"Supplier diversity unlocks value."
Gary Joseph wants to change the way businesses view Black Economic Empowerment. As CEO of the South African Supplier Diversity Council, he feels that BEE is widely misunderstood - especially its true value as a strategic tool for boosting the growth of the local economy.
“There is a big gap that we need to fill” Joseph says, referring to the loss of opportunity and productivity which stems from a business environment that is not inclusive. “BEE should be understood, first and foremost, as a means for helping us unlock value within South Africa. We need to see it not as a means of splitting the economic pie into smaller pieces – but of growing the pie itself.”
Founded in collaboration between the U.S. National Minority Supplier Development Council and the National Business Initiative of South Africa, SASDC was formed to help emerging enterprises gain sustainable access to the South African corporate supply chain market, an arena long-criticized as being resistant to the true embrace of black-owned businesses. Even with the advent of BEE, a common complaint echoed among historically-disadvantaged entrepreneurs has been that of being shunted to the outskirts of the supply chain landscape, limited to supplying goods and services far removed from the core business priorities of large corporate customers.
Consigned to the ‘lower’ rungs of the supply chain ladder, many black SMEs have found themselves squeezed out of the more strategic –and more lucrative- areas of procurement. Ghettoization of supply chain opportunities has been the result, fuelled by a deep cynicism among procurement chiefs of the competence and experience of black companies.
Joseph attributes this cynicism to a mind-set driven solely by a desire to comply with legislation rather than by a sincere attempt to understand the business case for diversifying the supplier base.
“Diversification results in a strengthening of a company’s supply chain capacity,” he stresses. “It also promotes greater efficiencies.”
This said, SASDC acknowledges that that there are, in the short-term, both costs and risks associated with bring emerging suppliers into the fold.
SASDC helps mitigate the risk for its corporate members by assessing and affirming the transaction-readiness of SMEs wanting to do business with them. By putting enterprises through the processes that top-notch supply chain departments would normally undertake themselves, SASDC helps reduce both the time and the costs of engaging with black-owned businesses. As a result, companies which might otherwise be hesitant to open up their supply chains find themselves much more willing.
SASDC, however, doesn’t stop at facilitating entrée for black business – promoting sustainable market access is the name of the game.
By providing technical, marketing and financial assistance as well as mentorship, networking and other ongoing development support, SASDC bolsters the capacity of SMEs to compete in the marketplace, thus helping to ensure that once they get their feet in the doors of Big Business, they can stay there.