Beyond BBBEE Points – 5 Ways Big Business Benefits from Working with SMEs
By Edge Growth, an enterprise and supplier development firm.
This is an excerpt from a post titled ‘Small suppliers for big impact: ‘Optimising your supply chain in a turbulent economy‘ available on the Edge Growth website.
Investing in an Enterprise and Supplier Development partnership does so much more than boost a business’s B-BBEE scorecard – though it performs this function extremely effectively as well.
By offering SMEs a valuable spot in its supply chain, an organisation is not only making an investment in the South African business landscape and offering entrepreneurs a helping hand – they are also investing in their own competitiveness and continued relevance in tough economic times.
Here are all the ways a collaboration with SMEs can benefit big business:
1. Improved competitiveness through B-BBEE scorecard
With national tender processes dominating the headlines lately, any business can be sure that compliance with B-BBEE mandates will be scrutinised like never before in the coming years.
Over and above the direct business advantages of partnering with SME suppliers, implementing an ESD programme is the most impactful way of improving a business’s B-BBEE rating, amounting to 40 of the total 107 points available. In times of recession, landing a lucrative tender can be the difference between failure and survival, so ensuring eligibility for such tenders is critical.
2. Greater agility
What’s the best way to get ahead of your competitors when there’s less and less business to go around? One way may be to develop new products or services, or improve customer service.
A smaller and more flexible SME supplier can help you do all this and more – quickly, more affordably, and often with a greater level of bespoke customisation than their larger counterparts would be willing to offer.
Manufacturing in mass volumes, warehousing, logistics and many other factors tend to dramatically hamstring larger suppliers in terms of service speeds.
A smaller, locally-based supplier, with fewer demands on their operations, is likely to be able to dramatically decrease turnaround times, translating into reduced costs and a boost in real-time responsiveness for their clients.
4. Access to new and emerging markets
In a period of recession, it’s not enough to merely aim to hold on to your existing clients. Breaking into new markets is equally important – and your SME suppliers can help you do this.
Often on the cutting edge of innovation themselves, they can be a source of valuable insights into current trends and new solutions, to both capture new customers and better serve existing ones.