Fetola - Benchmark Report October 2018

OCTOBER 2018

Benchmark Report

“It’s simple really… we help people to grow the economy and create jobs, by building businesses that last.”

Catherine Wijnberg, Fetola CEO

Fetola are leaders in business growth, with a decade of experience in the field of incubator management and enterprise development.

Businesses enrolled in Fetola programmes typically achieve an annual growth rate of 47.2% per business.

Their long-term survival rate (tracked over ten years) is 87.4%, almost five times the national average.

Fetola’s sector expertise ranges from agriculture and mining to financial services and manufacturing.

Sustainable business, including energy, waste and water are also strong focus areas.

Incubator Services: • Fetola Incubator Blueprint: The ‘How-to Guide’ to establish and run an award-winning incubator • Incubator establishment: Design and implementation of new incubators • Diagnostic services: Review of established incubators; improve efficiency and success rates • Capacity building: Practical training for incubator managers Contact us: +27 86 111 1690 / +27 21 761 5255

info@fetola.co.za

www.fetola.co.za

Content 02

More than 400 entries were received for the awards, from organisations with mature programmes to those just starting their journey.

Executive summary INDEX

04

Selecting

the winners How the 20 semi-finalists and winners were selected.

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benchmark report

This report provides us with a window into Supplier Development in South Africa, a baseline that will be used to compare year-on-year progress, and a measure from which to compare changes in future trends.

Publication design: www.gapdesign.co.za

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[ n avigation here ]

Overview of the ABSA Business Day Supplier Development Awards

a. Executive Summary It takes a country to grow an economy and for this reason we are delighted with the successful launch of the 2018 inaugural ABSA Business Day Supplier Development Awards. The awards recognise and celebrate businesses committed to building thriving, inclusive and transformed supply chains.

The awards were an opportunity to give a well deserved accolade to the companies that are building a better South Africa, whilst also presenting winners with a platform to share their own experiences. Furthermore, the event created the opportunity for delegates to engage in the synergy of dialogue amongst their peers, building valuable networks for future collaboration.

More than 400 entries were received for the awards, from organisations with mature programmes to those just starting their journey.

The judges considered six key criteria to identify category winners: Supplier Development needed to be central to company strategy, with tangible and lasting impact on target audiences. Innovation, ‘going the extra mile’ and commitment to the goals of transformation and economic growth were also rated highly.

The formal, transparent judging process made use of a panel of seven respected judges. The results and lessons learnt have been publicly shared as a way to enable both the participants and wider community to benefit from the best practice principles of the winners.

This benchmark report illustrates the value that participating businesses are placing on Supplier Development. In many cases this goes beyond superficial adherence to the National Development

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Plan with Supplier Development becoming integrated into the key strategic intentions of sustainable growth, and in some cases forming an integral part of competitive advantage.

The report provides us with a window into Supplier Development in South Africa, a baseline that will be used to compare year-on-year progress, and a measure from which to compare changes in future trends.

“The importance of Supplier Development, particularly in the current South African context, should not be underestimated. We are proud and delighted to be a partner of these inaugural awards, which recognise and honour some of the country’s leading champions (both individuals and corporates) of Supplier Development. At ABSA we believe that opening up opportunities for SMEs to access corporate supply and delivery chains is one of the most efficient and consistent ways in which established corporates can contribute to sustainable entrepreneurship development.”

Vusi Fele – Chief Procurement Officer, ABSA

OV ERVIE W

b. Background To The Awards The inaugural ABSA Business Day Supplier Development Awards, conceptualised by Fetola, had a twofold intention. Firstly, to change the narrative that paints Business as self-serving, by acknowledging the excellent work that leading companies are doing to open up the economy and diversify their supply chains. Secondly, to inspire others to follow this lead. Ultimately the initiative seeks to build a community of best practice, create a space for shared learning and encourage collaboration in the field of Supplier Development.

Presented in partnership with Fetola, Cold Press Media and Tiso Blackstar Group, the ABSA Business Day Supplier Development initiative is aimed at corporates, parastatals, government institutions and smaller businesses across various sectors.

Fetola are professionals with a decade of success in supporting the lasting prosperity of growing businesses. Their intention is simple; they help people to grow the economy and create jobs by building businesses that last. They do this by supporting small and medium sized enterprises (SMEs) to become independent, flourishing businesses and qualified suppliers, and by upskilling others to do the same. They specialise in providing corporate clients with strategic Supplier Development solutions, internal reviews; turn-key and capacity-building solutions.

