Business Incubation a collaborative model for supplier development

Transcription

1 Business Incubation a collaborative model for supplier development COMPANY LOGO HERE Brought to you by

2 What is supplier development? CIPC definition - Supplier development is the process of working with certain suppliers on a one-toone basis to improve their performance for the benefit of the buying organisation.* Typical benefits include: improving supplier performance reducing costs resolving serious quality issues developing new routes to supply improving business alignment between the supplier and the buying organisation developing a product or service not currently available in the marketplace * CIPC Knowledge Summary - Supplier Development

3 Existing BEE Legislation Since BBBEE Act and Codes of Good Practice (7 elements, 100 points) Introduced legislative requirements which were outside of traditional business modus operandi. Preferential Procurement - 20 points, 70% target. Compliance rather than development focused. Domain of finance department. Enterprise Development - 15 points, focused on monetary value rather than development targets. Domain of HR or CSI departments.

4 Proposed BEE Legislation Supplier Development Measured Entities encouraged to align enterprise and supplier development initiatives with supply chain requirements thereby linking Enterprise and Supplier Development with Preferential Procurement. Measured Entities receive points on the Enterprise and Supplier Development scorecard only if they have fulfilled requirement to demonstrate that they have developed an Enterprise and Supplier Development plan for Qualifying Beneficiaries. This plan should include: Clear objectives; Priority interventions; Key performance indicators; A concise implementation plan with clearly articulated milestones. Qualifying Local Supplier Development Beneficiary - Any existing or new entity that qualifies as an Enterprise Development Beneficiary or is more than 50% black owned and receives the Local Supplier Development support from the Measured Entity. Preferential Procurement - 25 points (9 points >50% black owned, 4 points >= 30% black women owned) Supplier Development 10 points Enterprise Development 5 points

5 Supplier Development - Challenges Insufficient number of 50% or more black owned companies of required standard to enable required targets to be met - suppliers need to be developed. Inability to source required businesses for preferential procurement opportunities. Lack of systems and processes to effectively select quality businesses. Lack of existing skills, experience and resources in order to carry out supplier development meaningfully. Employees not appropriately incentivised to ensure preferential procurement and supplier development objectives are met. Supplier development must be holistic procurement, development, finance. Supplier development encompasses additional costs and time which are difficult to justify commercially Lack of monitoring and evaluation processes.

6 Supplier Development within Context of ED Copyright (All rights reserved)

7 Business Incubation Model Recruitment and Selection The Applicant Passive/active Orientation Pre-feasibility Determine fit Preincubation (3 months) Viability Ability Gap Analysis Develop business plan, basic compliance Selection panel Business selection, matching and assessment Ignition and Integration (24 months) Compliance Business Ready Exit / Graduation (12 months) Sustainable Business Growth Procurement, finance and network ready Implementing business plan Increasing participation in supply chain Increasing jobs, net profit, net asset value Developing technical and business skills Business development and growth

8 How incubation can assist in supplier development? Established database and networks to source qualifying businesses. Ability for corporate employees to participate in a number of areas. Effective recruitment and selection processes. Extensive evaluation and monitoring. Existing extensive business development methodologies and processes. Provision of infrastructure and services to ensure compliance, professionalism and required standards are met. Facilitate conducting of gap analyses to determine development work required and ability of business to meet standards. Access to specialist service providers to enhance development. Ability to assist business in diversifying customer base. Assist businesses with access to networks, including other businesses in incubation. Assist businesses with access to finance.

9 In closing To close, this is how my topic/presentation - Business Incubation a collaborative model for supplier development - addresses these four national strategic objectives: Strategic objective 1: Economic growth Transforming the economy to create decent work and sustainable livelihoods Strategic objective 2: Infrastructure programme Building economic and social infrastructure Strategic objective 3: Skills and human development Strengthening the skills and human resource base Strategic objective 4: Africa advancement Pursuing African advancement and enhanced international co-operation Brought to you by COMPANY LOGO HERE