BEYOND THE SCORECARD A FOCUS ON LEADERSHIP IN SUPPLIER DEVELOPMENT AND JOB CREATION
Brought to you by
OLD MUTUAL EMPOWERING ENTREPRENEURS TO DRIVE ECONOMIC GROWTH. The development of small, medium and micro enterprises (SMMEs) makes a positive contribution to economic growth and job creation in South Africa. More importantly, the rest of the African continent recognises SMMEs as a new frontier in addressing the challenge of youth unemployment, poverty and inequality.
OLD MUTUAL’S
1
ACCESS TO MARKETS Aligning developing suppliers to Old Mutual’s priority procurement areas ensures access to markets.
2
ACCESS TO AFFORDABLE FINANCE Provided on patient and friendly terms which allows the beneficiaries to build capacity in their businesses.
3
ADEQUATE SKILLS DEVELOPMENT Based on a development plan which considers the growth of the business, technical skills and business acumen.
ENTERPRISE SUPPLIER DEVELOPMENT (ESD) FUND IS BASED ON THREE PRINCIPLES WHICH DRIVE THE GROWTH OF SMMES NAMELY:
OLD MUTUAL SUPPLIER DEVELOPMENT IMPACT STORIES
CTC SPORTS EQUIPMENT AND APPAREL CTC Sports was established and started operations in 1997 and is 100% blackowned. It is based in Maitland, Western Cape and is one of the two cricket ball manufacturers on the African continent and provides bespoke sportswear and accessories. • R1.4m has been committed to CTC Sports for the acquisition of equipment as well as working capital. • The development plan includes growing local manufacturing capacity.
In an effort to address the many challenges facing entrepreneurs, Old Mutual has formed an Entrepreneurship Ecosystem, which drives the holistic development and support of SMMEs. Various initiatives and business units work together to offer entrepreneurs tailor-made financial advice that supports entrepreneurial business growth and help their employees with financial and non-financial solutions. Some of the initiatives that drive this inclusive transformation for Old Mutual are the Old Mutual Foundation, Masisizane Fund (including the Old Mutual ESD Fund) and the Black Distributors Trust. THE OLD MUTUAL ENTREPRENEURSHIP AND JOB CREATION ECOSYSTEM AIMS TO: • Create new businesses that can be linked to Old Mutual value chains and/or operate as independent businesses • Provide holistic and integrated financial and development support
FOR ADVICE THAT MATTERS: Contact your Financial Adviser or your Broker. Call 0860 WISDOM (468378) or SMS “wisdom” to 32868 - standard rates apply. www.oldmutual.co.za/advice @OldMutualSA
ombds 08.05.2018 L11633
Old Mutual is a Licensed Financial Services Provider
Old Mutual South Africa
Vision Décor was established and started operations in 2006 and is 100% blackowned. It is a full service events and décor management enterprise based in Kuils River, Western Cape. The enterprise provides services from event concept development, equipment and décor supplies as well as full suite event management. • R8m has been committed to Vision Décor for the acquisition of a storehouse, vehicles and working capital.
• Drive financial inclusion through education and advice
facebook.com/OldMutualSA
VISION DÉCOR AND EVENT SOLUTIONS
OldMutualSA
• Their development plan includes growing the capacity to support large-scale national events. Currently they only have capacity for regional events.
For more information contact supplierdevelopment@oldmutual.com
EDITORS LETTER Dear Colleagues, Welcome to Beyond The Scorecard: A Focus On Leadership In Supplier Development and Job Creation, developed in partnership with Fetola, Cold Press Media and Tiso Blackstar Group. Supplier Development has become a very important element in the strategy of South African companies, who, as leaders, seek to maximise their position by reaching full points on the scorecard and strengthen their future market position. As with so many aspects of business today, this is neither a simple nor a quick solution – and is one where partners of the right caliber and integrity are vital in achieving transformation, growth, sustainability and success.
INDEX
of thought leadership:
8 Is localisation the tailwind driving South Africa’s economic growth? 14 Perception isn’t always reality. 18 SMMES: So much focus on funding, but what about skills? 20 Enterprise & Supplier Development must result in real impact. 26 A sustainable & impactful model crucial to ending poverty in South Africa.
This inaugural Supplier Development directory provides you with access to a comprehensive network of South Africa’s leading service providers, industry specialists and corporate game-changers. It includes a summary benchmark report which provides interesting insight into Supplier Development in South Africa today as well as thoughtleadership articles. This publication ensures that you have all the resources you need to manage your Supplier Development needs with confidence.
34 The future of Enterprise & Supplier Development.
The guide is carefully crafted to provide a balance of thought leadership and quick reference information and provides company and product profiles as well as contact details, so that you are able to quickly and easily build direct relationships with these preferred suppliers.
46 The Business Development support conundrum in the South African SME ecosystem.
As a supplement to the inaugural ABSA Business Day Supplier Development Awards, it also brings you details of finalists and winners, and comments from the judges about what differentiates their programmes.
58 The power of pooling resources and effort.
We trust you find the publication useful and full of practical advice, and that it becomes your ‘go to guide’ to be kept next to your desk for quick access.
38 Supplier Development. It’s about more than money. 40 Moving beyond compliance by leveraging mining supplier linkages. 44 Beyond the scorecard: What is holding SA back?
54 Supplier inclusion and diversity contributes to a more Socially innovative marketplace.
60 Leveraging incentive programmes for small-scale suppliers to enable job creation. 62 Fire up your supply chain: From Southern Africa to the world. 69 Changing lives sustainably through Supplier Development.
Enjoy the read!
72 Special treatment for small-scale suppliers.
Jennifer Potter
Catherine Wijnberg
Cold Press Media Director
Fetola Director
76 Supplier development. Getting the entire organisation on board. 80 Smart Metering
COPYRIGHT: Beyond The Scorecard: A Focus On Leadership In Supplier Development and Job Creation is published by Fetola and Cold Press Media (Pty) Ltd for Tiso Blackstar Group (Pty) Ltd. Copyright Fetola and Cold Press Media 2018. All rights reserved. Reproduction in whole or part is prohibited without prior permission of the publisher. Opinions expressed do not necessarily reflect those of the Board of Management of Tiso Blackstar Group (Pty) Ltd. All correspondence about Beyond The Scorecard: A Focus On Leadership In Supplier Development and Job Creation 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
The judging process and the reasoning behind their decisions are made public so that lessons learnt and best practice are shared.
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This report shares information from the inaugural ABSA Business Day Supplier Development Awards. This create the yardstick for future results, against which we will measure progress as a sector.
BENCHMARK REPORT How do the leaders in Supplier Development do it, and what are the key elements that make up a successful Supplier Development programme?
5 STEPS to building a strong
and stable corporate supply chain.
insights from our 2018 applicants
As part of the Awards application process, we invited applicants to share a lesson with their colleagues.
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Publication design: www.gapdesign.co.za
30 64 2018 WINNERS & FINALISTS
Acknowledging companies that stood out as overall leaders in the Supplier Development arena.
OVERVIEW of the ABSA Business Day Supplier Development Awards
BUSINESS MAKING A BIG IMPACT
T
Judging Process
he inaugural 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 focus on Supplier Development itself – the initiatives that are taking place within the corporate/government entity, and the suppliers being developed. The winners were selected from the large pool of entries by an independent panel of judges, who were selected for their integrity and experience, and for a range of skills including sector expertise, technical and business knowledge.
The awards, conceptualised by Fetola, seek to build a community of best practice and create a space for shared learning in Supplier Development.
The judging process and the reasoning behind their decisions are made public so that lessons learnt and best practice are shared – both through the event publication and a series of CEO Dialogues taking place after the event. Lastly, the results are benchmarked for year-onyear comparison and collated in a report with the latest information on practices in South Africa.
Presented in partnership with Fetola, Cold Press Media and Tiso Blackstar Group, this initiative is aimed at corporates, parastatals, government institutions and smaller businesses across various sectors.
The winners will share their story at the Awards event and at The CEO Dialogues, the post-awards networking event.
The winners were selected from the large pool of entries by an independent panel of judges, who were selected for their integrity and experience, and for a range of skills including sector expertise, technical and business knowledge.
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The categories
Overall Winner Companies that stand out as overall leaders in the Supplier Development arena.
Innovation Award Companies whose innovative approach or groundbreaking methods are changing the game in Supplier Development.
Women’s Empowerment Award Companies whose Supplier Development initiatives focus on women.
Newcomer Award Companies that have recently initiated Supplier Development.
Youth Award Companies whose Supplier Development initiatives focus on the youth.
Rural Award Companies whose Supplier Development initiatives focus on rural areas.
Small Supplier Award A small supplier that has harnessed the Supplier Development opportunity and transformed their business.
Find out more: www.sdawards.co.za Contact 086 111 1690 | info@sdawards.co.za
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Is localIsatIon the taIlwInd driving
south africa’s economic growth? Unpacking the trend between local investment and long-term economic growth Contrary to South Africa’s recent slate of poor economic growth, it has over the past two decades shown overall improvements, boosting living standards and reducing poverty nationwide. However, significant reforms are necessary to accelerate growth and create a self-sustaining platform for the country. South Africa, through the National Development Plan (NDP) aims to eliminate poverty and reduce inequality by 2030. Part and parcel of this, government has seen an opportunity in building local capabilities and creating an inclusive economy through localisation. This has been done before, point in case South Korea.
South Korea the industrialist South Korea is recognised for its spectacular rise from one of the poorest countries in the world to a developed, high-income country in just one generation. Following the Korean War in 1953, and having almost no natural resources and suffering from overpopulation, they turned to localisation. GDP (Billion US$)
1,400 1,300 1,200 1,100
300 200 100
Similar to the butterfly effect, an initial local investment can create an economic ripple effect which will lead to major direct, indirect and induced economic impacts. Take, for example, the purchase of new locomotives. As an alternative to importing locomotives and having money exit the country, government has required international original equipment manufacturers (OEMs) to transfer capabilities and procure components from established local suppliers.
South Africa
South Africa has embarked on some local programmes which may well have spurred some of its tailwind growth. The real question is whether it is so far behind other countries, that the growth led by industrialisation will remain an ideology rather than an implementable reality. If we aim for the latter, then South Africa needs to get its affairs in order and craft its industrialisation game plan soon.
0 1960 1970 1980 1990 2000 2010 2020
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South Africa, down but not out
South Korea
700 600 500
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Kerry Baldwin, Economic Development Specialist, Letsema Consulting
They rapidly reconstructed and developed their economy and by 2000, South Korea had increased their GDP by 728%, while South Africa improved by a meagre 69% over the period.
Local jobs will be created, value adding manufacturing will contribute to GDP, salaries and wages will increase and will contribute to household income. Employees will spend money and will contribute towards taxes and government revenue.
1,000 900 800
400
The Koreans aimed to acquire the capabilities with which the Korean industry could independently construct high-quality nuclear power plants within various constraints. In 1983, localisation agreements were implemented with foreign contractors to establish the technology base of domestic companies with a primary objective of achieving 95% localisation by the end of 1995.
Because we are late to the game, we need to fast track innovation on the back-end of a platform with the following six elements: 1. Clear strategic intent is required by government on priority segments. 2. A clear view of the demand signals and marketplace, including regional integration. 3. Investment from both the private and public sector (in the words of our CEO – it takes two to tango). 4. Time and reciprocity – long-term supply and manufacturing contracts to allow adequate settling in of skills transfer and competitiveness. 5. Sensible financing terms by financiers. 6. A competent set of members at the dinner table playing by the rules of the game to avoid bullying, corruption and greed
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BENCHMARK REPORT What is this?
This report shares information from the inaugural ABSA Business Day Supplier Development Awards. This will create the yardstick for future results, against which we will measure progress as a sector.
Introduction
What award submissions have shown us
This year saw the inauguration of the ABSA Supplier Development Awards, which recognise and celebrate businesses committed to building thriving, inclusive and transformed supply chains. The applications received provide valuable insight into Supplier Development programmes, and the sector at large.
409
Applications received
1. Supplier Development is a priority to businesses 2. Efforts are directed at growing supplier businesses in quality, capacity and skills 3. Ensuring the independence of suppliers is generally ranked low – suggesting that organisations prefer growing and supporting suppliers for their own supply chain efficacy 4. Impact on businesses owned by persons with disabilities is especially limited
20% 33% compleTeD, SuiTABle ApplicATionS
small EME participants
20
SHORTLISTED
12 Finalists
Overview of applications A total of 409 applications were received, of these 80 (20%) were complete and suitable to enter the Awards Small EME participants comprised 33% of applications were from small EME participants, 9% from QSE and the balance (10%) from GEN businesses. 48% of applications did not complete this question Eighty applications passed through the desktop vetting phase for further consideration due to their level of completeness, the amount of evidence supplied and having conducted Supplier Development programmes to SMEs within their own supply chain. Twenty were shortlisted as semi-finalists, with information verified by desktop study. After technical scoring and telephonic interviews, these 20 were further reduced to a batch of 12 finalists. The 12 were then provided with the opportunity to pitch to strategic judges as part of the process of identifying of the overall winner in each category A high number of applicants reported a level one BEE rating – perhaps a reflection of the large number of EMEs in the pool
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Statistics on spend & impact Sixty-eight applicants completed the question “How many suppliers are you developing?” giving a total of 4 728 suppliers, with an average of 69.5 suppliers per entrant. In the sample, the number of suppliers supported ranged from one to 1 400.
Industry in which the businesses operate There were a wide spread of businesses across industries, with professional services 17%; and community, social and personal services accounting for, 10%; and wholesale and retail trade comprising 7%; whilst 36% fell in the ‘other/unspecified’ category. Agriculture, hunting, forestry and fishing
5%
Communication
4%
Community, social and personal services
Sixty-four applicants completed the question “What is your annual Supplier Development budget?” accounting for a total of R1.52 bn, an average of R 23.76 m per entrant. In the sample, the budget ranged from less than R10 000 to R792m.
10%
Construction
5%
Financial intermediation, insurance, real estate and business services
1%
Manufacturing and assembly
1%
Mining and quarrying
4%
Other [Please specify]
36%
Professional services
17%
Restaurants and catering
6%
Transport and storage
4%
Wholesale and retail trade
7%
1-1400
number of suppliers supported
10 000 - R792Mil
annual SupplIeR DevelOpMenT BuDgeTS
Nando’s supports
1 400 supplieRs
Of the applications received, the two largest reported budgets came from Old Mutual and Coega Development Corporation. Nando’s, however, outstripped all other contenders, supporting a phenomenal 1400 suppliers, tripling the results of their competitors. The number of jobs supported was not part of the application metrics in this inaugural year, and will be included, amongst other standard questions in 2019.
*calculated from completed applications
brEakDown of applicants
Distribution of participant bEE rating non compliant
Exempt Micro Enterprise (EME)
level 8 level 7 level 6 level 5 level 4 level 3 level 2 level 1 0
20
40
60
80
100
120
134
Qualifying Small Enterprises (QSE)
36
Generic Enterprises (GEN)
42
Unknown
197
Total
409
140
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Implementation strategy
Who leads Supplier Development?
There is a clear trend towards the implementation of Supplier Development from within and 53% of applicants indicated that their programmes are targeted at building their own supply chain.
Indication of the importance of Supplier Development is reflected in the high number (52%) that report leadership coming from CEO/Director/ExCo level. It is not clear from the results where the implementation of Supplier Development sits in the organisation (Transformation, CSI, Procurement?) and this question will be included in future awards.
External supply chains
35%
Our own supply chains
53%
Not specified
12%
5%
This is also reflected in the low number of respondents who outsource all or part of their program (29%) with an overwhelming 71% that retain all elements of Supplier Development in-house.
CEO’s/Director/ExCo
7%
CFO/Executive management COO/Executive management
15% 52%
Executive management Management
17%
Operation Team 1% 3%
Other
What support is provided to Suppliers? A wide range of support is provided to suppliers. This includes: 1. 2. 3. 4. 5. 6. 7.
Newcomers welcome! The high number of EMEs in the application list is reflected in the 52% who indicated they are new to Supplier Development or have a new Supplier Development initiative. This bodes well for the future, when these initiatives are starting to bear fruit. The balance of applicants was split evenly between those who are running well established programmes, and those who are wanting to develop something new and innovative within their existing programme.
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Supplier Development is well established in the company
23%
Supplier Development is well established, but we are trying something new & innovative
25%
This is a new initiative we are just starting out
52%
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provision of grant and loan funding, preferential payment terms; business training, mentoring and technical support assistance with pricing, quality systems supported access to markets
Market access
11%
Mentoring/consultation
12%
Funding
13%
Business skills development
12%
Workshops/training
24%
Other
28%
One of the objectives of our National Development Plan is to address poverty in this country through the growth of small business. This event is showcasing economic participants that truly deliver growth by applying their resources to change the economic prospects in the communities that they operate.’ – Cornelia Olivier: Absa
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The purpose of Supplier Development
Applicants were asked to rate the importance of specific areas in their Supplier Development programmes. • Generally, all categories were rated highly, with the greatest emphasis on improving the quality of suppliers and the lowest to improve their company B-BBEE scorecard. • Ensuring the independence of suppliers was also ranked as a lower priority – suggesting that organisations prefer growing and supporting suppliers for their own supply chain efficacy. • The intended impact of Supplier Development scored consistently high, with many applicants ranking everything as equally important. • The least impact is clearly identified as disabled communities although some applicants indicated this to be an area of future focus. • The impact on rural impact was moderate, and is reflected by the low importance of this in many programmes. • Ranking of the impact of Supplier Development internally is very interesting, with most respondents ranking improved internal customer experience, and brand awareness as highest impact and cost reduction as the least priority/impact. Risk reduction too, was rated as a low priority. IMPACT OF SD PROGRAMME ON ORGANISATION (INTERNAL) 82% 80% 78% 76% 74% 72% 70% 68% 66% 64% 62% 60% Internal customer experience
Brand awareness
Supply chain transformation
Supply chain ease of operations
Risk reduction
Cost reduction
In conclusion This first benchmark report provides a snapshot of Supplier Development in South Africa and will be used to compare year-onyear progress, and measure changes in trends going forward. As it was important to encourage participation from a wide pool of applicants, the number of highly technical and performance-related questions was minimised this year. Whilst many participants included key performance indicators in the narrative, this was not a formal part of the questioning. This lack of key indicators and common measures of performance resulted in us being unable to award an Impact category. In 2019 we will introduce a more rigorous impact category requiring 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.
Communication Change management specialists will tell you that repeated communication is essential for embedding change, and 32% of participants indicated that they communicate their Supplier Development progress on a monthly basis. FREQUENCY OF COMMUNICATION OF PROGRESS OF SUPPLIER DEVELOPMENT PROGRAMMES TO THE REST OF THE COMPANY Annually
3%
Quarterly
17%
Monthly
32%
Weekly
18%
Daily
11%
Ad hoc
*data taken from 19% 136 who responded
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PercePtion isn’t always reality The true state of Supplier Development in South Africa By Catherine Wijnberg, CEO Fetola
e
ach time I read the press or engage with social media, it seems there is another story about how ‘business’ does far too little to benefit the common man, the smaller player or anyone other than their own shareholders. In this country, ‘business’ is most often painted as a selfish, self-serving parasite. But as we know, in South Africa perception and reality are often at odds. My goal when conceptualising the ABSA Supplier Development Awards was to explore ways to change this narrative. I am delighted to note that 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 fact is, it has emerged that many large businesses and corporates have a genuine and sincere desire to make a difference and grow the smaller players in their supply chains. More than that, they are passionate about it and put considerable time, energy and resources into helping others succeed. Now who would have thought that? Interestingly, it is not just the big guys rolling up their sleeves. Many fairly small businesses are also starting to embrace supplier development as a tool
For supplier development to succeed an entrepreneurial mindset is essential – both for understanding the small supplier, but also to cultivate the flexibility needed for innovation.
