Environmental Engineering Reference
In-Depth Information
cost structure in the business compared to the conventional Cape Town laundry,
in which profits to the owner, capital equipment and rent would account for a
much higher share of financial flows.
8
From Spier's perspective, the enterprise development approach involved
ZAR85,000 (US$11,300) to get going (mainly structure and equipment), but
nevertheless saves money overall. Over the first year, the saving of R117,000
(US$15,600) is equivalent to 25 per cent of what Spier would have spent on a
conventional laundry. Thus, in this instance, there is a clear commercial business
case for shifting procurement, as well as clear returns in terms of Spier's non-
financial values.
The laundry was established in August 2004. Since then a number of other
contracts have been established with emerging suppliers using a similar approach
to helping them get set up, as shown in Table 6.7. These include an alien vegeta-
tion clearing business, the staff restaurant business, a brick making business,
construction and contracts for specific capital investment. As Table 6.7 shows, just
one year later, by August 2005, 33 new jobs had already been created, and 14
existing, if somewhat precarious jobs, were sustained through new contracts. No
jobs were lost by switching away from suppliers.
9
As many as 22 of the 33 new
jobs have been sustained by on-going Spier contracts, which still continue, and all
but 2 of these are held by people who were formerly unemployed (the other new
jobs are temporary, according to when Spier needs inputs). A total of 12 are held
by women.
By 2007, a further 4 new suppliers were in place, meaning that, in total, 79
new jobs have been created through new supply contracts, of which 59 are held by
previously unemployed people, and 40 are held by women.
Most of the enterprise development businesses have shown similar levels of
success. One business did get into financial difficulty, not because of the system
but due to poor business practices. Here Spier worked with the supplier to
develop a more robust and responsible business approach. One of the other
successful businesses was the alien vegetation clearing business, as outlined in Box
6.1.
The third and final area of change is that some existing suppliers to Spier
have sought to enhance their own performance. A number were interested in their
scores after submission of their completed questionnaires, and several
approached Spier with a request to be re-evaluated. This was because they had
made changes in their company, often in the area of ownership, and sometimes in
areas such as affirmative procurement, employment equity and corporate social
investment. All those re-evaluated have improved on their previous individual
scores.
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