The Brief
The South African Government has committed to a significant programme of infrastructure development in the country for at least the next decade. Areas for attention include energy, transport and communications, with the aim to build the foundations to achieve increased competitiveness and economic growth.
The investment also offers the opportunity to localise the supply chains delivering these projects, which in turn allows spend to be retained in the country and better places the local suppliers to continue providing high quality products and services inside South Africa, as well as potentially outside of the country.
Alongside the need to develop supply chains, following the long period of apartheid there is a policy of positive transformation to drive racial equality, embodied within the Broad-Based Black Economic Empowerment (BBBEE).
Currently programme management organisations from outside the country often win major projects because of their proven experience and ability to deliver. Part of their brief is to use the services of local South African SMEs to deliver a high proportion of the supply chain delivery work required for the projects. While excellent in theory, in practice there have been barriers to implementation, including
- Difficulty in identifying SMEs with the right capabilities
- Lack of mechanism to objectively measure suppliers ‘fitness to supply’
- Establishing businesses current capacity utilisation and availability.
Consequently the preference is mostly to outsource to suppliers the organisations already know, which are often domiciled outside of South Africa.
The Solution
To overcome these challenges and to help achieve the vision for localising supply chains, it was agreed that an intense knowledge and understanding of local markets and entire supply chains in each industry needs to be established. This entailed a thorough analysis and understanding of both the demand and supply sides. Winning Moves has developed a highly effective response, in collaboration with the Technology Localisation Implementation Unit, based at the CSIR and ESKOM, the national electricity utility provider. A web-based supply chain benchmarking tool has been designed and programmed to underpin an overall initiative that will support 100s of businesses to become ‘fit to supply’ through technical upgrading investment and advice. In-depth training has also been provided to an elite team of experienced business advisers to ensure that the service is delivered to maximum effect.
The structure of the tool mirrors that seen in actual supply chain infrastructure projects, with a hierarchy of structures broken down into systems, which are then further sub-divided into component manufacturers and service providers (collectively SSCs). The tool will analyse and evaluate individual business contributions and their capacity to supply the various SSCs that make up a project.
By including functionality for comparison against the Benchmark Index database, businesses are able to compare their performance and methods against local and global best practices. This helps them to see how they measure up against buyer requirements, providing a firm foundation for developing their plans to meet the required standards to participate in localisation opportunities.
The Outcome
The service has recently been launched, with the nuclear energy industry earmarked as the first to benefit. It will provide the foundation for improved practices and performances of indigenous South African SMEs that are involved or have the potential to participate in the supported supply chains. Furthermore, the tool will help to ensure consistency of approach and quality of support, assisting localisation managers and advisers to deliver a high value, impactful service for each business.
The approach is designed to accelerate industrialisation and enterprise development, leading to a business base that has ever increasing capability. By participating and committing to upgrading, participating businesses can confidently expect to win more work and be assisted with re-purposing into other supply chains, including beyond South Africa’s borders. The tool is completely scalable and sustainable to underpin South African supply chain improvement activities, providing a powerful and objective resource, for many years to come.