have taken a strategic decision to use their influence in the retail space to boost the local craft and creative industry through their various programmes and initiatives, most notably the Joy from Africa to the World Programme. They have successfully shown leadership in the ecosystem and built a socially inclusive business that invests in local communities and leverages its own assets and resources to create new opportunities for the economically excluded. Boasting, in its first year, a spend of R336 million on small suppliers representing 38% of their overall total procurement spend, an average spend of R1,1 million per small supplier, their collaborative approach to working with various ecosystem players to deliver a unique programme, tangible support to local makers and promotion of market access for them, locally and internationally make them worthy of this award.
COLLABORATION AWARD
Winner: Distell & Tiger Brands
In partnership with Fetola Acknowledging companies who have taken strategic action to develop industry relationships and foster cross-sector collaboration for the benefit of the wider ecosystem. The success of any SD model is based on building, supporting and forming strategic partnerships. This year, Distell and Tiger Brands clearly articulated and illustrated their long-term commitment to success, growing the ecosystem and to innovative cross-sector collaboration.
In particular, these companies both showed • clear intention to grow the ecosystem of independent, small suppliers beyond their own supply chain, equipping these suppliers for diversification, growth, and sustainability • support to the broader ESD ecosystem by providing platforms to improve accessibility to support and services • active engagement in ecosystem activities and dialogue to promote shared learning • dedicated financial support, investment and active partnerships with government to provide funding guarantee mechanisms As significant players in the South African economy we encourage Tiger Brands and Distell to continue to play a significant role in transformation and acceleration of the SME landscape to support our much-needed economic recovery and reignite growth.
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Highly Commended Finalists GOODYEAR Goodyear is one of the largest tyre manufacturing companies in the world, they started their manufacturing facility in South Africa in 1945 and, today, have a growing footprint in South Africa and Sub-Saharan Africa. They are also represented by two subsidiary companies in the country – the Hi-Q franchise, a trusted and awardwinning tyre fitment centre in South Africa, as well as TrenTyre, the #1 Service Provider for fleets. As a newcomer, Goodyear have been commended by the judges for the intentional strategy of developing a few suppliers but deeply integrating them into the supply chain and walking a journey with them that derives mutual benefit and impact. They put a strong emphasis on customer base diversification for its suppliers to ensure sustainability beyond the Goodyear supply chain. Even though this is a newcomer, this brought a different spirit compared to all applicants seen, they have potential to make sustainable impact. With rigorous metrics for reporting, transparency in showing results and very clear targets for growth, they may be strong contender in the Impact Category in 2021!
We would also like to commend the other finalists in the Absa Business Day Supplier Development Awards - Envirosev, PetroSA and Sasol who have all shown leadership and commitment to building an economic and social ecosystem where small businesses and large corporates work together and thrive. Find out more, go to www.sdawards. co.za Contact 086 111 1690 info@sdawards.co.za!
[ WINNERS ]
Sponsored by: Absa
2020 WINNER
This ultimate Supplier Development award acknowledges businesses that stand out as overall leaders in the Supplier Development arena.
The SPAR Group Ltd With buy-in from a CEO level, management and a dedicated in-house team, the SPAR Group Ltd demonstrates visible commitment to deliver their Supplier Development transformation goals and targets, supporting their vision to be the first-choice brand in the communities they serve. SPAR’s purposedriven strategy addresses real South African challenges such as food security, nutrition, job creation and transformation. Their SPAR Rural Hub model (a collaboration between small-scale farmers, suppliers, communities and SPAR stores) creates opportunities and shared value, and positively contributes to societal change, which enables SPAR to remain true to their purpose: to inspire people to do and be more. SPAR’s programme and results boast a total programme value of R 11 323 000.00
and procurement spend of R 4,6 million with small suppliers. The judges were particularly impressed by: • their recognition of the transformative potential of ‘Purpose’ and effort to position it within the company and operating model to achieve greater integration • their genuine interest in promoting suppliers backed by tough investments to this end • the evidence of suppliers assisting in market access and their willingness to develop suppliers who work with their competitors • the authenticity and innovative nature of the SPAR Rural Hub model which shows merit and impact on the ground in transforming rural, farming
communities • their effort in addressing barriers to growth, especially for export markets, helping their small-scale suppliers become GlobalGAP accredited • their commitment to collaborative action through the partnerships formed • their evidence presented in support of long-term Supplier Development success -with the outcomes, outputs and results of their programme SPAR Group Ltd are actively pursuing higher levels of innovation, efficiency opportunities and value partnerships, and thus are deserved winners of the title of Overall Winner. We look forward to seeing this initiative grow and scale nationally, and toward bolder investment in this initiative in the future!