Business Essentials (BE) by Cold Press Media is a Southern African network of businesses seeking business in an-ever changing economic landscape. The platform helps businesses reach new markets through thought leadership and content driven marketing. The BE online community comprises of knowledgeable industry leaders that provide information and insights relevant to the growing South African market.

Tiso Blackstar Group is a global company with its roots in Africa, operating market-leading media, broadcast and retail marketing properties. The company is South Africa’s largest national English publishing group, the second largest digital publisher, owns the largest music and independent film catalogues on the African continent and operates unique TV channels.

Transformation of a supply chain works when an attitude of supporting and uplifting others is deeply embedded in the company culture, and influences decisions in every aspect of the business, not just Supplier Development. These organisations understand the importance of the whole economic and social ecosystem where small businesses and large corporates work together and thrive.�

Catherine Wijnberg – CEO, Fetola and Initiator of the ABSA Business Day Supplier Development Awards

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[ SELECTION PROCES S ]

1. c. Selecting The Winners In a country where ‘business’ is often painted as self-serving, the ABSA Business Day Supplier Development Awards explores ways to change this narrative. The lessons learned from this exercise have largely debunked the prevailing sentiment that corporates and parastatals in SA don’t invest in tomorrow’s business leaders.”

The application process In this first year, it was important to encourage as many companies as possible to engage with the concept and enter the awards, by helping applicants to understand the purpose of the awards, and to feel comfortable to enter. Supplier development is an area of anxiety for many companies, so great effort was made to reduce these anxieties through the engaging invitation process, and by making the application process simple and non-threatening.

Over 400 entries were received from a wide range of participants.

Categorisation by turnover shows that 33% of applications were from small companies, 9% were from QSE’s and 10% from GEN businesses (see definitions below).

48%

33%

9%

10%

9% were from QSE’s

(Qualifying Small Enterprises with an annual turnover of R10 - R50 million)

10% from GEN businesses

(Generic Enterprises with an annual turnover in excess of R50 million)

33% of applications were from EME participants

(EME participants: Exempt Micro Enterprises with an annual turnover of R10 million or less)

48% of applications did not complete this question.

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[ selection process ]

3.

2.

Shortlisting A detailed two-phase shortlisting was used. Firstly a desktop review identified the pool of applications for further consideration by removing applicants that did not fully match the award criteria. Eighty applications were taken forward to the next phase of detailed assessment in which all aspects of the application were assessed.

From this, a total of 20 semi-finalists were shortlisted for review by technical experts. The following criteria were used in this technical scorecard:

Identification of finalists

A total of 12 finalists were selected from the shortlist and invited to present a 20-minute in-person pitch to a panel of seven strategic judges.

Top 12 Finalists 1.

Accenture

2.

Coca-Cola Beverages South Africa (Pty) Ltd

3.

Distell Group

4.

Hatch Africa (Pty) Ltd

5.

Massmart

6.

Multichoice South Africa Holdings (Pty) Ltd

7.

Nando’s

8.

Pick n Pay Retailers (Pty) Ltd

9.

Property Point - A Growthpoint Properties Limited Initiative

1. Is the Supplier Development approach central to company strategy?

10. Sappi Southern Africa (Sappi Forests)

2. Does the applicant clearly identify impact and results of their programme?

12. Sun International

3. Are they committed to procuring from these new suppliers?

4. Are suppliers being assisted to expand their market elsewhere?

5. Are applicants committed to deliver on their supply chain transformation targets?

6. Overall professionalism and quality of entry.

11. Sasol South Africa (Pty) Ltd

A further eight applicants were highly commended:

Highly Commended Applicants 1.

Barloworld

2.

Coega Development Corporation

3.

Compass Group Southern Africa

4.

Cullinan Diamonds (Pty) Ltd

5.

De Beers Consolidated Mines

6.

Macsteel

7.

Old Mutual and Old Mutual’s Masisizane Fund

8.

Transnet

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[ Judging process ]

4.

The judging process A key priority of the 2018 Supplier Development Awards was to ensure a transparent, formalised judging process. For this, an independent panel of seven judges were selected for their integrity and experience, as well as for a range of skills including sector expertise, technical and business knowledge.

