CATHERINE WIJNBERG: Supplier development is a strategic growth tool
We want to celebrate those who acknowledge that in future new jobs will come not from large institutions or corporates, but from small firms
Four years ago, when Fetola conceptualised the Supplier Development Awards with partners Cold Press Media and Business Day, we wanted a tool to acknowledge that supplier development was an important growth mechanism towards the national goal to grow an inclusive economy and generate jobs.
We wanted to celebrate those who acknowledge that in future new jobs will come not from large institutions or corporates, but from small businesses. We wanted to recognise transformation; those large organisations that have increased procurement from small black-owned businesses and support the growth and development of these businesses to ensure the services they provide meet the needs of the company.
We wanted to recognise and acknowledge that building a world-class business is not an easy process, and doing so under the added constraints of legislation is even harder. And we wanted to celebrate the many companies that are committed, year after year, to meeting and exceeding their scorecard targets.
Four years later, with the Absa sponsored awards now having established themselves in the sector, it is clear to me that there are three basic categories of role player in supplier development — those companies that don’t bother with it, those that just do the basics to get the points, and those that go beyond tick-box compliance to unlock the full power of supplier development as a key strategic advantage for their organisations.
What a joy it is to be able to see those who do recognise that where CEOs and executive leaders optimise supply chain development as a growth tool, those companies are leaping ahead and building this into their business continuity and competitive advantage strategy.
Supplier development that is led from the C-suite is evident in longer planning cycles and in increased resourcing. It is also evident in the increased buy-in from procurement departments, which are arguably the real implementers in any supplier development strategy.
It is also clear that global Covid-19 disruptions have helped highlight the importance of maintaining a network of suppliers that are close — both in terms of trusted and supportive relationships and in close proximity. Building supportive supplier ecosystems means moving beyond historically dependency-laden supplier-client relationships to new types of relationships, where small suppliers are encouraged to grow their own independent and diverse client base and where commercial rules largely apply.
This, for example, is the basis on which Bidvest Afcom, in its 2021 Absa Business Day Supplier Development Awards entry, successfully supported new entrant Pavati Plastics to succeed in the plastic packaging sector. By deliberately breaking away from the traditional model whereby corporates hold “their” transformation suppliers into an exclusive and unilateral almost parent-child relationship, and choosing rather to support a strategic growth-focused model, a quality, trusted and transformed supplier was created in the form of Pavati Plastics, for which five years later Bidvest Afcom represent only 30% of their annual revenue.
This willingness to change traditional thinking, to collaborate and embrace innovation through learning, is exactly what we were hoping for when we developed the awards four years ago. We expect that companies will continue to challenge themselves to hundred times the outcomes of their current supplier development spend.
Recently, spirits producer and marketer Distell met that challenge by benchmarking its past supplier development strategies and choosing to build new working partnerships to make its Covid-19-ravaged budgets stretch further. The innovative outcomes will change the game for its own business and for its network of small suppliers.
In summary, best practice (and its outcome, innovation), continual learning, and collaboration are key themes in the Supplier Development Awards for a reason. This is a trio of solutions available to all companies and critical to the building of resilient, competitive advantage. If matched with the removal of constraining government red tape and reworking of legislation, we have the potential to deliver inclusive growth and job creation nearing the scale that the country needs.
• Wijnberg is CEO of Fetola and co-founder of the Absa Business Day Supplier Development Awards.