> Runners-up: The Distell Group The Distell Group is South Africa and Africa’s leading producer and marketer of wines, spirits, ciders and other readyto-drink (RTD) beverages sold across the world
Distell have a well-developed and professionally implemented ESD strategy that is supported at the highest level in Exco. This commitment is backed by investment in financial, non-financial and market opportunities. Investment in longterm opportunities, such as farming ventures, shows that Distell see ESD as part of their long-term competitive advantage and can be applauded for this forward-thinking approach, especially in the agricultural sector which is widely considered to be un-transformed. The judges were impressed by Distell’s programme
and results which boast a 23% of overall procurement spend on small suppliers to the value of R1,8 bn. This entry demonstrated a SD programme that impacts across all areas of economic transformation and publicprivate collaboration. Their commitment to supporting the lasting success of their suppliers in these Covid times is especially noted and acknowledged. The creation of healthy symbiotic relationships such as this are necessary for the economy to grow and speak to the authenticity of a brand that is committed to shared value.
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THOUGHT LEADERSHIP ARTICLE
HOW CORPORATES CAN SUPPORT SMES IN RURAL AREAS
AND BRING THEM INTO THEIR SUPPLY CHAINS By Renico Theron, Director - Tr ioplus Development
Supplier Development is not a point scoring exercise, but a valid method
to stimulate economic growth and development to small b lack-owned businesses.
Corporate institutions that intend to establish an
• The cost implications of repaying an asset
supplier invoice at completion and could even
tool or piece of equipment, is substantial.
mitigate some delays linked to delivery.
• These factors impact price and, if the lowest rate
Provide feedback to the small business and allow
of a service or product is the primary determining
them to improve on their service offering. A short
factor, you will not have equal participation.
meeting with a small business owner to indicate
• Unique scopes of work may require a higher level
effective Supplier Development Programme need
of skill and experience, the risks of which should
to consider the unique challenges experienced by
not be ignored. In these cases, work adjudication
SMEs. ReAecting over the past ten years, one can
needs to align with the specific requirements.
identify some key attributes of existing supplier relationships that present barriers to entry for SMEs:
These factors significantly lower the success probability of Supplier Development programmes in
• The substantial buying power and market access
rural areas of South Africa.
that established entities have developed over several years, small emerging SME's cannot
In every supply chain, there are, however, low to
compete at the same cost level.
medium risk opportunities. A successful Supplier Development programme looks to ringfence some
• Established businesses have built strong supplier
of these opportunities for small emerging businesses.
relationships and in effect, receive discounted prices for their loyalty and sizable procurement
Allow a small business to fairly compete with other
over the years.
small businesses.
• Established suppliers have numerous clients
While this approach will lead to a higher price for
that they render services or products to, which
goods and services, it will allow SMEs to access a
provides a platform where costs may be driven
supply chain and prove themselves; thereby adding
down or shared between projects.
to to their limited list of references and taking a step closer to becoming a credible business.
• Skilled permanent workers employed in large
52
organisations cost the company much less than
Cashflow is one of the most significant hurdles
the hourly or daily rate associated with recruiting
small businesses have to overcome. Once work
a skilled freelance worker for a particular short
commences, look to provide project funding to
term service.
address core costs of implementation or service
WWW.SDAWARDS.CO.ZA
delivery. These funds can be deducted from the
financed over several years, and renting a similar
success areas, and where improvement is necessary, will alter the outcome of the next opportunity the small business receives. One needs to look at the SME from a developmental and not only a service delivery or outcome-based perspective. Assist SMEs that are compliant and have long term contracts to acquire assets to increase their productivity and profitability. Providing interest free loans over the period linked to their contract term is typically an efficient asset financing model. Repayment for assets can be deducted from monthly invoices or contracted amounts. Incorporating these aspects into a meaningful Supplier Development programme allows for skills growth, economic opportunities, and asset growth.