The Judges were: Cecilia Njenga

Head, UN Environment Office in South Africa

Michelle York

Regional Chapter Manager, Aspen Network of Development Entrepreneurs (ANDE)

Elmarie Goosen

Independent Supplier Development Consultant

The judging criteria At the pitch sessions the judges were asked to consider the following criteria:

• • • • • •

Evidence that Supplier Development is central to company strategy Clear information on programme outputs, outcomes and impact Specific evidence of impact on women, youth or rural/non-traditional economies Evidence that the programme is unique, new, innovative or pioneering Passion and purpose Professionalism and a culture of ‘going the extra mile’

The judging process followed a pre-defined, formal scoring process with a clear audit trail to ensure fair and unbiased results.

The judging encouraged identification of best practice which could be shared – both through the event publication, “Beyond the Scorecard”, and a series of CEO dialogues taking place after the event.

Mamosa Motjope

Managing Director, Wamobu Consulting (Pty) Ltd

Cornelia Oliver

Head of Sourcing Corporate Services, Barclays South Africa

Catherine Wijnberg

Director and Founder, Fetola

Zoleka Lisa

Director of Procurement Capabilities and Sustainability, AB-Inbev Africa

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An explainer video was also made of the process and is available at https://youtu.be/ eR08kuFWYXs

[ n avigation here ]

The spectrum of entrants encompassed organisations with mature programmes to those just starting their journey. There was one overall winner and six category awards.

2018 categories THE

by ABSA overall Sponsored companies that stand out as overall WINNER Acknowledging leaders in the Supplier Development arena.

Newcomer Award

Sponsored by Sentech

Innovation Award

Sponsored by Technology Innovation Agency

Youth Award Women’s Empowerment Award

Acknowledging companies that have recently initiated Supplier Development.

Acknowledging companies whose innovative approach or ground-breaking methods are changing the game in Supplier Development.

Sponsored by Business Day

Acknowledging companies whose Supplier Development initiatives focus on the youth.

Sponsored by Cold Press Media

Acknowledging companies whose Supplier Development initiatives focus on the empowerment of women.

Rural Economies Award

Sponsored by ABSA

Small Supplier Award

Sponsored by Fetola

Acknowledging companies whose Supplier Development initiatives focus on rural economies.

Acknowledging SME’s, nominated by the finalists, who are supported by their programmes and exemplify excellence.

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[ navigation here ]

1.

Newcomer Award

Sponsored by Sentech Acknowledging companies that have recently initiated Supplier Development.

Winner: Hatch Africa (Pty) Ltd Hatch Africa (Pty) Ltd have developed an Enterprise Development and Supplier Development strategy which is supported by an implementation plan linked with their SMME transformation programme. Their strategy goes far beyond complying with the minimum requirements of the B-BBEE scorecard. Their process uses a combination of an incubation platform; bespoke mentorship to develop partners’ business acumen and ability to deliver at a high standard; and championing suppliers in the programme with other customers to get more work, practical and financial support.

Their programme was initiated in response to tender requirements from their clients specifying a heavy weighting towards ESD in their tender evaluation.

They started reaping benefits beyond compliance and took the decision to include an element of Supplier Development in all their projects to release those benefits. Now, only three years after starting the programme, these small suppliers are responding to tenders themselves and approaching Hatch to partner with them on large pieces of work! In a very short space of time, Hatch has built their own reputation as a small Supplier Development partner for technical skills, and in the process, are building a network of technical suppliers that work together on large projects.

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2.

Innovation Award

Sponsored by Technology Innovation Agency Acknowledging companies whose innovative approach or ground-breaking methods are changing the game in Supplier Development.

Winner: Massmart Massmart, the retail holding company and owner of Makro, Game, DionWired, Builders Warehouse, Jumbo and Cambridge stores established their Supplier Development programme in March 2012 with a budget of R200 million to be invested over five years. Their programme focuses on developing local small manufacturers of durable goods. Preference is given to black women-owned businesses. The portfolio currently comprises of 29 local manufacturers. Six suppliers are export substitution projects while eight suppliers have started exporting to Chile, New Zealand, Australia, Zambia and Botswana since joining the programme.

Massmart displayed an innovative four-stage method, starting with the formal analysis of their supply chain to identify gaps for products that could be manufactured locally, instead of imported. This is followed by a pricing discussion between the Supplier Development team and Procurement, to get agreement on commitment on pricing and off-take.

With this in hand the team launches a drive to identify local suppliers that could be supported to grow into this supply opportunity. The team then completes a process re-engineering audit to ensure efficiencies, and costcompetitiveness.

With a considered effort to nurture local supply chains, Massmart then partners with these manufacturers to grow their businesses and does not lock then into the Massmart supply chain exclusively - thus allowing the supplier scope to grow their market share. The judges felt that this company is changing the game in Supplier Development with this innovative approach.

