Small, medium-sized and microenterprises (SMMEs) advisory and project management firm  Zevoli Growth Partners (ZGP) has partnered with education and training solutions provider African Management Institute (AMI) to create a programme that helps South Africa’s mining industry build a stronger SMME supplier pipeline.

The FutureForge for Mining Supplier Diversity programme, which was launched in 2020, targets early-stage and early-growth businesses looking to integrate into the local mining supply chain by becoming procurement partners for mining houses. 

ZGP MD Mpopi Khupe says a common issue found in the mining industry is the hesitation and reluctance from corporates to afford local SMMEs procurement opportunities, owing to “unprecedented” perceptions that “SMMEs are riskier, offer inconsistent quality and are not yet established and therefore dependable”.  

FutureForge prepares SMMEs in the mining value chain by providing the mentorship, learning and development, industry-specific compliance, and practical tools to enable SMMEs to meet the stringent supplier standards set out by corporates, she adds.

As mining houses have committed to achieving supplier diversity and localising their procurement spend by incorporating SMMEs from mining communities, with SMMEs striving to create job-creating, sustainable businesses, both miners and SMMEs have the goal of achieving shared value; however, SMMEs typically do not fully understand the factors that hinder mining houses’ ability to establish a supplier relationship. 

“SMMEs typically become acutely aware of the compliance, mandatory and technical requirements only during the RFx stage, which often results in an imminent opportunity being missed,” says Khupe.

Therefore, FutureForge includes a deliberate focus on safety, health, environment and quality (SHEQ) compliance and other mandatory technical requirements to establish and/or enhance SMMEs’ adherence to mining standards and regulations.

It also targets digital marketing to bolster the SMMEs’ visibility to potential corporate clients, with Khupe noting that the programme also offers to revamp logos, websites, brand books, and social media tool kits in line with the latest digital marketing trends and practices.

Moreover, although FutureForge’s primary focus is on SHEQ compliance and industry-specific requirements, the programme offers a variety of business operational efficiency systems and tools.

ZGP and AMI’s approach to enterprise and supplier development ensures that every SMME development programme is tailored to meet the unique needs of every client. This includes focusing on specific practical business strategies that enhance capacity and capability, thereby ensuring that, once the programme is completed, the SMME is fully capable of ‘levelling up’, enthuses Khupe.

She notes that the programme, therefore, aims to ensure that local SMMEs are provided with the appropriate level of capacity-building support to become procurement ready. 

FutureForge also aims to ensure that any development gaps are proactively addressed, consequently positioning the SMMEs for success should opportunities, such as registering as a vendor or responding to a request for proposal, arise.

Challenges

Khupe states that the main challenge for programmes such as FutureForge is, ironically, the increased level of interest shown by SMMEs that operate in the targeted community, as ZGP typically does not have enough programme openings to enrol all of them owing to being limited by the recruitment criteria and other client requirements which are typically aligned to ring-fenced procurement opportunities. 

Another challenge is that some SMMEs perceive the programme as the equivalent of a marketing department, which results in a feeling of entitlement regarding securing procurement opportunities with the corporate sponsor. 

“We focus on enabling the business owner to move away from this mindset and use the programme to provide the skills, knowledge and tools to market the business to a wide range of potential clients.”

Since its inception, FutureForge has created an average employment growth rate of 3% and a revenue growth rate of 26%, while 96% of the participants in the programme have stated that they would highly recommend FutureForge to other SMMEs, adds Khupe.

This has been achieved despite ZGP’s initially aiming to preserve and not necessarily grow revenue or increase the small business’ employment rate, as this programme was introduced at the height of the Covid-19 pandemic.

The key objective of the programme was always to develop a pipeline of local, procurement-ready potential suppliers to stimulate entrepreneurial activity in local non-urban communities. 

This enables the SMMEs in these communities to engender sustainability, increase job creation and mitigate the socioeconomic challenges of these communities, Khupe concludes.