The Durban Chamber of Commerce and Industry and professional services firm Deloitte today announced that they have entered into a partnership to facilitate bringing together large enterprises seeking to integrate B-BBEE qualified small and medium-sized enterprises (EMEs and QSEs) into their supply chain while meeting their quality, delivery and cost-competitiveness requirements.
The 2013 B-BBEE Codes of Good Practices were gazetted in 2014 and are now in full effect. They now stipulate five elements (reduced from seven) on how companies are measured on their B-BBEE compliance: including ownership, management control, skills development, enterprise and supplier development (ESD) as well as socio-economic development. As a result many companies saw a reduction of their empowerment rating, as the revision places an emphasis on three priority elements: ownership, skills development, ESD. Companies must achieve compliance of at least 40% of these priority elements.
Failure to achieve the 40%, according to the gazetted amendments, will result in the reduction of overall compliance by at least one level, and this has on average resulted in a general drop in the B-BBEE status level , for example, from 5 to 6.
Lerato Sithole, Supply Chain Director at Deloitte, says: “The motivation for the partnership was that the Chamber presents an ideal platform for small and large businesses to synergise their needs and collectively address their common challenge, which is how to best facilitate economic activity.”
“The development of new enterprises is a necessity for large companies to comply with current B-BBEE Codes of Good Practices, but it is not their internal core competence, explaining why many of them are challenged. Granted, many by now do have considerable experience in developing B-BBEE suppliers, though some that have previously invested large sums of money into ED have not seen this translating into suitably qualified B-BBEE suppliers, ready to take-up more of their procurement spend.”
Where the partnership will assist, is that where such qualified B-BBEE suppliers are not available, these large enterprises now need to take up the more challenging task of finding, screening, developing and sustaining such suppliers while protecting or enhancing their competitiveness and delivering value for their shareholders, customers, value chain partners and their host communities.
“In contrast, many deserving small enterprises with the potential to grow into sustainable B-BBEE suppliers continue to languish and fail before they cannot access the ED and SD opportunities presented by large enterprises. To succeed, they require access to both the immediate and broader market spaces, they need accelerated skills and/or capability development and experience in the core supply chains of larger enterprises.”
“This partnership will assist in matching up these parties in a mutually beneficial manner, while yielding benefits for both large and small enterprises,” says Sithole.
According to Dumile Cele, CEO of the Durban Chamber of Commerce and Industry “The chamber is the ideal platform for collective ED and SD: by leveraging its strong and wide industry ties, its access to viable ED candidates among its business members, and now with the support of Deloitte among other industry partners, with strength in supply chain management optimisation, business management and training and mentorship of Small and Medium Enterpises.”
“Sustainable ED and SD starts with the identification of optimal preferential procurement opportunities that are ripe for B-BBEE candidates to be matched once they are qualified out of the programme,” says Sithole.
The Deloitte/Durban Chamber programme has the following elements:
Assess: conducting expenditure analysis in order to establish a company’s current spend trends and the estend of its contribution to both Enterpise and Supplier Develoment programmes.
- Prioritise: prioritising Enterpises with development potential; establishing an ED and SD plan for each company.
- Develop: screening enterpises, and networking them. Training, mentoring and incubating enterprises.
- Sustain: Integrating pre-qualified suppliers into the large business’s supply chain, and thereafter providing continuous development and mentorship.
Unpacking the detail for candidate B-BBEE Enterprises, Sithole and Cele explains that the training per will be bespoke to the skills and capability requirements of the small and medium enterprise, including regular group and one-on-one mentorship sessions. They will have access to an incubation hub, which is a facility with desks, meeting rooms, telephone and internet access; as well as access to back-office services such as payroll, tax, accounting and marketing.
Networking will provide candidates with presentation by industry advisors, industry tours, both local and international, as well as the potential to attend various buyer conferences, forums and seminars. Furthermore, the partneship will provide additional support in developing a feasible business plan and assistance in identifying and obtaining a source of funding.