By Catherine Wijnberg
Four years after founding the Absa Business Day Supplier Development awards it’s clear that there are three basic categories of people in supplier development – those that don’t bother with it, those that do the basics to get the points and those who are realising the strategic power of supplier development as a key competitive advantage.
Where CEOs and executive leaders recognise the power of supply chain development they are leaping ahead and building this into their business continuity plans.
Global covid disruptions highlighted the importance of suppliers that are close – both in terms of trusted and supportive relationships, and in close proximity. This also means moving beyond dependent supplier-client relationships to new relationships where commercial rules apply and small suppliers grow their own independent and diverse client base.
This is the basis on which Bidvest Afcom successfully established the growth of new entrant Pavati Plastics into the plastic film market. By breaking away from the tradition model whereby corporates hold transformation suppliers into unilateral relationships Bidvest Afcom chose to rather support a win-win solution, whereby a quality, trusted and transformed supplier was created for Bidvest Afcom and a valued client was created for 30% of Pavati Plastic’s annual revenue.
This willingness to open up the playing field, to collaborate and innovate as a driver for supplier transformation and growth is exactly the intended result from the Absa Business Day Supplier Development Awards.
It is human nature to look to our own successes with pride, and to want to claim and be applauded for them, and it is very important to do so.
However, as an industry and as a country we also need to challenge ourselves to step out from this comfort zone and look at the bigger picture. And that picture is dismal. At last official count South Africa had a shortfall of just under 8 million job SA’s unemployment rate hits a record 34.4% | Fin24 (news24.com)s, and is growing daily. The recent riots and looting have been a reminder that solving this isn’t something that can wait. For our individual, company and country socio-economic well-being. Answers are needed now.
Yet to create 8 million jobs in the next year requires us to generate 22,000 new jobs every day for 364 days. That is the equivalent of four new Vodacoms every day, or 2,200 new small suppliers employing 10 people – every single day for 364 days.
As this is the number of jobs we have created in all the years since 1994, clearly we cannot achieve this by doing what we have always done. As discussed recently with President Ramaphosa, Fetola and other business leaders, we need to do things radically differently. This means Government removing constraining red tape such as tax, legal and legislative compliance for start-ups (Join the movement – Startup Act South Africa) and focusing efforts on passing legislation that will open up small business growth industries such as the circular economy opportunities that arise from the 2020 waste legislation. Acts and regulations | Department of Environmental Affairs (dffe.gov.za)
Huge growth possibilities are also being missed as a result of inappropriate legislation constraining the growth of industries such as hemp and CBD oil – all of which is currently imported because of some ill-conceived laws around local production that cannot exceed 10ppm (.001% THC) which is not possible in South Africa’s growth climate Cannabis_and_related_substances_A5_final-1.pdf (sahpra.org.za)
Secondly companies need to challenge themselves to 100x the outcomes of the Supplier Development spend. Recently Distell met that challenge by benchmarking their past supplier development strategies and choosing to build new working partnerships to make their covid-ravaged budgets stretch further. The innovative outcomes will change the game for them and for their network of small suppliers. Distell | Leaders in Job Creation and Supplier Development – Bing video
Lastly the new way of doing business is all about sharing – Uber, Airbnb and the like. This means collaboration for win:win outcomes and scale. Collaboration to maximise market reach, to accelerate learning and growth and to reduce costs of doing business are actions with potential to improve our global competitiveness and drive the inclusive growth we so desperately need.
In summary, best practice (and it’s outcome, innovation), continual learning and collaboration are key themes in the Supplier Development awards for a reason. This is a trio of solutions that is available to all companies and critical to the building of resilient competitive advantage. If matched with removal of constraining Government red tape and re-working of legislation, we have the potential to deliver inclusive growth, and job creation nearing the scale that the country needs.
_____________________________________________
My name is Catherine Wijnberg and I am CEO of Fetola. I’m passionate about the radical scaling of successful small businesses as a tool to enable inclusive economic growth and job creation.
I do this by leading a dynamic partnership of growth professionals that build businesses that last. Reliable, responsible and resilient companies that anchor our economy.
Partnership and collaboration is central to delivering results and scale and its in this role that I am a founding partner of the Business Day Supplier Development awards, whose purpose is to unlock the latent potential of supplier development as a tool for inclusive growth. These awards recognise excellence, share lessons and best practice and encourage collaboration as a means of success.