Enterprise and Supplier Development (ESD) Explained:
In the context of South Africa, ESD refers to a set of affirmative action and local content development measures aimed at promoting economic transformation. Under the revised B-BBEE Codes, ESD refers to the combination of Preferential Procurement, Supplier Diversity, Supplier Development and Enterprise Development programs.
Preferential Procurement
(25 +2 points) is a national policy aimed at public and sector procurement to buy goods and services from previously disadvantaged individuals or businesses.
Supplier Development
(10 points) is the process of working with certain suppliers on a one-to-one basis to improve their performance for the benefit of the buying organization, leading to improvements in the total added value from the supplier in question in terms of B-BBEE rating, product or service offering, business processes and performance, and improvements in lead times and delivery.
Enterprise Development
(5 points) is an economic development strategy that is underpinned by building SMMEs, and integrating them into competitive markets that are stronger and more inclusive. Enterprise development is achieved by monetary and non-monetary, recoverable and non-recoverable contributes actually initiated in favour of a beneficiary entity by a measured entity with the specific objective of assisting or accelerating the development, sustainability and ultimate financial independence of the beneficiary.