ENTERPRISE AND SUPPLIER DEVELOPMENT
Enterprise and Supplier Development (ESD) is now the most significant element on the revised Broad Based Black Economic Empowerment (BBBEE) scorecard.
The revised Broad Based Black Economic Empowerment [BBBEE] Codes of Good Practice of 2015 consolidated Enterprise Development [ED] and Preferential Procurement [PP] elements into one pillar, which is the Enterprise and Supplier Development (ESD) Pillar. Additionally, sub-minimal performance in this pillar has been the primary cause of the majority of corporates suffering an automatic downgrade to their BBBEE ratings.
This pillar counts for 40 of the total 107 points available to measure entities to achieve a minimum of 40% of the total targets of the 3 subcategories of ED, PP, and Supplier Development (SD).
The aim of SD is to increase the competitiveness, capacity, and capability of local suppliers. Examples include training and implementation of ISO9001 or specific skills training.
The amended Codes of Good Practice require businesses to commit to supplier development with black-owned small suppliers through the supplier development pillar of the scorecard.
How to Select Supplier Development (SD) Beneficiaries
Companies need to select the right suppliers and engage with them based on an implementation plan that includes:
- Clear objectives
- Priority Interventions
- Key Performance Indicators (KPIs)
- Implementation plan with milestones
The above plan must be signed off by the company and the SD beneficiary to ensure it meets verification agency requirements. If there is no paper trail or evidence, the points cannot be claimed.
Selecting Suppliers for Risk Management and Governance
Here are some questions to consider when selecting suppliers to ensure proper risk and governance are managed:
- How should suppliers be selected?
- How can these elements be evidenced and structured into the Supplier Development (SD) agreement?
- How can this meet the company's supplier development needs?
With years of experience, the BSC can help you build a supplier plan and supplier selection process. The BSC has a database of Black Small, Medium and Micro Enterprises (SMMEs) across all sectors. They can assist you to connect with a small black business and ensure all supplier development contracts are in place, as well as ensure there is a paper trail for the measured entity to claim points on the BBBEE scorecard.
About the BSC
The BSC is a Registered Section 21 Non-Profit Company with an ISO9001:2015 accreditation.
Here are some of the key services offered by the BSC:
- Enterprise and Supplier Development Strategy Advisory
- Corporate consulting on ESD (e.g., developing policies and procedures)
- ESD Implementation and Management (e.g., drawing up of ESD contracts)
- Business and statutory compliance for ESD beneficiaries
A few of BSC's clients include Hulamin Limited, BSi Steel, Somta, Aberdare Cables, Absa Bank, and Goscor Forklifts.
Contact the BSC for all your Enterprise and Supplier Development needs.
SMME
Business Services
Business linkages
Enterprise Development
Company and CIDB Registration
Business counselling & mentorship
Entrepreneurial training
Sourcing finance for emerging businesses
H.R Services
Payroll and statutory returns
Employment contracts & documentation, all above law compliance
Ongoing HR/IR consultancy and advisory support
Financial Services
Bookkeeping, tax compliance e.g VAT, personal tax, record keeping
Ongoing financial advisory and support