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for encouraging a healthy and equitable ecosystem within their own networks. In fact, while I might be a bit biased as a lifelong champion of small business, some of the most innovative supplier development programmes that were reviewed for the Awards, were from smaller companies and QSEs (businesses with a turnover of between R10- and R50 million). This is not really surprising. For supplier development to succeed an entrepreneurial mindset is essential – both for understanding the small supplier, but also to cultivate the flexibility needed for innovation. This can be a real barrier in some large corporate organisations which are by nature quite structured. To counter this, a few outstanding companies have created independent supplier development units with a ‘small business mindset’, and others are actively encouraging a new style of entrepreneurial thinking in their ranks. What also emerged as we reviewed the over 400 applications, is that there is a supplier development continuum. From those who are simply not interested, to a few that are still trying to cheat the system, through the middle road of just ticking boxes and meeting compliance, all the way to a select few who have moved well beyond the scorecard. These pace setters see supplier
development as a genuine strategic opportunity, a way to build a stronger ecosystem, and quite simply, as the right thing to do for our collective future as a nation. The real results shine where companies have made supplier development central to their strategy. Driven by a clear vision and purpose and properly resourced, such CEO-led initiatives tend to deliver super-sized results. As one entrant stated candidly: ‘If I just could get my CEO to buy into this process, everything would change, including our results.’ What is really exciting is how many entrants were willing to share their experiences – from the hard lessons and mistakes, to the successes. Even more heartening was the fact that they are more than open to learn from others. This bodes well for a thriving ecosystem that works together to amplify the impact of supplier development, not just on an individual level but collectively as a whole. It is my dream that we grab the opportunity that supplier development is offering us with both hands. Now is our chance, as ‘business’, to plant a stake in the ground and make a lasting contribution to redressing the inequality of the past and building a more transformed economy. We must not let it slip away.
SAICA Enterprise Development plays an active role in economic transformation in South Africa, through advancing the sustainable growth of entrepreneurial Black businesses. This is our collective vision for a more inclusive future. Developing Leadership skills, Business Skills and especially Financial Excellence in your Enterprise and Supplier Development programmes is our expertise. Enabling you to seamlessly broaden your supplier base by integrating quality SMMEs is our passion. We provide impactful B-BBEE Enterprise and Supplier Development solutions that ď€ t with achieving your transformation objectives. Partner with us today in shaping the next generation of sustainable big business. Call Sibusiso Nkosi on 011 4790617 or email sibusison@saicaed.co.za
Ignite. Enhance. Advance.
From SA ld r o w e to th uality, q – g in is m o r Never comp bal supply lo g r o y it n commu
er ’ deliv n i p e e K
y fresh
Chilli champions As the key ingredient of our spices and delicious sauces, African Bird’s Eye chillies are shipped all over the world from Southern Africa. We use over a billion chillies annually, all of which are planted the traditional way, by hand. We have also worked hard to improve quality of life for our thousand-plus network of small-holding farmers by maximising their profits through reducing the number of supply chain intermediaries.
Freshness is very important to Nando’s. Our development of a stackable and environmentally-friendly crate system has both optimised space and ensured the practicality and sustainability of the transport of chicken, helping us to maintain our high quality standards.
Pitch-perfect packaging
Our take-away bags, boxes, serviettes and labels are all made from locally sourced materials and manufactured right here in South Africa. In the last year we produced over three hundred and forty five million packaging items, all made from high grade kraft paper. This SA produced packaging is then distributed to over four hundred Nando’s restaurants in fourteen countries. Testament to the quality of our packaging is that our new leak-proof, grease-proof chicken bag won a Gold Pack Awards Food Medal in 2017.
ad i-Thre
R The PE
Nando’s global brand is rooted in our South African heritage and we are very proud that our recipes are now enjoyed across the globe. Our marinades, bastings and sauces are delivered from Johannesburg to sixteen countries. In the last year we shipped over nine million litres of them around the world. This requires careful planning – so we manage the supply chain closely to make sure sourcing is seamless, no matter where our restaurants are located.
Secret Sauce
Made & worn with pride
We are proud to wear our unique, branded clothing every day - but even more proud that it is made in South Africa and supports local businesses. These businesses provide employment to large numbers of women who would otherwise struggle to find work. To date over 80,000 garments have been made for us, which if you laid them end to end would reach from Joburg to Tshwane and back. Over the years we have nurtured these small businesses by procuring bulk fabric on their behalf, arranging immediate payment and assisting with quality control. Today there are around 10,000 Nando’s employees in eight countries who wear these garments but we plan to significantly expand that footprint over time. This will allow us to create even more local jobs and contribute to the survival of a key South African industry.
“The partnerships we enjoy with our suppliers go beyond commercial terms, service, quality and innovation. We work very closely with them, sharing the details of our strategies and marketing plans in order to collaborate better. We also choose to work with passionate, energetic suppliers that share both our values and our desire to positively change lives.” Linda Reddy, Nando’s Supply Chain Director (IMEA)
Love for our flame-grilled PERi-PERi chicken has seen our family grow around the globe, but we like to keep things close-knit. We were very excited a couple of years back to find a way to extract a dye from the essence of what makes us Nando’s - PERi-PERi. We infuse this bright red dye into cotton to create PERi-Thread which we then stitch into all our garments, giving them both a physical and a symbolic connection to the brand. PERi-Thread is a symbol of love and commitment. It reminds us of our values, our promises and is a celebration of our connectedness.
We recently started an initiative with our suppliers to tackle youth unemployment through the Harambee programme. Nando’s was a founding partner of this initiative and through it, we have to date, employed over 3000 young South Africans in our restaurants.
Creati
We are the largest exporter of contemporary art from South Africa. We have, over the years, curated thousands of pieces to over 23 countries. On an ongoing basis, we support over 300 artists.
Local design to the world
ng em
ployme
nt
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SMMES: SO MUCH FOCUS ON FUNDING, but what about skills?
I
think we can all agree that the funding of small businesses is only part of the solution. What is possibly more important (as an enabler) is the initial assessment of the level and adequacy of skills existing within new or developing enterprises and to evaluate what further skills development or training is required to ensure a firm business foundation and sustainable growth is achieved. A study by StatsSA which surveyed households and obtained evidence relating to skills development and unemployment between 1994 – 2014 showed the following: • During this time frame across the South African working population of households, there was an increase in skilled labour (21% to 25%), with a shift away from semi and low-skilled labour. • What is interesting to note in the growth of skilled labour is the disparity within the different race groups. *For the purpose of this analysis, the occupation types were used to infer skills levels based on the Quarterly Labour Force Survey. Skilled: manager, professional, technical. Semi-skilled: sales and services, clerk, machine operator. Low-skilled: domestic worker. This is clear evidence that the role of enterprise and supplier development is a crucial one needed to up-skill and train the broader population. It is one thing to provide finance and access to markets, but without the appropriate skills development to make these investments sustainable it would be a fruitless exercise. The role that the private sector plays in postinvestment business support and capacity building is incredibly important. There is a requirement to build both technical skills as well as overall business management skills. This, in my view is when we will start seeing real impact. In order for the enterprises to be effective in the contracts that they
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By Khanya Okumu, ESD Manager, Old Mutual
are awarded a focus on skills development (by both parties) is required. At the end of the day, an enterprise should leave an ESD programme empowered to stand and survive in the business world. We know that we are losing the challenge when time and time again we see developing enterprises moving from one ESD programme to another with nothing to show for it. Monitoring and evaluation of these enterprises is therefore also essential to track growth and success – but also to identify areas of weakness or need for further intervention. At the heart of ESD is the notion that larger businesses/corporates should move beyond compliance (aka box-ticking) and towards the heart of transformation. Intertwined here is the responsibility to use development interventions and activities in a deliberate, focused manner so that the skills level in small businesses can move upwards and ensure the longevity and success of growing enterprises.
In an economy where growth has crawled to a near halt, SMMEs cannot be expected to be the holygrail for job creation. Making an impact in increasing the potential salary earning or employable workforce is key and therefore skills development requires a multi-faceted approach: 1. From early education phase – where emphasis must be placed at school level for entrepreneurship training and opportunities as a key enabler. Entrepreneurship should, in essence, become a career option to consider. Innovation must be incubated. The world is changing and the skills required to be productive are changing as well. 2. lear regulations and commitment to quality interventions should be stipulated at policy level to incentivize skills development/ skills transfer from large corporates to small businesses. 3. Without looking at the bigger picture, these developmental areas are without support – so a holistic approach to skills development – mentorship, networking and overall business acumen are skills that often distinguish between those who do well and those who don’t in business. It needs to all work harmoniously and as an effective and efficient ecosystem reliant on each other’s strengths and support mutually beneficial objectives.
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ESD
must result in real impact By Seapei Mafoyane, CEO of Black Umbrellas, A Cyril Ramaphosa Foundation partner entity
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outh Africa has an imperative to overcome the legacies of apartheid, and to forge an inclusive, more equitable society with opportunities to prosper for all. The democratic government initiates policy measures towards this, enjoining society to commit to shared goals. Such is the Enterprise Supplier Development (ESD) element on the Broad-based Black Economic Empowerment (B-BBEE) scorecard. It facilitates the participation of historically disadvantaged people in the economy, transforms it to benefit all South Africans, and contributes to growth. Yet the attitude to the measures may be one of a compliance imposition, obligatory only because of its sanctions, or just a box to be ticked off with great self-acclaim but little concern for making a real difference. Serious thought needs to be given to what investment in ESD must achieve in real terms, and how. The importance of small and medium enterprise (SME) development is reflected in South Africa’s National Development Plan. It aims to increase the contribution of small business to the economy to 90% by 2030. Small business growth has benefits for the economy and society, especially in respect of employment creation, South Africa’s intractable challenge. The ESD element of the codes has real potential to create economic growth and jobs, by
building sustainable businesses and linking them into supply chains. Enterprise Development is recognised as key to poverty alleviation. But while small business already plays a significant role in the economy, it suffers from a high failure rate. As many as 70% of SMEs in South Africa fail in their first two years of existence. To be successful, small black-owned businesses and entrepreneurs need effective development. Every rand invested by corporate South Africa or government in ESD must result in concrete and tangible impacts that make for sustainable blackowned SMEs that genuinely and competitively participate in corporate, SOE and government supply chains. These impacts include increased job creation, procurement opportunities and SME business growth. The latter measurable by turnover, profitability and net asset value. Black Umbrellas, which nurtures black-owned businesses in their critical first three years, assesses their potential against four criteria that are foundational to sustainability: whether by the end of the three-year period the business would be able to generate a profit, have a positive nett asset value, employ four individuals, and be able to pay those individuals market-related salaries. Such practical measures of outcome are required for ESD investment and proper monitoring and
The importance of small and medium enterprise (SME) development is reflected in South Africa’s National Development Plan. It aims to increase the contribution of small business to the economy to 90% by 2030
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evaluation measures are required to determine and assess impact. These factors make for the difference between SMEs on the periphery or at the centre. Meaningful investment in ESD recognises persons and SMEs most likely to succeed, and develops them to full independence, including of procurement, finance and infrastructure readiness. This should include such “soft skills” development as time management, presentation skills and business etiquette. Many established businesses suffer constraints of time, commitment, dedicated skills, resources and capacity for effective ESD. The requirements of reliable, quality supply override and displace the requirements for patient Supplier Development. In the event, there is a case for ESD to be outsourced to experienced and expert third parties. The codes allow for payment by a company to a third party for ESD, but the direct and thorough involvement of contracting companies in the effective longterm development of specific supplier enterprises to meet their specific needs, also has benefits for the bespoke meeting of their supply needs. In the broader scheme of things, effective SME development diversifies the supplier pool to the direct benefit of individual end-user companies and is investment with a definite economic and social return - if it truly builds sustainable black-owned SMEs. When SMEs can thrive, incredible, associated wins can take place in the area of job creation. Previously impoverished groups can have access to these jobs and earn a living wage and this conducive microeconomic businesses environment can translate into some real economic magic for South Africa.
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LANDIS+GYR
Tel: +27 (0)12 645 3109 | Email: info@za.landisgyr.com | Fax: +27 (0)86 743 2777 2 Slate Avenue, N1 Business Park, Old Johannesburg Road (R101), Kosmosdal Ext.7, Gauteng, 1685
[CASE STUDY] Simartech Simartech is a 75% black women-owned company based in Midrand supplying Landis+Gyr with Customer Interface Units.
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andis+Gyr South Africa is an electronic meter manufacturing company that offers a complete range of metering solutions, from prepayment, smart and credit metering to meter test equipment and system solutions. It is a Level 1 B-BBEE company that is strongly committed to black economic empowerment, local manufacturing, support of local BEE suppliers and skills development for our South African people. Landis+Gyr meters are locally manufactured at the Midrand facility and supplied to the South African market as well as across most of the African continent and beyond. Landis+Gyr have an Enterprise Development programme that is modelled at creating black-owned suppliers in the electronic industry.
rla Nel Photogra © Ca phy
Success Story Landis+Gyr opened doors for Simartech, a start-up company, through their Enterprise Development programme. Simartech was given an opportunity to assemble Customer Interface Units (CIU) from June 2015. Landis+Gyr provided all the training, equipment, and guidance throughout the manufacturing process.
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He continues:
Our Enterprise Development model provided Simartech with training, equipment and mentoring throughout the manufacturing process. The model also requires Simartech to duplicate the initiative by developing other manufacturing companies in their value chain.
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Enterprise Development
“Landis+Gyr provided a turnkey Enterprise Development model that enabled Simartech to minimize typical challenges (access to capital, knowledge and skills transfer, market entry, etc.) faced by many black start-up companies,”said Godfrey Marema, Chief Operating Officer at Landis+Gyr.
Currently, Simartech are not only assembling CIUs – they have now invested in their own machine and are starting to manufacture PCBAs. This Landis+Gyr model represents a true Enterprise Development initiative, which helps support the government’s objective of creating employment, building black-owned companies that are sustainable in their own right and can be globally competitive.
“We started with six employees, one production line, and zero turnover. Currently, we have 36 employees (mainly black females), two production lines, and a projected turnover of R 43 million!” says Lemao Motaung, Managing Member. Simartech has now embarked on a second phase and re-invested the proceeds in PCBA (Printed Circuit Board Assembly) manufacturing equipment. This added capability will enable them to become a fully integrated electronics manufacturer, with a projected turnover of R 120 million in the 2018/2019 financial year.
Godfrey Marema, Chief Operating Officer, Landis+Gyr
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TIA
The Technology Innovation Agency
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he Technology Innovation Agency (TIA) is an entity of the Department of Science and Technology that was established for the purpose of enabling and supporting technological innovation across all sectors of the economy in order to deliver socioeconomic benefits for South Africa and enhance its global competitiveness.
These goals are achieved by supporting the development and commercialisation of research outputs from higher education institutions, science councils, public entities, private research institutions and enterprises and bringing them to market. The ultimate goal of TIA is to use South Africa’s science and technology base to develop new industries, create sustainable jobs and help diversify the economy. In seeking to realise its mandate, TIA is positioned to be the link within the National System of Innovation (NSI) in a bid to enhance the country’s capacity to translate a greater proportion of local research and development (R&D) into commercial technology products and services.
The knowledge generated at various universities and public research institutions has not been reaching the market owing to a lack of funding instruments targeted at the development of technologies. The mission of TIA to exploit South Africa’s knowledge resources into sustainable socio-economic opportunities that lead to creation of knowledge based industries which in turn will result in companies becoming more competitive. The goal is to ensure that innovation ideas can be shaped into viable technology development projects and that the technology innovations are de-risked for commercialisation funding by our partners within the NSI. TIA has the following funding mechanisms: the Seed Fund, the Technology Development Fund and the Commercialisation Support Fund.
Key to the mandate of TIA is the delivery of socia-economic benefits for the country in line with Sustainable Development Goals. To this end, TIA provides support to innovative entrepreneurs.
In addition to the funding, TIA provides non-funding support geared at supporting innovators and SMMEs. These include Technology Stations (engineering services), Technology Platforms (life science/biotechnology), the Youth Technology Innovation Programme and Innovation Skills Development, Technology Innovation Cluster Programme, The Global Cleantech Innovation Programme. Technology Stations and Platforms are situated at various Universities of Technology and each provides solutions to small and medium enterprises in specific technology areas. The Innovation Skills Development Programme in partnership with other key stakeholders in the NSI deliver programmes on critical thinking skills for interns, researchers, and the youth. Key to the mandate of TIA is the delivery of socio-economic benefits for the country in line with Sustainable Development Goals. To this end, TIA provides support to innovative entrepreneurs. The Fourth Industrial Revolution Over the last 50 to 60 years South Africa has lost a great opportunity to look at how we can build on our stockpile of natural resources to transform our economy from a resource base to a knowledge base.
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w w w. t i a .o r g . z a Tel: +27 (0)21 422 3780 4th Floor Black River Business Park, Fir Road, Observatory, Cape Town, 7925
In the Fourth Industrial Revolution TIA looks at supporting technologies that can integrate various sectors of the economy to capitalize on the knowledge economy opportunities. During the previous industrial revolutions, it took decades to establish the training systems and labour market institutions that were required to develop the major skills on a large scale. However, things are different now; the pace of change is simply rapid and both the public and private sector will have to change their approach to education, skills and employment.
TIA INFORMATION Vision To be a leading technology innovation agency that stimulates and supports technological innovation to improve the quality of life for all South Africans. Mission To facilitate the translation of South Africa’s knowledge resources into sustainable socio-economic opportunities Website: www.tia.org.za Corporate Office TIA House, 83 Lois Avenue, Menlyn, Pretoria, 0181 012 472 2700 customerservice@tia.org.za Western Cape Regional Office
As an organisation established, specifically to harness technology innovation to drive economic growth, TIA works with various partners within the NSI, playing the role of connector, facilitator, funder and enabler. TIA, therefore, seeks to drive the overall thinking within the system towards gearing enterprises for the Fourth Industrial Revolution. TIA supports creative enterprises whose innovations will have not only economic impact, but also impact the lives of the many South Africans who cannot access critical products and services.
4th floor, Central Park, Black River Business Park, Fir Road, Observatory, Cape Town, 7925 021 442 3780 KwaZulu-Natal Regional Office 4th Floor, 102 Stephen Dlamini Road, Musgrave, Durban, 4062 031 220 3100 29°50’57.242°S 30°59’53.671°E
Success Story AgriProtein AgriProtein Technologies (Pty) Ltd is a technology start-up company located in Philippi, one of the economically depressed areas of Cape Town. The company has already created over 30 new job opportunities for the community. Since 2009, the company has, at their own cost, successfully developed and piloted a nutrient recycling technology that converts organic waste into animal feed protein. This technology was developed as part of their goal to commercialise an insect-based protein feed in the animal feed industry. This is in response to an unmet market need in the animal feed and livestock industries to bring to the market, sustainable and affordable alternatives to fishmeal and soymeal. In March 2014, TIA committed R11, 9 million to support the demonstration, market testing and validation of this technology. AgriProtein committed another R11, 9 million as co-funding towards the same milestones. The company then built its 2 500 ton-per-year commercial scale facility that will enable it to demonstrate the technology with the intent to start commercial sales. The company has already sold up to 80 tons of their two main products. To enter the next phase in its innovation journey, the company has plans to scale its production capacity to meet demand from the market (animal feed manufacturing) over the next five years by commissioning seven production factories in South Africa, Africa and Europe. For this purpose, AgriProtein has successfully negotiated further funding support from local and international investors, who have committed funds towards three production factories in South Africa on successful completion of the technology demonstration, market testing and validation milestones, funded by TIA.
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Working together to enhance health No single sector in South Africa, albeit the public or private sector can successfully confront the immense challenge of the quadruple burden of disease. It requires combined forces, shared vision and commitment to working together.
The Social Compact Forum and the Public Health Enhancement Fund (PHEF) had one goal in mind – to establish a social compact in healthcare. Since 2012, we have been joined by 22 companies who have helped us in realising our vision of enhancing healthcare for all South Africans by initiating and running with several projects. The PHEF is managed by the private sector through the establishment of a not-for-profit entity to leverage and contribute to strengthening the health sector that will lead to a stronger relationship between public and private sectors to the benefit of all our people.
