Why have the revised B-BBEE codes caused such a stir?
The new codes have placed increased pressure on companies to overhaul their supply chains.
The Enterprise and Supplier Development Element, as set out in Code Series 400 of the 2013 B-BBEE codes, measures the extent to which enterprises buy goods and services from suppliers with strong B-BBEE procurement recognition levels and who are Empowering Suppliers.
It’s in the best interest of companies to transform their supply chains.
What challenges do corporates face when overhauling their supply chains?
Listed companies are answerable to their shareholders. Making money is their ultimate goal, and overhauling a supply chain is often perceived as risky, as it directly impacts the bottom line.
Companies feel the pressure to bring empowering businesses into the supply chain, but they are worried about the level of service that will be provided by an untested supplier.
We assist in taking the risk out of this process, while also using this opportunity to assist empowering companies to penetrate those corporate supply chains they have previously been excluded from.
How do you go about doing this?
The SBU incubation model supports emerging black businesses so that they are able to flourish as independent, sustainable businesses that can form part of a mature supply chain.
Fundamental to its success is a tiered intervention, where entrepreneurs transition and bolster their businesses through successive levels of activation.
This begins with a pre-incubation phase (3 months), followed by full incubation (3 years), and through to graduation. The statutory compliance of the businesses is a core component of the development, as is the world-class mentorship programme.
And how do you assist large companies in overhauling their supply chains?
Many procurement departments experience difficulty in sourcing quality black-owned businesses as suppliers. Shanduka Black Umbrellas (SBU), with over 300 100% black-owned businesses in its incubators, and Shanduka BlackPages (SBP), with over 7 000 100% black-owned members listed on the online portal, provide a meaningful source of possible suppliers that can assist in meeting scorecard targets. It’s in the best interests of everyone involved to provide a more secure supply chain.
Overhauling a supply chain can obviously be difficult. How should companies approach the issue?
It can be difficult; but it’s not insurmountable. We don’t recommend that existing suppliers who do not conform to the new B-BBEE codes simply be ejected from the supply chain. Instead, we suggest looking at ways in which Empowering Suppliers can be added to the equation.
SBU can assist in developing existing 100% black-owned EMEs and QSEs within a Measured Entity’s supply chain so that they may be provided with greater procurement opportunities and increase the percentage of Total Measured Procurement Spend from these companies.
What mistakes should SMEs avoid when trying to establish themselves within large supply chains?
Do not try to be all things to all people in the hopes of maximising every opportunity. A big part of the incubation process involves coaching entrepreneurs to focus on that specific area where they can add real value.
As a small business, you want to find a particular niche that you can fill successfully, thereby maximising your unique value proposition.