Runners-up: Property Point and Sappi South Africa (Sappi Forests)

[ n avigation here ]

3. 4.

Youth Award

Sponsored by Business Day Acknowledging companies whose Supplier Development initiatives focus on the youth.

Winner: Hatch Africa (Pty) Ltd Hatch Africa (Pty) Ltd are passionate about investing in people and the company displayed overall merit in their approach in transforming the youth target market, developing a new cadre of young, highly skilled professionals to serve their client base. This is a deliberate strategy to build the future of their business, and that of the sector – for the good of all.

Runners-up: Multichoice South Africa Holdings (Pty) Ltd & Nandos

Women’s Empowerment Award

Sponsored by Cold Press Media Acknowledging companies whose Supplier Development initiatives focus on the empowerment of women.

Winner: Sappi Southern Africa (Sappi Forests) Sappi Khulisa, a department within Sappi Forests, is one of the doyens of rural development, and has been funding small growers since 1983 with an interest free loan, free seedlings, extension services and guaranteed access to market for produce. They work with about 4 000 micro-farmers and community-based farmers supplying 450 tonnes p/a of timber to Sappi mills, which is purchased from them at the market price. Supporting 204 contractors, the initiative has successfully uplifted impoverished rural communities in KwaZulu-Natal and the Eastern Cape, and since inception has paid small growers a total of R1.6 billion. More recently they are working with land restitution farmers extending basic tree-growing support solutions to include business training through their Institute of Entrepreneurship. Sappi also support local recycling economies and embed sustainability in all they do.

Sappi clearly articulated and displayed impact in their approach to transforming this target market, and with over 60% of their contractors comprising of women display a firm commitment to the empowerment of women through the economic opportunities within Supplier Development.

Runners-up: Multichoice South Africa Holdings (Pty) Ltd and tied Hatch Africa (Pty) Ltd/Property Point

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[ navigation here ]

5.

Rural Economies Award

Sponsored by ABSA Acknowledging companies whose Supplier Development initiatives focus on rural economies.

Winner: Sappi Southern Africa (Sappi Forests) A sterling example of rural impact. Sappi Southern Africa (Sappi Forests) ‘adopt’ clusters of rural farmers; embodying the ‘shared value’ principle. Sappi recognise that transformation is not just a moral imperative, but a pragmatic growth strategy for the company, and essential if we are to realise the country’s full economic potential while helping to bring the black majority into the economic mainstream. Sappi displayed great merit in the lasting commitment to growing a local supply chain and evidence of impact in their approach to supporting and expanding rural and non-traditional economies.

Runners-up: Pick and Pay Retailers (Pty) Ltd and Coca-Cola Beverages South Africa (Pty) Ltd

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6.

Small Supplier Award

Sponsored by Fetola Acknowledging SME’s, nominated by the finalists, who are supported by their programmes and exemplify excellence.

Winner: Reapso South Africa Reapso SA was established in 2012 and is a clothing manufacturing business that focuses on the mass production of workwear. Through Massmart, they supply private label workwear to all Makro stores countrywide. Reapso SA’s attitude toward growth and inclusion, emphasis on client relationships, commitment to skills development for employees and understanding of their own business environment also impressed the panel. Reapso SA strives to provide the same opportunities that they were given in the Massmart Supplier Development programme to other SMEs in the supply chain to assist them in their own growth path.

Runners-up: Mila cleaning

2018 overall winner Sponsored by: ABSA

Acknowledging companies that stand out as overall leaders in the Supplier Development arena. This, the ultimate award of the 2018 Supplier Development awards identifies a company that leads the way in their strategic approach to supplier development, forging a path for others to follow.

Winner: Massmart As the overall winners, Massmart displayed how their Supplier Development approach is central to their strategy of competitive advantage, and exhibits their capacity and commitment to deliver on their transformation goals and targets. They clearly identified impacts for their target market and articulated detail and results of their programmes such as jobs created, increased turnover/production capacity of suppliers, suppliers incorporated into their own supply chain and/or suppliers expanding their market/growing.

In addition to their innovative approach to strategic supplier development, the team

clearly articulated a strong focus on small suppliers that provide import substitution, and export potential, together with an understanding of the importance of an open market for these companies with their commitment to ensuring their long lasting, independent success.

Massmart provide a great example of long-term vision involving the entire organisation, going well beyond simply ticking the scorecard boxes and utilising supplier development for competitive advantage whilst committing to a stronger local economy by supporting South African manufacturing, design and innovation.

