Enterprise Supplier Development

What is Enterprise Supplier Development?

Enterprise  Supplier Development (ESD) is a mutually beneficial economic development activity that involves enterprises enabling other enterprises to grow and achieve sustainability through the provision of financial and other support aimed at helping small to medium enterprises develop vital key functions within their business structure.

How important is ESD to your business?

Because ESD is essentially concerned with leveraging procurement spending, it provides an effective means of enabling sponsor companies, or ‘enablers’, to grow and strengthen the competitiveness of their supply
and value chain. In South Africa, it is a scorecard element of Preferential Procurement and Enterprise Development that accounts for 40% (40 of the 105 points) of an enterprise’s overall B-BBEE score.

Facts about Enterprise Supplier Development

  • The required Enterprise Development contribution from measured entities should be 1% of netprofit after tax (when developing a business outside of an enterprise’s supply chain)
  • Supplier Development contributions should be 2% of net profit after tax (when developing abusiness within one’s supply chain)