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South Africa: Local Supply Lines Increase Economic Growth

         Date: 2012-06-02

           Tag: South Africa Economic, South Africa Economic Growth

Summary: Over the years, Anglo American's enterprise development arm, Zimele, has discovered a pool of businesses and individuals in various communities with the entrepreneurial capacity to be incorporated s…

Over the years, Anglo American's enterprise development arm, Zimele, has discovered a pool of businesses and individuals in various communities with the entrepreneurial capacity to be incorporated successfully into its supply chain.

However, many of these suppliers are new to the market and lack the relevant experience to meet the needs of most companies. It was created to maintain these enterprises by providing on-going support in the form of guidance and appropriate funding.

In addition to investing in skills development, local infrastructure and mentorship programmes, it has also been able to generate sustainable job creation and socio-economic development through the integration of SMEs into the group's supply chain.

I believe that a sure way for companies to stimulate economic growth is through the integration of small enterprises into corporate supply chains.

Stimulate economic growth

Zimele's Supply Chain Fund provides access for black-empowered SME's to be included into our company's supply chain.

This directive has already generated real economic value to both communities and our company. The success is evident in the fact that in 2011, close to 49% or R64.5 billion of Anglo American's total available procurement spend was directed to HDSA (historically disadvantaged South African) businesses.

In a general sense, it is also vital to stimulate economic growth, in order to boost the capacity of small enterprises to be integrated into corporate supply chains.

Money which is not being invested in industries, mines, and general infrastructure, by corporate companies, should be invested in growing the economy and communities. This will further SME growth, create new markets and significantly boost employment.

Ultimately, every corporate company in South Africa should aim to procure locally in their supply chain and develop or create the companies that are able to do so. Committing fully to this directive will make a real difference in furthering economic sustainability and creating a positive legacy for the country.

Considerable benefits

Anglo American has realised considerable benefits by choosing to procure key goods and services from local communities surrounding its operations.

We have discovered that there are sufficient businesses and individuals in these communities with the entrepreneurial capacity to be incorporated successfully into our supply chain. As a result, we strongly maintain that other corporate companies should also adopt this highly successful strategic approach.

Collaborating with suppliers from local communities and developing new businesses will not only create a socially positive impact through creating local jobs and enhancing skills development and investment in local infrastructure, but also directly benefit corporate companies.

Through funding local orders and backing entrepreneurship, a company ensures that its supply chain is more controlled, which subsequently minimises the investment risks. Importantly, it also creates a substantial amount of goodwill among the local community.

When procuring locally, one must always bear in mind that many of these suppliers are new to the market and lack the relevant experience to match a company's needs.

Therefore, this procurement has to be accompanied by a commitment to maintain these enterprises by providing on-going support in the form of guidance and appropriate funding and payment terms. This will help level the playing field and create an increased number of sustainable and excellent suppliers.


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