Runners-up: Multichoice South Africa Holdings (Pty) Ltd and Sappi Southern Africa (Sappi Forests)

As much pleasure one gains when awarding winners, it is doubly difficult to make someone a runner up, especially when all of the finalists had the courage and commitment to apply and displayed many aspects of their programme that were laudable.

Unfortunately though, not everyone can be a winner and the promise of these awards was for a transparent, professional and unbiased judging process. It is with this in mind, that we acknowledge all the winners of the ABSA Business Day Supplier Development Awards for showcasing how transformation of a supply chain works when an attitude of supporting and uplifting others is deeply embedded in the company culture, and influences decisions in every aspect of the business, not just Supplier Development.

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BENCHMARK REPORT Introduction Benchmarking is an important tool for measuring progress of the sector and shifts in trends. This inaugural report marks a starting point against which future changes can be measured.

In the inaugural awards we encouraged participation from a wide pool of applicants. Given that Supplier Development is currently a field in which many experience anxiety, questions were deliberatly open-ended and engaging, and the number of highly technical and performancerelated questions was minimised to avoid discouraging entrants. Whilst many participants added key performance indicators in their narrative, this was not a formal part of the questioning.

The consequence of this softer approach was that the absence of key indicators and common measures of performance resulted in us being unable to award an impact category. Now that the awards have been launched, and the process and intention are clear, we intend to introduce a more rigorous impact category in 2019. This will require completion of a standard set of key performance questions such as jobs created, jobs sustained and cost per job, and financial questions to measure grants, loans and direct investment.

409

Applications received

20% 33% completed, suitable applications

small EME participants

What award submissions have shown us 1. In leading companies, Supplier Development forms part of a central strategy for business growth.

2. For some, Supplier Development goes beyond just adhering to the B-BBEE rules, and forms part of a larger strategy to strengthen supply chains, whilst doing the right thing for the country.

3. Many applicants rank supply chain transformation higher than cost reduction.

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SHORTLISTED

The Pool of Participants Of the completed applications received, 40% were medium and large corporate entities (QSEs and GENs).

Results have been presented for the whole group, and a sub-set of results for the 40% of larger companies that self-identified on the B-BBEE scorecard scale as QSE and GEN businesses.

Despite the wide range of company size, age and focus, similarities between the overall applications and the sub-set of 32 larger QSEs and GENs indicates a common mindset towards Supplier Development.

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12 Finalists

[ Benchm ark report ]

Industries in which the businesses operate

The benchmark report shares information from the inaugural ABSA Business Day Supplier Development Awards which creates a yardstick for future results, against which we will measure progress as a sector.

Overall there was a wide spread of industry representation, with professional services comprising 17%; community, social and personal services, 10%; and wholesale and retail trade, 7%. The largest category was ‘other/unspecified’ (36%), which is a reflection of the high number of SME and intermediary applicants whose industry falls outside the standard demographics.

For the sub-set of QSEs and GENs, the two best-represented industries were professional services and manufacturing (21%) with construction the second-highest category (10%).

Industries in which the businesses operate OTHER

7%

WHOLESALE & RETAIL TRADE

TRANSPORT & STORAGE

8%

4% 3% 6% 5%

RESTAURANTS & CATERING

17%

PROFESSIONAL SERVICES

4%

MINING & QUARRYING

MANUFACTURING AND ASSEMBLY

FINANCIAL INTERMEDIATION, INSURANCE, REAL-ESTATE

CONSTRUCTION

COMMUNITY SOCIAL AND PERSONAL SERVICES

36%

8%

21%

8%

1%

21%

1% 3% 5%

5%

COMMUNICATION

4% 5%

AGRICULTURE HUNTING, FORESTRY & FISHING

5% 5%

10% 10%

All Applications QSE & GEN Applications

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[ Benchm ark report ]

37%

Who Leads Supplier Development In Organisations?

Overall, the importance of Supplier Development is reflected in the high number (52%) of companies where leadership of Supplier Development is at a strategic level. In the broad pool of applicants leadership was with CEO/ Director/ExCo (17%); CFO (19%), and COO (19%).

This is even higher in the entries from larger companies where 73% of Supplier Development leadership sits at an executive level: CEO/ Director/ExCo (27%) and COO (32%).

32%

How Are We Supporting Our Small Suppliers?

A wide range of support is being provided to suppliers by the participating companies, with the majority of support falling into the ‘other’ (28%) and ‘workshops/training’ (24%) categories.

