Massmart and the South African Bureau of Standards (SABS) signed an agreement on Tuesday to help small businesses improve their product quality.
“The Consumer Protection Act that came into effect in April 2011 fuelled the initiative,” Massmart chief executive Grant Pattison told media in Johannesburg.
“We recognise the opportunity to develop our local supplier base while ensuring safer, higher quality products for our customers.”
The deal covered three areas, said Sylvester Ratlabala, SABS commercial executive. SABS would conduct quality audits on suppliers to Massmart’s value chain.
It would also test products on Massmart’s shelves to ensure they met the required standards.
The SABS would provide training to Massmart’s suppliers, particularly small and medium businesses (SMEs), on meeting standards.
“The goal is to ensure that SMEs that supply to Massmart’s chain have quality products that can be competitive,” said Ratlabala.
Pattison said new regulations, such as the Consumer Protection Act, had unintended consequences, as complying with the new requirements increased producers’ costs. At the moment, complying with the required standards could cost between R35 000 and R90 000 and was a lengthy process.
In terms of this agreement, a simplified, cheaper approach would be used.
“It’s not a standard of low quality, just simplification,” said Pattison. “We intend to reduce the cost below R10 000.”
SABS chief executive Boni Mehlomakulu said SMEs were often excluded from supplying goods to big corporations because they could not meet the required standards.
Previously, companies had to comply with the ISO9001 manufacturing standard established by the International Organisation for Standardisation (ISO) — the world’s largest developer and publisher of international standards.
In the last few months, SABS had refined a standard to apply to SMEs, and Massmart had agreed to accept this globally-benchmarked standard.
“What we have developed is an audit standard aligned to ISO, but more simplified in approach,” said Graham Rebello, Massmart channel executive.
The standard did not just apply to Massmart, but could be applied by anyone. It was applied by the British and Mexican standardisation institutes, among others, Mehlomakulu said.
The ISO was also working on a standard to apply to SMEs, which should be adopted in the next two years, Ratlabala said.
United States retail giant Walmart acquired a controlling stake in Massmart earlier this year, after the competition tribunal approved the deal, with conditions. One of the conditions, volunteered by Massmart, was to create a R100-million fund to spend on a local supplier programme over the next three years. — Sapa