For more information visit www.phef.co.za
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A SuStAinAble & impActful model cruciAl to ending poverty in South Africa By Gregory Petersen, Senior Commercial Manager, Enterprise and Supplier Development, De Beers
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he South African Government and the private sector face massive trials in a collective effort to eradicate the issues of poverty, unemployment, and inequality in our country. In the mining communities, these issues require concerted effort and meaningful partnerships to address them.
whilst many companies are currently providing these SMEs with support, not many are providing adequate funding to stimulate real growth. It is this growth that will impact the activity in the entrepreneur development space, which will help in strengthening our economy and addressing issues of unemployment.
Statistics SA shows that over 30.4 million South Africans are living in poverty; this is underscored by an official unemployment level that is just below 30%, and the terrifying youth unemployment rate that is above 50%. The National Development Plan (NDP) has identified poverty alleviation as a key target area, promising to bring down the proportion of the population living below the lower-bound poverty line from 39% in 2009 to zero by 2030.
The current focus is on sustainable black economic empowerment through the creation of SMEs, but in fact, the strategic focus should be shifted from being a funding initiative, to one that targets capacity building through mentorship to ensure that these enterprises are not dependent on funding in the long-term. The emphasis should also be on ensuring that SMEs access markets, as well as building and managing networks for potential partnerships. This way, enterprises are set-up for long-term success and are likely to grow more organically in line with sustainable opportunities that are available to them.
At the end of 2017, South Africa recorded a positive job growth trend with more than 100 000 jobs added to the economy across all sectors. South Africa needs to increase the number of jobs by tenfold on an annual basis for the next seven years if we want to deal with the “evil triplets� of poverty, unemployment, and inequality. In the mining sector, huge strides have been made in supporting the development of sustainable enterprises. The support and funding of 287 small and medium-sized enterprises (SMEs) has enabled the creation of 3098 jobs. Until the end of November 2017, 301 loans have been successfully approved, valued at R77 million, to various entrepreneurs. The funded SMEs have a collective turnover of R367 million per annum. A developing country like South Africa benefits greatly from the growth of SMEs. However,
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The emphasis should also be on ensuring that SMEs access markets, as well as building and managing networks for potential partnerships.
Through development programmes, up-andcoming entrepreneurs from mining communities will continuously be empowered. These programmes should offer entrepreneurs training on topics such as market research, financial management, and operational management, which will ultimately contribute to a bankable business plan. They play a key role in unlocking economic opportunities and, therefore, achieving inclusive economic growth and sustainable employment for our host communities beyond mining.
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EnviroServ Walks Away with Oliver Top Empowerment Award Nomination
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he Oliver Top Empowerment Awards for 2018 recognised and awarded companies who have accelerated the development, sustainability, and financial independence of black-owned businesses, particularly SMEs and emerging businesses.
Young entrepreneurs are eager to get into business, and often need assistance in building their businesses. We nurture these suppliers to find a niche market where they have the biggest chance of success. We also assist by providing a range of payment terms depending on the situation the entrepreneur faces.
This year EnviroServ was proud to be nominated in two categories: Skills Development, and Enterprise and Supplier Development.
EnviroServ works to create strong new suppliers in our value chain through a dedicated team of highly trained team members who genuinely believe in the upliftment of young business entrepreneurs.
EnviroServ’s procurement team has a competitive Supplier Development programme and systems. Our procurement team consistently searches for new suppliers to improve the efficiency and effectiveness of our supply chain. We welcome the chance to give new companies the opportunity to demonstrate their credentials and capacity to meet our high service levels. Over the last year we incorporated 89 new EME/QSE vendors into our supply chain, with benefits for all parties.
We have the support of leaders and managers in EnviroServ who are deeply committed to empowerment goals. We live our company values, including innovation, diversity, passion, quality and integrity in our dealings with the suppliers in our value chain. For further information, please contact Veronica Manana. veronica.manana@enviroserv.co.za www.enviroserv.co.za
A winning combination for Yarona Electronic Systems and EnviroServ Prince Makatu started a small business in 1996 with minimum resources, a bakkie, one staff member and the will to innovate and succeed. When Sean Wilcocks, group facilities manager at EnviroServ met Prince, he was impressed with the man’s work ethic and creative thinking ability. In talking, the two men ascertained that Prince had big dreams and a business friendship grew between Sean and Prince. “He was providing security fencing, gate motors and general security installations for us, but he wanted to branch out,” says Wilcocks. By 2013 Prince was employing eight staff members and covering electrical, plumbing, security installation work, and a new venture into gates and carports.
From PA to Truck Company Owner: Nolitha Nkosi and EnviroServ Show the Way The day Nolitha Nkosi raised up her hand, she not only had to quit her secure job as the private assistant to the CEO of EnviroServ but changed her future too. As par t of EnviroServ’s commitment to Enterprise and Supplier Development that focusses on the development of black female owners of businesses in their supply chain, staff were asked to raise their hands if they wanted to be included on the company’s supply database. “EnviroServ really helped me work out a business plan. They told me to buy a truck but supported me with contacts and they lent me a trailer at no cost. They assisted with regulatory details and compliance and a good payment deal, knowing that as a black small business owner access to credit could be a problem.” In 2016 Nolitha TS started operations with one truck, a driver, and a trailer. The small company with a big heart started out working at the Holfontein site and grew as EnviroServ started asking her to collect waste from other customers. Nolitha’s perseverance through challenges to her new business were won through her hard work and assistance from EnviroServ, becoming a valuable member of our supply chain. Within six months Nolitha bought another truck, and again EnviroServ lent her a trailer - with the proviso that she works towards buying her own trailer. She now has her own tipper trailer and a tank trailer on loan from EnviroServ, employs two drivers and an administrator, with Nolitha and her husband very hands-on. “I simply could not have done it without EnviroServ,” says Nolitha.
Wilcocks chuckles as he remembers a time when the man who had come to him for advice was the one with a solution. “We were struggling to seal a skylight and Prince came up with the perfect solution”. “He handles all our Gauteng building and security maintenance and has really grown into his business. He’s always available – day or night.” A great symbiotic relationship between Prince Makatu and EnviroServ has grown into a mutually beneficial combination - making things happen.
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AVBOB 100 Years of Being There for Policyholders Spell Future Success
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oved and directed by the limitless need for funeral insurance and services, AVBOB has stood firmly in the service of the people of South Africa since 1918. The totality of AVBOB’s business is that of social responsibility which is borne out by their slogan: “We’re here for you.”
Today the AVBOB Group (AVBOB Insurance, AVBOB Funeral Service and AVBOB Industries), consisting of more than 300 branches countrywide, is Africa’s largest mutual society. As a mutual society, AVBOB does not have any external shareholders. This means that their policyholders share directly in successes ranging from normal benefits and annual bonuses to the incredible R8 billion in special bonuses and enhanced FREE funeral benefits* the organisation has declared over the past ten years. This year, on 15 August, AVBOB will be reaching a historical milestone when the company celebrates its centenary. Proving that they have stood the test of time. It is an achievement of which they are justifiably proud. In an industry rife with buzzwords and acronyms covering the spectrum from risk assessment and organisational alignment to BBBEE, AVBOB distinguishes itself by walking the talk, whilst sticking to the letter and spirit of every directive. “The spirit of an organisation lies in its workforce; they are the ambassadors, the passion and the drivers that steer the ship to ultimate success,” says AVBOB CEO, Frik Rademan.
The spirit of an organisation lies in its workforce; they are the ambassadors, the passion and the drivers that steer the ship to ultimate success.
One of the secrets of AVBOB’s sustained success is the intensive support they offer to funeral representatives to help them build the necessary entrepreneurial skills. This support includes, but is not limited to, systems training; the provision of assets such as buildings from which to conduct their business (rent, renovations and office equipment); vehicles (placement and maintenance); and advertising and promotional materials. All of this, and more, is aimed at ensuring that funeral representatives are equipped to run their businesses effectively, efficiently and successfully. As Rademan points out, “The result of empowered staff is a successful organisation.” Against this background, AVBOB is gearing for the future by ensuring that the organisation continues building from its original foundation, taking lessons from the past, whilst taking their current achievements to the next level. Rademan says, “We are deeply grateful for the opportunities
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and learnings of the past 100 years, which has enabled us to consistently improve our offerings to all our stakeholders. Looking at the future, we look beyond our balance sheet. We appreciate and embrace our staff and our policyholders as we look to all our fellow South Africans to determine the best, the most profitable and the most compassionate way forward for us all.” In closing, and in summary, enterprise is the backbone of AVBOB. They are committed to ensuring that as the organisation grows and succeeds, all their branches move with them every step of the way. “Our 100 years in business was built on the hard work and determination of our people, which is why our staff complement of 8000 proves time and again, and at every level, why the AVBOB flag is flying high,” concludes Rademan. *Terms and conditions apply.
w w w.a v b o b.c o. z a Tel: +27 (0)861 28 26 21 | Email: info@avbob.co.za AVBOB Head Office, 368 Madiba Street, Pretoria, 0002
{IN THE NEWS} WHERE THERE’S AN ENTREPRENEURIAL WILL, AVBOB WILL FIND A WAY In 2013 a group of aspiring young people, forming a cooperative called Diepsloot Kasi Hive, approached The AVBOB Foundation and requested assistance with their numerous and wide-ranging dreams to change their world. Through the AVBOB Foundation, AVBOB formed a partnership with Diepsloot Kasi Hive and created an enterprise development plan that enabled the members to realize their passion for betterment by focusing their efforts on achieving a practical and profitable venture. With AVBOB’s guidance and support, backed by resources, knowledge and experience built up over 100 years, the Diepsloot Kasi Hive members not only created a vegetable garden in their community; they did this while studying, and ultimately achieving AgriSETA-accredited qualifications. This relationship between a corporate giant and a fledgling cooperative from a bustling township has become a shining model of socio-economic development – and a singular success story of institutions uniting to achieve the common goal of improving the only world that we have.
Success Story START FROM THE BOTTOM! One day in 2002 Thembisile Mpanza from Ulundi, KwaZuluNatal entered her local AVBOB branch and asked for a chance to better her life. Her courage was awarded by an appointment as a casual driver. Today, 16 years later, she is a funeral representative with her own branch in Ulundi. Thembisile lauds AVBOB’s unstinting suppor t of her entrepreneurial ambitions – from their comprehensive training to supplying the assets she needs to succeed. Her success also benefits community suppliers in Ulundi who are contracted to assist with services such as tents, transport, catering, and flowers. “AVBOB has given me an opportunity and I grabbed it with both hands, I started from the bottom and now my vision is reaching for the top, to the advantage of everyone involved – from my clients and my staff to my suppliers,” she concludes.
AVBOB’S WIN-WIN ENTERPRISE DEVELOPMENT PROGRAM Driven by their responsibility to provide not only compassionate support to customers, but optimal employment opportunities to fellow South Africans, AVBOB created a ground-breaking enterprise development program. The objective of the program is twofold: to ensure that all AVBOB funeral directors are fully equipped to render efficient, professional service, and to empower them to grow sustainable businesses, built on the knowledge and credibility of the 100-year-old AVBOB brand. One of the greatest benefits of the program is that it enables funeral service representatives to manage their business without any capital outlay. The only requirement is a strong will to learn, succeed and serve. So whilst aspiring funeral directors undergo an intensive training program to prepare them for a successful career, AVBOB’s team of experts takes care of the rest, providing everything from infrastructure and marketing support to facilities and equipment. The AVBOB brand has served South African families with pride since 1918. One of the secrets of their success is their dedication to training people of the highest caliber. If you believe that you have the heart and compassion to fulfil the role of funeral director, apply online at http://avbob.jb.skillsmapafrica.com/.
@AVBOBSA
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@AVBOBSA
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5 steps
How do the leaders in supplier development do it, and what are the key elements that make up a successful supplier development programme?
to building a strong and stable corporate supply chain By Catherine Wijnberg, CEO Fetola
1. take a top down approach
Focused, strategically aligned plans for transformation of the supply chain start from the inside out. Specifically, they begin with assessment of gaps and needs in the procurement line up, and work outwards to the development of appropriate, targeted suppliers. Ideally enterprise development is part of this development continuum. Some leading roleplayers go even further and use their skills-training spend to build talent with entrepreneurial skills.
2. Find the gaps
As one size doesn’t fit all there is a clear need for tailored solutions – both for the corporate, and the small supplier. In fact, more than 70% of respondents to the 2018 ABSA Supplier Development awards have chosen to develop in-house solutions for this reason. Such solutions demand flexible, innovative and bold team leadership – and partners with the range of skills and experience to respond accordingly.
in short, supplier development demands a knowledge of internal corporate needs, the ability to spot viable opportunities, and a solid understanding and skill in building small businesses. This is a field that is driven by people who are passionate about making a difference and hell bent on constantly improving their results. 30
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Award-winning supplier development initiatives are driven from the CEO downward. Supplier Development is understood at EXCO level and dedicated resources are ringfenced for implementation. The message from the top is that supplier development is a company imperative.
3. choose partners careFully
4. tailor your programme
5. monitor & evaluate
Qualified, capable and passionate partners are essential, both inside and outside the organisation. Ideally these should be project leaders that are personally invested in the success of the programmes and accountable for their results – and include those with influence in procurement, transformation and strategy. External partners such as business trainers, mentors and technical advisors with hands-on experience and understanding of small business are critical.
Catherine Wijnberg is the founder and CEO of Fetola, a company of business growth specialists. For more than a decade Fetola has empowered people with the practical skills, resources, resilience and confidence to emerge as thriving business owners in their own right. Mail her on cwijnberg@ fetola.co.za.
And lastly, for supplier development to work it is vital to know what success looks like, to understand how to measure it, and to keep reviewing progress against the national benchmark of success.
w w w.c ova - a d v i s o r y.c o. z a Tel: +27 (0)11 568 3340 | Email: fmakoni@cova-advisory.co.za Maxwell Office Park, Building 1, Magwa Crescent, Waterfall City, Midrand, 2006
COVA ADVISORY
Rethinking Job Creation By Fungai Makoni
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t has been dubbed a new dawn and indeed it is. The events of the first half of February ushered in renewed hope and belief in the people of South Africa. Hope that the immense challenges facing the nation can and will be overcome. The belief that the country’s new leadership is up to the task of turning things around. The challenges are immense and the conditions difficult. South Africa remains a dual economy known for its extreme income inequality, which unfortunately is one of the highest in the world. Poverty and prosperity are defined by race and gender with ten percent of the population earning around 55%–60% of all income, compared to only 20-35% in advanced economies. Unemployment remains stubbornly high at 26.7% and the most affected are the youth. The president made it clear in his maiden State of the Nation address that the creation of jobs, especially for the youth, is at the centre of South Africa’s agenda in 2018 and that the government will implement various measures to address unemployment including the convening of a Jobs Summit. The hope is that this summit will result in the alignment of stakeholder efforts and the generation of practical and effective ideas that will result in the creation of much-needed jobs. Indeed, it is high time that job creation is rethought.
Historically underrated in their importance to the job creation effort are small and medium enterprises (SMEs). SMEs are acknowledged worldwide as being the backbone of socio-economic development and growth. They are critical to the growth of gross domestic product, new job creation and entrepreneurship. A recent study by the
International Finance Corporation (IFC), a subsidiary of the World Bank, showed that SMEs account for more than half of all formal jobs worldwide, and their share of aggregate employment is comparable to that of large firms. SMEs do not only drive economic growth and job creation but play an important role in addressing urgent development challenges, such as those related to service delivery. It is clear from the above, that what South Africa needs to overcome the challenge of high unemployment is the proliferation and the strengthening of SMEs. This underscores the importance of Supplier Development. Supplier development is defined by the Chartered Institute of Procurement and Supply as “the process of working with certain suppliers on a one-to-one basis to improve their performance and expand capabilities for the benefit of the buying organization.” Through a focus on Supplier Development, companies are able to create many mutually beneficial opportunities, contribute to job creation and showcase their commitment to the wellbeing of South Africans. Although the private sector is the engine of the country’s growth, sustainable and inclusive private sector-led growth that contributes to reducing unemployment will not happen of its own accord. The government has to play a central role in developing an enabling environment. An environment that will encourage businesses to engage in activities that will create jobs, activities such as Supplier and Enterprise Development. Towards this end, the government already has a number of incentives in place to encourage job creating activities by the private sector, however their effectiveness is hampered by ignorance, as not many companies are aware of their existence, as well as challenges related to their administration. One of these incentives is the Strategic Partnership Programme (SPP) which is administered by the Department of Trade and Industry (DTI). The programme’s objective is to support large private sector companies in developing and nurturing SMEs within their supply chain. It also aims to support Broad-Based Black Economic Empowerment
ABOUT COVA ADVISORY Cova Advisory is a majority blackowned firm that was set up by D u a n e N e w m a n a n d Tu m e l o C h i p f u p a . I t s s e r v i c e s ra n g e from assisting companies with government grant and incentives services to sustainability, carbon and energy strategy ser vices. Cova is able to assist corporates with supply chain transformation projects by helping them to identify and access available grants and incentives to fund their Supplier and Enterprise Development costs. Cova Advisory has set up a strong local network within the private and government sectors. It has access to various thought leaders in South Africa and around the world on investment promotion, sustainability and supplier development.
(B-BBEE) policy by encouraging businesses to strengthen the element of Enterprise Supplier Development (ESD) of the Codes of Good Practice. The incentive is a cost-sharing grant and is available for infrastructure and business development costs that are necessary in the mentorship of suppliers. It is unfortunate that such a tool is being under-utilised. The hope is that in this new dawn, the government and the private sector would finally come together to rethink job creation and effectively implement measures, old and new, that will set the country firmly on a path of transformative and sustainable job creation.
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NORTHAM PLATINUM LIMITED Investing in a future for our people Northam Platinum’s empowerment transaction, finalised in 2015, secured for the company a new lease on life, and in a transaction which was hailed as “innovative” and “imaginative” at the time, CEO Paul Dunne engineered a parallel and successful cash raising exercise resulting in a war chest of R6.6 billion. investment in infrastructure in this area has been considerable, with 27 kilometres of permanent roads having been established, and ongoing investment in surrounding schools and community infrastructure, as part of an active and forward-looking stakeholder engagement programme in these isolated and frequently forgotten communities.
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he combination of impeccable empowerment credentials, cash in the bank, and an energetic chief executive who is passionate about his product and its prospects, created the perfect launchpad for Northam’s expansion strategy. Only two to three years later we are already seeing some of the fruits of this initiative, with Northam having grown from a single-asset, high risk PGM producer to one with an asset base which is diversified in terms of geography, depth, risk and mining method, and with an enviable cost profile. Fo r m a n y y e a r s t h e g r o u p’s p l a t i n u m group metal output was pegged at about 280 000 ounces, emanating from the company’s single, deep-level Zondereinde mine in Limpopo province, which was limited in terms of accessible and easily mineable reef, exacerbated by the metallurgical constraints posed by the properties of certain reef types. Employee numbers at Zondereinde were for years pegged at the ~7 000 level. Within a three-year period, after construction started on the Booysendal property on the eastern limb in 2010, the group’s output had grown by 160 000 ounces, or by 53% to 460,000 ounces. At steady state production, achieved in 2013, the Booysendal North UG2 mine was operating with
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a workforce of 1 915 individuals. Continued investment in expansion at Booysendal created further opportunity at this operation which now has a stable workforce of 3 780. By the end of 2017, Northam’s employee complement amounted to 12 579 showing job growth of 39% since 2010. As the group’s expansion strategy unfolds and starts delivering, further work opportunities will start manifesting. Already the group’s growing smelting capacity has resulted in 100 additional surface jobs at the Zondereinde metallurgical complex. With a new, additional furnace up and running since early 2018 this number will grow to a total of 80, while the underground progress into the Tumela block has already accounted for an additional 350 positions at Zondereinde. This number is likely to grow by 650 as the mining area becomes established and material starts emerging from this critical addition to the Zondereinde operation, and as this operation increases its production capacity to 350 000 ounces. Excellent progress continues at the group’s flagship brownfields expansion initiative in the eastern Bushveld complex, the new Booysendal South mine. Historically this area of the country has been underdeveloped and education levels are low. Northam’s
With our focus on local recruitment where possible, the South mine, and its development, is regarded by much of the local population as a beacon of opportunity. Already the South mine, during its establishment, has made 1 000 job opportunities available in 2017, while this number is likely to be doubled in 2018 as the construction and development reaches critical mass. Economic growth is key to South Africa’s emergence from the persistent low investment ratings of the previous year. With sustained investment in infrastructure and in our business, we at Northam hope also to attract the kind of investment which we need to stimulate and expedite further job creation in South Africa.