In the QSE and GEN sub-set, a stronger emphasis is placed on business skills development (28%) and funding/access to funding (18%). Some emphasis is also placed on market access (12%) and formal workshops/training.

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QSE & GEN Applications

19%

17%

17%

19% 13%

CEO DIRECTOR EXCO

CFO

COO

13% 35%

5% 1%

EXECUTIVE MANAGEMENT MANAGEMENT

12%

All Applicants

5%

4%

3%

1%

Growth From Within – The 2018 Supplier Development Strategy Implementation of Supplier Development is from within, with 53% of applicants running programmes targeted at building their own supply chain and only 35% of respondents who outsource all or part of their programme. For the group of larger companies, QSEs and the GENs there is even stronger focus on building their own supply chain (69%) and only 19% outsource their Supplier Development to others.

All Applications

27%

OPERATIONS TEAM

19%

QSE and GEN Applications

53%

68%

EXTERNAL SUPPLY CHAINS

EXTERNAL SUPPLY CHAINS

OWN SUPPLY CHAINS

OWN SUPPLY CHAINS

NOT SPECIFIED

NOT SPECIFIED

All Applications

24% 18%

12%

28%

28%

QSE & GEN Applications

11%

OTHER

13%

12%

15%

15%

12%

9% 3% 0%

MARKET ACCESS

MENTORING/ CONSULTING

FUNDING/ BUSINESS WORKSHOPS/ ACCESS SKILLS TRAINING TO FINANCE DEVELOPMENT

MEDIA EXPOSURE

OTHER

41%

How Often Do We Communicate?

Change management specialists preach that repeated communication is essential for embedding change, and 32% of all participants indicated that they communicate their Supplier Development progress on a monthly basis.

In the QSEs and GENs sub-set, the percentage is even higher at 41%, indicating an appreciation of the need to gain and maintain buy-in from broader teams of people within the company.

How Important Is Supplier Development?

32%

All Applications QSE & GEN Applications

22%

22% 19%

18%

17%

11% 6%

6% 3%

Ad hoc

daily

weekly

monthly

annually

87% 79%

81%

77%

74%

77%

73%

77%

Applicants were asked to rate the priority of Supplier Development internally across six different fields. Overall, there was little variation in these rankings (67% - 79%), with most respondents reporting that improved internal customer experience, and brand awareness was most important, with cost reduction having the lowest priority or impact. Risk reduction was also rated as a low priority.

For the QSEs and GENs brand awareness was rated as the highest priority (87%) , followed by internal customer experience. Cost reduction was rated as the lowest priority (68%) .

quarterly

3%

INTERNAL CUSTOMER EXPERIENCE

BRAND AWARENESS

SUPPLY CHAIN TRANSFORMATION

EASE OF OPERATIONS

69%

74% 67%

68%

RISK REDUCTION COST REDUCTION

All Applications

QSE & GEN Applications

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Awards event ] ] [ navigation here

2018 awards THE

event

The awards event was unique in a number of ways. Designed as a working format to enable business to business networking and learning.

Speakers:

Business Day: Editor Lukanyo Mnyanda

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Master of Ceremonies Zipho Sikhakhane, facilitated an action-filled programme, with speeches, on-stage discussion with the finalists and an interactive ‘meet the winners’ networking session.

ABSA: Head of Supplier Development Hank Van Rensburg

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Fetola: Director Catherine Wijnberg

ABSA Africa Sourcing Chief Procurement Officer

Business Day & Financial Mail.

Former Edtor-in-Chief

Vusi Fele

Peter Bruce

[ awards event ]

click to watch the video

A motivational video (https://youtu.be/flmwJwZcEwU) inspired delegates by shining a light on the strategic Supplier Development approach by leading corporates. The video conveyed the following key messages:

Supplier Development is not easy, it takes long-term commitment, strategic buy-in at an organisational level and is underpinned by partnerships.

Successful Supplier Development not only makes good business sense but is vital to building sustainable, thriving, inclusive and transformed supply chains.

And it is the right thing to do.

Supplier Development is a field of constant learning.

Peer-to-peer learning and collective actions to create robust ecosystems will help us meet our transformational goals.

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[ Awards event ]

The discussion grappled with embracing Supplier Development at a strategic level in the business, and enabled each finalist to share some insight on their success, challenges and recommendations.”

The CEO panel discussion 1

An important feature of the event was the CEO panel discussion with the finalists entitled ‘Learning From the Best’. The panel was moderated

by Zipho Sikhakhane and Catherine Wijnberg.

