COVID-19, a disruptor of unprecedented scale, has impacted the global economy and forever changed the business landscape. Many businesses, big and small, are struggling to survive right now which begs the question, is there a place for supplier development in these dark times? This was the line of inquiry taken by leading ESD specialists Litha Kutta, Director of Enterprise and Supplier Development at Tiger Brands, Guy Harris, ESD specialist and Vikesh Singh, Supplier Development Manager at SAB, during the Absa Business Day Supplier Development Dialogue Series hosted on 10 June 2020, in partnership with Fetola, Cold Press Media, and Arena Holdings.

Panellists agreed that while times were challenging, or perhaps because of that, supplier development presents us with an opportunity for strengthening ecosystems that will deliver long-term benefits to corporates and small suppliers.

Seven vital, low-cost solutions were identified to bolster efficiency, foster innovation and build stronger supplier ecosystems in companies during these challenging times:

  1. Supplier Resilience: Corporates can improve supplier resilience by assisting them with access to broader market networks. This can be in the form of simple introductions or more structured solutions such as the Market Access Platform (MAP) that creates win-win relationships between high performing, black-owned suppliers and cross-industry buyers. MAP is currently used by SAB, Total, KFC, General Electric, Coca-Cola Beverages South Africa and Macsteel.
  2. Digital priorities: This is the time to find new solutions and put those that work on steroids. Corporates that reach out and assist small suppliers with digital transformation by improving data access or reducing costs of technology through training and software access, can significantly accelerate the rate of technology adoption in the supply chain, improving inventory management and fast-tracking improvements in supply chain efficiency.
  3. Price and payment: Corporates wishing to help their supply chains to weather the COVID-19 storm can do so by speeding up payments and easing trading terms. This is also an opportunity to review the value chain ecosystem to identify where there is waste and reduce costs, for example, by supporting collective procurement (i.e. buyer groups), guaranteeing supply purchases and helping suppliers bring down costs by assisting with re-engineering services.
  4. Actively communicate: Communication is one of the most effective and least costly solutions of all. Increase two-way communication with customers, suppliers, business partners, and employees to build understanding. Bridge the gulf between corporate and small supplier expectations through open days, meetings and mentorship. Listen and act on feedback to build empathetic dialogue and effective solutions. Building authentic relationships will also enhance long-term loyalty which is the cornerstone of lasting success.
  5. Think Local: Given South Africa’s wave of inequality that threatens society’s humanity and our economic well-being, we are compelled to actively seek opportunities that retain value within South Africa. Companies that encourage innovation from within and actively support the success of these spin-off suppliers can build stronger local supplier bases. These local suppliers (including IT and software) can reduce exposure to exchange rate risks and build local employment. Government’s support for a consolidated and effective strategy is needed here.
  6. African outlook: African relationships also need nurturing, so look at sourcing from African countries as well as marketing into them. We cannot drive development in a continent that is failing. Government plays a leading role in extending a welcome to our neighbours, lowering business barriers and encouraging cross-border collaboration.
  7. Bring risk management into strategy: Anticipating a new normal of pandemics, climate change impact and social disruption require a deliberate strategy to manage risk. Risk conversations to be embedded in strategic planning so that future shocks are anticipated.

“There is no doubt that enterprise and supplier development will play an even more critical role in driving economic revival in the aftermath of the Covid-19 crisis. Innovation and digitization will be central to building stronger, smarter supply chains and ensuring a lasting economic recovery,” said Vusi Fele, Chief Procurement Officer at Absa.

“At Absa, we believe that opening up opportunities for SMEs to access corporate supply and delivery chains is one for the most efficient and consistent ways in which established corporates can contribute to sustainable entrepreneurship development. This will even be more crucial in the post-Covid-19 economic recovery environment. Both corporates and SMEs need to think about doing business differently going forward in order to thrive in the ‘new normal’.”

“Now is the time to be ultra-effective in business and aim to do more for less. Supplier development in 2020 is about efficiencies built through communication and collaboration,” said moderator, Catherine Wijnberg, CEO of Fetola. “This is not the time to ‘go it alone’ and save ourselves at the cost of our small suppliers, but the time to take big, bold decisions, to look inward at our own country, look outward as part of Africa, and accelerate our path to recovery!” she concluded.

The fourth Absa Business Day Supplier Development Awards online dialogue will be taking place on the 8 July 2020. Panel members will explore Post Corona – recovery strategies for struggling supply chains, and share how leading corporates are re-building and establishing more resilient supply chains, while growing the Supplier Development ecosystem. To register Click here