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We believe in our country, our company, our people and our product
NORTHAM MAKES HEADLINES AS IT INVESTS IN INCREASING PRODUCTION AND CREATING JOBS
JOB OPPORTUNITIES IN METALLURGY Nor tham’s original metallurgical infrastructure dates back to the late 1980s. After the company’s transformative growth over the past few years, Northam opened its second furnace at the metallurgical operations at the Zondereinde platinum mine, near Thabazimbi, in the Limpopo Province. Before the expansion, the metallurgical plant’s employee complement amounted to 536 full-time employees.
Northam Platinum will create about 6 500 permanent and contractor jobs over the next four to five years.
Th e s m e l te r ex p a n s i o n p ro j e c t was approved by the company’s board in June 2015, with a capital amount of R750 million. First matte was tapped in January 2018, and 65 permanent new jobs will be created, indicating a 12% growth rate in employee numbers in a period of just more than a year. What it means for the company, is that the new 20MW furnace will provide the additional capacity re q u i re d to t re a t t h e g row i n g volumes from its Zondereinde and Booysendal mines, along with those of Eland when it starts producing – effectively raising capacity to treat up to 1 million ounces of PGMs.
ARTISAN LEARNERSHIPS INCREASE FROM 17 TO 21 Zondereinde general manager Danny Gonsalves’ decision early in 2017 to increase the artisan learnership programme from 17 to 21 eager students has been vindicated. A year later all 21 candidates are making excellent progress in their fields. “Engineers are valued throughout all sectors in the economy, but Northam remains the place to be,” commented Mr Gonsalves pictured above amongst 21 eager would-be artisans. He added that “learner artisans should feel, at the end of their course, that they really deserve the trade certificates they have earned”.
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The FuTure
of enterprise and supplier development By Abigail Murray, Associate: Enterprise Development, Saldanha Bay Industrial Development Zone
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he BBBEE Act and Codes of Good Practice of the South African National Department of Trade and Industry subscribe the development of Small businesses by means of Enterprise and Supplier Development initiatives. The idea is for big business to develop smaller businesses and encourage entrepreneurship in the country. Elements of the scorecard, designated groups and interventions include: • Broad-Based Black Economic Empowerment • The disadvantaged groups • 51% black-owned, black women-owned and youth-owned enterprises. • Localisation • Transformation • Corporate social investment • And the benefits to big business by means of scoring and incentives Some industries and communities are not geared for supporting Enterprise Development (ED), or Supplier Development (SD), whilst large companies and state-owned companies (SOCs) with government contracts are required to report on their ED and SD spend in order for government to measure success in SMME growth and positive change to the economy. The BEE Act and the Small Business Act have vastly different definitions of small, medium and micro enterprises as well as exempted micro
enterprises and qualifying small enterprises that add to the confusion. In considering the interventions big companies could do to add value, they need to differentiate the type of business they wish to invest in: start-up, trading, revenue generating, profit-making or a business that adds value to its core function relating to Supplier Development. The conundrum starts when the pool consists of mostly small businesses that need to learn about compliance, business basics, and the importance of safety in operational circumstances. Corporates find themselves looking for ways to assist these businesses without creating the expectation of work, considering the risk involved with engaging with businesses not yet equipped to work on operating sites. Supplier Development, similarly, comes with its own challenges. From an ED division, funds will be earmarked to support a key small business provider to the core function of the company running into millions of rand. It takes an entire organisation to do Supplier Development. Many Supplier Development plans are designed by B-BBEE consultants with little to no operational experience. If you are going to make a success of your Supplier Development programme, you must have subject matter experts and operational managers from across your organisation in your planning team. And the general language of helpfulness needs to be understood and lived out by all divisions within the organisation.
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Enterprise and Supplier Development remains a responsibility of more than just the government in South Africa. There are many parties involved and many moving targets that everyone needs to stay committed to the cause of why they have embarked upon this journey. Recent studies show globalisation trends prove Local Economic Development is beyond zoning, attracting investors and/or collaboration between the private and public sectors. It is now the strategic profiling of regions to create a competitive advantage through the stimulation of entrepreneurship and ensuring a competitive advantage for the areas through business incubation, the development of clusters and strategic linkages with major players. It is also evident that the local officials do not have an in-depth knowledge of their own environments. Some of the programmes offered by agencies were not adapted to local realities. In supplier development government indicates its commitment by means of policies and the incentivising of compliance. Big companies commit to this because they want to run a business in a conducive environment and want to invest in the area it draws its resources from. SMMEs need to latch onto this opportunity and commit to growing businesses to make a difference in the community they serve and then aim to also change the economy by employing from the areas and keeping the money circulating within the areas in which it operates. Development agencies, officials and knowledge organisations need to form part of a development ecosystem to support rural and township economies to develop in touch with local realities.
O&M CAPE TOWN 6349/E
Volkswagen driving South Africa’s automotive transformation. Having invested more than R6.1 billion in South Africa over the past 3 years and ensuring that over 60% of all vehicle parts are locally manufactured, Volkswagen South Africa continues to contribute significantly to the growth of the automotive manufacturing industry and transformation in South Africa as a whole. The Volkswagen Ntinga Project is strategically placed to assist VWSA with its strategy to deepen localisation and increase the number of Black-owned suppliers in the Volkswagen and automotive value chain.
“Ntinga” is a Xhosa word meaning “to soar up and rise” and this Volkswagen initiative aims to enable exactly that for five black-owned manufacturing businesses. The pilot project launched in 2017, is an 18-month coaching and mentorship programme in partnership with the Department of Trade and Industry that enables five new black-owned manufacturing businesses to become Volkswagen suppliers.
Established in 2011, the Volkswagen Business Support Centre is our business incubator that aims to boost and stimulate small businesses in the Nelson Mandela Bay. The entrepreneurs attend an intensive entrepreneur development programme with the aim of improving their business acumen and growing their businesses. Realising the challenges that come with being a manufacturing business, the Volkswagen BEE Trust was established in 2016 with an initial investment of R86 million to provide financial and non-financial support to black-owned automotive manufacturers. The Trust provides venture capital funding to South African Black SMME’s in the automotive sector who show potential to grow exponentially. We strongly believe in the inclusive growth of the automotive sector and the South African economy, and are proud of our contribution towards the transformation of the automotive industry.
ENRICHING LIVES THROUGH SUSTAINABLE EMPOWERMENT MultiChoice plays a big role in contributing to the South African economy. From helping small to medium businesses through its MultiChoice Enterprise Development Trust to supporting the manufacturing sector through decoder manufacturing – empowerment is one of our strategic pillars at MultiChoice.
UPLIFTING COMMUNITY TELEVISION
Aside from great local shows on many of DStv's channels, MultiChoice's empowerment work also means that community TV stations Soweto TV, Bay TV, Tshwane, GauTV, Cape TV and 1KZN TV give their local communities a voice. We donate funds and equipment, and pass on broadcasting skills to the community television stations on DStv.
DSTV DECODERS
All MultiChoice decoders are manufactured in South Africa. The flagship DStv Explora decoder is made in a dedicated factory in East London. This factory creates much-needed jobs opportunities in the area. Single view HD Decoders are also manufactured in South Africa in a dedicated factory in Johannesburg. This factory specifically creates opportunities for young people between the ages of 18 to 25.
“Our empowerment initiatives help us to touch different communities in our industry in a very tangible way. We believe it's important for us to play a role in growing the economy and to ensure we have a healthy, thriving communities in South Africa. We'll continue to give our support to communities and to help them to tell our local stories,” said Calvo Mawela, CEO for MultiChoice South Africa.
Sport development
MultiChoice has also been working with sports federations locally and abroad to bring the best sport to our customers. Our support means many sports can thrive – our MultiChoice Diski Challenge and the SuperSport Rugby Challenge provides the opportunity for young players to compete in a tournament and gain valuable experience. The programme also train the youth in sport broadcasting through internships. The interns get involved in producing live MultiChoice Diski Challenge and SuperSport Rugby Challenge matches for SuperSport. Young producers receive mentoring and coaching from experienced professionals.
TELLING LOCAL STORIES As a broadcaster, MultiChoice takes it role in helping South Africans tell their stories very As a broadcaster,we work with our content producers to help them build their businesses and we pass on the skills we've learned over 30 years in the business. In this way, we support upcoming actors, production houses, technical and production teams to tell their stories. Many of these stories become instant favourites among DStv customers – just think about Our Perfect Wedding, Date my Family, Isibaya, Queen and Papa Penny Ahee, to name just a few. Over the last five years, MultiChoice has invested more than R7 billion in local productions alone.
ENTERPRISE DEVELOPMENT
The MultiChoice Enterprise Development Trust aims to empower small and medium businesses in the film, television and media industry with funding and mentorship. Since it was launched in 2012, the Trust has benefited more than 100 entrepreneurs and invested more than R3 billion.
TICK-A-TARGET TICK'S PASSION IN SPORTS!
Lizzy Kilani is the Managing Director of Tick-A-Target which started in 2016. “The MultiChoice's Development Trust has been a great help to take my business to the next level. I've been doing activations, branding, public relations and sponsorship management for tournaments such as MultiChoice Diski Challenge, SuperSport Rugby Challenge, Telkom Knockout and Cricket South Africa.,” said Lizzy Kilani.
AFROPULSE IS BREAKING THE MOULD IN CREATIVE INDUSTRY
AfroPulse Media is a production house that offers integrated agency-type creative solutions. It was started in 2011 by Mosa Sibande, Aluwani Munyamela and Stanley Denga.“In 2016, MultiChoice's Enterprise Development Trust gave us funding which assisted us to acquire the latest state of the art equipment to compete with the best. MultiChoice has helped us dream beyond what we thought we could do,” said Mosa Sibande, Managing Director at AfroPulse.
MEDIASYNC FOCUSES ON BRAND EXPOSURE IN TAXI RANKS
MediaSync specialises in national outdoor advertising and focuses primarily on marketing and selling outdoor advertising signage at taxi ranks. “MultiChoice's Enterprise Development Trust benefited our business by providing us with a capital investment to sales and business support and training, which has helped to give us competitive edge,” shared Tshepo Mofokeng, CEO and CoFounder at MediaSync.
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SuPPlier DeveloPment it’s about more than money Meaningful and sustainable transformation fostered within the logistics industry
By Kamogelo Mmutlana, Chief Executive Officer, Barloworld Logistics
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aul Kagame, President of the Republic of Rwanda, once said: “Development is about more than money, or machines, or good policies – it’s about real people and the lives they lead.” As our country grapples with economic transformation and growth this quote is particularly relevant, highlighting the need for sustainable interventions and partnerships between corporate South Africa and other stakeholders. With economic growth forecast at a meagre 1%, unemployment at more than 26% and inflation hovering at the 5% mark, it has never been more important to foster entrepreneurship. With each viable business added to the marketplace, employment is created, and resources are utilised, adding to the national product and per capita income of a country.
The local logistics industry, as a significant employer and buyer, has a responsibility to drive change in all spheres, but particularly within the enablement of a diverse supplier base. Whilst transformation is often associated with broadbased black economic empowerment (BBBEE) scorecards, real, sustainable transformation is an opportunity for all within the economy to play a role in the development of South Africa. “Economic prosperity for all demands far more than a tick-box exercise to avoid penalties and secure contracts and as a company, we strive for a sustainable, viable impact through our supplier and enterprise development programmes,” says Kamogelo Mmutlana, Chief Executive Officer, Barloworld Logistics. “Our industry contributes more than 10% to the South African GDP, employs thousands and sits right at the heart of the economy, and so the responsibility to set the right tone and example is critical. By building relevant programmes that create real, long-lasting entrepreneurial partnerships, as an industry we have the opportunity to leave a lasting legacy.” Indeed, as early as 2001, the organisation has been actively involved in growing microenterprises within the transport industry. Such programmes have evolved over the years into robust empowerment mechanisms providing high-potential individuals with the ability to improve their skills and become business owners, changing their trajectory from an employee with limited prospects to an entrepreneur in charge of their destiny. Amongst the success stories are the so-called ‘Emerging Truckers’, individuals taking ownership of vehicles in support of Barloworld Logistics’ customers in both the agriculture and chemical industries and heralding a new type of professional micro-transporter in the market. While the fostering of micro-enterprises has long been a tradition, the inclusion of supplier development as part and parcel of procurement
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Supplier development is about providing individuals with the tools to better themselves and the communities, not simply about funding,” strategies is a growing trend. This means that supplier development will be managed and supported correctly to move transformation from a perceived trade-off between scorecard and business needs to an every-day norm. Once internalised, as within Barloworld Logistics, the intention will be to strengthen relationships with all suppliers, including micro-enterprises. This is driven by a belief that customers, and indeed, organisations, will benefit immensely from continued ambitions to develop emerging entrepreneurs. “Supplier development is about providing individuals with the tools to better themselves and to their communities, not simply about funding,” adds Mmutlana. “A multi-pronged approach of skills transfer, mentoring and market-access provides developing suppliers with muchneeded support, worth far more than a simple cash injection. This type of support translates into business benefits in that the industry has more access to micro-enterprises directly aimed at providing the services vital to driving the economy.” Barloworld Logistics participates in the programmes offered by the group incubation hub, Siyakhula. This hub focuses on the development of majority black-owned SMMEs or suppliers who have the intention of transforming their businesses. “It is an interesting challenge for leaders to chart the way to meaningful transformation within the supplier and enterprise development space,” concluded Mmtulana.
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mall business-owners want to grow their businesses and want to understand the market opportunities to position their existing or emerging businesses better for the future.
Understanding that need, the SBIDZ has conducted TED-Talk styled information sessions with SMMEs on a monthly basis since 2015 covering questions from the oil, gas and maritime industry, such as: What it means? How oil and gas rigs work? What will happen in the Port of Saldanha? How does it impact the Saldanha community? What does it take to do business in these industries? These sessions attract 60 to 100 small businesses every month, and the SMME community is informed on the standards of the oil, gas and maritime industry, as well as challenges experienced in the area and mitigating ways. Where possible, local SMMEs are brought in to tell their entrepreneurial stories, and share insights into a very competitive and highly standardised industry. Presentations and videos are shared and key sessions have been videographed for sharing online.
[CASE STUDY] Collaboration for sustainable Enterprise and Supplier Development in Industrial Development Zones, Infrastructure phase. The Challenge: The SBIDZ is in its infrastructure phase with an expectant community with regard to business opportunities, and growth in businesses in various industries for the immediate and long-term.
Goals: The SBIDZ will be a new open space for upstream oil, gas and marine repair, fabrication, logistics and related servicing in the Port of Saldanha. It provides a place where like-minded visionaries have the freedom to partner, create new opportunities, to generate growth and gain a sustainable advantage. The surrounding region responds to this opportunity through its highly collaborative, innovation-driven and resilient SMME ecosystem, where SMMEs can assume their role in contributing to the economy and creating jobs.
Optimization Areas: • • • • • • • • •
Creating partnerships with corporate partners in Enterprise and Supplier Development Mutually improved access between buyers and suppliers Easier ways of identifying development needs of SMMEs Improved communications between buyers and suppliers Pooling of resources by corporates Leveraging on opportunities from other sectors Improved access to markets for SMMEs Improved access to development partners Stimulating innovation and stronger value chains
The Results:
Success Story The SBIDZ embarked on a contractor development program and empowered five local contractors to erect a 5km perimeter fence. Three of these contractor’s CIDB grading was bettered and the SBIDZ is eager to replicate this program by means of its infrastructure program.
The creation launch and implementation of Grow-Net. A combined database of SMMEs from all corporate partners resulting in a platform where all of the optimization criteria is met. The initiative is supported by national, provincial as well as local government, and represents a Public Private Partnership with private sector and development partners.
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Moving Beyond CoMplianCe
leveraging Mining Supplier linkages Attributed to Sandile Mzilikazi Khumalo, Manager of Supply Chain Sustainability at Exxaro
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upplier Development activities can no longer be viewed as grudge expenditure driven by compliance. In addition to the widening trust deficit among social partners, rapid advances in mechanisation technology coupled with the volatility of commodity prices require mining companies and government to re-examine the role of their Supplier Development programmes. At a firm level, this entails integrating Supplier Development activities into strategic sourcing practices and innovation strategies. At a macro level, industry-coordinated Supplier Development activities offer the best chance to transform the demographic profile of South African supply chains and develop a globally competitive sector, bolstering the entire South African mining industry in the process. Like most mining jurisdictions, the development of the domestic mining supplier base has historically been tied to the domestic demand base. At its peak in the 1970s, domestic demand for mining inputs, matched by a sizeable investment in domestic research and development by the likes of COMRO (Chamber of Mines Research Organisation), gave rise to a number of leading supply firms. Some of these still maintain top positions in the supply of performance chemicals, specialised mining equipment and services. However, they are the exception. As a rule, the mining input sector has seen its fortunes flounder with that of the mining sector.
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Advances in mine automation and mechanisation are also accelerating demand and supply-side consolidation of equipment firms, making it more difficult for emergent South African industrialists, black or white, to compete. Consequently, the supply structure is highly concentrated amongst a few players, with high levels of capital and knowledge acting as significant barriers to entry. Advances in mine automation and mechanisation are also accelerating demand and supply-side consolidation of equipment firms, making it more difficult for emergent South African industrialists, black or white, to compete. This trend is likely to continue. A 2013 McKinsey study estimates that purchases of capital equipment constitute as much as 30% of mine expenditure. The supply markets for most of this equipment is principally through multinational original equipment manufacturers (OEMs) operating in South Africa through local distributors. Notwithstanding several interventions by government to encourage new players, there remains significant inertia brought on by the high transfer costs of switching OEMs as well as an absence of economies of scale to support domestic suppliers. Trade liberalisation and the emergence of lowcost country producers have also seen domestic demand increasingly satisfied through imports. Owing to preferential procurement requirements, these imports (estimated as high as 62% in 2016) have been facilitated through black empowered intermediaries of multinational firms. However, domestic value added is limited. Preferential
procurement policies have been effective in increasing the participation of new entrants, but a new approach is required to take the mining sector forward.
So what is to be done? In April 2018, the newly appointed Minister of Mineral Resources, Mr Gwede Mantashe, launched a new vision for the South African mining sector dubbed “Vision 2030�. This is a fresh and muchwelcomed attempt to bring the development path of the sector in line with the National Development Plan. Realising this objective requires the cooperation of business, mining operators and workers, but is also highly dependent on bringing along mining input suppliers. To promote a transformed and competitive mining sector, these groups must jointly prioritise resuscitating the domestic mining research base, invest in joint skills development and the development of shared technical standards. In this manner, Vision 2030 defines a future wherein the mining inputs sector will be an engine that sustains South African mining as a key contributor to the GDP of the country, well into the future – to supply the mineral and metal demands of a global population.
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COLLECTIVE VALUE CREATION
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uppliers need to create and deliver value competitively. This principle forms the foundation for all Collective Value Creation’s programmes and it is with this in mind that we created our supply chain competitiveness programmes. We believe that job creation is a result of suppliers delivering superior customer value over time. Our programmes were developed around the needs of global supply chains and follows the process from the first sales engagement through to continuous improvement in the customer relationship. From experience we have found
that these processes are not standard and depend highly on the nature of the industry and the client. We have therefore tailored our programmes around the various industry needs, from within mining, retail, construction as well as manufacturing. Our engineers drive efficiencies through our lean supplier development programme consisting of components such as target setting and benchmarking, quality management, process improvement, asset maintenance and continuous improvement.
PROGRAMMES Supplier Competitiveness Programme Our supplier competitiveness programme has subject matter experts that guide suppliers through the specific nature of their engagement with the customer. Areas of development include compliance and supply chain readiness, legal contract management and negotiation, anti-corruption compliance, customer relationship management, reporting and performance improvement around Service Level Agreements. The outcomes of this programme deliver suppliers that can effectively and competitively engage in the B2B space.
