Media Statement: The South African Supplier Diversity Council (SASDC) is now open for business. This demonstrates a clear commitment by Corporate South Africa to adopt supplier diversity as a core business support strategy.
Following the registration of the SASDC as a Section 21 company on 10 January 2011, the Council’s Board of Directors met for the first time on Friday, 11 February 2011. Matthew Govender, Managing Director of Barloworld Siyakhula, was appointed to serve as Interim Chairman of the Board of Directors.
The SASDC is a member-directed, not-for-profit organisation supported by the United States Agency for International Development (USAID), under a Strategic Partnership Agreement with the Department of Trade and Industry. Its members are like-minded private sector corporations, state-owned enterprises and universities that are committed to supplier diversity. It is the first corporate-led organization of its kind in South Africa and is linked to similar organizations in the USA, UK, Canada, Australia and China.
The 11 founding members of the SASDC are: ABSA, Barloworld, Cummins, De Beers, FirstRand, Foskor, Johnson Controls Inc., Rand Water, SASOL, Standard Bank and Unilever.
Context - The South African Economy
Public debate has heightened in the past year with respect to the effectiveness of the Codes of Good Practice for Broad-based Black Economic Empowerment. These stem from the visible trend that although South Africa has experienced economic growth, the participation of black citizens in the main-stream economy remains low. Corporate South Africa is also grappling to effectively integrate elements of BBB-EE into corporate strategy because of the complex nature and consequent interpretation of the BEE Codes. In response, the South African Government has publicly noted the need for it to review the current form, structure and content of the Codes.
Supplier diversity is the process of integrating a growing pool of competitive Black Suppliers into corporate supply chains in a sustainable way, using targeted procurement practices and enterprise development to achieve this.
Corporations have set up programmes and structures aimed at meeting preferential procurement and enterprise development scores, with variable levels of success in achieving the right numbers. In most cases these are standalone programmes operating on the periphery of the corporation’s business strategy and mainstream operations. They are also seen as a cost and not an investment in the corporation’s future competitiveness or sustainability. The questions that arise are: ‘Is this sustainable?’ and, ‘What would happen if the BEE Codes were to cease?’.
Supplier diversity development is a strategic business tactic and process that enables corporations to use targeted procurement and enterprise development to invest in their long term competitiveness and sustainability, while meeting the compliance needs of these two elements under the BEE Codes.
Benefits and Services for Corporate Members
Companies joining the SASDC can draw on each other for experience in best practices and benchmarks regarding supplier diversity development. They can be aided in the establishment of value-adding supplier diversity programmes, reducing, for instance, the costs of identifying, recruiting, and supporting suitable black-owned suppliers. Members of the SASDC have access to a national network of committed corporate peers, bona fide black-owned suppliers and high profile publicity.
As a leading national business membership organisation, the SASDC is the definitive authority on supplier diversity. SASDC’s leadership and broad interaction with national corporate and public policy decision-makers distinguish it as a unique and responsive source for its members.
Benefits and Services for Black Suppliers
Black suppliers have the opportunity to become listed on the SASDC database of bona fide black suppliers. The Council implements a rigorous black supplier certification process that is approved by the Council’s members as a collectively endorsed methodology and standard for assessing and certifying black suppliers with whom they would be prepared to transact.
This database is owned, managed and maintained by the Council and only contains bona fide black suppliers that have been certified as “transaction-ready” to do business with Council members. It is aligned with the supplier assessment and vetting processes that Council members would normally undertake with all their new suppliers. The database is aimed at reducing the cost and time that would be expended independently by each of the Council members in the absence of such a database.
The Way Forward - Real Progress
With supplier diversity being a relatively new concept in South Africa, and in order to reap the maximum benefits, the SASDC advocates that firms adopt supplier diversity as a core business support strategy, and not as a peripheral social programme aimed at improving public relations. The Council seeks to be the leading corporate council in South Africa dedicated to promoting sustainable supplier diversity value-add, through targeted procurement and black supplier development.
With the Council now registered and its doors open for business, it is committed to deliver on its objective by embarking on the process of certifying bona fide black suppliers, and by growing its base of corporate membership support.
For more information about the SASDC, please visit www.sasdc.org.za or contact Gary Joseph, tel: 011 544 6000, email: joseph.gary@nbi.org.za.
Issued by the South African Supplier Diversity Council
Johannesburg
09 March 2011
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