What is Enterprise Supplier Development (ESD)?
Enterprise Supplier Development, especially in a South African context, refers to affirmative action taken by corporations aimed at promoting economic transformation.
Supplier Development vs Enterprise Supplier Development:
Supplier Development: Looks at your current supplier database
Enterprise Supplier Development: Focuses on Suppliers that are not yet on your database (This includes startups)
Under the revised B-BBEE criteria, ESD can take the form of:
An ESD method that encourages governmental departments and agencies to source goods and services from previously disadvantaged businesses or individuals
An ESD method wherein companies create a proactive business process of sourcing products and services from under-used suppliers. Creating more of a balance in the marketplace.
An ESD method with the strategy of promoting economic growth and reduce poverty. Through contributions to black-owned businesses.
An ESD method wherein companies work with suppliers on a one-on-one basis to improve the suppliers’ performance.
A few examples of Enterprise Supplier Development exercises:
- Access to market through opportunities
- Business Development Support
- Mentorship to guide and grow the Business
- Training targetted at improving the Business Owner
Why would companies participate in Enterprise Supplier Development?
Corporations can improve their B-BBEE Rating through ESD
Corporations benefit through ESD by improving beneficiaries performance. Thus improving services and products that they use
Participating in ESD can help corporations reduce costs through mentorships and partnerships.
ESD can aid corporations in developing new routes of supply
ESD aids in improving business alignment between beneficiaries and the sponsors
ESD allows corporations to build products or services that are not currently available in the marketplace
The last way ESD can aid your corporation is through generating competition a product or service that is dominating the marketplace.
South African Companies Currently making a Difference with their ESD Programmes:
⦁ SAB ESD Programmes aim to create a diversified and inclusive supply chain
⦁ Woolworths ESD Programme primarily supports emerging SME’s in Woolworths supply chain. According to their website, the aim is to lift the barrier of entry into their supply chain for small, medium, black-owned and women-owned enterprises
⦁ Telkom launched Future Makers in 2015. The Programme supports strategic start-ups and existing small businesses as well as other entrepreneurial ventures aligned to the technology sector and the Telkom Value Chain.
The Transformation Legacy helps both corporations and entrepreneurs by providing opportunities for Enterprise Supplier Development.