[CASE STUDY] The Impact from the Supplier Competitiveness Programme Collective Value Creation ran a supplier competitiveness programme on behalf of a large corporate in eThekwini. The immediate outcomes of this short-term programme lead to the SME’s on the programme realising a 20% increase in turnover.
Governance for Good Programmes Our internationally licenced Anti-Corruption programme is specifically tailored to train and implement risk mitigation practices that educate and empower SME’s in understanding and combating fraud and corruption. Corruption offers a real threat to conducting sustainable business practices, with international fines and significant reputational damage being some of the consequences. With South Africa scoring 43/100 in a recent survey by Transparency international, corruption is not something companies can ignore, and supplier development efforts have to include a strong anti-corruption programme.
Yolelwa Sikunyana who heads up the Governance for Good programmes for Collective Value Creations says: “It is wonderful to see SME’s become active in combatting corruption.” Before, the implementation of the programme it was found that 25% of the SME’s reported being approached for facilitation payments by public officials. The programme led to the immediate implementation of a Code of Conduct and Anti-Corruption policies from the participants on the programme.
@Collective Value Creation
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DISTELL
Powering Sustainable Enterprise Development
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istell’s Supplier and Enterprise Development initiatives are geared to support meaningful empowerment in the communities in which we operate, as well as the broader South African community. The outcomes based initiatives are driven by the Distell E+Scalator Programme and primarily linked to Distell’s supply chain, focused on education, technical skills, job creation and entrepreneurship.
The E+Scalator is committed to the inclusive participation of small black-owned businesses, by increasing their capabilities and capacity through tailored, collaborative initiatives. Through supplier discovery, business development services, supply opportunity identification and off-take agreement, the E+Scalator Programme supports these identified suppliers and equips them to do business with Distell. To further support small black-owned businesses, as well as empower them and ensure their long-term viability and success, the E+Scalator has partnered with ABSA Bank to offer access to funding. This is managed through an Enterprise Development Fund and a Supplier Development Fund, which provides zero-interest funding to qualifying small black-owned businesses within the Distell supply chain. Funding applications are supported through a joint business case developed collaboratively by the E+Scalator and the supplier. The funding is cash-flow backed and supported by procurement off-take agreements with Distell, thereby limiting the risk of default by the supplier. To expose suppliers to further potential business within the Distell, the E+Scalator hosts an Enterprise and Supplier Development Open Day, where existing empowered suppliers have one-on-one time with procurement category managers. Since its inception, the E+Scalator has supported a range of small blackowned businesses to expand and create jobs. Omega Packaging is an existing Distell supplier that has benefited from the E+Scalator. Due to rapid growth, this 100% black-owned small business experienced a number of challenges to its original business model. The E+Scalator project team assessed all aspects of Omega’s business and helped the company implement proactive restructuring, capacity building and turnaround strategy. A business case was developed and funding was provided, to purchase more efficient machinery. The company now operates a more streamlined business. The E+Scalator also leverages the technology and capability of the new Distell
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Procurement Service Centre in order to discover and include an increased number of empowered SMMEs in procurement sourcing events, as well as dramatically streamlining the supplier on-boarding process and BEE masterdata management. The Distell E+Scalator will continue to identify local suppliers, with the aim of increasing capabilities, as well as capacitating and providing development, and coaching, in order to grow these small businesses and support their long-term viability.
Success Story THULEKA DUZE Thuleka Duze, a 44 year old female entrepreneur from the dusty streets of Gugulethu, has made a name for herself through her passion of designing Ekasi handbags, crafted from colourful African print fabrics, sourced from Ghana. She is a graduate of the University of Stellenbosch’s Small Business Academy (SBA) Development Programme (DP), which has provided her with the necessary skills to further develop her business. Soon after starting her business, she established a market for her goods in Longstreet, a thriving tourist hub in Cape Town. Although she did relatively well in selling her products, Thuleka was not able to increase her target market due to lack of business expertise and an impactful marketing strategy. The DP has provided Thuleka with expertise and skills which she is utilising to expand her business. It has also enabled her to network with the university’s SBA and MBA alumni and build relationships, providing potential opportunities, such as her recent venture, exporting bags to Spain. “Being equipped with business skills has been empowering. It has enabled me to plan and put systems in place, to ensure the long-term success of my businesses,” says Thuleka. Co-sponsored by Distell, the SBA DP is an annual nine-month course targeted at participants from communities in the Western and Eastern Cape. Participants graduate with an NQF level 5 qualification. The programme equips graduates with key business expertise such as marketing, financial management and business planning.
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[CASE STUDY] 33 Degree Energy Systems • •
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Faced with escalating electricity rates and rolling blackouts affecting production across South Africa, Distell pursued a sustainable energy solution to power its largest manufacturing site in Springs. A lack of potential empowered suppliers led the Distell E+Scalator team to support the establishment of a majority black-owned entity that could provide a turnkey solar energy solution. 33 Degree Energy Systems was commissioned to manage the installation of one of the largest solar rooftops, for the Springs manufacturing site. The project was successfully completed at the end of 2016 and continues to deliver benefits above the technical estimates. Upon successful execution of this project, 33 Degree Energy Systems has received requests from major clients interested in commissioning similar projects.
{IN THE NEWS}
Amarula Bottle Tassels Empowerment Initiative Bears Fruit “Every time we see the yellow tassel that is so symbolic of the Amarula brand and resonates with our consumers, we know that there is a proud team of women, previously without proper jobs, and now the shareholders of one of Distell’s flagship supplier development initiatives,” says James Wilkinson, Distell’s Group general manager for business improvement. This flagship initiative is the Handwork Hub, an empowerment initiative driven by the Distell E+Scalator Programme, which continues to bear fruit, realising the fulltime employment for more than 30 women.
Established in February 2017, the Somerset West based Handwork Hub is a majority blackowned, wholly woman-owned business that produces around 12 million of the tassels for the Amarula cream liqueur bottle. Amarula is an iconic South African beverage produced by Distell, a global producer of alcoholic beverages, with a diverse portfolio of award-winning brands.
ABOUT
Established in 2016, the Distell E+Scalator Programme was initiated to empower and accelerate small black-owned businesses, b y i n c re a s i n g t h e i r c a p a b i l i t y a n d capacity. It assesses the requirements and challenges of the small, medium and microsized enterprises and through a tailored approach, assists with business development services, supply opportunity identification, off-take agreement support and access to dedicated zero-interest funding. A distinctive feature of the E+Scalator approach is that the opportunity to do business with Distell is approached from their perspective, rather than from a corporate one, and the team work cross-functionally within the business to act as an integrator of these business opportunities into Distell. Distell E+Scalator successes include: establishment of the Handwork Hub, a majority black-owned, wholly womanowned business that produces the tassels for the Amarula cream liqueur bottle; development of Pink Peppercorn Catering Company, a 100% Black Women owned business managing the canteen and catering services for Distell’s Shared Service Centre in Tygervalley; and the expansion of Maneli Commodities, a 51% black-owned business, formed as a partnership between Maneli Foods and established commodity traders, Perdigon. Maneli was identified and on boarded towards the end of 2016 and is now the sole supplier of maize to Distell. Distell E+Scalator is currently pioneering a leading initiative aimed at inclusive, broadbased participation of new and existing empowered farmers in the apple value chain linked to Distell’s cider business. To support this project Distell has built a smaller scale production plant at its Adam Tas site to produce apple juice, juice concentrate, and apple aroma which will assist the company in developing further insights to support emerging black farmers.
“The most significant aspect of being in partnership with the women is being a part of something that is bigger than us. It is indeed a learning curve for all of us and we are certainly excited about the road ahead, and are grateful to Distell for making this possible”, says Handwork Hub managing director and partner Toni Rimell. In addition to incubating the enterprise, the Distell E+Scalator assisted the Handwork Hub with a R2,7 million interest-free loan, thereby helping to secure modern premises with upgraded equipment.
@Distell
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Beyond The Scorecard What is holding SA back? By Catherine Wijnberg, CEO Fetola
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he forecast is that by 2030, as much as 90% of new jobs in our economy will be created by small, medium and micro enterprises. In reality though, fewer than 30% of all SMMEs survive beyond three years – so there is a gulf between this dream of job creation, and the reality of its achievement. But whose problem is this? We already spend billions of Rands on enterprise & supplier development (ED & SED), so it’s not a budget issue. Moreover, hundreds of corporates and multinationals currently meet the minimum requirements of the BEE scorecard, so it’s not a compliance issue.
Is it perhaps an attitude problem? Or a problem of misunderstanding? An attitude problem is easy to spot. That person or company that merely ticks the box and gets the points without really considering the long-term impact or benefit of the exercise, or worse – those that try to cheat the system and get the points anyway. The problem of misunderstanding though, is that we don’t know what we don’t know.
When it comes to supplier development – essentially the practice of nurturing and supporting new and emerging black-owned suppliers in the supply chain – there are willing corporate and government role-players wanting to make a difference, and we have eager SMEs wanting to do business with them, but the gap between the two is wide. It is a gap that most people are unaware of. It is a gap of understanding, of expectation, and behaviour. The challenge is two-fold. Firstly there is a huge power imbalance between the corporate world and that of the small and growing business. They also speak a different language, have very different systems and ways of operating. This often leads to a mismatch of expectations – with small businesses excluded from the supply chain and feeling resentful, and corporate buyers, frustrated by low levels of performance of small businesses, under pressure to squeeze these unsuitable providers into their buying schedule. The net result is that supplier development often becomes a frustrating disappointment; a begrudging compliance exercise with limited returns, instead of an incredible opportunity for business to make a lasting and positive impact on our economy and our country.
In truth, few really understand these challenges or how to resolve them, and only a handful of people, and companies have begun to actually deal with them head on. What is clear is that when it comes to investing in emerging small enterprises, we can no longer afford to simply spend the money and tick the boxes to satisfy BEE scorecard requirements. Business needs a long-term strategy, and a firm focus on investing their ESD funds effectively to create a brighter future for themselves, and every South African. Collectively we have the resources to generate real, lasting growth of small businesses, a greater circulation of wealth amongst the population, and a thriving equitable economy. As someone whose career and calling has been the development of the small business sector, I am proud to be part of the inaugural Supplier Development Awards. Sponsored by ABSA, the Awards aim to acknowledge individuals and organisations who are bridging this divide and implementing ground-breaking supplier development programmes that make a real impact. To date, more than 400 entries for the Awards have been received, including significant players like Nando’s, Sasol, Sun International, De Beers, Old Mutual, Massmart and the Distell Group. This suggests that supplier development is being taken seriously in South Africa with corporates, parastatals, government institutions and smaller Qualifying Small Enterprise (QSE) businesses looking well beyond the scorecard to do the right thing. 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. Sustainable growth, lasting empowerment, and positive benefits for all stakeholders is possible. It’s time for big business to make a big impact.
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TIGER BRANDS TRANSFORMING THE AGRI-SECTOR BY GROWING OUR SUPPLIER BASE
As the largest producer of branded food products in Sub-Saharan Africa, the growth and development of the agricultural sector in South Africa is vital to Tiger Brands. We contribute directly to the strategic development of the agri-sector through our enterprise and supplier development interventions, as part of the broader economic transformation agenda of the country. Tiger Brands remain committed to supporting BBBEE and small business, spending R12,1 billion and R1,9 billion in these categories. In 2017, we sourced R73 million worth of fresh produce from black emerging farmers and through our partnership with government, spent an additional R30 million on enterprise and supplier development, focused primarily on emerging farmers. We are focused on transforming our supply chain, currently procuring about 2,5 million tons of agricultural commodities per year, two-thirds of which come from local livestock, vegetables, fruit and grains suppliers and 16% of which comes from black-owned businesses. We are working steadfastly to increase this to R120 million by 2021, by helping more black suppliers in the agricultural sector. To achieve this goal, we have partnered with government to identify and develop smallholder farmers, who were previously unable to enter our supply chain or compete with their commercial counterparts. In the first phase of the project, 33 smallholder farmers from the Western Cape and Limpopo have been identified to particulate in the programme, receiving financial support, technical training and mentoring, in addition to seed, fertiliser and farming equipment, with a guaranteed offtake agreement from us.
In addition to raising productivity, enhancing food security and promoting rural development, Tiger Brands’ programme is expected to create jobs outside of farming, in both the services and production sectors. The projects across our value chain focus on growing small businesses that we can support over the longer term. In 2017, we spent R15 million on enterprise and supplier development, exceeding planned expenditure for the period through the provision of training, support and mentorship towards identifying and establishing viable community enterprises. One of our projects, the tomato farming community in Nwanedi, Limpopo has experienced enormous benefit as part of the smallholder farmer programme. Their passion for their craft shows in the quality of their crop, which ends up in our much loved and award winning products like All Gold tomato sauce and Koo baked beans. This smallholder farmer programme should create 400 jobs, mostly in Limpopo and the Western Cape. Our near-term target is to raise the volume of crops we buy from those farmers from 23 000 tons to 35 000 tons a year.
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The Business DevelopmenT
support conundrum in the south African sme ecosystem turning over less than R50m per annum. The EU conversely defines an SMME as a business with no more than €50m (±R750m) in annual revenues.
By Nadia Karim Rawjee, Director of Strategy and Finance, Uzenzele Holdings
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have spent the past 8 years providing “Business Development Support” (BDS) services to small, medium and micro enterprises (SMMEs) through (in)direct end client relationships from start-ups to 70-year-old multi-million-rand businesses looking for scale and growth capital. Over this time, I’ve met amazing development entrepreneurs, social enterprises and consultancy businesses adding immense value to the SMME ecosystem and there are well over 340 organisations providing much-needed support to the South African SMME ecosystem. So why do we still feel, as an industry and SMMEs, like the progress is still so slow?
HErE arE THE 4 rEaliTiES THaT arE HolDing SMMEs back
1. Definition of SMMEs The South African definition of SMME is governed primarily by two pieces of legislation; The National Small Business Amendment Act and the B-BBEE Act. The National Small Business Amendment Act defines the largest sized SMME in relation to turnover as that from the wholesale and retail sector generating R64m1 in revenue per annum whilst the generic B-BBEE Codes have defined an SMME as 1
Does not accommodate for inflation
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The disparity in these definitions and market expectations creates a massive vacuum in developing the appropriate business development support services to address entrepreneurs’ expectations and service providers’ offerings for this market. The result is niche offerings for particular sectors and segments of the economy, with every service provider and financier defining SMMEs in their own way, which in turn creates a decentralised and unstructured maze of offerings which SMMEs must navigate in order to find the solutions their businesses require.
2. The narrative of entrepreneurship Then there is the narrative which promotes that everyone has the freedom to be an entrepreneur, so everyone who has ambitions should become an entrepreneur. This has set many an aspirant business owner up for failure. Whilst the environment in South Africa is changing with policies such as the B-BBEE codes, that promote a less oligopolistic and concentrated economy by promoting SMMEs, it will still be some time before we see the inclusion of more SMMEs into the mainstream economy. In a world of quick-wins and instant gratification, these realities, barriers to entry and lead times are often not communicated, and aspirant entrepreneurs are left ill-equipped to stay in the game for long enough to see success.
investing donor funds to provide standards in the business development professional services sector which will provide a level of transparency and clarity of the role players and gaps which exist, but there is still a long way to go.
4. bDS quantity over quality and sustainable impact Most donors and sponsors who provide the impact capital needed to finance BDS or “non-financial support” services have reporting requirements driven by mandates which enforce measurement of impact by the number of SMMEs supported as opposed to the impact of the interventions, which, in my view, is the more pertinent measurement. To me, BDS or non-financial support is the single highest impact investment which can be made into an SMME. Unfortunately, it is undervalued and the push to show numbers has led to service providers lowering their quality of service and providing theoretical classroom-style training instead of high-impact, customised and subsidised advisory which can really propel a business forward. These measurement requirements, alongside budget constraints from local and international donors, a disjointed ecosystem, an unrealistic narrative of entrepreneurship and the definition disparity, culminate in the conundrum of BDS services needed to truly support the growth of SMMEs.
3. Disjointed SMME development ecosystem
The development of an SMME ecosystem is a developmental, impact-driven concern that needs patient problem solvers and capital to back it. The South African BDS services sector needs to be creating social entrepreneurial mechanisms and solutions which are sustainable in their own right.
Adding to points 1 and 2, the South African SMME ecosystem is relatively new and there is some lack of connectivity within the BDS value chain as well as a lack of transparency and credibility of most BDS providers. There are organisations who are actively
This means that donors and sponsors must look at how to provide impact capital and budgets to entrepreneurs, to bridge the development gap and look at measurement from a longer viewpoint.
TOYOTA SOUTH AFRICA MOTORS
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Toyota Empowerment Trust • • •
R42 million fund to focus on skills and enterprise development Trust began operations in January 2018 Initial focus on the training of specialised automation technicians
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oyota South Africa Motors (TSAM) announced the creation of the Toyota Empowerment Trust (TET) at its Toyota State of the Motor Industry event in Sandton, Johannesburg.
The TET has been seeded with R42 million in startup funding and will focus on skills and enterprise development initiatives in the automotive industry. Initially, it will facilitate the training and qualification of specialised automation technicians. “The Toyota Empowerment Trust will implement training and enterprise development initiatives alongside and in support of our other education initiatives. These include our Toyota Teach programme that supports over 9 primary schools and our Toyota Technical Education Programme (T-TEP) that supports, and often manages, technical high schools in KwaZulu-Natal and Gauteng,” says Andrew Kirby, President and CEO of Toyota SA Motors. Toyota has already started with the creation of a fully-equipped robotics and automation training facility in Durban, KwaZulu-Natal. This facility will train technicians in the maintenance of complex manufacturing equipment, such as welding and spray painting robots. In addition to the training, the TET will eventually be able to support qualified technicians to start their own maintenance firms and offer this highly soughtafter specialist service to Toyota and other vehicle manufacturers in South Africa. Says Kirby: “As the largest vehicle manufacturer in South Africa, we are ideally suited to offer this type of training. Trainees will be able to hone their skills at our manufacturing facility in Prospecton, Durban, and we will no doubt use their new talents to full effect at our plant.” “I trust that many of the trainees will find employment at our plant or, in the case of prospective small business owners, a stable base of work from where they can expand their services to other manufacturers.” TSAM started training in earnest in January 2018.
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LETSEMA
Tel: +27 (0) 11 233 0000 | Email: info@letsema.co.za 1st Floor, 34 Melrose Boulevard, Melrose Arch, Johannesburg, 2196
Introducing Letsema Catalysing positive socio-economic growth by unlocking your true business and leadership potential.
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he word Letsema comes from Sesotho, meaning a company of people working together for mutual benefit. This is Letsema’s underlying philosophy; that through collaboration and partnership business can be a powerful catalyst for social change. At Letsema, they live and practise this philosophy. Empowerment and diversity are inherent drivers in all their activities. It is this foundation that has given rise to them becoming one of South Africa’s leading long-term investment holding and business advisory companies. Letsema, started 22 years ago as a humble oneman team, was the first black-owned management consulting company in South Africa. Today, the Letsema Group directly and indirectly employ more than 3 200 people.
Whilst many of their competitors have come and gone, Letsema stands steadfast in the vibrant,
ye t t u r b u l e n t , b u s i n e s s and social environment. The firm focuses on business advisory and strategy services, and provides boutique intelligence to advise small, medium and large-scale businesses on strategy and economic development. Letsema has grown from providing business advisory services (Letsema Consulting), to also include an investment holding company (Letsema Investments), and a leadership foundation (Letsema Foundation). These enable its vision of empowering people through leadership development, to eventually empowering businesses through its consulting services and direct investments, that in turn creates meaningful and sustainable socioeconomic impact.
Despite humble beginnings, the consulting arm has made a significant impact to over 500 SMMEs through its strategy, business model and enablement services both directly to EME and QSE companies as well as through the strategies of larger organisations that wish to transform and nurture local suppliers.
Lestema’s economic development practice provides sound and best-practice advice to successfully grow and transform South Africa.
