Our view at esd3sixty.co.za : The linkage between Supplier Development and Preferential Procurement in the context of B-BBEE (Broad-Based Black Economic Empowerment) in South Africa is deeply intertwined, as both elements aim to promote and enhance the economic participation of black-owned businesses in the South African economy. Here’s how they are connected:
Supplier Development focuses on building the capacity and capability of black-owned businesses, ensuring they are competitive, sustainable, and can deliver quality products and services.
Preferential Procurement emphasizes purchasing goods and services from B-BBEE compliant suppliers, especially those with higher B-BBEE recognition levels. By procuring from these suppliers, organizations indirectly support and validate the efforts made in supplier development.
Economic Growth and Sustainability:
Through Supplier Development, organizations invest in the growth of black-owned businesses, which in turn can become potential suppliers.
Preferential Procurement ensures that these developed suppliers have a market to sell to, creating a sustainable ecosystem where black-owned businesses can thrive.
B-BBEE Scorecard Points:
Organizations can earn points on their B-BBEE scorecard for both Supplier Development and Preferential Procurement. By effectively implementing Supplier Development initiatives, organizations can increase the number of B-BBEE compliant suppliers they work with, which can further enhance their Preferential Procurement score.
Strategic Business Benefits:
Supplier Development can lead to a more diverse and resilient supply chain, reducing risks associated with supplier concentration and ensuring a steady supply of essential goods and services.
Preferential Procurement can lead to better market positioning, as organizations that actively support B-BBEE initiatives may be viewed more favorably by stakeholders, customers, and the community at large.
In essence, Supplier Development and Preferential Procurement are two sides of the same coin. While Supplier Development nurtures and grows black-owned businesses, Preferential Procurement ensures they have opportunities to participate actively in the economy. Together, they create a holistic approach to economic empowerment and transformation in South Africa.