I
I
TRIOPLUS DEVELOPMENT
www.trioplus.co.za info@trioplus.co.za Tel: 053 833 2036 Offices in Limpopo, Mpumalanga, Freestate, Northern Cape, Western Cape and Gauteng
TRIOPLUS DEVELOPMENT Developing people and communities through skills training, mentorship and entrepreneurial incubation This methodology is the combination of business
Secondly businesses that are already part of a large
mentoring and support, across sectors, provinces,
Corporate Supply Chain.
income groups racial, gender, language, culture, ·--·································--
and creed profiles. Underpinning all the above, TrioPlus Development
(_·: � /'
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prides itself, its products, and services on the emphasis of development of human relationships - between company and client, company and enterprise, and between company and community.
OVERVIEW TrioPlus Development is a nationally recognised Enterprise and Human Capital Development company with a strong locus on developing people
TrioPlus classifies two key categories within its Supplier Development Programmes:
and communities through skills training, mentorship, and entrepreneurial incubation within all regions of South Africa. The business was established in 2012 with the amalgamation of three strategically aligned business consulting companies. The merger was on basis of thirty-live years collective experience in individual and business development.
potential. The supplier orientated and readiness
(SOAR) Programme has been developed to allow alignment with the requirements of a Supply Chain and prepare the entrepreneur for the compliance, adherence, and operational efficiency expectations.
A structured mentorship and related training
(SMART) Program is used assess all the facets of a business and compile a final report to provide a clear understanding of the entity's operational classification level, business development gaps and technical
When the developmental gaps within an organisation are clear, a staged developmental plan can be implemented to assist the entity with advancing to a greater level of credibility and sustainability. This process aims to connect small businesses to allow for greater opportunity participation within the Supply Chain.
Key to this journey is the completion of a two stage Business Assessment to assess attributes, skill level
The programme time frame will be linked to the
and business acumen of any Supplier development
assessment outcome of each business. Gaps will be
candidate. The second stage comprises of a technical
evaluated, and Key Performance Indicators drafted
consultation with an industry expert. This programme addresses key aspects that was Part of this process is focused to develop and
found lacking in several active vendors and
empower Entrepreneurs and their enterprises in
subsequently hindering their growth. By addressing
becoming key to any Supply Chain and successfully
these matters prior to entering the supply chain
delivering on requirements from End-Users while
process several shortfalls are minimised and result in
growing a sustainable business.
an improved vendor profile.
@TrioPlusD
SM ME
larger organizational supply chain requirements and
methodology of developing an Entrepreneur
0
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development needs.
holistically to achieve a greater level of sustainability.
TrioPlus Development
·..._
The first is businesses with Supply Chain entrance
We approach Supplier Development with a
0
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to measure the implementation and success of the development. Generally, this programme lasts 6 12 months, but could be expanded due to growth factors.
• TrioPlus Development
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55
THOUGHT LEADERSHIP ARTICLE
PSYCHOLOGICAL CAPITAL INVESTMENT FOR BETTER SUPPLIER SUSTAINABILITY By Doli Mbambo, Corporate Services Manager, Agribusiness Development Agency - KZN
It i s n o w more than ever that businesses need to amplify its efforts towards strengthening their supplier development programmes. As we are hit by the overwhelming reality of living with the new normal due to the Covid-19 pandemic that transformed the way we do things into more digital practices, thought leadership and flexibility is key. Amongst other areas businesses need to intensively invest in psychological cap ital amongst their teams that drive supplier development programmes s o as t o stay co mp e t ent and sustainable.
