There are a handful of things your organisation can do to boost its supplier diversity efforts, including establishing a website portal, using the Supply Nation Opportunities Board, employing a supplier diversity manager, giving feedback, and setting goals. Each of these things will go a long way to enhancing your program, but all of them together will push you to the front of the supplier diversity pack in Australia!
When Indigenous businesses attempt to work with major corporations they come up against a series of barriers that make the process more difficult than it should be. They often have very limited resources, which makes it challenging to build the necessary business relationships. Or they find the procurement process opaque, and make little headway. Major corporations too, have limited resources – but they are in a position where a handful of measures can be taken to efficiently and affectively drive supplier diversity goals.
Of the 97% of Fortune 500 companies that have supplier diversity programs, almost all have a dedicated supplier diversity portal or website. Coca Cola, Apple, and General Motors each have a dedicated webpage or website where diverse suppliers can find information on their policies and opportunities. They can also register themselves as a potential supplier, read case studies, and see what other programs that company is running.
The dedicated website shows that the business is serious about supplier diversity and that supplier diversity is open to all businesses. By being able to register efficiently online, it breaks down numerous barriers facing minority suppliers. Suppliers won’t feel as intimidated at the prospect of placing a ‘cold call’ and therefore will feel more inclined to register. This has the added benefit of streamlining the whole process, thus allowing your organisation to have a standardised and efficient response to all requests for registration.
Use the Opportunities Board
Supply Nation has developed a dedicated Opportunities Board where Members can post any RFXs, which can only be seen by Supply Nation Certified Suppliers. By centralising opportunities that Members have, the Opportunities Board allows suppliers with limited resources to survey RFXs from multiple Members in one spot. It also streamlines Members engagement with Supply Nation. Members can use the Opportunities Board to provide the best advantages to their business.
You can pick certain opportunities that you think would suit Certified Suppliers – low hanging fruit, such as corporate gifts, work wear, and merchandise. Your organisation could post all low risk or non-contractual purchases. With competitive suppliers in almost every sector of the economy, it is worth using the Opportunities Board to increase competition on these purchases.
By posting to the Opportunities Board as standard practice, Members will have a standardised way of reaching out to diverse suppliers. Simply copy-paste the terms of the RFX into the Opportunities Board, and you can increase the level of competitive submissions for contracts and will subsequently make a better price more likely.
Dedicated Supplier Diversity Manager
All Supply Nation Members have a supplier diversity advocate of some form; however they are usually balancing that with other responsibilities, often their role will fall under procurement or corporate social responsibility (CSR). There are extremely few full time supplier diversity managers in Australian corporations, yet this has been recognised as an essential part of a meaningful and sustainable supplier diversity program.
Supplier diversity programs must be constantly worked on in order for them to be successful. When a company has competing priorities, a program like this needs a dedicated team or staff member. Indigenous business will be able to develop meaningful relationships with the supplier diversity manager and will ensure that maximum positive impact will be felt by that business and its stakeholders.
Certified Suppliers need feedback in order to develop their business and their products. Supply Nation receives anecdotal evidence indicating that occasionally Members reject Certified Suppliers proposals, without also giving them feedback on what it is they did wrong or what they could do better. Supplier diversity is about development for Indigenous communities as well as cost savings, CSR and supply chain resilience for corporations. If Indigenous business does not develop, then corporations will not reap the benefits of supplier diversity.
Building an honest and trustful relationship with Certified Suppliers, where feedback, suggestions, and help is given regularly, will ensure they deliver what your organisation requires.
Setting goals for a minimum amount of engagement with Indigenous suppliers is a point of contention for many Supply Nation Members. It matches a broader community concern with affirmative action policies, where perception is that setting rigid targets may, in itself, create inequalities and inefficiencies. However, in the US it is common practice for the largest firms to set themselves diverse procurement spend targets – despite arguments against it.
Setting measurable targets in staffs KPIs is an efficient way of kick-starting supplier diversity policies. By implementing this standard, your organisation can expect to see a significant increase in engagement. Engagement can be measured by the dollar spend with Certified Suppliers, the amount of suppliers being worked with, or the quality of the engagement. Targets will ensure that Indigenous Suppliers are considered regularly and on more challenging projects – giving them the opportunity to develop.
Some of these measures are more capital intensive than others, and each independently will help drive an organisation’s supplier diversity goals. However, for maximum impact, all five will drive up social procurement spend and catapult that organisation to the front of the supplier diversity space in Australia. In order to develop, Indigenous businesses need commitment from Supply Nation Members that they are willing to institute effective and meaningful supplier diversity policies.