Unemployment rates in and around mining communities increase annually, with limited new job opportunities emerging. Enterprise and Supplier Development (ESD) is of national importance and can unlock significant organisational value. With an expanded unemployment rate of 34.4% and an enduring historical disadvantage to address, South Africa’s government regulations make ESD mandatory for organisations across sectors.
Although SMMEs (small, medium and micro enterprises) make up about 98% of the formal business economy, mining faces high barriers to entry, expansion and meaningful participation in the supply chain, and thus only employ 28% of the working population. With effective ESD, we can strengthen the mining industry by deepening production and value-adding manufacturing capacity and therefore drive economic growth at a national level.
Bringing mining SMMEs into the supply chain
ESD actively promotes the economic wellbeing and advancement of historically disadvantaged people by supporting their businesses and employment creation. But business opportunities in the low complexity, low-value categories are saturated, with high barriers to entry into value-adding commodities segments. With many mines taking a compliance-driven approach to ESD, there’s a limited focus on true economic transformation.
Failure statistics for SMMEs are high – up to 60% fail within the first two years of operations. For mines, the challenge is to navigate two regulatory frameworks; meet organisational and community needs for transparency, inclusion and support; and turn their ESD programmes into a strategic advantage.
For this reason, Accenture and Adapt Digital Solutions have brought to market a multi-tenant Mining ESD Platform for the mining industry that is designed to ramp up meaningful outcomes for the entire mining ecosystem. It is a Salesforce and cloud-based platform available as a service.
This ESD platform can change the way mines interact with and develop suppliers in their communities. It extends spending with SMMEs across multiple procurement areas. It enhances support and success rates by making a broader range of SMME support initiatives visible and available on a larger scale. The Mining ESD Platform is designed to evolve your engagement with local suppliers from publishing opportunities to end-to-end development of local suppliers and enterprises.
How the platform works
By putting the local supplier first, SMMEs gain visibility into opportunities that could lead to their participation in the supply chains of multiple mining companies with local operations. Beyond making opportunities visible, the platform helps local enterprises better understand and work towards meeting the requirements of mining companies.
The platform serves three fundamentals: to Transform by driving empowerment within the supplier base, to Include by embracing smaller enterprises, and to Support by developing smaller enterprises. Ultimately, the platform allows us to go from transparent and scaled publication of opportunities to an extensive local supplier and opportunity management, administration of interactions with ESD beneficiaries (from gap analysis to dashboards and reports), and digital management of funding, loans and other development initiatives.
The Mining ESD Platform supports the entire ESD cycle, enabling it to scale and deliver higher impact. It enables supplier registration, business registration verification, and technical and development support. It publishes procurement and development (including funding) opportunities, allows suppliers to indicate interest and apply for these opportunities, and provides feedback on application outcomes for shortlisted organisations. The ESD platform provides avenues through which suppliers can get support to become better equipped to engage with mines and provides mines with visibility of the supplier’s readiness to contract on multiple dimensions. The platform will also enable reporting, supporting mines to demonstrate their performance against DMRE and DTI targets for ESD.
Driving shared value
The benefits for the SA mining industry are many. Local businesses can engage seamlessly with the mining company and gain the right skills and competencies through non-financial support programmes. With potential demand, local companies can scale products and service offerings and access financial and development support. By extension, the local communities will thrive by promoting localisation and increased industry participation and economic growth.
For the mines, the platform offers an alternative, efficient avenue to engage with communities. It also improves supplier diversity through the procurement of goods and services from previously disadvantaged groups. It reduces duplication of effort across mining companies, such as accreditation of suppliers and training content. Overall, mines can improve their service delivery and benefit from potential cost savings. On the broader spectrum, the mining ESD platform helps promote B-BBEE awareness within mining companies and maintain B-BBEE ratings, adhere to standardised DMRE-compliant reporting on ESD, and enhance ESD points on the B-BBEE scorecard and supplier development spend.
By Kgomotso Lebele, Technology Lead for Accenture in Africa
