Environmental Engineering Reference
In-Depth Information
more intensive mentoring or other support at the start. But the development
impact per enterprise can be substantial.
3
Shifts in the behaviour of existing suppliers when they respond to the
questions and expressed values of the company to which they supply.
In terms of the poverty impact of supply chain reform, Spier's experience
provides some specific, though still incomplete, evidence. The approaches
adopted by Spier were focused on broad transformation issues and not specifi-
cally on poverty relief - although this was certainly one of the desired outcomes of
the process. The poverty impacts range from the very tangible, to the dynamic
and less tangible. First there are the flows of income to local enterprise via new
contracts, and the new employment created. As Table 6.7 noted, in just over
1 year, localization created 33 new jobs with on-going contract values of
US$78,500 flowing into local enterprises. In 3 years it created 79 jobs. It is partic-
ularly notable that 59 jobs are held by previously unemployed people, as bringing
them back into the labour-market has dynamic benefits, whereas it is often
assumed that most benefits of enterprise initiatives are captured amongst those
who are already economically active.This high proportion is probably attributable
to Spier's specifically attaching value to the involvement of unemployed people
when screening new suppliers, based on its understanding of supply chain condi-
tions.
The contracts with Spier will have catalysed further enterprise development
among the suppliers, but beyond some anecdotal examples, this is not currently
measured. For example, one of the new suppliers gained profile through his work
with Spier and was able to become a BEE partner with a larger company. Major
constraints for micro businesses are lack of access to the market networks, to
credit and to economies of scale. Where contracts with an established business like
Spier can help them overcome these, there are likely to be dynamic benefits that
go well beyond the specific work commissioned.
Another area of impact is via the mainstream suppliers who were scored by
Spier and some of whom have started responding to Spier's criteria. One of the
key aims of Spier was to address the challenges of South Africa's inequality by
exploring the levels of transformation (BEE), employment equity and equitable
labour practices within their suppliers. This is not so much targeted specifically at
generating income for 'the poor' but at tackling deep inequality and changing the
structure of the economy in the long term. The exact extent of supplier reform to
date is unknown, as are the impacts on their employers, but even if they were
known, the more substantive impact in changing attitudes and management
attention would be hard to measure. In this sense, the impact of Spier's supply
chain reform needs to be assessed not only in terms of direct financial flows to
poor people (which are significant to those involved but not compared to the scale
of economic need in the region), but also as part of a longer-term process of
shaping how business is done, for greater equality and impact on poverty.
The Spier experience indicated the enormous potential for pro-poor inter-
vention in the supply chain and the need for this to receive greater attention in
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