What Does Enterprise Supplier Development (ESD) For BBBEE Involve?

What Does Enterprise Supplier Development (ESD) For BBBEE Involve?

Enterprise Development (ED) is and has been an area of activity where many large companies wish to effect great transformation in their supply chains for a genuine win-win. This approach and shift in thinking has seen Enterprise Development mature from a compliance issue (tick box) to one of genuine transformation among medium to large South Africa companies. The end product is called Enterprise Supplier Development (ESD), a merger between Enterprise Development and Preferential Procurement. It is described in statement 400 of the new BBBEE codes and it forms one of the three priority elements with a 40% minimum threshold.

As 01 May 2015 draws closer and closer the number of companies seeking to get clarity on ESD in order to proactively prepare for measurement under the new BBBEE codes thereafter is increasing dramatically. Hardly, a week goes by when I do not get asked “so what exactly does BBBEE Enterprise Supplier Development involve?” It is a simple question, but the answer is anything but simple. For ESD to be strategic, sustainable, cost-effective and efficient it must involve more than just writing a cheque to a 3rd party intermediary e.g. Fund Manager or Incubator. Read More

Invite for SMMEs in the City of Tshwane to a working visit to Moscow, Russia, on 08-14 December 2014

Invite for SMMEs in the City of Tshwane to a working visit to Moscow, Russia, on 08-14 December 2014

The Executive Mayor of the City of Tshwane, Cllr Kgosientso Ramokgopa, is planning a working visit to Moscow, Russia, on 08-14 December 2014. 

The main purpose of the visit is to formally establish technical relations and build business linkages between the cities of Tshwane and Moscow. Our engagement with the City of Moscow is undertaken within the broader context of South Africa’s cooperation with our BRICS (Brazil, Russia, China and South Africa) partners, aimed at addressing poverty and underdevelopment in the South-South sphere cooperation. Read More

Unpacking The New BBBEE Act

Unpacking The New BBBEE Act

The Broad-Based Black Economic Empowerment Amendment Act, No 46 of 2013 (BEE Amendment Act) which amended the Broad-Based Black Economic Empowerment Act, No 53 of 2003 (BEE Act) to, amongst others thing, make the BEE Amendment Act the principal legislation in South Africa with regard to BBBEE, to make it obligatory for all governmental bodies to apply the generic BBBEE Codes of Good Practice or other relevant code of good practice gazetted in terms of the BEE Amendment Act when procuring goods or services or issuing licences or other authorisations under any other laws, and to penalise fronting or misrepresentation of BBBEE information, came into force and effect on 24 October 2014.

The “trumping” clause contained in s3 (2), will become effective on 24 October 2015 one year after the rest of the BEE Amendment Act comes into force.

The below are several highpoints of the amendments announced by the BEE Amendment Act: Read More

Supplier Registration Invitation For Black Youth And Black Persons With Disabilities Owned Businesses.

Supplier Registration Invitation For Black Youth And Black Persons With Disabilities Owned Businesses.

Murason Business Services (MRS) hereby invites vendors to be pre-qualified as potential Suppliers and Enterprise Development partners.

MASSIVE OPPORTUNITY; potential 3 year contract on a large Infrastructure Projects.

In line with our  BBBEE and Enterprise Supplier Development (ESD) strategy that is aligned to the Broad-Based Black Economic Empowerment (BBBEE) Act and codes of good practice issued by the Department of Trade and Industry (DTI), this invitation only applies to black owned Exempt Micro Enterprises (EMEs) and Qualifying Small Enterprises (QSEs) that are 51% or more owned by People With Disabilities or by Youth (between 18 – 35 years of age). Read More

Tax Implications Of Enterprise Development Grants Contributions.

Tax Implications Of Enterprise Development Grants Contributions.

Broad-Based Black Economic Empowerment (BBBEE) is a regime that affects almost all businesses in South Africa and for an expanding business, a good BBBEE scorecard can sometimes be the difference between clinching a life-changing tender as opposed to turning into ashes. Businesses, depending on the classification of the business, have to choose a certain amount of BBBEE elements, of which one may be ‘Enterprise Development’.  Read More

The Love And Hate Relationship Between ESD And Procurement.

The Love And Hate Relationship Between ESD And Procurement.

We as Enterprise and Supplier Development (ESD) Practitioners frequently find ourselves at odds with Procurement when contracts involving tangible/strategic products are involved. ESD Practitioners are charged with increasing their companies’ overall BBBEE spend, but face a major obstacle in the form of little buy-in or participation from their Procurement Team. To surmount this obstacle, ESD Practitioners need to really understand the reasons why the Procurement Team seems to want little to do with Small Black Businesses and Enterprise and Supplier Development. To appreciate their perspective perhaps we need to put ourselves in the shoes of our procurement colleagues. 

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Pre-requisites For ESD

Pre-requisites For ESD

Increasing competition within the worldwide economy has for many years been forcing South African companies to reduce their costs and improve their BBBEE scores. However, traditional approaches have been limited to eliminating wastage within companies, improving efficiencies through outsourcing of non-core functions and concluding BEE ownership deals.

Read More

Leave Enterprise Supplier Development To The Professionals

Leave Enterprise Supplier Development To The Professionals

It is not a secret that most South African companies are not only dedicated to doing business with black-owned suppliers, but are also committed to the sustained success of these suppliers. In light of the new BBBEE codes of these companies are putting in place Enterprise Supplier Development (ESD) programs to help achieve and show this commitment. However, despite their well intentions I have found that the majority of internal ESD programs are missing vital components.

In my opinion, there are two main causes for most internal Enterprise Supplier Development (ESD) programs not being as effective or successful as they can be:

  1. companies leave the programs entirely in the hands of their internal staff without providing any training to upskill or reskill them;
  2. program components are not focused on the critical aspects of business development that benefit the suppliers.

While these companies are dedicated to the development of their black-owned suppliers, supplier relationship management or supplier diversity management is not in their wheelhouse. In other words, Enterprise Supplier Development (ESD) is not their core business, nor should it be. Read More

A Customisable Approach To Deliver The Best ESD Results

A Customisable Approach To Deliver The Best ESD Results

I was recently asked by one of my JSE listed clients to conduct some research on Enterprise Supplier Development (ESD) strategies. My client, like many other big businesses in South Africa is currently endeavouring to initiate this strategy within their supplier base in order to comply with the revised B-BBEE Act and Codes of good practice.

Having spent a few days with me in ESD workshops the company now knows that Black-owned suppliers of critical goods and services can provide major competitive benefits in the form of lower costs, improved quality, on-time delivery, technological innovation and customer service. And as the company seeks to expand its business activities, they have realised the importance of bringing with them a capable and diverse supplier base that can support these expansion initiatives into new markets and businesses, as well as drive costs out of the supply chain. Read More

ESD and B-BBEE Compliance

In terms of B-BBEE the consolidation of the Preferential Procurement (PP) and Enterprise Development (ED) elements of the scorecard to create a single element called Enterprise Supplier Development (ESD) is a strategic move by government to facilitate and support national development goals. The overall objective is to strengthen the capacity and capabilities of black-owned enterprises in order for them to be integrated into the mainstream supply chain of larger corporates and ensure symbiotic relations. The end result is the creation of more effective black-owned enterprises that strengthen local procurement and a more inclusive and representative South African economy. Read More

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