The discussion grappled with embracing Supplier Development at a strategic level in the business, and enabled each finalist to share some insight on their success, challenges and recommendations.

The facilitated dialogues that followed provided an excellent opportunity for all attendees to engage with each other, and with the finalists. Animated conversation was held between individuals, around tables and in groups. Many attendees formed new relationships, strengthened existing contacts and took to heart the call to collaborate.

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2

3

4

5

6

7

8

9

1. Dr. Pierre Olivier: Managing Director, Hatch Africa (Pty) Ltd 2. James Wilkinson: GGM, Business Improvement, Distell 3. Brian Leroni: Head of Corporate Affairs, Massmart 4. Shawn Theunissen: Founder, Property Point and Head of CS, Growthpoint Properties Ltd 5. Vukani Mngxati: Country Managing Director, SA & Africa GU Managing Director, Accenture 6. Velaphi Ratshefola: Managing Director, Coca-Cola Beverages South Africa (Pty) Ltd 7. Suzanne Ackerman-Berman: Director of Transformation, Pick n Pay Group, Board Director and Chairman, Ackerman Pick n Pay Foundation 8. Alex Thiel: CEO, Sappi SA Moderators: Catherine Wijnberg & Zipho Sikhakhane

[ n avigation here ]

Feedback on the awards

“The panel discussion was good as it touched on what corporates are doing and what their plans are to improve the Supplier Development landscape.”

“We were able to engage with each other and discuss relevant topics more intimately during the breakaway session. All discussions were thought provoking.”

“The round-table discussions had a very practical component, and knowledge sharing was more relevant.”

“The presentation by the keynote speaker, Vusi Fele, addressed what was at the heart of our challenges as a country.”

“I enjoyed Vusi Fele’s presentation because of the practicality of it.”

“The entrants were of a very high standard and put a lot of effort into their applications.”

“A breakfast event, and a good balance of panel discussions and round tables meant that everyone had a voice.”

“The judging process was transparent and well explained.”

“The overall feeling of the event was inspiring and very positive.

Everyone left feeling like they had done the right thing by attending, and that is always the sign of a successful event.”

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insights from our 2018 applicants

As part of the Awards application process, we invited applicants to share a lesson with their colleagues. The following top 15 insights stood out.

1

The Enterprise and Supplier Development (ESD) strategy MUST be fully embraced at an executive level in order for it to be effective.

‘As a significant change agent of procurement behaviour, the ESD role should be positioned as a group function outside of procurement, with access to group executives and the board. Procurement does not tug on people’s heart strings, so the value of the transformation this function can bring needs to be sold to the group. Close alignment to CSI and sustainability/environmental agendas helps with this, as they are often regular talking points at an executive level’.

- Sun International

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Work with an organisational centric approach and analyse your existing procurement initiatives.

‘We work from the inside out, targeting specific areas of need within our own business and then source suppliers to that particular need.’ - Massmart

3

[ LES SONS LE A RNT ]

Keep programmes targeted, simple and measurable.

‘Be the best you can with the best that you have.’

- Famram Solutions (Pty) Ltd

5

Identify the impact & link this to key indicators of success that are monitored and evaluated.

‘It’s important to look beyond the scorecard and focus on making an impact on people’s lives, their families and communities. This needs to permeate the thinking and approach to the formulation of Supplier Development programmes.’ - Nando’s

4

Be in it for the long haul. See programmes as long-term strategic organisational commitments. ‘…. sufficient time needs to be allocated on a sustainable basis to ensure success.’

- The Siyazisiza Trust

‘We believe that programmes and initiatives should not be seen as short-term, but rather as long-term organisational and environmental sustainability strategies…’

- Compass Group Southern Africa

‘Transformation of a supply chain works when an attitude of supporting and uplifting others is deeply embedded in the company culture, and influences decisions in every aspect of the business, not just supplier development.’ – Fetola

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Start small

‘Start small and be patient, return on investment takes time’ - Garden Cities NPC RF

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7

[ Lessons learnt ]

Bridge the divide and understand context.

‘…. cognisance must be taken of language, culture, traditions, education and infrastructure (or lack thereof)’.

-The Siyazisiza Trust

9

Understand your shared value ‘Focus more on understanding your product or service.’

- Dikela Zillion Group

‘Focus on the client - it is rarely just about the funding. There are other enabling factors such as capacity building, access to markets and business development’.

