This report shares information gleaned from the applications submitted for the Absa Business Day Supplier Development Awards and provides valuable insights into Supplier Development programmes and the sector at large. It also serves as a yardstick for year-on-year comparison against which we will measure progress as a sector.

Insights

Now in its third year, the Absa Business Day Supplier Development Awards were targeted towards larger companies who implement Supplier Development initiatives in their own supply chains and qualify in the BBBEE scorecard as GEN businesses (i.e. those with a turnover of more than R50 million).

  • Again, there were slightly fewer applications than the previous year, but the calibre was higher, considering the more rigorous entry criteria
  • 43% of applications received met all qualifying criteria – which shows us that the awards are more targeted, and companies are understanding how to articulate the merits and impact of their programmes
  • 44% of the applications were EME participants, 9% were QSEs, and 40% were GEN businesses – again showing we have hit the sweet spot in terms of targeting and messaging
  • There was a noted increase in well-established programmes compared to last year, with 25% of entrants confirming that their programmes have been running for 5 or more years
  • 82% of applicants indicated that Supplier Development is well established in the company as opposed to 23% in 2018, and 27% in 2019 – this is a superb indicator of organisations seeing the value Supplier Development brings
  • 89% of the applicants indicated that they are developing their own supply chains in-house (as opposed to 50% last year), while the rest rely on third party and intermediaries for support in implementing their Supplier Development programmes – this indicates a marked shift in corporates embracing Supplier Development at a strategic level and embedding it within their organisation
  • 57% of the companies reported that senior leadership steers the process of the Supplier Development strategy, as opposed to 43% in 2019 – this signals a significant uptake in the C-suite embracing Supplier Development within businesses
  • 32,14% of companies task procurement with implementation of their programme on the ground, with the rest a spread of responsibility
  • Of the applicants that indicated their total programme value, it was noted that their expenditure on small suppliers ranged from R250 000 to R4.5 billion comprising a combination of cash, in-kind support and other trade-offs
  • The percentage of spend on Supplier Development as a portion of the total operational budget of companies ranged from 1 to over 70%
  • 1345 small businesses (comprising QSE’s and EMEs with a turnover of R5-20 million annually) were supported by our finalists
  • Average size of jobs created per entity ranged from 3 to 100.
  • 50% of the Supplier Development programmes targeted existing vs new opportunities.
  • 80% of the finalists’ programmes focused on growing the ecosystem of independent, small suppliers beyond their own supplier chain with 93% of companies taking action to develop relationships in the ecosystem – evidence that a strong spirit of collaboration is now entrenched in the ecosystem
  • 80% of the finalists’ programmes/projects specifically support regional manufacturing businesses and product/service providers with 47% of businesses actively pursuing import substitution when looking for suppliers
  • 100% of companies said innovation is an important aspect of their strategy
  • There was an increase in the use of metrics used for the measurement of impact and year-on-year improvement – with a whopping 94% of the applicants showing that they currently track their results through metrics/ success indicators

Our 24 semi-finalists

  1. Bigen
  2. BTS/Avocado
  3. Catalyst For Growth NPC
  4. Cova-Advisory
  5. Distell Group
  6. Empact Group
  7. EnviroServ Waste Management (Pty) Ltd
  8. Fidelity Services
  9. Gibs
  10. Goodyear South Africa
  11. Mustek
  12. PetroSA
  13. Pragmaworld
  14. SAB
  15. Sasol
  16. Soldado T Enterprise
  17. South African Energy Coal
  18. SPAR Group Ltd
  19. Telkom
  20. Tiger Brands
  21. Transformation Legacy
  22. Unilever South Africa
  23. V&A Waterfront
  24. Vhembe College

 Our 11 Finalists

  1. Distell Group
  2. Empact Group
  3. EnviroServ Waste Management (Pty) Ltd
  4. Goodyear South Africa
  5. PetroSA
  6. SAB
  7. Sasol
  8. SPAR Group Ltd
  9. Tiger Brands
  10. Unilever South Africa
  11. V&A Waterfront

Facts & Stats 2020

Applications received year on year

*Note: 2020 had more rigorous entry criteria

  • 2018: 409
  • 2019: 379
  • 2020: 62 

Size of businesses applying year on year

  • GEN:
    • 2018: 10%
    • 2019: 15%
    • 2020: 40%
  • QSE:
    • 2018: 8%
    • 2019: 10%
    • 2020: 9%
  • EME:
    • 2018: 33%
    • 2019: 37%
    • 2020: 44%
  • BLANK:
    • 2018: 48%
    • 2019: 38%
    • 2020: 7%

% qualifiers in the application process

  • 2018: 11%
  • 2019: 4%
  • 2020: 43%


How are corporates implementing Supplier Development?

