Sustainable supplier development within companies as an enabler of sustainable performance

Abstract

The purpose of the research was to attain an understanding of how a formalised Supplier Development program can result in sustainable performance for SMME suppliers. Sustainable performance was evaluated based on the triple bottom line environmental, social and economic sustainability framework. A mono methodology of qualitative research was followed to gather data. Semi-structured interviews were conducted with Suppliers forming part of a supplier development program within a buying firm, and data attained was triangulated with interviews of supplier development executives tasked with the implementation and execution of SD programs. The research found that supplier development through its different initiatives enables the sustainable performance of SMME suppliers. It was found that initiatives such as the implementation of a regulatory framework to enforce compliance with environmental and safety protocols were successful. Environmental sustainability was also enhanced through recycling and the separation of waste management procedures. Furthermore, the adoption of green and renewable energy, as influenced by the just transition program and the digitalisation of business processes, which took shape post the COVID-19 pandemic, has positively impacted environmental sustainability adoption. It was found that the social aspect of sustainability for suppliers was enhanced through programs of localisation, local training and development of SMME and various employee wellness programs. Economic sustainability is one of the major focuses for most SMME suppliers and was extensively supported through different funding mechanisms, market access programs and operational efficiency measures driven by third-party contributors such as the South African Institute of Chartered Accountants (SAICA) and the Gordon Institute of Business Science (GIBS). Furthermore, a number of initiatives that cut across the three dimensions of sustainable performance were found, including continuous monitoring and evaluation of suppliers, the different training interventions and the creation of an SMME ecosystem that brings multi-dimensional stakeholders to develop suppliers' capability throughout the program. Overall, extensive evidence supports that supplier development programs enable the sustainable performance of suppliers.