Letsema’s Economic Development practice boasts a proud set of offerings that both SMMEs and large-scale organisations can partner with for best-practices on localisation, transformation and business growth. Letsema provides the following services: • • • • •
Macro-economic and supplier intelligence services Transformation and B-BBEE services that maximises socio-economic returns as part of an organisation’s growth strategy Award winning socio-economic impact assessment studies that can forecast and model the impact of investments to the broad economy Supplier Development and Localisation strategies and operating models for businesses that aim to leverage their procurement spend to develop competitive and capable suppliers SMME growth strategies and advisory services that leverage their networks and expertise to grow businesses using best-in-class strategies
Send an email to ED@letsema.co.za or call 011 233 0000 for the Letsema team to help you on your development journey.
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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.
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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
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[ LESSONS LE ARNT ]
Keep programmes targeted, simple and measurable.
‘Be the best you can with the best that you have.’ - Famram Solutions (Pty) Ltd
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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
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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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Bridge the divide and understand context.
‘…. cognisance must be taken of language, culture, traditions, education and infrastructure (or lack thereof)’.
-The Siyazisiza Trust
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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
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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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[ LESSONS LE ARNT ]
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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Supplier incluSion & DiverSitycontributes
to a More Socially innovative Marketplace By Peter Zerp, Supplier Inclusion and Diversity Manager, Accenture
Accenture’s Global Supplier Inclusion and Diversity Program connects supply and value chains with businesses owned by women; ethnic minorities; lesbian, gay, bisexual and transgender (LGBT) persons; and persons with disabilities. By tapping into diverse talent pools, corporate businesses will optimize their supply chain, while providing socioeconomic advancement for these groups.
What are social innovation, supplier inclusion and diversity?
Social innovation involves all solutions created to engage groups and individuals who may be distanced from business opportunities. Women, for example, make up about half the world’s population. They own about 35% of all businesses, but earn less than 1% of the money spent on vendors by large corporations and governments. Ethnic minorities, LGBT groups, as well as veterans, persons with disabilities and immigrants face similar problems. They are excluded from or have limited access to opportunities. Unfortunately, this lack of supplier inclusion and diversity holds true for high and lower income countries alike.
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The unconscious bias
It is easy to assume that women in a liberal country such as the Netherlands have equal career opportunities. On the contrary, when accepted for jobs, more often than not, women are offered part-time contracts. The reasoning is as simple as it is limiting: companies assume that women will want to work parttime when raising a family. This unconscious bias will put women considerably behind their male counterparts.
Ignorance breeds intolerance
Creating supplier inclusion and diversity: where to start?
In some countries, socio-economic advancement is stimulated by government programs. The US Government applies federal regulations when it comes to procurement. American companies pursuing a government contract need to prove their diversity. In South Africa, the Broad-Based Black Economic Empowerment (B-BBEE) program requires large investors to include and develop black-owned and black women-owned businesses into their supply chains.
A different bias applies to minority groups: we prefer to do business with people who are alike. Hence, people who differ from us in terms of appearance or background will encounter greater difficulties in their efforts to secure a contract.
In Europe, there are no such regulations but if more inclusive procurement policies are implemented in the public and private supply chains, it can help trigger initiatives empowering women and minority-owned businesses.
It’s a win-win situation
Global platforms and mentoring programs
We strongly believe that partnering with a diverse business is a win-win situation, as these businesses: 1. Are generally highly flexible and innovative 2. Are better equipped to respond to market changes than larger organizations 3. Lack overhead costs and are, therefore, likely to offer competitive pricing Also, by sourcing from diverse suppliers, companies might explore new markets and gain a competitive advantage. Finally, supplier inclusion and diversity increases the chances of contracting extraordinary talent, as the talent pool increases. Integrating these groups through a supplier inclusion and diversity program can lead to socio-economic advancement and offers a competitive edge for large businesses.
We need to get to know one another. Worldwide, organizations like WEConnect International (women) and the National LGBT Chamber of Commerce (NGLCC) focus on helping out women and members of the LGBT community respectively. Such groups offer excellent opportunities for diversity groups and corporate organizations to connect with each other. Secondly, we can help integrate small and diverse enterprises into our supply and value chains. They need to become more business savvy: instance-risk sharing, marketing and technological skills will help them secure the robustness of their business and maintain a sustainable partnership with larger clients.
Making a difference
Inclusive supply chains empower entire communities. Corporations partnering with diverse businesses will benefit from higher flexibility, increased innovation, cost-effectiveness and potential access to new markets.
UZENZELE HOLDINGS
w w w.u z e n z e l e.c o m Tel: +27 (0)12 346 5174 | Cel: +27 (0)81 313 0698 | Email: info@uzenzele.com
Capitalising Suppliers Uzenzele Holdings provides advisory services in capitalisation of suppliers within corporate value chains. This is achieved through supporting SME suppliers to access debt, grant and equity financiers - ensuring the SMEs are able to capitalise their businesses in order to grow into long term, sustainable suppliers that deliver consistent quality to supply chains.
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ABOUT UZENZELE hilst there is a commercial case to localise, often, the single biggest concern of procurement officials in supporting local and/or transformed SMEs is the assurance of quality, price and consistency of supply.
Conversely, SMEs need offtakes and commitment from credible clients to justify the investment of establishing local manufacturing that can meet the corporates’ supply demands. 93% of SMEs in South Africa don’t know where or how to access finance, nor do they have the skill, network and expertise to structure a bankable document which financiers of any nature are able to fund against. The Department of Trade and Industry (DTI) has allocated R12.7bn in grants until 2020, with over R9.6bn specifically for the manufacturing sector. The grants provide financial support for improved facilities, processes, products, and to upskill workers - expecting to result in over 200,000 new jobs.
Established in 2010, Uzenzele has advised over 1,713 SMEs on where and how to access finance. Uzenzele’s specialty is in capital raising services for expansion of existing manufacturing businesses within established value chains. Uzenzele provides specialist advice to SMEs in determining where and how to access finance for expansion and growth. As certified UNDP Supplier Development Professionals, Uzenzele is able to guide the selection and identification of strategic, high impact suppliers within corporate value chains - with a focus on the capitalisation of these entities for a sustainable win-win solution. Uzenzele leverages its experience and network of commercial and developmental financiers to apply for capital on behalf of its clients.
[CASE STUDY] “ABC” Stats: • • • • • • •
Manufacture and wholesale of baby care products Clients: large blue-chip retailers locally and agents in 2 African countries Track record: 5 years old, sustainable, financial controls in place Capacity: 24hr shifts 6.5days a week means cannot grow further Black ownership: >90% Black operator/industrialist: managing director Timeline to funding: 7 months
“ABC” needed to expand, and with our guidance, determined it needed in excess of the minimum R30m (OPEX and CAPEX) required to qualify for a Black Industrialist Grant with the DTI. Uzenzele prepared “ABC”’s bankable business plan and raised 50% of their qualifying project costs of over R20m as cash grant funding plus R40m in debt finance to support their expansion. “ABC” has moved into their new state-of-the-art facility with new machinery, producing higher quality products, more economically to meet increased market demand. “ABC” has created 89 new jobs. *”ABC” has not been named for purposes of confidentiality.
@Uzenzele-Holdings
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@UZENZELE
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DE BEERS
Our Commitment To Empowering Local Entrepreneurs
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e Beers is taking giant steps in empowering entrepreneurs in the Limpopo and Free State provinces by disbursing almost R170 million worth of contracts to 37 black ‑owned enterprises. During 2017, De Beers Group has increased its Enterprise Development efforts in line with its commitment to the social and labour plans entered into with its hosting communities. Deliberate actions were initiated and undertaken to ensure that enterprises in Musina and Kroonstad are developed and supported to take advantage of the supplier spend invested by the group in this area. To date, Voorspoed mine in Kroonstad has spent a total of R49.95 million on local procurement from 10 suppliers from its labour sending communities. The suppliers offer services such as office cleaning, building maintenance, canteen and catering services, plant cleaning, and the supply of warning signs around the plant – collectively, they have created 129 jobs. Venetia mine in Musina has locally procured services from 27 black‑owned suppliers at a contract value of R120 million, offering services ranging from security and hygiene to engineering. These contracts will support about 200 new jobs in the Musina and surrounding labour sending communities.
The key focus is the establishment, upskilling and development of local businesses with the aim to create employment for themselves and others and in the longer term contribute to the socio‑economic development of the area. All businesses are enrolled in the Supplier Development programme offered by the mines and delivered through an expert partner. This involves a baseline assessment of all newly appointed suppliers and the design and implementation of a customised programme to assist them in developing business skills and other skills necessary for continued growth and sustainability of their businesses. A mentorship programme of about two years is offered and includes formal mentoring, training, coaching and the provision of tools to enable the businesses to put in place the necessary controls and governance expected of any business. A key focus of the programme is the marketing and growth of the businesses to ensure sustainability beyond the contract with the mine. In addition, De Beers Zimele provides start up and working capital funding at an interest rate of 6% p.a for SMEs in need of this.
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Businesses that are not successful in competing for procurement opportunities are encouraged to enroll in the enterprise development programs offered at the De Beers Zimele Hubs. The key focus is the establishment, upskilling and development of local businesses with the aim to create employment for themselves and others and in the longer term contribute to the socio‑ economic development of the area. During 2017, 77 businesses were given the opportunity to participate in the De Beers Enterprise Development Incubation Programme. A total of 39 enterprises graduated and are still receiving mentorship support. De Beers remains committed to making a lasting contribution in the socio‑ economic environment of the communities it operates in, efforts within the area of enterprise and supplier development being one of the tools aimed at making a difference.
ABOUT DE BEERS ZIMELE The De Beers Zimele Community Fund was created and rolled-out in October 2007 with De Beers Consolidated Mines support to aid enterprise development, employment creation and poverty alleviation in the areas of De Beers’ operations. This initiative builds on Anglo American Zimele’s existing and successful enterprise development, and assists the business unit in obtaining the necessary social and labour plan approvals from the Department of Mineral Resources (DMR) and satisfying on-going socioeconomic development and local community needs. The community fund is operated in conjunction with a network of four small business hubs established within De Beers’ operational areas. De Beers Zimele has, since its inception in October 2007 to 30 November 2017, approved 301 loans to various entrepreneurs operating in De Beers’ mining communities and labour sending areas. These loans advanced amount to R77 million.
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Success Story Rising to the Top - One Loaf at a Time South Africa is a country of rich and varied opportunities for true entrepreneurs and often it is the simplest business models that prove the most profitable. Mukondi Mafune and her business as an Independent Distribution Contractor for Sasco Bread are the perfect example of such an enterprise. With a start-up loan of R 539 473 from the De Beers Zimele Venetia Business Hub, Mukondi launched her business as an Independent Distribution Contractor for Sasco in the Musina area. The contract with Sasco paired with the low interest loan from Zimele allowed Mukondi to set up her own, autonomous depot and distribute bread to national retailers, community spazas and farm stalls. As a qualified accountant, Mukondi recognised the cost-saving implications of a specialised delivery vehicle and utilised the funding from Zimele to purchase a Toyota Dyna truck which can accommodate up to 2000 loaves of bread in a single load. In addition, the loan facilitated the appointment of eight permanent employees consisting of a director, three drivers, three assistants and an administration officer.
[CASE STUDY] Advancing female entrepreneurs through local procurement.
{IN THE NEWS}
De Beers showcases its community involvement through community fairs
In September 2017, De Beers Group made a public commitment when it announced a three-year partnership with UN Women to accelerate the advancement of women across the organisation, in the marketplace, and communities. The De Beers Zimele programme has played a critical role in empowering female entrepreneurs through local procurement opportunities at our Venetia and Voorspoed mines. Last year Zimele had a 45% participation rate by female-owned businesses across the De Beers operations. At Voorspoed mine in the Free State, four black female-owned enterprises have received three-year contracts wor th R14.8 million to provide cleaning, canteen, and administration services, including the supply of warning signs to the mine. Collectively, they have created 41 jobs. Venetia mine in Musina has empowered three black female-owned businesses with three-year contracts through Zimele, to provide services such as bush clearing, providing office supplies and facility management. In a first of its kind, a black female-owned company from Musina was awarded a sub contract worth R10.89 million by Steffanuti Stocks for surface infrastructure for the Venetia Underground Project. The incubation programme in Musina and Blouberg currently has 15 female-owned enterprises under mentorship. De Beers is looking into strengthening our programmes even further to support female participants from our host communities.
@DeBeersGroup
@de-beers
De Beers Venetia mine prioritises engagement with local communities as part of its commitment to uplift local socioeconomic conditions. One of the effective engagement platforms is the annual community fairs designed to bring communities closer to the mine and highlight opportunities that community members might benefit from. The fairs also highlight key socio-economic development areas such as local procurement, Supplier and Enterprise Development, local employment and community skills development, job opportunities, as well as corporate social investment. In March, hundreds of people gathered at three venues in Blouberg, Alldays and Madimbo to meet and interact with representatives from De Beers and from major contracting partners. They also had the opportunity to visit exhibition stalls showcasing various programmes, initiatives, jobs and training opportunities. Venetia mine general manager, Gerrie Nortje said, “Employing and developing the skills and talents of local people are among the most important ways we contribute to the long-term development of our communities – and this will continue to about 2045 through the Venetia Underground Project.” De Beers Zimele beneficiary and owner of construction company, Masa Sunrise, Rudolph Meyer said, “Because of the Mine’s support, we are able to create employment for ourselves and others. Over time we will be able to expand our businesses to into other avenues and this will eventually lead to community development and sustainability.”
@DeBeersGroupOfCompanies
@DeBeersGroup
@DeBeersGroup
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The Power of
pooling resources and effort
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f you asked a cross-section of South Africans what they thought the single largest socio-economic challenge facing our country might be, you are likely to elicit a range of responses; from unemployment, a pedestrian economy, poverty, the land question, housing and others. I suspect few, unless they’re in the sector or prompted to do so, would have mentioned access to healthcare. I’ve done the exercise myself, however, once prompted, healthcare access suddenly ratchets up towards the top of the list.
By Stavros Nicolaou, Chairman, Public Health Enhancement Fund (PHEF)
In a country such as ours, which has one of the most complex disease burdens, with amongst the worse of infectious or communicable disease such as HIV, TB and others on the one hand and a new exploding crisis of so-called NCD’s – Non Communicable Diseases, such as Cardiac Disease, Hypertension and Diabetes on the other, it is worth sitting up and taking note. You would be surprised how addressing healthcare access is inextricably linked to many of the other challenges I raised at the outset. An unhealthy nation, leads to an unhealthy, demotivated and unproductive workforce. Trade and Industry Minister, Dr. Rob Davies, has often emphasised the need for our country to grow its economy through industrialisation and globally competitive companies that satisfy domestic demand and provide a strong export orientation. Inaccessibility to healthcare or a deteriorating disease burden, will lead to an unproductive labour force and globally uncompetitive companies. It is therefore easy to establish the link between healthcare and the economic growth, employment and skills aspirations of our country. SA has 0.4% of the world’s population, yet it harbours 19% of its HIV prevalence. We should be taking advantage of this unfortunate statistic and leading the world in research and
SA has 0.4% of the world’s population, yet it harbours 19% of its HIV prevalence. We should be taking advantage of this unfortunate statistic and leading the world in research and technology that finds solutions 58
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technology that finds solutions. Central, therefore, to addressing our challenges of economic growth, improved productivity, global competitiveness and increased research capability, is that of Human Capital and Resourcing. The shortage of Healthcare Professionals (HCP) and its associated cousin, the healthcare brain drain, is not unique to our country. Addressing this twin challenge is much bigger than just the public sector or the private sectors acting alone. After all, getting a doctor to work in a rural community can change that resource-constrained community in the most meaningful way imaginable. Five years ago, 23 private healthcare companies entered into a partnership with Health Minister Dr Motsoaledi and his department. Building on the Minister’s theme that the private and public sectors might disagree on many things in health care, “let’s, however, focus on the areas where we have commonality on and build from there.” One of these areas was and remains the Human Capital and Resourcing in the sector. Further building on the theme that pooling of CSI resources leads to greater efficiencies, less duplication and fragmentation, the 23 companies through a vehicle called the Public Health Enhancement Fund (PHEF) are sponsoring 100 medical students, all from rural, resource constrained communities through medical school. As these students are mostly from rural communities, a significant portion of these are likely to return to their birthplaces and begin their work that will positively change the lives of many. Moreover, through the PHEF partnership, the fund is sponsoring around 100 Masters and PhD students, all of whom are carrying out research in HIV, AIDS and TB. Given the lack of research capability in our county and Minister Motsoaledi’s target of producing 1000 PhD’s over 10 years, the partnership is set to make a material positive dent in the Minister’s 1000 PhD target. Partnerships and pooling of resources can change the health human capital resourcing quagmire and help create a healthier nation that does indeed contribute to a more productive and globally competitive workforce.
w w w. s e a h a r ve s t.c o. z a Tel: +27 (0)21 468 7900 | Email: info@seaharvest.co.za | Fax: +27 (0)21 465 5883 | 1st Floor, Block C, The Boulevard, Searle Street, Woodstock, 7925, Cape Town, South Africa | PO Box 761, Cape Town, 8000
SEA HARVEST
Developing Black Suppliers on the Cape West Coast
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ea Harvest was committed to developing black suppliers before Enterprise and Supplier Development became part of the Broad-Based Black Economic Development (B-BBEE) scorecard. With an overall B-BBEE score of 97%, the fishing company, which listed on the Johannesburg Stock Exchange (JSE) in March 2017, believes in doing more than just “ticking the boxes”. Its investment philosophy ensures that investing in black businesses in local communities is a high priority. Sea Harvest Procurement Manager and Chairperson of the West Coast Business Development Centre (WCBDC), Welmarie
Coetzee, says, “When local businesses thrive, the whole community benefits. As the single largest employer in Saldanha Bay, this is a key focus for our business. We spend an average of R100 million doing business with local small- and medium-sized suppliers (SMMEs) on the Cape West Coast, the majority of this being with black-owned businesses. There are many examples of small businesses that have experienced dramatic growth because of the continued work that they do with Sea Harvest,” Coetzee says.
In the year ending March 2017, Sea Harvest assisted 4,648 budding entrepreneurs; 490 new businesses were registered with the South African Companies and Intellectual Property Commission (CIPC); 822 people received training facilitated by the centre; and much needed funding was provided to qualifying SMME’s by the Small Enterprise Finance Agency and the Cape Agency for Sustainable Integrated Development in Rural Areas as a result of applications submitted with the WCBDC’s assistance,” explains Coetzee.
She adds that business advice and coaching are provided for developing entrepreneurs to assist them in achieving sustained business growth. To formalise this mentoring process, Sea Harvest, together with other corporates based on the West Coast, established the WCBDC 20 years ago. “The centre offers technical skills training and mentoring support to help entrepreneurs turn their dreams into a reality.
“It is extremely rewarding to play a role in helping people accomplish their dreams of starting their own businesses and then seeing how they, in turn, adopt the same investment philosophy of developing others with the aim of creating sustainable work opportunities and promoting social transformation and economic growth along the West Coast,” concludes Coetzee.
[CASE STUDIES]
Saldanha business owner, Suleiman Adjiet
Saldanha business owner, Suleiman Adjiet, has grown his transport company from just one taxi in 1998 to 20 taxis and 12 cold storage freezer trucks, largely thanks to Sea Harvest’s procurement policies, which prioritises investing in local black suppliers. Sea Harvest’s sea-going staff are transported to and from work by Adjiet’s taxi business, which started with one driver. In 2004, he had sufficient capital to diversify and start another company, SHR Transport. He bought a cold storage truck and started pitching for contracts to deliver Sea Harvest’s frozen hake to Cape Town. Today he is responsible for transporting frozen hake across the country. S. Adjiet Transport: sadjiet@telkomsa.net/ 082 899 1033
Mornay Kurtz is the owner of MCK Engineering, which has grown exponentially in recent years. He started doing welding and vessel maintenance for Sea Harvest 10 years ago with a staff complement of five. As he proved his reliability, Sea Harvest provided Mornay with increased opportunity, which resulted in him employing more people – he currently has 35 employees. Kurtz is just as keen as Sea Harvest to create employment opportunities and, in early 2017, opened a technical training school to teach welding skills to young apprentices. MCK Engineering: mckengproj@gmail.com/ 022 714 0099 Mornay Kurtz (front row, fifth from right), owner of MCK Engineering with employees and learners
For more information about Sea Harvest, visit www.seaharvest.co.za @SeaHarvestSA
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LEVERAGING INCENTIVE PROGRAMMES for small-scale suppliers to enable job creation By Tumelo Chipfupa, Director: Cova Advisory and Associates
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ompanies engage in Supplier Development (SD) programmes for a number of reasons unique to their business circumstances as well as their short and long-term strategies. Despite the specific motivation for establishing an SD programme, companies that choose to go down this route face significant challenges as diverse as lack of technical and human resources in supplier organisations, lack of trust, lack of commitment, ineffective communication, etc. The scale of potential challenges may completely prevent an SD programme from getting off the ground or alternatively lead to a programme that is much smaller in scale than would otherwise be the case.
