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Supplier development: A positive move in the right direction

Supplier development: A positive move in the right direction

The Amended B-BBEE codes came into effect on the 1st of May this year and the new Supplier Development regulations bring about changes to what has been the norm for many years.

While it was easy for companies to ‘finance’ smaller businesses to earn points on their BEE scorecard without taking any ‘real’ responsibility, the new codes are forcing companies to think laterally and contribute to the success of their own suppliers.

Buhle Moyo, a B-BBEE specialist at The Hope Factory says, “Supplier Development is all about corporates working with their suppliers to guarantee success for both parties. The Amended codes stipulate that recipients of investors must now be suppliers to the business.

“Big businesses can do more to support the operations of SMEs, and also need to help smaller businesses to overcome their challenges; i.e. when they make mistakes, it’s not enough to just walk away and procure the services from another company. Supplier Development requires that these small businesses receive help from corporates that they service to help meet their own efficiencies.”

Government is unable to create jobs on it's own; therefore, it has made provision with the Amended codes that corporate South Africa also plays its role in improving the economy; and Supplier Development is one of those platforms.

According to Moyo, The Department of Trade and Industry recognised that under the current codes, there is not enough transformation, and therefore, the procurement structure needs to change.

Corporates already have suppliers on their database that they can choose to work with and help develop. The suppliers have to become the core of the business, therefore, they have to be integrated into the investors supply chain.

Moyo says, “If investors develop and graduate suppliers into their supply chain, they also earn extra points.”

There are two options available to investors in order to meet the new requirements; either invest in existing black suppliers within the company supply chain; or introduce new black suppliers into the company supply chain. Both options require the investors to develop a Supplier Development strategy which may require assistance from a business development company to help meet the requirements.

Supplier Development and Enterprise Development contribute up to 40% of the BEE scorecard. Earning the 15 points through Supplier Development and Enterprise Development are quick wins if done properly.

“And The Hope Factory can help,” says Moyo.

Our team offers a free funder needs analysis service by assisting investors to find the most compatible service providers / suppliers for their businesses. Through planning and implementation, the team offers investors a seamless and holistic Supplier Development solution. More importantly, is its independent identification assessment of potential suppliers. 


Photo caption: Buhle Moyo, a B-BBEE specialist at The Hope Factory.