- Old Mutual

11. Work with

intermediaries

‘Working with established intermediaries in the ESD funding space helps focus activities whilst relying on their expertise for training, credit control and evaluation and other aspects outside of your company’s expertise.’

- Distell Group

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Procurement opportunities for local and/or SMMES need to be made more simplistic and accessible.

‘The days of a corporate hiding behind governance to exclude the “smaller companies” needs to pass. There are very innovative ways on how to do this without compromising on governance, it just takes a little willingness to bring about the change .’ - Cullinan Diamonds (Pty) Ltd

1

ESD is a two-way activity that should be thought of as a joint-venture, it’s a partnership with your client/supplier.

‘Relationships are key and establishing the trust of new and existing suppliers is a key enabler.’

- Distell Group ‘…in order to constantly improve the way your business and their business works, never assume that your programme is always working without faults. There is always something that can be improved. Foster the positive relationships between your head office and your suppliers. This relationship can make or break your supplier development.’

- Avocado Vision (Pty) Ltd

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[ LES SONS LE A RNT ]

Invest in

people. ‘…. investing in a business

Collaboration is critical within your organisation and in the market to leverage competencies and resources. Embrace the sharing economy.

‘Collaboration between other large corporate entities is likely to become an increased priority of our programme as we seek additional opportunities for the businesses we have developed. We will also look at co-funding and loan syndication opportunities to increase the impact and number of entities that we can support.’

- Distell Group ‘Share your knowledge and data as it goes a long way towards empowerment.’

- The SMME Index

requires investment in the entrepreneurs behind that business - not only in professional development but personal development as well.’

- Multichoice South Africa Holdings (Pty) Ltd

‘In business your most important asset is the relationships you build along the way. Understanding where your clients are coming from or understanding their pain in dealing with a problem, works wonders for building that relationship. The result of course is the growth of a long-term client. And a happy client tells others. At Property Point, we believe that people do business with people they like hence relationship building has become the core of our day to day business.’

- Property Point

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No one size fits all

‘Our experience has shown that no two businesses are ever truly the same. We have learnt that as each business faces different challenges a bespoke approach to ESD yields the best results.’

- Multichoice South Africa Holdings (Pty) Ltd

‘Good Supplier Development programmes should: • not treat all suppliers as the same • balance training with practice (training on its own is of limited benefit to most businesses) • create a safe environment for learning and experimentation.’

- The Box Shop

Innovation is key in identifying incremental opportunities & creating new businesses.

‘Often the intersection between procurement, product development and commercial functions is a fertile opportunity space for ESD.’ - Distell Group

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conclusion Feedback from participants confirmed that the inaugural 2018 ABSA Business Day Supplier Development Awards were a significant success, and gave weight to the important role that Supplier Development plays in the country.

This was supported by the fact that more than 400 entries were received, including significant players like Nando’s, Sasol, Sun International, De Beers, Old Mutual, Massmart and the Distell Group. This is an excellent start for a new initiative, and indicative of the need and desire for a platform to acknowledge the important role that big business can play in the development of a broader, thriving economy.

With entities across the board from corporates and QSEs to government institutions already looking beyond the minimum requirements of the scorecard, there is clearly an understanding of the role that business plays in the economic and social ecosystem. Such an environment in which the whole spectrum of the business community collaborates and flourishes can only serve to benefit South Africa, and is to be enthusiastically encouraged!

Over the next few years it is hoped that the ABSA Business Day Supplier Development Awards will establish themselves as the country’s leading platform for showcasing of best practice in supplier development and facilitating shared learning on the pivotal topics of sustainable growth, empowerment, and positive benefits of an inclusive economic ecosystem.

Are you with us in 2019?

It’s time for big business to make a big impact.

get involved. be recogniSed.

22 May 2019

save the date for the 2019 awards

Next year’s event will take place on 22 May 2019. Don’t miss your opportunity to get involved and be recognised for your Supplier Development initiatives.

Cold Press Media (Sales): 021 - 422 1156

Fetola (Awards): 021 - 761 5255 Business Growth Professionals

“It’s simple really… we help people to grow the economy and create jobs, by building businesses that last.”

Catherine Wijnberg, Fetola CEO

Scaling Small Suppliers • • • • •

360° Diagnostics Specialist Business Training Experienced Mentors Holistic Growth Strategy Monitoring & Evaluation

Founder of the ABSA Business Day Supplier Development Awards Contact us: +27 86 111 1690 / +27 21 761 5255

info@fetola.co.za

www.fetola.co.za