20/20 Insight kicked off the year on a few positive notes. One we can talk about is the Jo’burg leg of -Massmart’s Supplier Linkages road show, which was held on the 29th January 2014, at the Protea Hotel in Sandton.
We were invited by the South African Supplier Diversity Council (SASDC), and upon attending found ourselves sufficiently impressed to write about it.
What impressed us the most?
There was a genuine feeling of actual commitment to achieving results from all the speakers on the day. The clear objectives set for Massmart’s R200m Supplier Development Fund (SDF), as well as the structure and processes that have been put in place were also testament to the fact that these guys had already been walking their passionate talk for a while.
The response from the SDF was essentially three-fold:
1. Valuable lessons have been learnt
They admitted even before the com-plaints started rolling in that there had been a lot of challenges in the initial stages of the programme, the bulk of which came from having too broad a mandate and trying to help (or please) everyone. They took away the lessons from that and have now substantially narrowed and focused their offering.
Notably, they have segmented their areas of intervention in terms of the expected impact and the potential for success or growth. But the sweet spot is occupied by those suppliers (current and potential) who fall into what Massmart terms the “high impact priority industry cluster,” e.g. clothing and textiles, paint and bricks, building materials and mill-ing.
Those Black owned businesses that are looking for markets and development support in the aforementioned indus-tries, ought to hurry up and contact the Supplier Development Fund (SDF)!
2. The Customer is King
They then spoke quite firmly about suppliers developing a sense of entitlement. Essentially the message was that the SDF’s purpose and desire is to develop black South African suppliers, but Massmart outlets are only distributors, and are thus limited by consumer demands in what they can do.
If Massmart’s customers are not willing to buy your products, there is ultimately little point in them trying to give you preferential treatment and shelf space. And given South Africans’ love for international brands, it’s hard to blame them. So, any change has to be supported by us as individual consumers, by developing a ‘brand South Africa’ consciousness.
3. The key is Value Offering
Finally, a key point they tried to drive home was that it’s all about value offering. As a supplier, I can’t approach them thinking “what’s in it for me?” – that’s the privilege awarded to consumers. I have to think first, “what’s in it for you?”. You as in, you: Makro or Jumbo Cash and Carry, and you, the international household brand-loving consumer.
Suppliers need to look at their services and create in them a value proposition that surpasses the competition and can receive ‘preferential demand’ from consumers, then the SDF’s job is made easier and they are able to win over Massmart’s buyers who carry the final decision (sort of) and are, from what were told, very hard-nosed about their business.
But in practice, small local manufacturers and suppliers have a steep climb when competing with global brands that have billions of dollars behind their product development and marketing. Such are the harsh realities of the business world and entrepreneur-ship as it turns out. As they say, if it was easy, we’d all be doing it.
Nevertheless, the support is there and it’s backed by R200m. It all appears very genuine, sufficiently focused as well as goal orientated. Local manufacturers of Makro or Jumbo products would do well to look up the Supplier Development Fund.
For more information, e-mail: firstname.lastname@example.org; or visit www.massmart.co.za