One of the most effective ways of earning points on your BBBEE scorecard is through Enterprise Supplier Development (ESD). According to this article on sa-tenders.co.za, ESD counts for 40 points on the Generic Scorecard and for 30 points on the Qualifying Small Enterprise (QSE) Scorecard.
“The reason it is easy to score points is because there are several sub-elements and you can score points on each one of them.
The sub-elements are:
· Preferential Procurement,
· Supplier Diversity,
· Supplier Development, and
· Enterprise Development.”
Entrepreneur Nelson Sebati further unpacks these sub elements by defining each as follows:
· "Preferential Procurement is a national policy that encourages government departments and agencies to buy goods and services from previously disadvantaged individuals or businesses".
· "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 company’s supply chain thus quantitatively reflecting the demographics of the community in which it operates by recording transactions with diverse suppliers".
· "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, leading to improvements in the total added value from the supplier in question in terms of B-BBEE rating, product or service offering, business processes and performance, improvements in lead times and delivery".
· "Enterprise Development is a strategy for promoting economic growth and reducing poverty by building SMMEs, membership organisations to represent them and competitive markets that are stronger and more inclusive".
It consists of monetary and non-monetary, recoverable and non-recoverable contributions actually initiated in favour of a beneficiary entity by a measured entity with the specific objective of assisting or accelerating the development, sustainability and ultimate financial independence of the beneficiary.”
A mouthful, yes, but ESD Programmes are an effective way for your organisation to contribute to economic transformation in the country.
It’s about skills transfer, community development, upliftment of the people and surrounds in which we operate.
Of course, if you are hoping to be the beneficiary of such an ESD Programme, you would need to fulfill a number of requirements – one of which is the ability to deliver the goods and services to the level your supporting company expects.
This requires keeping an eye out for current and future production demands, cash flow, staffing, machinery, technology and other elements that help sustain your ability to deliver.
Often, funding such sustained delivery and expansion requires new sources of finance . . . and that is where Purchase Order Funding can play a key role in helping you maximise the advantages offered by ESD programmes.
FundingHub encourages all entrepreneurs and big business alike to investigate the possibilities of ESD.
Certainly – executed well – it is one of the more logically sound initiatives to helping us build a stronger, more competitive and inclusive local economy.