Developing successful Supplier Development programmes in the Eastern Cape

02 October 2019 | Web Article Number: ME201916535

Commerce & Trade
Government & Municipal
SMME Development & Support

With the Eastern Cape Manufacturing Indaba starting today in Port Elizabeth, the event’s MD Liz Hart reflects on one of its key themes, Supplier Development.

SUPPLIER development is the process of personally working with specific suppliers to boost their performance for the benefit of the buying organisation. This leads to advancements in the total added value from the supplier in question with reference to B-BBEE rating, product or service offering, business processes and performance, improvements in lead times as well as delivery.

As a significant element of the Broad-Based Black Economic Empowerment policy, Supplier Development is ultimately intended to boost economic transformation in South Africa.

Supplier Development not only improves knowledge and collaboration sharing amongst business networks but improves responsiveness to market dynamics. Moreover, it facilitates the reduction of inventory costs for companies along with time for sourcing information and time to market a product. Furthermore, it enables the development and manufacturing of innovative designs, as well as improved quality and consistency of products.

South Africa acknowledges entrepreneurship as a stimulus for growth, and Supplier Development provides small businesses with access to various opportunities through an improved BEE status, which ultimately ensures the sustainability and success of such businesses.

Considering this, the Eastern Cape province has proven its commitment to Supplier Development. General manufacturing contributes a significant portion to the provincial economy and is predominantly driven by the needs of the automotive sector, which represents the largest manufacturing sector in the Eastern Cape. The province boasts four of the seven OEMs operating in South Africa and up to 100 major component manufacturers.

South Africa’s automotive sector is the cornerstone of the national manufacturing base and accounts for 6.8% of GDP. With that said, the Eastern Cape is home to the manufacturing facility of international vehicle assembler Volkswagen Group South Africa in Uitenhage.

The establishment has made remarkable strides in proactively including previously disadvantaged groups in current and future economic endeavours. Their multifaceted transformation strategy has been developed to achieve the nation’s transformation objectives.

In October 2017, Volkswagen South Africa (VWSA) launched the Ntinga Project, an initiative designed to identify and develop black-owned suppliers within motor manufacturing. On successful completion of an 18-month training and mentorship programme, the establishment awarded previously disadvantaged industry players with a supplier contract.

Further to this, the group established the Volkswagen BEE Trust and Volkswagen Business Support Centre with the objective to provide both financial and non-financial support to black-owned suppliers in order to increase the number of black suppliers within the automotive value chain.

By embracing supplier diversity, South African manufacturers can realise increased supply chain competitiveness, product innovation through interaction with new suppliers, along with an improved brand image with their shareholders, government and within their communities. In addition, they can profit from advanced market intelligence through closer supplier relations, increased market share and loyalty as well as access to public/private sector business through achieving BEE compliance.

The Eastern Cape Manufacturing Indaba, being hosted on 3 and 4 October 2019 in Port Elizabeth, is set to delve into such policies that aim to encourage governmental departments and agencies as well as provincial manufacturers to source products and services from previously under-utilised suppliers.

The conference aims to impart insights on best practice supplier diversity development implementation in an effort to assist industrialists to sustainably integrate Black-owned suppliers into their supply chains. This will consequently cultivate black businesses, employment and ultimately, our nation’s economy in its entirety.

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