This can be achieved by replacing your team's
behavioural understanding to enable all stakeÂ
"supplier" mind-set with a "supply-partner" -coach
holders to generate the most value. One such
mentality, emphasizing the importance of total cost
perspective is to enhance and embrace the concept
of ownership, supplier performance, and growing
of psychological capital in business.
and nurturing supplier relationships. Reward your team for how many suppliers they develop, not just for finding the most inexpensive sourcing options. Supplier development is closely related to supplier relationship management and is the process of working with certain suppliers on a one-to-one basis to improve their performance for the benefit of the procuring organization. To achieve this supplier partner mentality, organisations need to invest in psychological capital internally with an outcome orientation, achievement, as opposed to what they are likely to achieve without, positive psychological as a foundation. The lour psychological resources represent what an individual is; and particularly highlight the strengths rather than weaknesses of the person.
When talking about psychological capital one refers to lour constructs, there may as well be more, however from a positive psychology perspective we talk of sell-efficacy, resilience, hope and optimism. This means the organisation who has the capacity to develop suppliers must psychological capital to engage in such a journey with the one that requires development. Conversely the one who required to be developed has to have a level of psychological capital to embark on such a journey of guidance, correction and direction.
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I
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Psychological capital is generally related to positive work attitudes, high performance and wellbeing in work situations. In addition, the ability to understand oneself and others is relevant for business leadership, resilience during unprecedented business times, customer h andling, n e t w o r king, t e a mw ork, negotiation and conflict handling. Businesses need to proactively champion supplier development programmes at a more commerce-
'' Psychological capital
is generally related to positive work attitudes, high performance and wellbeing in work situations.
www.ada-kzn.co.za I info@ada-kzn.co.za I Tel: 033 347 8600 5 Cascades Crescent, Cascades Office Park, Montrose, Pietermaritzburg, KwaZulu-Natal, 3202
AGRIBUSINESS DEVELOPMENT AGENCY
Promoting diverse, deracialised, prosperous and sustainable agri business sector in KwaZulu-Natal
Promoting Agribusiness through Partnerships & Knowledge
Mcfair Holdings is a
high-tech, undercover farming
operation
located at t h e D u b e
AgriZone. The business is owned by KwaZulu Natal born youth couple.
Mcfair Holdings operates in a 4ha greenhouse
farming facility and specializes in commercial high
quality green, yellow, red peppers and also grows
tomatoes. Farming operations started within the Dube
Trade Port Special Economic Zone in May 2019. The intervention from ADA has enabled the business
to increase production, access better markets, and reduce time in processing through efficiency in the
operations through the forklift as well as the grading
machine and scissors chair trolley. The business
supplies directly Pick n Pay and Woolworths food
as well as various other intermediary fresh produce
and logistics operators. Employment opportunities
increased from 30 to 45 employees including
The Agribusiness Development Agency (ADA) is a
•
Financial Resources and Administration
provincial public entity of the K ZN Department of
Include targeted development finance and
Agriculture and Rural Development (DARD). ADA
investments and ensures good administration.
internships.
is a vehicle that facilitates the growth of a strong, transformed, diversified, dynamic, competitive and
•
Agribusiness Facilitation and Enterprise
sustainable agribusiness industry in KwaZulu-Natal
Value Chain Development
focusing on projects that are catalytic in nature.
Creating an environment which is favourable for
Target Audience
to markets, innovation and technologies.
agribusiness entrepreneurs and connecting them
•
Commercial Farmers
•
Women in Agrbusiness
•
Youth Farmers and in Agribusiness
•
Distressed Farmers and Agribusinesses
•
•
Infrastructure Development This includes agribusiness capacity and systems development through the establishment of physical infrastructure and investment at the appropriate scale and time.
Emerging farmers and Agribusiness Startups
the farm in 2003 through
private purchase and initiated a dairy enterprise using his own funds. The ADA initiated its intervention to
develop the dairy farm by providing amongst other
things animal feed to mitigate against the impact of
drought, construction of a 20 point herringbone dairy
parlour with bulk tank room and Vet room, supply and
installation of milking equipment and construction of
current herd size of 160 cows. The improved dairy
has resulted in increased milking efficiency. This milk
Knowledge and Comprehensive
is supplied to Creighton dairies as input stock and is packaged and processed into various products for the
Capacity Building To enhance the knowledge base and capacity
retail market. The dairy farm now has 13 employees
who are milking cows, performing farm maintenance and general work.
of the agribusiness sector through training and leadership development.