  • In-house: 88.89%
  • Outsourced (through an intermediary): 5.56%
  • Combination of both: 5.56%

 Strategic support

  • 2018
    • Leadership (strategy – Executive: 52%
    • Leadership (strategy – Executive | Operations – Management): 36%
    • Other: 10%
  • 2019
    • Leadership (strategy – Executive: 43%
    • Leadership (strategy – Executive | Operations – Management): 30%
    • Other: 26%
  • 2020
    • Leadership (strategy – Executive: 57%
    • Leadership (strategy – Executive | Operations – Management): 32%
    • Other: 11%


Parties responsible for implementing the Supplier Development Programme on the ground

  • Procurement Department: 32.14%
  • Marketing Department: 7.14%
  • Sustainability Department: 10.71%
  • CSI Department: 14.29%
  • Intermediary: 3.57%
  • Other: 32.14%

 

Total number of supported small enterprises/suppliers through our finalists

1345 – who are QSE’s and EMEs with a turnover of R5-20 million annually.

Average size of jobs created per entity ranged from 3 to 100.

 

Spread of support interventions on offer to suppliers

  • Finance terms: 8.24%
  • Grants & loans: 11.76%
  • Mentorship: 15.29%
  • Market readiness: 11.76%
  • Media & communications support: 2.35%
  • Market access: 16.47%
  • Gap analysis: 9.41%
  • Peer support: 7.06%
  • Design thinking 4.71%
  • Leadership: 5.88%
  • Other (specify): 7.06%

 

Age of programmes

  • Less than 2 years (NEW): 23.08%
  • 2-5 years: 51.92%
  • 5 years plus: 25.00%

 

 Opportunities targeted

  • New opportunities: 50%
  • Existing opportunities: 50%

 

Programmes growing the ecosystem of independent small suppliers beyond their own supplier chain

  • Yes: 80%
  • No: 20%

 

Companies that have taken action to develop relationships in the ecosystem

  • Yes: 92.86%
  • No: 7.14%

 

 Programmes/projects specifically supporting regional manufacturing businesses and product/service providers

  • Yes: 80%
  • No: 20%

 

Businesses actively pursuing import substitution when looking for suppliers

  • Yes: 46.67%
  • No: 53.33%


Level of establishment of
Supplier Development 

  • Well established in the company
    • 2018: 23%
    • 2019: 27%
    • 2020: 82%
  • Well established, but we are trying something new and innovative
    • 2018: 25%
    • 2019: 24%
    • 2020: 18%
  • Just starting out
    • 2018: 52%
    • 2019: 50%
    • 2020: 0%

Typical planning time-frames for entrants’ Supplier Development programmes

  • 6 months-1 year: 17.65%
  • 1-2 years: 29.41%
  • 2-5 years: 52.94%
  • 5 years plus: –

 

Suppliers’ greatest areas of challenge

Scale/volumes

Lack of experience

Price

Quality

Reliability

Lack of funding

Access to markets

Competition

Lack of commitment

Lack of equipment

Basic business compliance

Performance measurement

There was an increased reporting in the use of metrics measuring the impact and year on year improvement. It was promising to note that a number of businesses are tailoring their indicators or using common measures of performance (jobs created, jobs sustained and cost per job, and financial questions to measure grants, loans and direct investment) to rigorously gauge their impact.

 

Companies that currently track their results through metrics/success indicators

  • Yes: 94%
  • No: 6%

 

The spread of metrics or success indicators used to track results

  • ROI: 7.14%
  • Jobs created: 26.19%
  • Jobs sustained: 14.29%
  • Business growth: 19.05%
  • Increase in turnover: 21.43%
  • Other: 11.90%

 

Typical reporting cycles

  • Monthly: 21.43%
  • Quarterly: 50.00%
  • Annually: 28.57%