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SUPPLIER DEVELOPMENT FAQs

What is Supplier Development?

Supplier development is the process of working with certain suppliers on a one-to-one basis to improve their performance for the benefit of the buying organisation.

Supplier development should lead to improvements in the total added value from the supplier in question in terms of product or service offering, business processes and performance, improvements in lead times and delivery.

What is supplier diversity?

Supplier diversity is the proactive business process of sourcing products and services from previously under-used suppliers. This process helps to sustain and progressively transform a corporation’s supply chain thus quantitatively reflecting the demographics of the community in which it operates by recording transactions with diverse suppliers.

Why should a company consider supplier diversity and development?

Supplier diversity and development make preferential procurement and enterprise development a meaningful, effective and value enhancing activity rather than something that a company feels compelled to do in order to comply with B-BBEE scorecard requirements.

South Africa’s economic future depends upon the sustainable increase in the number of small and medium sized companies representative of the country’s demographics and their meaningful participation in the mainstream economy via the supply chains of large established companies. Many smaller companies do not have the skills and resources to take on meaningful opportunities that are made available through preferential procurement but with appropriate enterprise development support this could be possible.

Why should I consider Shanduka Black Umbrellas FAQs ?

For those companies which wish to diversify their supply chain by including more black-owned EMEs, a collaborative solution may be created with Shanduka Black Umbrellas whereby appropriate 100% black-owned clients which meet the companies’ supply chain needs are identified via the companies’ supplier databases, Shanduka Blackpages and the existing clients within the Shanduka Black Umbrellas programme and a managed supplier development solution be provided via the Shanduka Black Umbrellas incubator.

The managed supplier development solution will ensure the risk to companies in bringing new suppliers into their supply chain will be minimised via the systems and processes already operating within the Shanduka Black Umbrella’s program, namely:

  • a rigorous selection program that includes credit and criminal checks to ensure the most appropriate clients are selected;
  • a training and personalised mentoring program that includes benchmarks on business plans which the clients prepare themselves thus ensuring each client is properly prepared and supported to deliver the level of service, quality and pricing required; rigorous monthly financial accounts provided for every client in the program which enables the corporate suppliers to see the economic benefit provided by the procurement opportunities provided to the clients;
  • a monthly evaluation of the progress and sustainability of each client;
  • supporting the clients with services and infrastructure such as telecoms, use of vehicle, internet and e-mail etc.
  • The supplier development programme would also provide significant B-BBEE scorecard benefits to a participating company as they would be able to claim 125% of the amounts contributed to Shanduka Black Umbrellas for enterprise development purposes and would be able to claim 132% of any procurement from clients within the programme.