Agribusiness Development Agency - KZN
KZN. Mr. Ngcobo /66} the farm owner, bought
The farm has started obtaining higher milk yields from the improved pastures and stock watering and has peaked at approximately 2 S00L per day under the
Development Agency provides services including:
0
Donnybrook, about 20 km outside of l x opo,
stock handling facilities and access road infrastructure,
For agribusiness support the Agribusiness
•
is a
dairy farm located in
G) kzn_ada
0
Agribusiness Development Agency-KZN ADA-KZN
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THOUGHT LEADERSHIP ARTICLE
7 LOW-COST SOLUTIONS TO BOLSTER EFFICIENCY, INNOVATION AND BUILD STRONGER SUPPLIER ECOSYSTEMS
Crippled, but not dead: managing supplier development in Covid times Covid- 19 has affected the global
economy and changed the business
landscape, and many businesses,
big and small, are str uggling to
survive. Is there a place for supplier
development in these dark times?
This question was debated by specialists Litha Kulla, Tiger Brands enterprise and supplier development director; Guy H ar ris, enterprise and supplier development specialist, and Vikesh Singh, SAB supplier development manager, during the Absa
Seven vital, low-cost solutions were
Price and payment: Corporates wishing to help
identified to bolster efficiency, foster
their supply chains to weather the Covid-19 storm
innovation and build stronger supplier
can do so by speeding up payments and easing
ecosystems in companies during these
trading terms. This is also an opportunity to review
challenging times:
the value chain ecosystem to identify where there is waste and reduce costs, for example, by supporting
Supplier resilience: Corporates can improve
collective procurement (for instance buyer groups),
supplier resilience by assisting them with access to
guaranteeing supply purchases and helping suppliers
broader market networks. This can be in the form of
bring down costs by assisting with re-engineering
simple introductions or more structured solutions such
services.
as the Market Access Platform (MAP) that creates win-win relationships between high-performing,
Actively communicate: Communication is
black-owned suppliers and cross-industry buyers.
one of the most effective and least costly solutions.
MAP is used by SAB, Total, KFC, General Electric,
Increase two-way communication with customers,
Coca-Cola Beverages SA and Macsteel.
suppliers, business partners and employees to build
Cold Press Media, and Arena Holdings.
Digital priorities: This is the time to find new
and small supplier expectations through open days,
Panellists agreed that while times were challenging,
solutions. Corporates that reach out and help small
meetings and mentorship. Listen and act on feedback
suppliers with digital transformation by improving
to build empathetic dialogue and effective solutions.
data access or reducing costs of technology through
Building authentic relationships will also enhance
training and software access, can significantly
long-term loyalty, which is the cornerstone of lasting
accelerate the rate of technology adoption in the
success.
Business Day Supplier Development Dialogue series hosted on June 10 2020, in partnership with Fetola,
supplier development presents an opportunity for strengthening ecosystems that will deliver long-term benefits to corporates and small suppliers.
understanding. Bridge the gulf between corporate
supply chain, improving inventory management and fast-tracking improvements in supply chain efficiency.
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Think local: Given SA's wave of inequality that threatens society's humanity and our economic wellbeing, we are compelled to seek oppor tunities that retain value within SA. Companies that encourage innovation from within and support the success of these spin-off suppliers can build stronger local supplier bases. These local suppliers (including IT and software) can reduce exposure to exchange rate risks and build local employment. The government's support for a consolidated and effective strategy is needed here.
African outlook: African relationships also need nurturing, so look at sourcing from African
''
There is no doubt that enterprise and supplier development will play an even more critical role in driving economic revival in the aftermath ofthe Covid-19 crisis." - Vusi Fele, ChiefProcurement Officer at Absa
countries as well as marketing to them. We cannot drive development in a continent that is failing. The government plays a leading role in extending a welcome to our neighbours, lowering business barriers and encouraging cross-border collaboration.