In South Africa, entrepreneurial companies can take advantage of a plethora of government grant and incentive programmes, aimed at developing small and medium enterprises as well as particular industries, in order to supplement the resources that they have available for SD programmes. Companies however often do not take advantage of these opportunities either because of ignorance about their existence, because the programmes are sometimes inadequately designed for the needs of companies or their supply chain partners, or in some cases, programmes are managed in a bureaucratic manner making access too costly in effort and time for nimble footed corporates. The scale of the government programmes available range from the R6 billion per annum grant budget of the Department of Trade and Industry to the R15 billion per annum Automotive Production Development Programme, a subsidy programme administered by the Economic Development Department.
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Some companies initiate SD programmes in order to improve the cost and quality of inputs sourced from local suppliers as a way of improving one’s own competitiveness, especially when strategies such as Just in Time and Just in Sequence supply chain management are key to global competitiveness. At other times, companies engage in SD as a way of showcasing their commitment to the wellbeing of the local community especially in circumstances where a company’s social license to operate goes beyond the simple act of obtaining a government license. These are instances where host communities need to be involved and happy, since they have a lot of power to hinder operations. In the South African context, the preferential procurement requirements of the Broad-Based Black Economic Empowerment legislation, as well as local content requirements attached to procurement of certain goods and services by government, are increasingly becoming key drivers of SD initiatives. For companies that rely on government assistance programmes or government awarded licences such as the automotive assemblers and mining companies respectively, the pressure to develop viable SD programmes is likely to intensify with time. This requires that companies rethink how they can tap into some of the publicly available resources which they have hitherto not used optimally or completely ignored. In his maiden State of the Nation address, President Ramaphosa has signalled an intention to hold a jobs summit involving industry, trade unions and communities to galvanise these social partners behind a renewed focus and initiatives aimed at job creation. Through SD initiatives, business can make a major contribution to meeting the country’s employment needs. In order to accomplish this
In his maiden State of the Nation address, President Ramaphosa has signalled an intention to hold a jobs summit involving industry, trade unions and communities to galvanise these social partners behind a renewed focus and initiatives aimed at job creation. goal, it is however imperative that captains of industry adequately school themselves in existing government grant and incentive programmes, identify programmes that tie in well with their SD initiatives and make representations to government that these be scaled up at the expense of programmes that are not performing adequately. This will contribute towards creating a sound, viable and fair basis for a public private partnership effort aimed at sustainable job creation.
WBHO
w w w.w b h o.c o. z a Tel: +27 (0)11 321 7200 | Fax: +27 (0)11 887 4364 | Email: wbhoho@wbho.co.za
Industry Leaders in Contractor Development
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ur success in implementing a n d m a n a g i n g o u r Su p p l i e r and Contractor Development Programme is recognized as the leading contributor to our achievements in transformation. WBHO has invested over R 189 million in 56 programme participants over a 10 year period. Our reward in watching the growth of entities from small sub-contractors to fully independent partners to WBHO on large projects; is immeasurable. In addition to our Enterprise Development (ED) programmes, our recent commitment on the Voluntary Rebuilding Programme we entered into with government, is that we have committed to growing three emerging contractors to 25% of our annual turnover in 7 years.
The aim of WBHO’s ED Programme is to develop the beneficiary company to achieve independent operational capacity at its maximum potential level. The ED model is therefore designed to ensure that the support which WBHO provides to the developing organisation is slowly withdrawn in an agreed and structured way, leaving a successful independent business. It is therefore our own staff, who must be recognised for their unstinting commitment to the success of the ED companies under their guidance. This effort is made in addition to the demands of their own projects. Further detail on our programme can be obtained on our website in the “ROAD TO TRANSFORMATION” book.
NAACAM
w w w. n a a c a m .c o. z a Tel: +27 (0)11 3924 060
Driving Supplier Development in the Automotive Sector
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he development of suppliers within the automotive manufacturing value chain is crucial to the longterm viability of this key industrial sector. The National Association of Automotive C o m p o n e n t a n d A l l i e d Ma n u f a c t u r e r s (NAACAM) devotes much time and resources to ensuring its members, multinational and local, have the required support to develop blackowned sub suppliers. NAACAM is a funding founder of the Automotive Supply Chain Competitiveness Initiative (ASCCI) which is rolling out a black Supplier Development initiative countrywide. To date, nine fledgling companies have been identified to receive multi-faceted support to aid their growth as either direct suppliers (tier
1) to the vehicle assemblers in South Africa, as well as tier 2 suppliers to established, large component manufacturers. East Cape Automotive Industr y Forum (ECAIF), another NAACAM initiative, is running two activities targeting black Supplier Development. The first involves transforming existing businesses by taking on black shareholders and the second, is the establishment of new enterprises where aggregate demand was identified, specifically in the areas of packaging, manufacturing and chemicals. Companies looking for turn-key models of Supplier Development are encouraged to contact NAACAM.
Success Story Emerging companies, Naicker’s Toolmakers & Enermous, are small black-owned SMMEs that have been paired with large NAACAM members, Supreme Springs and Smiths Manufacturing respectively, to be developed as suppliers within the Toyota SA value chain.
@NAACAM
@NAACAM_SA
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Fire Up YoUr SUpplY Chain: From Southern africa to the world In the midst of South Africa’s fluctuating credit rating, rising unemployment and a highly competitive business environment, South Africa’s fighting spirit remains a driving force for better things to come. Our country is bursting with possibility, and through collaboration and win-win partnerships, together, we can fix our sh*t!
A purpose-driven way of doing things South African businesses share the same goal: to create a thriving economy. In order to do this, it’s important that we support our communities and their businesses by creating opportunities for them in our supply chains. In doing so, we use our collective power to not only create meaningful opportunities for local suppliers, but also to generate employment and drive growth and skills development. To build a better country, we need to put our people first. We live this philosophy at Nando’s. Our partnerships with local entrepreneurs and artisans have created employment for many South Africans who might otherwise struggle to gain the necessary opportunities, resources and exposure to grow their businesses; from the small-holding chilli farmer who provides the raw ingredients for our unique PERi-PERi sauce, to the artists that create the artwork that hang in our restaurants and the small businesses that hand stitch our clothing.
Doing things together as partners
By Linda Reddy, Nando’s IMEA Supply Chain Director
In essence, the formula is simple: getting the right product to the right place at the right time - all the time. However, active involvement in the development of local suppliers is necessary to achieve a successful ecosystem that benefits all parties. Partnerships with suppliers must move beyond merely commercial terms of service, quality and innovation to focus on collaboration: sharing strategies and marketing plans to foster passion, inspire ingenuity, build long-lasting relationships and ultimately add value. One way of doing this is by seeking commonality in values. Successful businesses thrive on working with partners that will be an extension of their business values. At Nando’s, we look for partners who are passionate and energetic, who take pride
in great service, making the best possible food, and who want to make an impact in the world. It is important to us that our suppliers share the same philosophy as we do.
The journey to get better, together While more and more entrepreneurs are able to access the market, the reality is that economic pressures continue to constrain start-ups. By embracing inclusivity, breaking barriers and celebrating connectedness, we have the opportunity to catalyse talent - whether through mentorship, skills development, capital funding, or information sharing. Businesses have a responsibility to the communities in which they operate and the supply chain is arguably the starting point to initiate growth and foster transformation. We need to exercise ‘patience’ in our dealings with our fellow local businesses, and with ourselves – this is a journey. Big change doesn’t happen overnight - developing a locally-focused supply chain, fostering growth and strengthening progress is a marathon, not a sprint. We’re all learning and working towards making our country one in which opportunities are plenty, and prosperity is accessible.
Going global together A challenge businesses face with trading freely across markets is to continually be competitive on price, service, innovation and quality. Although strong in many aspects, some South African businesses are not ready for the aggressive global context. Focusing on exceptional service and managing inputs (in an inflation market) needs a lot of work. We need to work closely with our small to large suppliers to improve this quickly as we are competing with countries that have lead-time advantages and higher productivity levels with lower inflation. With high unemployment levels and capital expenditure investment in South Africa, automation is still questionable for many businesses. Putting people at the heart of everything we do builds relationships and creates a South Africa that benefits everyone. As our co-founder, Robbie Brozin says “It’s the people that make the chicken” – we look at every opportunity to touch someone along our supply chain and strive to get better each day.
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OMNI HRC
Tel: +27 (0)21 685 9160 | Email: info@omnihrc.com | Fax: +27 (0)86 715 4292 The River Park, off Liesbeek Parkway, Nolands House, 1st Floor, Mowbray, 7700 | P.O. Box 13628, Mowbray, 7705
Creating Standards Others Are Drawn To “The greatest glory in living lies not in never failing, but in rising every time we fall.” Nelson Mandela
“When you talk about entrepreneurship and business, you always realize that a journey of success is actually built on failure,” says Lize Moldenhauer, managing director. The business offering at Omni HR Consulting is about maximizing human capital from both an operational and business success perspective. Following a consultative approach requires truly listening to our clients’ needs even when they have trouble articulating what that may be. Training and development are central to Omni’s offering and as such offers multiple programmes with full qualifications and learning programmes
both on a National Certificate and National Diploma level, all accredited with the SETAs, the National Qualifications Framework and the Department of Higher Education. Our accredited solutions are built on the methodology of work-integrated learning (WIL) which allows our learners to contextually apply their knowledge and skills within their own working environments to demonstrate competency. As a business, we want to make a difference in the communities we serve and as such have encapsulated our communities in three distinct categories: Employee, Community and
Supplier Development. Supplier Development as a transformation driver can provide access to and accelerate the growth of suppliers who wish to partner with our organization. We see a supplier “partner” as some form of alliance; a relationship-based on similarity of interests, nature, or qualities. In a supplier relationship, you know what is needed and you merely want to close the gap of the need. In a partner relationship, you are co-creating solutions that will best address the need with a partner that is like-minded and is able to become an extension of your business.
OUR OFFERING Our training and development solutions are centred around the following six categories: • • •
Administration and Business Management Programmes Contact Centre Development Programmes Education, Training and Development Programmes
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Hospitality Management Programmes Leadership Development Programmes Personal Development Programmes
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SETA accredited qualifications, skills or learning programmes Recognition of Prior Learning (RPL) programmes
The programmes within each category may be delivered as: • •
Just-in-Time (“off-the-shelf”) training and development solutions Customised learning material or learning mediums
Our consulting services may be combined with our training and development solutions to result in a holistic skills development initiative or be utilised separately. Our services in this area range from: • • • •
Training Needs Analysis Implementation and Project Management of Learnerships Design and Development of Intellectual Property, e.g. Learning Material and Assessment Tools Skills Development Facilitator Services
• • • •
Designing of Performance Management Systems Development of Competency Frameworks Niche Recruitment and Selection Services HR Generalist Services
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@OmniHRConsulting
@OmniHRC
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2018 WINNERS
ABSA Business Day Supplier Development Awards
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ore than 400 entries were received for the awards, from organisations with mature programmes to those just staring the journey. This suggests that Supplier Development is being taken seriously in South Africa, contributing to sustainable growth, lasting empowerment, and positive benefits for all stakeholders.
Newcomer Award
Sponsored by Sentech Acknowledging companies that have recently initiated Supplier Development.
Winner: Hatch Africa (Pty) Ltd With a core business focusing on consulting engineering and Project Management, Hatch has just started their journey but is committed to meeting the SA government’s objectives for transformation as set out in the National Development Plan. They have developed an Enterprise and Supplier Development strategy which is supported by an implementation plan/process inextricably linked with their SMME transformation programme. Their strategy goes way beyond complying with the minimum requirements of the B-BBEE scorecard. They have designed their process to use a combination of an incubation platform; bespoke mentorship to develop partner’s 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. The success of their process is evident exceeding the 3% NPAT requirement. Hatch was scored highly by the judges because 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. Their enthusiasm on the development aspect and the business benefits led the judges to believe that this new ESD programme is likely to be a very sustainable one.
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Innovation Award
Sponsored by Technology Innovation Agency Acknowledging companies whose innovative approach or groundbreaking 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 (SDP) in March 2012 with a budget of R200 million to be invested over five years. The programme focuses on developing local small manufacturers of durable goods. Preference is given to black women owned businesses. The portfolio consists of 29 local manufacturers. A total of six suppliers are export substitution projects while eight suppliers have started exporting to Chile, New Zealand, Australia, Zambia and Botswana since joining the programme. Products manufactured include instant noodles, cooking gel, chefwear, socks, charcoal, mosaic tiles, bricks, detergents, ladders, paint, toilet seats, water-saving toilet valves, wire nails, wooden doors, ethnic haircare products, glues and adhesives, plants, Christmas crackers, office furniture, lamp shades and bases, cooler boxes and utility boxes. What makes this program innovative, is that Massmart analyses their supply chain and identifies products that could be manufactured locally, instead of imported. With a considered effort to nurture local supply chains, Massmart then partners with these manufacturers to grow their businesses and does not lock them 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.
Runners-up: Property Point and Sappi South Africa (Sappi Forests)
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Youth Award
Sponsored by Business Day Acknowledging companies whose Supplier Development initiatives focus on the youth.
Winner: Hatch Africa (Pty) Ltd Hatch are passionate about investing in people and the judges felt that 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.
Runners-up: Multichoice South Africa Holdings (Pty) Ltd and Nandos
As a judge on the panel, it struck me that all the finalist entries shared the common characteristic of teams that proactively design development opportunities rather than wait for circumstances to align. I hope organisations can find inspiration in these stories and take bold steps to be more daring in their own development initiatives.” - Cornelia Olivier: ABSA
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 (Grow in isiZulu) is a department within Sappi Forests, which started out as Project Grow and has been funding small growers since 1983 with an interest free loan, free seedlings, extension services and and guaranteed access to market for produce. It largely works with tiny micro-farmers and communitybased farmers who comprise about 4000 growers 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 KwaZuluNatal and the Eastern Cape. Since inception the programme 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 was scored highly by the judges due to the fact that they clearly articulated and displayed impact in their approach to transforming this target market with over 60% of their contractors comprising women.
Runners-up: Multichoice South Africa Holdings (Pty) Ltd and tied Hatch Africa (Pty) Ltd/Property Point
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Rural Economies Award Sponsored by ABSA Acknowledging companies whose Supplier Development initiatives focus on rural economies.
Winner: Sappi Southern Africa (Sappi Forests) The judges considered Sappi a sterling example of rural impact, they ‘adopt’ clusters of rural farmers, truly understand the ‘shared value’ principle and recognise that transformation is not just a moral imperative, but a pragmatic growth strategy that aims to realise the country’s full economic potential while helping to bring the black majority into the economic mainstream. Sappi displayed great merit 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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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 for the catering, hospitality, construction, health, school and sports sectors. Through Massmart, they supply private label workwear to all Makro stores countrywide. All SME growth stories are remarkable in their own way, but Reapso SA with their selfless attitude toward growth and inclusion, emphasis on client relationships, commitment to skills development for employees (especially women) and understanding of their own business environment impressed the panel. Reapso SA make a point of paying it forward: providing the same opportunities 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
Brought to you by
2018 WINNER Sponsored by: ABSA
Acknowledging companies that stand out as overall leaders in the Supplier Development arena.
Winner: Massmart As overall winners, Massmart displayed how their approach is central to their strategy and creatively exhibited their capacity and commitment to deliver on their transformation goals and targets. They clearly identiďŹ ed 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. The judges felt that this programme was a great example of long-term development and support involving the entire organisation, ticking all the boxes for the right reasons and supporting South African manufacturing, design and innovation. Runners-up: Multichoice South Africa Holdings (Pty) Ltd and Sappi Southern Africa (Sappi Forests)
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2018Commended finalists
We would also like to commend the shortlisted finalists and highly commended applications of the ABSA Business Day Supplier Development Awards.
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
I was blown away by the simplicity of some of the interventions and also the tenacity of some (34 years is a long time to work at changing perceptions) - Elmarie Goosen, Fetola
10. Sappi Southern Africa (Sappi Forests) 11. Sasol South Africa (Pty) Ltd 12. sun international
HiGHly coMMenDeD 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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These organisations understand the importance of the whole economic and social ecosystem where small businesses and large corporates work together and thrive! Are you with us in 2019? It’s time for big business to make a big impact. W W W.SDAWA RDS.CO.Z A
Find out more: www.sdawards.co.za Contact 086 111 1690 info@sdawards.co.za
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Changing Lives sustainabLy Through Supplier Development By Hank Van Rensburg, Head: Supplier Development, Africa Sourcing, at Absa
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hen the principles of Supplier Development are brought to the fore it may be prudent to reemphasize the fact that it cannot just be a tick box exercise on the part of South African corporates. Each corporate beyond their corporate responsibility has a social responsibility to make a positive, sustainable impact on the society within which they operate. In order to realise the full benefit of running Supplier Development programmes, it is necessary for the corporate entities to do a comprehensive evaluation of their supply chain in conjunction with the short term and medium term strategy outline of the corporation as a whole. These reviews need to inform the nature of the investment that will be made by the corporation in driving Supplier Development. Part of the challenge that corporate South Africa deals with when addressing Supplier Development is the fact that it has not been given the acknowledgement it deserves from the board members downwards. It is treated as another element on the B-BBEE scorecard rather than as a mechanism to be part of the societal transformation objective. Globally, Supplier Development goes under the Supplier Diversity banner. Even though it has its own challenges, the success that is more prevalent is due to the fact that the corporations involved in Supplier Diversity tend to have made it a core business strategy. This is not the case, however, in South Africa and hence the harder sell to the decision makers. In overcoming this challenge it is prudent to realise that identified opportunities need to be unpacked in the value chain to illustrate more than just a Supplier Development opportunity, but rather a strategic imperative that while adding value to your business it also becomes a future influencer in the economy of the country.
The procurement team needs to be conditioned differently so that the focus at Absa is not only on cost savings but rather on value drivers which may include savings as a subcomponent. It needs to be realised that Supplier Development does not mean more expensive. It provides the opportunity to better unpack inefficiencies in a value chain and more effectively leverage off growing suppliers that may also bring new ideas to the table. Once a deal has been concluded the most important element of Supplier Development is an effective post-investment support programme, commonly referred to as business development support. This programme needs to almost act as a member of the small business team that aids the administrative growth while there needs to at the same time be a technical guide to the business. The focus of the majority of time and resources should really be centred on the support phase as it is the point where faith in the growing supplier is reinforced or lost by the business users.
Stay focused, go after your dreams and keep moving toward your goals. ~ LL COOL J AS tHe SupplieR DeVelopment plAn iS Being foRmulAteD tHeRe ARe A numBeR of key ActiVitieS tHAt neeD to Be fActoReD into tHe plAn:
1. Identify the targeted opportunities for sustainable Supplier Development 2. Rally the support of the key stakeholders which may include: a. Consumers of the service within the organization b. Budget holders that influence savings vs transformation c. Sourcing (procurement) teams that execute on the deal structure d. Post investment support teams 3. Ensure that the best mechanism is chosen for each individual case. For example, if it is access to finance, the needs should be understood. 4. Understand the maturity of the Supplier Development candidate. It will be a key indicator of the post investment support required. 5. Develop an effective risk matrix that can be used to manage the internal “noise� as well as inform on what interventions may be required to remove the risk.
