The state of Enterprise and Supplier Development (ESD) in South Africa is a constant conversation within the transformation fraternity. This topic has been debated in various platforms and it continues to be a hot topic, especially when it comes to the transformation of supply chains in Corporate SA. The B-BBEE Commissioner also released a statement this year saying that she will focus on the sector this years.
Vusi Thembekwayo hosted an online panel discussion on this issue on the 7th of May 2020. On the panel, Litha Kutta, Director for Enterprise and Supplier Development at Tiger Brands, provided an overview of this matter. He said that while there has been an improvement in SMMEs that have received ESD support, the focus is still on those who provide non-core supply chain items. He said that there is an over-subscription of such beneficiaries within ESD programmes, which is not a good recipe for supply chain transformation and diversification.
Kutta added that black entrepreneurs will have to think differently if they want to access the core supply chains of big businesses. He stated that to be on a core supply chain, technical skills are very critical. And unfortunately, this is very difficult to address through ESD programmes. One of the approaches that he suggested was that, entrepreneurs need to collaborate with people that have technical knowledge to start businesses that have technical experience. He alluded to the fact that there are many executives with technical knowledge and experience that are sitting in corporate. Those could potentially be partners for SMME’s.
The development of non-core black suppliers in the ESD sector has been pointed at by many ESD practitioners as the reason why ESD has made very little impact.