To actively make an SME opportunity possible in the corporate sector and ensure meaningful supply chain transformation, it is imperative to facilitate SME relationships with procurement – as the opportunity-holder – from the outset. This should be done by means of one’s enterprise development initiative, says Shawn Theunissen, head of CSR at Growthpoint Properties and Property Point (Growthpoint Properties’ enterprise development programme), in this month’s SmartProcurement.
Facilitating SME relationships directly with procurement will, however, typically require a mindset change from all parties concerned, he cautions. “While taking a more market-driven approach and partnering with entrepreneurs to assist them to become ‘procurement-ready’ will have real benefits for both the corporate and the SME, everyone involved must actively commit to the process. Various touch-points need to be created, and relationships developed and maintained.”
Theunissen recommends formalising this process through one’s enterprise development programme – as has been done by Property Point since it first started its programme in 2008, despite this not being the typical approach taken by most ED practitioners.
“As Growthpoint Properties’ enterprise development initiative, we recognised the value of enabling SMEs to tap into the thinking of our front-end decision-makers from the outset. To this end, our procurement department has been involved in the programme ensuring supply chain integration from the very beginning.”
This approach continues today. “Not only does the procurement team sit on our selection panel but, post-selection, each SME’s procurement-readiness is subsequently assessed as part of its development map.”
SMEs also attend a procurement induction session where they are given insights into the process and exactly how it works. This enables any misperceptions about procurement-readiness to be addressed, and all parties’ expectations to be appropriately aligned.
“Because SMEs receive business development support throughout (incorporating aspects of self-development, compliance and governance, among others) and we assist them to become bankable, the programme is able to mitigate the risks often associated with small suppliers. It also overcomes any reputational concerns Growthpoint might have in terms of the SME not having an established track record in the property industry.”
By creating a symbiotic relationship between the SME and procurement as the opportunity-holder, Property Point encourages innovation and consistently educates these businesses about procurement standards and requirements – improving their operations, notes Theunissen.
As a result, incubated SMEs are able to compete for Growthpoint contracts and find new ways to add value. “Direct integration with procurement thus improves their chances of becoming successful and sustainable in the long-term.”
The programme has correspondingly ensured that Growthpoint Properties diversifies its supply chain whilst simultaneously increasing its BEE compliance – critical given the requirements of the new B-BBEE codes.
“The ongoing relationship between SME suppliers and Growthpoint’s procurers has additionally increased levels of service and improved delivery.”
By using one’s enterprise development initiative as a bridge to initiate and then facilitate a positive and mutually-beneficial relationship between procurement and SMEs, one can ensure that “opportunities” are in fact meaningful and can be accessed by small businesses. “This, in turn, will ensure that your organisation moves beyond a tick-box approach to compliance and transformation,” says Theunissen.