Rethinking The Future

New Ideas for Effective Supplier Development Programmes

By Dr Sydwell Shikweni, Transformation Director, Merchants

Supplier development (SD) programmes require organisations to commit to constantly reviewing and adapting their approaches to SD to ensure that they remain aligned to the rapidly shifting supply-chain landscape and are future-ready.

The need for organisations to integrate supplier development into their strategies extends beyond the B-BBEE requirements in the local context and into global best practice imperatives championed by the United Nations Global Compact. This calls for organisations to develop an impact sourcing standard, in line with the Global Impact Sourcing Coalition (GISC) and accelerate these practices, particularly focusing on SMEs to address growing unemployment and inequality.

Given the teething challenges and high failure rate experienced by most SMEs, which can pose significant risks to an organisation’s supply chain, there is a significant need for organisations to prioritise their support for entrepreneurs – in turn, setting them up for success.

There are various innovative ways that supplier development programmes can be implemented to derive maximum benefits. These include:

• Selection and identification of needs: This increases the success rate of the supplier development programmes as measured by completing the development programmes, business continuity and integration of beneficiaries into the organisation’s supplier value chain, for example.

• Supplier mix plan: Organisations are increasingly expected to diversify their supply chain through an inclusive approach. Undergoing an analysis of the current mix and developing a plan to diversify the organisation’s supply chain is a positive starting point. It is imperative to find ways to include previously economic-disadvantaged individuals or groups such as black women, youth and those with disabilities.

• Localised support for SMEs: This enables the organisation to build strong relationships with the local communities within which they operate. Long-term relationships with SME suppliers, in turn, bring about stability, trust and can positively impact productivity. It enables both parties to engage in mutual problem-solving and allows the organisation to share its knowledge and expertise regarding sustainability.

• Supply chain optimisation: Organisations can optimise their supplier development programmes by grouping smaller suppliers into cooperatives and working with ethical intermediaries to assist in tailoring the developmental interventions aligned to the specific needs of each supplier, thus increasing their success rate.

• Share resources and knowledge: Resource sharing and knowledge exchange is an integral part of capacitybuilding efforts to ensure that SME suppliers have the necessary skills and knowledge to fulfil the organisation’s sustainability requirements. Resources and expertise can be shared through educational events, case studies, webinars, reports, templates, tools and/ or other guidance materials.

• Engage with the supplier: There are several ways for organisations to engage with their SME suppliers, including assisting in setting and reviewing their goals, providing training and resources, engaging in mentorship programmes or looking into sectorspecific initiatives for suppliers to join.

• Supply chain governance and transparency: Supplier development programmes with above-board governance and transparency fundamentally contribute to building and maintaining trust, managing supply chain risks, assisting with reputation management and enhancing competitive advantage.

These are complementary actions that organisations can implement to achieve more sustainable supply chains through their supplier development efforts. There is a significant need for ideation of new and innovative approaches to supplier development programmes to enable South African SMEs to navigate and thrive in the current economic environment.