Sunday, 14 June 2020

COVID-19: A chance for deeper, better supply chains

Written by

Author: Andy Matakanye, CEO Enprolabs 

The COVID-19 lockdown has highlighted just how vulnerable many Enterprise and Supplier Development initiatives are – and why it is important for corporate South Africa to invest in the long-term sustainability of their smaller suppliers.  

While Enterprise and Supplier Development programmes have allowed many small businesses a chance to get their foot in the door, COVID-19 has meant that many of these businesses have simply ceased to exist as the lockdown took hold.  

From a B-BBEE scorecard perspective, this has sent shockwaves through “Transformation Managers” who have built their scorecard elements around a handful of preferred suppliers. Suddenly with their prized B-BBEE levels under threat, they have found themselves scrambling around looking for and on-boarding new suppliers.  While the lockdown has been incredibly disruptive to the South African economy it presents an opportunity to once again re-set the dial and return to the focus on small business development and growing entrepreneurs in South Africa.  

The PPE sector is a perfect example: We have suddenly realized how important it is to invest in clean, sanitized and safe working environments. Many organisations – big and small – have consistently under-invested in this space.

Now that there is a virus changing the way that employers and employees conduct themselves, both the private and public sector are scrambling around for high quality suppliers.  This is unfortunate when there are so many promising young small businesses who want to be part of the solution.  It shouldn’t take a crisis to create this urgency.

It shouldn’t take a global pandemic for us to recognize that we cannot create concentration risk on a few key suppliers.  South Africa has long had a track-record of businesses being vertically and horizontally integrated and shutting out small suppliers. The uncompetitive nature of many industries is a result of this legacy integration and yet it took only a month for us to realise just how vulnerable our supply chains really were. We know we shouldn’t be wasting a crisis, so let’s use this opportunity to focus on building deeper and more diverse supply chains so that we are prepared for the next part of the crisis.  

Andy  Matakanye is CEO of Enprolabs an innovative manufacturer and supplier of high quality, competitive industrial, commercial and household cleaning detergents and health and Hygiene products.