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YOUR EDUCATION, ENTERPRISE AND SOCIAL DEVELOPMENT PARTNER FOR A FULL-SPECTRUM OF B-BBEE POINTS Since 2004 Cyril Ramaphosa Foundation has invested over R343 million and leveraged an additional R913 million through its partner entities to create real change in education and enterprise development. We have earned our partners a full-spectrum of Broad-Based Black Economic Empowerment (B-BBEE) points in the various pillars on the scorecard. Cyril Ramaphosa Foundation can be the means by which your company comprehensively, effectively and efficiently fulfils B-BBEE compliance. B-BBEE helps redress the raceand gender-based economic and social inequities of apartheid. It facilitates the participation of historically disadvantaged people in the economy, transforms it to benefit all South Africans, and contributes to growth and socio-economic development.
ABOUT CYRIL RAMAPHOSA FOUNDATION Cyril Ramaphosa Foundation is an independent Public Benefit Organisation. Since 2004 it has had a substantial impact on the people and communities in which it works. It provides a spectrum of innovative interventions, From Classroom to Boardroom, that
EARN YOUR B-BBEE SCORECARD POINTS AND MAKE A REAL DIFFERENCE
helps develop human potential and entrepreneurial capacity for an inclusive, empowered society. Cyril Ramaphosa Foundation does so through its implementing partner entities:
Adopt-a-School Foundation KST Cyril Ramaphosa Education Trust Mabindu Business Development Trust Black Umbrellas Cyril Ramaphosa Foundation is a partner of choice for dynamic development models that make a real difference to lives.
EARN FULL-SPECTRUM B-BBEE POINTS with Cyril Ramaphosa Foundation
Earn full recognition of spend points by supporting the development of small black businesses through Black Umbrellas, a Cyril Ramaphosa Foundation partner entity.
EQUITABLE ECONOMIC OPPORTUNITIES
How Cyril Ramaphosa Foundation can contribute to your score card
Management Control
Ownership
Black Umbrellas was established in 2009 when Mabindu Trust partnered with Black Umbrellas to form a non-profit enterprise development incubation organisation. Black Umbrellas partners with the private sector, Government
VALUE CHAIN
and civil society to address the low levels of entrepreneurship and high failure rate of Black-owned emerging businesses in South Africa. The programme
Enterprise & Supplier Development
Preferential Procurement
promotes entrepreneurship as a desirable economic path and nurtures 100% Black-owned businesses in the critical first three years of their existence through its nationwide incubators.
1 408
TALENT PIPELINE
Bursaries
SMMEs INCUBATED incubated since 2012 (pre- and full incubation)
R2.4 BILLION
Skills development
11 522
R133M
JOBS CREATED AND PRESERVED SINCE 2012
PAID IN TAX BY SMES SINCE 2012
TURNOVER SINCE 2012
Socio-economic development
R584M
PAID IN SALARIES SINCE 2012
OPTIMUM POINTS ON THE SCORECARD 25 POINTS
19 POINTS
25 POINTS
$
R46 262
AVERAGE COST PER JOB CREATED
R985M NET ASSET VALUE
OWNERSHIP EQUITY The percentage share of economic benefits of black South Africans in the company
ENTERPRISE SUPPLIER DEVELOPMENT POINTS
MANAGEMENT CONTROL Representation in board decision making, executive management, senior, middle & junior employee base PROCUREMENT Procurement from empowering suppliers as a proportion of total procurement relative to B-BBEE level, size and black ownership
Procurement from Black-owned suppliers
25 (+ 2 BONUS POINTS)
Supplier Development
10
Enterprise Development
5 (+ 2 BONUS POINTS)
TOTAL
40 (+4 BONUS POINTS)
TO EARN YOUR B-BBEE SCORECARD POINTS AND MAKE A REAL DIFFERENCE Contact: Mmabatho Maboya
+27 (0) 11 592 6560
Strategy and Partnerships Executive
info@cyrilramaphosa.org www.cyrilramaphosafoudation.org
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SpEcial trEatmEnt for small-scale suppliers - can it work at a corporate level? By James Wilkinson - Distell Group General Manager: Business Improvement
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nterprise and Supplier Development is an important part of sustainable transformation. Beyond the investment in Small, Medium and Micro Enterprises (SMMEs) and given that approximately 90 per cent of new jobs created in South Africa are attributed to SMMEs, the value add to enabling SMMEs transcends job creation. It is also one of the tangible opportunities in ensuring meaningful community development and growing our economy. For corporates, the effective development of SMMEs presents a great opportunity to improve capabilities across the supply chain, as well as broaden the supplier base. Although there has been progress in this space, effective ESD remains a challenge for both SMMEs and corporates, particularly in respect to scaling their inclusion in core business value chains. Having recognised this gap, Distell’s taken on a more collaborative approach, in order to drive sustainable ESD. The Distell E+Scalator Programme was established in 2016 with the objective of empowering and escalating SMMEs within supply chain, thereby ensuring their long-term viability. After all, big suppliers were once small suppliers and the science of how to scale small business informs the E+Scalator’s methodology, activities and support provided to participating SMMEs. We believe in this approach, because we know this is where we can make an upstream impact on job creation. The fundamental shift in assumption that we have had to bring about is captured in the departure point of whether it can work at a corporate Level. Rather than starting with how it can work for Distell, we look at how it can work for our suppliers and then use our cross-functional mandate within Distell to act as an integrator. This approach has enabled Distell to evaluate more opportunities, become more innovative and identify ways to make it work for everyone.
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As is evidenced in our growing ESD initiatives, this has been a recipe for success. Although there have been challenges, our model is geared to engage with the SMMEs to understand these challenges from their perspective. The primary obstacles limiting SMMEs include the cost of compliance with quality requirements, overcoming a regional base in making supplies to nationally distributed production sites, limitations of sufficient available capacity to meet demand, and the pervasive constraint of working capital. Thereafter, we make it work at a corporate level, by tailoring our support in aid of the supplier, for example Distell disaggregates demand forecasts to include more suppliers in single sourcing events. The localisation of supply towards smaller businesses has, in fact, increased the opportunity for face-toface engagement and decreased supplier response times through closer proximity to production sites. Crowding in smaller suppliers also increases competition, transparency and is an important source of innovation. The E+Scalator Programme has also driven the startup of a number of new businesses and through this, delivered cost efficiencies through leaner overhead structures. We recently localised the production of a key packaging material from China. To achieve this, we supported that supplier with the required development, tailored technical and start-up support which resulted in price parity to the previous source of supply.
TOP: James Wilkinson Distell Group General Manager: Business Improvement
In order to discover and on-board more small suppliers, the E+Scalator programme also informed the design of our procurement shared services capability. Part of this operating model includes an online platform that provides real-time visibility to suppliers, of opportunities to do business with us, whilst helping to prioritise the involvement of the E+Scalator team. So developing and doing business with SMMEs is not so much about special treatment, as it is about exploring the opportunity from their perspective, and supporting and developing that relationship through a special engagement mechanism. It certainly works at a corporate level, but most importantly it empowers SMMEs by providing the necessary and tailored mechanism for their advancement and growth.
Rather than starting with how it can work for Distell, we look at how it can work for our suppliers and then use our cross-functional mandate within Distell to act as an integrator.
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SENTECH
Tel: +27 (0)11 471 44 00 | Email: communications@sentech.co.za SENTECH, Octave Street, Radiokop, Honeydew, Johannesburg
SENTECH Connecting You To The Digital Evolution SENTECH is South Africa’s premier provider of electronic communications network services in the broadcasting and communications industry.
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ENTECH provides broadcast transmission services to radio and television stations nationwide. Its infrastructure and data communications platforms also provide services to South Africa’s commercial telecommunication sector.
As a technology company, SENTECH always aspire to see beyond the horizon, remain at the cutting edge of technology and being leaders in the ICT infrastructure services market. SENTECH is committed to providing South Africa with world class and quality solutions and working hard towards living up to that commitment. SENTECH ran the first DAB+ trial that commenced in 2014 and also participated in the DRM30 trial. The main objective of these trials is to determine if both the DAB+ and DRM30 technologies could co-exist with current analogue sound technologies and explore the benefits to all parties of digital radio.
The fourth industrial revolution imposes the move from analogue to digital. The broadcasting as we have known has evolved at a radical pace. “The digital broadcasting is here, feet it, touch it”, said Malmail Booi, SENTECH CEO. The ability to utilise one frequency for multiple stations brings variety and opens the market for more stations to come onboard SENTECH’s platforms. “This evolution has become important in the frequency congested radio network. The evolution of FM into a digital era where one frequency that currently carries 1 FM radio station would be able to carry up to 18 stations as well as additional display on consumer information that each radio channel wish to broadcast”, said Mlamli. Digital radio offers broadcasters additional capacity to launch new services for the listeners. The user experience is beyond audio, digital radio includes text and image streaming directly to devices. SENTECH together with National Association of Broadcasters (NAB), Southern African Digital Broadcasting Association (SADIBA) and the SABC have demonstrated the success of the DAB+ and DRM technology trials. This product is now ready to be commercialized.
SENTECH’s Transformation and Developement Transformation is one of SENTECH’s key strategic pillars, it particularly prides itself on the impact it has made in the education and the enterprise development areas. SENTECH strategy focusses on stimulating ICT SMME growth in South Africa, providing opportunities where potential exists. Enterprise and supplier development forms part of SENTECH’s transformation and development mandate. Through its Enterprise and Supplier Development (ESD) initiatives, the company stimulates the growth of small and medium enterprises, create jobs and provides critical ICT intensive skills for the economy. Through its incubation programme, SENTECH was able to incubate 20 SMMEs to create an environment through which entrepreneurs can develop their entrepreneurial competencies required to grow profitable and sustainable businesses. SENTECH also took grant funding approach and offered financial support to 13 SMMEs within the ICT industry. These initiatives have contributed to SMMEs growth. SENTECH continues to provide advisory and mentorship role for the SMMES on a demand basis.
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ACCENTURE
Enterprise and Supplier Development Program As a global organisation, Accenture believes we have a responsibility to engage proactively with the business in communities in which we live and work. One of these ways is through the Accenture global Diverse Supplier (DSDP) where we create opportunities for qualified enterprises to grow and actively participate in the economy.
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ccenture is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology and operations. Combining unmatched experience and specialised skills across more than 40 industries and all business functions – underpinned by the world’s largest delivery network – Accenture works at the intersection of business and technology to help clients improve their performance and create sustainable value for their stakeholders. With approximately 442,000 people serving clients in more than 120 countries, Accenture drives innovation to improve the way the world works and lives.
Our programme works across 17 countries to engage and develop business owned by Women, Lesbian, Gay, Bi-sexual and Transgender persons (LGBT). Ethnic Minorities and Persons of disabilities.
As a global organisation, Accenture believes we have a responsibility to engage proactively with the businesses in communities in which we live and work. One of these ways is through the Accenture global Diverse
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Supplier Development Programme (DSDP) where we create opportunities for qualified enterprises to grow and actively participate in the economy. Our programme works across 17 countries to engage and develop businesses owned by Women, Lesbian, Gay, Bi-sexual and Transgender persons (LGBT), Ethnic Minorities and Persons with Disabilities. By incorporating diverse businesses into our supply chain, we gain access to innovative and cost-competitive supply solutions supporting our business to grow and Lead in the New. It allows us to drive a more-inclusive and empowered marketplace. Our DSDP, a mentorship programme launched in the US in 2006, now runs in 4 geographies (US, Canada, UKI and South Africa) and has successfully graduated 133 diverse suppliers. We are recognised as one of the leading companies for Supplier Inclusion and Diversity. In South Africa, from a successful pilot in 2015, Accenture launched a two-year Enterprise and Supplier Development (ESD) programme in 2016 with a group of black-owned Small and Medium Enterprises (SMEs) who recently graduated. Our key objectives are to provide SMEs with access to market, stimulate growth and increase their economic participation through our supply chain. Our programme is an organisation-wide with shared responsibilities. The executive mentors and trainers are Accenture Senior Managers and Managing Directors who go beyond their call of duty and take up the challenge to mentor small business participants. Our approach is not a one-size-fits all. When the SMEs enter the programme, they go through a business assessment which assesses the individual business and
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In accelerating SMEs, the programme leverages Accenture’s capabilities and global reach while exposing the SMEs to the latest cutting-edge Technology and Digital solutions.
highlights areas of development. Then a development plan is mapped out for a two-year programme which is specific to the individual SME. We adopt a blended development approach, consisting of: Mentorship. Training. Operational Efficiency. Technology and Skills transfer. Digital SME Toolkit. Access to Market. Collaboration. Early Payments when supporting our beneficiaries to ensure we build high performing businesses. In accelerating SMEs, the programme leverages Accenture’s capabilities and global reach while exposing the SMEs to the latest cutting-edge Technology and Digital solutions
Our ESD programme is driven from the top and is designed to meet transformation goals of Accenture and its clients. It has progressed to strategically enable growth and generate pipeline to procurement transformation strategy. The programme allows us not to only develop SME but also to procure from them. The programme significantly contributes to our B-BBEE scorecard, however, it was established and adopted long before the Government formalised its expectations of empowerment in the private sector.
@Accenture in South Africa
@Accenture in South Africa
@AccentureSA
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Supplier Development Getting the Entire Organization on Board. By Cassandra Julius, Marketing Manager, OMNI HR Consulting (Pty) Ltd
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upplier Development initiatives (SDIs) do not form part of the natural course of business. It is safe to assume many organizations would not have engaged or known how to engage in SDI until the Broad-Based Black Economic (B-BBEE) Codes outlined activities that may contribute to Supplier Development.
TOP: Cassandra Julius, Marketing Manager, OMNI HR Consulting (Pty) Ltd
Who ultimately owns the SDI though? In many instances the strategy to be deployed is decided by top management and delegated to a transformation manager (if you have one) or to the procurement manager (or team); again, if you have those roles within your organization. Small to medium enterprises do not always know how or where to start when it comes to Supplier Development and as a result may outsource this activity. Being in the people business, we understand that building and nurturing relationships is what underpins all we do. Why should this be different when it comes to Enterprise or Supplier Development? Surely, we are building and nurturing a relationship with an organization too? Here is the practical approach to Supplier Development we took within our organization: We created a commodity listing, noting all suppliers we do business with in addition to their associated B-BBEE compliance. We further noted the rand-value expenditure monthly, which assisted our management team in understanding proportionally the ‘value’ of our suppliers from a procurement point of view. It is important to note, that the monetary value spent did not determine the value of the relationship with the supplier. The question we asked ourselves thereafter
Small to medium enterprises do not always know how or where to start when it comes to Supplier Development and as a result may outsource this activity.
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was ‘who operationally has a relationship and deals with a particular supplier regularly’ and in answer to that question we created a commodity or supplier customer-relationship manager (CRM). In doing this, it assisted us in determining the individual/s involved who has a mutually beneficial interest in deploying tactics to achieve SDI and transformation objectives. The role of the CRM is to ensure that the suppliers within their span of control, understands what our business is about in addition to the impact and potential consequence of not working together effectively. In addition, it is our business to establish what our suppliers need from us to ensure their operation functions effectively. The engagement between supplier and CRM is how key performance areas are co-created and thus speaks to a mutually beneficial relationship. Examples of key performance areas we have deployed are: a range of early-payment periods; training and development initiatives either discounted or sponsored; project specific opportunities where a supplier is used to fully service a project; and assistance with human resource, information technology or marketing activities should these be required by the supplier to grow their operation and customer base. The commodity listing is a document that is readily available to any line manager within our business. The listing is updated regularly indicating randvalue spend (per supplier) in addition to what the agreed-upon payment terms are. Furthermore, it is clearly indicated which suppliers are ear-marked as Supplier Development beneficiaries which is one of the key elements to ensuring that teams throughout the organization understand how to engage with a supplier and via which CRM. In our experience, appointing an individual to govern the overarching supplier relationship is what guides the procurement and payment process. SDIs and activities are therefore not challenged if at the onset various stakeholders understand the role they play in achieving the organization’s Supplier Development strategy.
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EXXARO
Tel: +27 (0)12 307 5000
Equipping the community to sustain itself Success Story Thabitha Chauke has been growing vegetables on her parents’ land, near Hlagakwena Village. Exxaro saw the potential for her to expand her business into a self-sufficient and profitable enterprise. In phase I, Exxaro helped her improve her infrastructure, which included providing storerooms, drip-irrigation, and water storage facilities. During the construction phase, 16 local people were employed. Thabitha and her six permanent employees also received technical training on agricultural methods and produce marketing. “Exxaro’s assistance has really helped us to get ahead with our cultivation of tomatoes and peppers, and improve our yields,” Thabitha said.
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xxaro’s Enterprise and Supplier Development (ESD) program reinforces the company’s socio-economic development (SED) strategy and positions Exxaro as a company underpinned by a vision of “powering better lives in Africa and beyond”. Consistently, the ESD program focusses on investing in black youth businesses in host communities, as a means of offering sustainable businesses that will eventually create job opportunities in local communities. Exxaro will also actively participate in the national Youth Employment Service (YES) initiative led by South African businesses. The value offering of the ESD program will include financial and non-financial support. The financial support consists of grants, loans and equity whilst non-financial support includes training that is small business management programmes through an accredited training service provider in the incubation centers established. Exxaro’s business units will play an active role in the program by supporting the identification, integration and monitoring of the development of beneficiaries.
In Phase II, Exxaro continues to support her, by further improving her infrastructure (nursery tunnel and packaging shed), providing resources (tractor and trailer) and operational support (fertilizer and pesticides). This improvement will increase the number of seasonal labourers from 42 to 150 that will be employed during planting and harvesting season. Besides many walk-in customers, Amokelani now supplies fresh produce to the town of Lephalale, as well as to the Pretoria municipal market.
Exxaro-Resources
@ExxaroResources
@ExxaroResources
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Smart meterIng – a Key to Reducing Electricity Theft and Consumer Debt
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t is estimated that by the end of December 2017, approximately R20 billion was owed to Eskom and municipalities by electricity consumers and the business community. Debt on this scale leads to liquidity challenges and hampers the ability of providers to maintain and develop the network to be ready for new electricity connections and support economic growth.
TOP: Godfrey Marema, Chief Operating Officer, Landis + Gyr SA
South Africa’s slow economic growth in the past few years has negatively affected economic development and job creation resulting in a reduction in consumers’ disposable income. This, coupled with higher electricity prices in the past few years has driven consumers to default on their electricity bill obligations, whilst others have resorted to electricity theft. Additional factors affecting municipality electricity revenues include incorrect billing, inaccessibility of meters, inability to disconnect customers who are in arrears and the associated operating costs of sending staff to disconnect and reconnect defaulting consumers.
Recent advances in technology have led to the introduction of modern electricity smart meters. These developments promise to hold the key to solving some of these challenges. Smart meters enable municipalities to accurately record electricity usage and read consumption remotely resulting in accurate billing, thereby improving collections. Implementing smart metering solutions offers utility companies the ability to remotely disconnect non-paying consumers and reconnect them after paying their bills at a click of a button. To top it all, this new technology enables the utilities to remotely detect electricity theft and disable electricity dispensing immediately. The other advantage is that consumers are able to track their consumption and manage their energy usage better through the In Home Display Units (IHDU). Another exciting feature about this smart electricity solution is the use of Power Line Communication (PLC) based on G3 technology which is robust, follows open standards and helps reduce communication costs. This solution also allows measurement of energy that is fed back to the grid from renewable energy sources. The need for all stakeholders to invest in smart metering to protect revenue is justified when looking at a recent smart metering project (~ 32 000 meters) conducted in Sandton and Midrand. The utility was able to improve revenue generation and reduce debt by disconnecting non-paying customers, whilst converting some customers to prepaid to reduce the risk of debt. South Africa cannot ignore the benefits brought by this new technology and the need to invest in it. More skilled labour will be required to design, manage and maintain these systems, so the argument that technology will take jobs away doesn’t hold any water. Smart metering is already available on tap in South Africa, conceptualized, designed and manufactured right here at home. A perfect way for South Africans providing solutions for themselves. With rapid introduction of this smart technology, the current debt can be eradicated within two years. Godfrey N Marema, is the Chief Operating Officer of Landis+ Gyr SA, a leading electronics manufacturer, and he writes this article in his personal capacity
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