Bring risk management into strategy: Anticipating a new normal, climate change impact and social disruption require a deliberate strategy to manage risk. Risk conversations need to part of strategic planning to adequately prepare for future
"At Absa, we believe that opening up opportunities for SMEs to access corporate supply and delivery chains is one for the most efficient and consistent ways in which established corporates can contribute to sustainable entrepreneurship development. This will be even more crucial in the post-Covid- 19 economic recovery environment. Both corporates and SMEs need to think about doing business differently to thrive in the new normal."
'' Now is the time to
be ultra effective in business and aim to do more for less. Supplier development in 2020 is about efficiencies built through communication and collaboration. This is not the time to 'go it alone' and save ourselves the cost ofour small suppliers, but the time to take big, bold decisions, to look inward at our own country, look outward as part ofAfrica, and accelerate our path to " recovery. - Catherine W-?Jnberg
shocks.
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www.macsteel.co.za I info@macsteel.co.za I Tel: 011 871 0000 7 Brook Road, Boksburg, Gauteng, South Africa
MACSTEEL
MACSTEEL
ABOUT MACSTEEL Macsteel Service Centres SA ( Macsteel} is Africa's leading manufacturer, merchandiser and distributor of steel and value-added steel products. The company has a proud South African history spanning 116 years. Macsteel has invested in six business units and operates from a strateg ic network of more than 40 service centres, branches and warehouses. The company supplies a range of carbon steel, stainless steel, specialty steels, aluminum products and value-added processes to all industry sectors to the entire Sub-Saharan geographic region.
[CASE STUDY] The Usizo Supplier Development Programme
not sufficient to operate his business.
SOLUTION AND BENEFIT The Usizo Supplier Development Programme offered Richard Ndwandwe credit to the value of R l 00K. The provision of this credit was made possible
OVERVIEW
through Macsteel's credit facility and has assisted
The Usizo Sup plier D evelop ment Programme
with priming Richard's business for future trading
is designed t o strengthen t he c a p a c i t y of
of larger orders. Through his business Richard has
manufacturing SMMEs in the steel industry by
created eight jobs and has the capacity to handle 20
offering sustainable solutions to overcome their
tons of steel a day. He's expanded his business, now
operational limitations. In addition, the programme
boasting two branches; with the main branch based
promotes gender and racial equalities as well as
in Richards Bay and the other branch in Matubatuba
empowering youth-owned small businesses.
in KwaZulu-Natal province.
CHALLENGE
SUCCESS STORY
Richard Ndwandwe resigned from his permanent employment as a branch manager for a steel company and decided to start his own business.
However, with no starting capital and no bank willing to finance his business vision due to lack of collateral, the situation seemed hopeless.11 11
Macsteel's Usizo programme spans nationally ac ross nine p r o v i n c es. Macsteel appointed ORT SA, a leading n on-pro fit education and training organisation as their inter medi a r y partner, t o assist i n fast tracking 2 2 non compliant Usizo customers, SMME's that did not meet the programmes minimum supplier referral criteria. The task was to mentor and coach Macsteel Usizo customers to reach compliance of above
However, with no starting capital and no bank willing
75%. Of these 22, 19 Gauteng SMME's
to finance his business vision due to lack of collateral,
received their certificates of compliance
the situation seemed hopeless. Adding another layer
at the Macsteel annual awards ceremony
of complexity was that Richard was making use of his
in February 2020.
personal bakkie and trailer for deliveries and this was
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Macsteel Service Centres SA
O
Macsteel Service Centres SA
Macsteel has a dedicated workforce, ensuring focus on product quality, combined with reliable service and competitive prices. The company supports the 'Proudly South African' principle and recognizes that transformation is critical to the Future success of South Africa, all its citizens and the businesses which operate within the country. As part of its social initiative, Macsteel prides itself on their Skills Development Training initiatives to continuously improve career opportunities assisting Macsteel to meet their employee equity plan. In recent years, Macsteel's investment of more
than hall a billion rand on warehousing and best in practice plant and equipment, bears testimony to their unwavering confidence in
the Future of the steel industry in South Africa
and Africa as a whole.