[ T HO U G H T LE AD ER SHIP ARTIC L E ]
Supply chain walks and local procurement moves for SMMEs By Larisha Naidoo
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very year, corporate South Africa spends billions of rands on well-intentioned programmes designed to mentor and coach SMMEs. It’s not enough. To take SMMEs to the next level, where they thrive and become employers in their own right, big business must be doing more to integrate them directly into their supply chains. Many large companies have existing enterprise supplier development (ESD) programmes. But they don’t have enough growing SMMEs in them. Just like our young people need jobs as well as skills, our small businesses need the backing of corporate supply chains. They can do all the mentorship programmes they like, but the fact is that without that first purchase order or contract, they will never take the next step. Making this happen starts with executive sponsorship, it requires a culture change and a business shift. Somebody senior and passionate in a large corporation needs to actively drive the process of onboarding and retaining small businesses. Businesses must have deliberate supply chain policies, practices and targets that focus on local procurement. For a successful local procurement programme there needs to specific local community procurement targets and procurement planning with accountability filtering down the organisation.
not forgetting that the work load increases within the supply chain department however there is a clear business case that is strongly linked to the sustainable development goals.. Good ESD isn’t a one-year engagement: the best results are delivered through sustained, long-term relationships, that deliver real value to both the big and small business. It is an investment that requires time and energy towards developing the small business with empowered developmental feedback that translates from a once-off purchase order to a longer sustainable contract.
Larisha Naidoo is head of Anglo American’s enterprise development arm, Zimele Providing access to markets is key – but corporates can only give opportunities to SMMEs if they know they exist, and what they can do hence getting to know suppliers is a critical step to shifting to local community procurement. There has to be strong engagement with community businesses to appreciate the issues faced by the small business owners on the ground, and their abilities and skill sets. It’s inevitable that there will be some early hiccups in any new supply chain partnership
It is vital that small businesses are created, nurtured and sustained to become valued participants in a supply chain
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It is also vital that these small businesses are created, nurtured and sustained to become valued participants in a supply chain. To create sustainable businesses, an ESD programme needs to focus equally on mentoring and coaching entrepreneurs, igniting partnerships that create market linkages, and assisting with business loan funding. A critical element of SMME support is understanding the essential services that small businesses need. That means having mentors who understand business problems and can provide support in areas like tax and governance and can help build capacity in areas like financial acumen, leadership, market orientation and strategic thinking. Formation of strategic partnerships with established suppliers to the operations is also key to further supporting the development of community based enterprises and suppliers allowing them to take advantage of contracting opportunities available in the mining value chain.
