|Overview : |
Following the successful implementation of the UNDP Supplier Development Methodology on the selected value chains of the programme in year 1 of implementation, majority of the findings of the diagnostic review across value chains revealed the following challenges faced by the supplier SMMEs which hinder their optimum operations:
• Poor project management skills fundamental for efficient business operations,
• Market access challenges.
• High prices of locally produced goods and services
• Poor quality of goods/services
• Inadequate cash flow streams to sustain daily business operations as well as inability to access credit facilities
It is this last point which, when broken down to identify contributing factors, SDP consultants comprehensively identified the following impediments, which were predominantly common with the mining value chains of the programme;
• Lack of Costing and Pricing skills
• Lack of accounting problem-solving skills by the owners
• Lack of skilled and competent personnel to maintain records for the companies
• Limited market opportunities due to stiff competition,
• Access to only limited opportunities in terms of monetary value as a consequence of limited capacity,
• Late payments from buyers leading to poor cash flow streams
• Inability to access credit due to unsustainable operations (high operating costs versus limited turnover) which leads to inefficient operations.
As a result of these challenges, most suppliers on the SDP programme under the mining value chains have found themselves unable to grow.
Sound accounting and internal control systems in any business, irrespective of its scale, cannot be over-emphasized. A vast majority of small-scale businesses don’t afford to install complex and detailed accounting systems even if they want to. This often leads to existence of single entries in their books and in some cases incomplete records due to lack of a standard guiding recording tool