7 Tips for achieving BBBEE compliance quickly

| 0 Comments
Obtaining BBBEE procurement recognition for your organisation is usually not a simple exercise. The task can be daunting even for the most pro-active  procurement officers. Wade van Rooyen of  IQuad Verification Services shares 7 excellent tips for quickly achieving BEE targets.

1. More than 20% of suppliers may be irrelevant


"Not surprisingly, Pareto's principle also applies to BBBEE.   It may not be necessary to liaise with all of your suppliers, when the top 10  or 20 will do.   The procurement target set for companies using the generic scorecard is that 50% of its procurement spend should come from other contributors to BBBEE.   If your company makes 70% of it's purchases from one qualifying supplier, then it will not be necessary to measure the other suppliers.   Conversely, if that supplier is not a contributor to BBBEE then the measurement of the others becomes vitally important," he tells Smart Procurement.

2. All suppliers are equal, but some are more equal than others!

"In every organization there are suppliers that are critical and cannot be changed (strategic suppliers), and others that provide services that are freely available (non-strategic suppliers).   Isolate strategic suppliers and accept that you might never get  the dedired recognition for your expenditure with them.  

Non-strategic suppliers however should be the recipients of a ruthless policy that axes non-contributors, and favors contributors to BBBEE.   If after axing all non-contributing non-strategic suppliers you are short of the target, then engage strategic suppliers with a request to improve their status in your interest. "

3. Borrow from Peter to pay Paul

" If a company spends a total of R100 per year, and spends R50 with a non-contributing strategic supplier that it cannot change, it must ensure that the remaining R50 derives maximum benefit.   If a non-strategic supplier can be sourced that has a procurement recognition level of 135%, then for each R1 spent with the non-strategic supplier, the company can afford to spend 35c with the strategic supplier without an adverse affect on its scorecard."

"Money spent with non-strategic suppliers should therefore aim to yield the maximum procurement recognition available," states van Rooyen.

4. Categorize & Customize

"Many companies launch into a supplier evaluation exercise that commences with detailed information requests from their suppliers.   In reality, the process may be more effective if broken down into smaller 'bite size' processes.  

All of a company's suppliers can be categorized into one of the categories below.  The actions for each of these categories will vary, and will be dependant on whether a supplier is considered strategic or not.

Those who:

Action - Strategic Supplier

Action - Non Strategic Supplier

Know their status   

Obtain certificate and recognize in procurement calculation

Are in the process of establishing their status

Await the outcome and pend for future follow-up

Are not interested in the process

Engage in a process of changing mindset to mutual benefit

Change supplier

Are non compliant

None

Change supplier



5. Size does count

Suppliers with a turnover less than R5 000 000 are automatically exempt from any BBBEE targets, and may be awarded 100% procurement recognition.  Collectively these suppliers may have a meaningful impact on your procurement recognition.
 
6. Outsource!

Many companies will be prepared to assist with categorizing, communicating with and establishing the status of suppliers.  Costs for this assistance vary from R0 to around R100 per supplier contacted.


7.  Key steps in evaluating procurement recognition

(i)  Categorize suppliers into Strategic, Non Strategic, and Exempt
(ii) Isolate suppliers (excluding exempt enterprises) that account for 80% of your expenditure (as a general rule this will represent about 25% of your total supplier base).
(iii) Send a request to suppliers to categorize themselves into those that know their status, those that are in the process of establishing their status, those that are not interested, and those that are non compliant.
(iv) Implement customized actions for each category.
(v)  Measure your procurement recognition
(vi) Implement systems to track measured procurement spend."


Wade van Rooyen, from IQuad Verification Services (Pty) Ltd, can be contacted on  082 850 9311

www.iquadvs.co.za

Leave a comment


 

 

Career opportunites

Tutor and Coordinator

  • Gauteng Operations, Planning & Inventory Permanent Procurement Management Supplier / Business Development
Purpose of the job: To plan, coach, advise

Commodity Manager

  • <500 000 Commodities Gauteng Procurement Management
Are you a Commodity Manager looking for the

Supply Chain Professional

  • <500 000 Gauteng Procurement Management Supply Chain
I specialize in placing professionals in the Supply

Supply Planning

  • <500 000 Gauteng Operations, Planning & Inventory Supply Chain
Seeking dynamic candidates to take to the market

Industrial Engineer

  • <500 000 Gauteng Industrial Engineer Procurement Consultant
Are you an Industrial Engineer looking to make

Logistics Manager

  • >500 000 Gauteng Logistics & Warehousing Supply Chain
Seeking vibrant industry specific individuals seeking new opportunities

Operations Manager

  • <500 000 Gauteng Operations, Planning & Inventory Procurement Management
Looking for an Operations Manager to take into

Supply Chain Systems Administrator

  • >500 000 Gauteng Procurement Management Strategic Sourcing Supply Chain
One of South Africa's leading, mining companies is

Logistics Manager

  • <500 000 Gauteng Logistics & Warehousing Procurement Management
Are you an experienced Logistics Manager looking for

Continuous Improvement Manager

  • >500 000 Gauteng Procurement Management Supply Chain
I specialize in placing professionals in the Supply

Warehouse Assistant

  • <500 000 Gauteng Logistics & Warehousing Operations, Planning & Inventory
I am currently looking for ambitious Demand Planner,

Internal Procurement Officer

  • <500 000 Gauteng Permanent Procurement Officer / Specialist Strategic Sourcing
Position Available: Internal Procurement Officer Status : New ...More

Supply Chain Officer

  • <500 000 Gauteng Procurement Officer / Specialist Supply Chain
Seeking dynamic candidates to take to the market

Supply Chain Planner

  • <500 000 Free State Operations, Planning & Inventory Supply Chain
Seeking dynamic candidates to take to the market

Senior Buyer

  • >500 000 Buyer Gauteng Procurement Management
Tech-Pro specialises in placing professionals in the Supply

Industrial Engineer

  • <500 000 Gauteng Industrial Engineer
Tech-Pro specialises in placing professionals in the Supply

Warehouse Manager

  • >500 000 Gauteng Logistics & Warehousing Operations, Planning & Inventory Supply Chain
Seeking hands on individuals that come from an

Manufacturing Purchasing Specialist

  • >500 000 Procurement Officer / Specialist Supply Chain Western Cape
A leading auto manufacture company based in Cape

Procurement Sourcing Specialist

  • <500 000 Gauteng Procurement Consultant Strategic Sourcing
A Leader in the Supply Chain industry is

Planning Manager

  • >500 000 Gauteng Operations, Planning & Inventory Procurement Management
Looking for Planning Managers to take into the