Relationship between mines’ enterprise and supplier development programmes

The question was: What is the relationship between the mines’ enterprise development programme and the supplier development programme?

The findings in Table 4.18 showed that out of five participants who took part in the research according to Company A, three disagreed and two strongly disagreed that the mining sector faced a shortage of skills in relation to SMME development. Three participants strongly agreed and two agreed that the Company A model needed to be adapted in terms of the relationship between enterprise and supplier development.

Four of the participants of Company A strongly agreed and one agreed that there was an increased expectation on mining companies to contribute meaningfully in terms of large-scale employment and procurement opportunities. The increased expectation according to participants was from DMR, local authorities, communities and local SMMEs.

All five participants of Company A agreed that to maintain their legitimacy where mines operate, local content levels need to increase dramatically. The local content levels refer to the participation of local suppliers within the value chains. Four out of five participants also agreed that supplier competitiveness has to improve

dramatically from local communities/municipalities through training programmes, and one participant also strongly agreed on this issue.

TABLE 4.18: RELATIONSHIP BETWEEN ENTERPRISE AND SUPPLIER DEVELOPMENT PROGRAMMES

Company A Strongly

Disagree Disagree Agree Strongly Agree The industry faces a skills shortage in relation to SMME

development ^{2 3}

Our business models need to adapt to provide broader

social benefits for local communities/municipalities ^{2 3}

There is an increasing expectation on mining companies to contribute to meaningful, large-scale employment and procurement opportunities

1 4

To maintain legitimacy where we operate, local content

levels need to increase dramatically ⁵

Supplier competitiveness has to improve dramatically from local communities/municipalities through training programmes

4 1

Supplier productivity has to improve dramatically from local communities/municipalities through training programmes

4

Supply chains need to leverage suppliers and

contractors to promote sustainable manufacturing bases in host communities

5

Company will need to make the right strategic investments into supplier training and skills

development which improve supplier competitiveness

2 3

Local procurement initiatives are principal value drivers for the business and for communities around our operations

1 2 2

Local procurement should aim to create opportunities for local suppliers to provide high-quality goods and services to support our mining activities

3 2

The inclusion of small, medium and micro enterprises in our value chain is a critical priority as this serves to support our ambitions in creating thriving and fulfilled communities while securing our rights to mine

1 2 2

Increasing our local procurement efforts means more money, skills and opportunities being made available to our host communities, this will have a multiplier effect which grows the local GDP

4 1

According to Table 4.18, one participant of Company A did not comment, while four participants agreed that supplier productivity has to improve dramatically from local communities/municipalities through training programmes. For mines to be able to do

business with suppliers, their productivity requires improvement so that it does not affect the mining production negatively. All five participants agreed that supply chains need to leverage suppliers and contractors to promote sustainable manufacturing bases in host communities. The findings of Table 4.18 were similar with those of DMR (2015:30), where the research showed that 36% of mining right holders have met their set target on mine community development. This will result in the increase of a sustainable manufacturing base of hosting communities when local suppliers and contractors are used by mines.

Two of the five participants agreed, and three participants strongly agreed that Company A would need to make the right strategic investments into supplier training and skills development to improve supplier competitiveness.

One participant of Company A disagreed that local procurement initiatives are principal value drivers for the business and for communities around company operations, while two participants agreed and two strongly agreed that local procurement initiatives are principal value drivers for the business and for communities around company operations.

Table 4.18 further shows that three participants agreed and two strongly agreed that local procurement should aim to create opportunities for local suppliers to provide high quality goods and services to support mining activities. One participant disagreed that the inclusion of small, medium and micro enterprises in company value chain is a critical priority as this serves to support company ambitions in creating thriving and fulfilled communities while securing company rights to mine, while two of the participants agreed and the remaining two strongly agreed on this point.

The increasing of mining company’s local procurement efforts means more money, skills and opportunities being made available to the host communities. This will have a multiplier effect which grows the local GDP, according to four respondents who agreed and one who strongly agreed to the statement.

Table 4.19 shows the results of the participants from Company B. Only two participants from Company B participated in the research. The two participants divided the questionnaire into two as per each individual’s areas of responsibility.

The first participant in the supply chain dealt with both Section B and Section C of

the questionnaire, while the other participant in the enterprise development department dealt with Section D and Section E.

TABLE 4.19: RELATIONSHIP BETWEEN ENTERPRISE AND SUPPLIERS DEVELOPMENT PROGRAMMES

Company B Strongly

Disagree Disagree Agree Strongly Agree The industry faces a skills shortage in relation to SMME

development ✓

Our business models need to adapt to provide broader

social benefits for local communities/municipalities ✓

There is an increasing expectation on mining companies to contribute to meaningful, large-scale employment and procurement opportunities

✓

To maintain legitimacy where we operate, local content

levels need to increase dramatically ✓

Supplier competitiveness has to improve dramatically from local communities/municipalities through training programmes

✓

Supplier productivity has to improve dramatically from local communities/municipalities through training programmes

✓

Supply chains need to leverage suppliers and

contractors to promote sustainable manufacturing bases in host communities

✓

Company will need to make the right strategic investments into supplier training and skills

development which improves supplier competitiveness

✓

Local procurement initiatives are principal value drivers for the business and for communities around our operations

✓

Local procurement should aim to create opportunities for local suppliers to provide high quality goods and services to support our mining activities

✓

The inclusion of small, medium and micro enterprises in our value chain is a critical priority as this serves to support our ambitions in creating thriving and fulfilled communities while securing our rights to mine

✓

Increasing our local procurement efforts means more money, skills and opportunities being made available to our host communities, this will have a multiplier effect which grows the local GDP

✓

The participant from Company B agreed to the following statements as shown in Table 4.19:

 The industry faces a skills shortage in relation to SMME development.

 To maintain legitimacy where we operate, local content levels need to increase dramatically.

 Supplier productivity needs to improve dramatically from local communities/municipalities through training programmes.

 Supply chains need to leverage suppliers and contractors to promote sustainable manufacturing bases in host communities.

According to the responses shown in Table 4.19, the participant strongly agreed and neither of the two participants disagreed with any of the statements with the following:

 Our business models need to adapt to provide broader social benefits for local communities/municipalities.

 There is an increasing expectation on mining companies to contribute to meaningful, large-scale employment and procurement opportunities.

 Supplier competitiveness needs to improve dramatically from local communities/ municipalities through training programmes.

 Company will need to make the right strategic investments into supplier training and skills development which improves supplier competitiveness.

 Local procurement initiatives are principal value drivers for the business and for communities around our operations.

 Local procurement should aim to create opportunities for local suppliers to provide high quality goods and services to support our mining activities.

 The inclusion of small, medium and micro enterprises in our value chain is a critical priority as this serves to support our ambitions in creating thriving and fulfilled communities while securing our right to mine.

 Increasing our local procurement efforts means more money, skills and opportunities being made available to our host communities; this will have a multiplier effect which grows the local GDP.

The findings of Table 4.19 affirm the findings of Semanye (2014:13) that the ultimate objective of variables approaches in this table is to overcome the challenges faced in terms of driving business development and entrepreneurship, with particular focus on access to finance and other business services, business linkages into supply

chains, and ensuring businesses adopt responsible practices in areas such as ethics, community safety and working conditions.