SME's - Is tendering harmful to SME's?

Guest post by: Dr. Rob Smorfitt
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SMEs and entrepreneurs in Africa - By Dr. Rob Smorfitt

How important is government business and large business for SME’s?

I believe it is very important, but there are riders here which must be considered. The purpose of government allocating business to SME’s, is to try and grow the SME sector, as growing SME’s are key players in job creation.

But how can these SME’s keep growing unless they receive continuous business. Sustainable SME creation and growth is completely dependent on continuous business from the buying organisation. But government and large businesses are strong believers that tendering is the best means to purchase the products and services they need. They feel the need to remain impartial in the purchasing process. Yet they espouse supply chain management as their credo. Supply chain management expressly guides the buyer to choosing suppliers that enhance the efficiencies of the buyer at every level. So surely tendering is in contradiction of this credo.

Is tendering an anachronism from the past? Is it not time for government and large businesses to treat the purchasing function in the true spirit of supply chain management, and stop resorting to tendering practices that “are objective” when in fact subjectivity is exactly what is needed.
If government policies are to achieve the goal of creating and growing SME’s, and large businesses are to find the efficiencies they desperately seek in their supply chain, through the use of SME’s, then we need to return to subjective purchasing practices.

Rob Smorfitt

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SMEs and entrepreneurs in Africa - By Dr. Rob Smorfitt

About the Author: Dr. Rob Smorfitt

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Have an MBA and a PhD in entrepreneurship. Three key areas of ongoing research are entrepreneurship and innovation in large business strategy, the impact of legislation on SME development and SME finance. Run my own SME blog at http://sme-smb-smme.blogspot.com as well as an entrepreneurship and innovation for large businesses blog at http://innoveur.blogspot.com. I have been self-employed since 1982. I have started or purchased in excess of 50 businesses since then. Most were sold again and a few were shut down because of a lack of profitability. Many were run by staff or family while I worked full time in my bigger businesses. Author of 6 books. Written articles for various magazines, newspapers and websites. Experienced in research within developing countries.
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SME's - Is tendering harmful to SME's?

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