Local sourcing is not only advantageous to companies because it lowers costs and increases the reliability and responsiveness of the supply chain; it is also becoming increasingly inclusive as many corporations endeavor to incorporate small, medium and micro enterprises (SMME’s) into their value chains. Recognising these benefits, the hospitality sector is one example where linkage programmes are increasingly being implemented and best practice examples are beginning to emerge.
In 2004 for example, South African hotel Spier incorporated an enterprise development (ED) approach to their procurement strategy to begin sourcing from local suppliers and contractors. Since then, the hotel has benefitted from both local and commercial gains ranging from cost savings to a flexible, committed and resilient local supplier base as well enhanced high staff motivation as a result. The approach also earned Spier government recognition as they helped in the development of local enterprise and employment creation (e.g. in just over a year, 33 new jobs with ongoing contracts worth US$79,000).
Similarly, in Zambia, the potential for local business linkages is certainly recognised. The National Business Linkages Program, a collaboration between the Zambia Development Agency and the International Labour Organisation (ILO) for example, aims to facilitate the creation, expansion and deepening of commercially viable business linkages between large corporation and SMSEs. A practical “linkage example” of the programme’s activities includes a questionnaire where prospective supplier farmers can fill in their contact information as well as other details such as type of produce, production/ distribution capacity and available machinery. The questionnaire is then forwarded to potential buyers who if interested can get in contact with the farmers directly.
My work as BIF country manager in Zambia does confirm that some leading hotels are increasingly exploring local fruit and vegetable sourcing from small scale farmers. Currently, some of these hotels are buying some of their fruit and vegetables from local smallholder farmers, but scale remains relatively insignificant and many products are imported from South Africa and elsewhere. What are the existing challenges and barriers that prevent hotels from opening their supply chains to local entrepreneurs/farmers?
A recent stakeholder workshop, co-hosted by the Business Innovation Facility (BIF) and the Agri-Business Forum(ABF) in Lusaka, brought together around 15 buyers from local hotels and small scale vegetable farmers, to address this question and explore opportunities for potential collaboration.
The discussion revealed interesting views from both stakeholder groups. Representatives from the hotel sector highlighted the following challenges as the main impediments for increased local sourcing:
For their part, the farmers highlighted different, but related challenges:
The subsequent discussion focused on ways to overcome some of the barriers summarized above. More effective communication between farmers and buyers/hotels as well as building on existing examples and initiatives were identified as key. Suggested solutions and approaches for ways forward included
There was overall consensus regarding the interest to progress the discussion among stakeholders further. Hotel and farmer representatives were selected to make up a working group to attend the next meeting to thrash out the proposals in more detail and chart a realistic way forward. It was suggested that supermarket representatives would also be invited to the next meeting as their procurement needs are similar to hotels.
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