Supplier diversity is enjoying growing recognition and the trickle-down benefits to the business community and the greater Australian community are evident. Supporting Indigenous economic development is an admirable way to demonstrate good corporate citizenship and social responsibility. It pays dividends, building your company’s reputation among competitors, with stakeholders and customers. At its best, it can give your business an extraordinary competitive edge.
What is supplier diversity?
Supplier diversity is a business strategy aimed at providing equal opportunity for small to medium enterprises owned by Indigenous people to become suppliers to the government and companies throughout Australia. Businesses and corporations employ this initiative to ensure inclusivity in supply chain practices to suppliers of diverse and minority backgrounds.
One of the most effective ways to increase your supplier diversity (SD) spend is through collaboration, working with other organisations to introduce or identify Indigenous businesses and potentially utilise their services or purchase their goods.
How can you, as a Supply Nation Member contribute collaboratively to Indigenous business success?
Supplier development activities
Many of our Certified Indigenous Suppliers are very small businesses that lack resources or expertise in extra-curricular fields including marketing and advertising. Collaborating with a Certified Supplier by inviting them to avail of your resources creates a cycle of mutual assistance. By providing mentoring or coaching, the owners of Indigenous businesses learn how to improve their offerings without having to invest in capital that may be out of reach. Training staff of Indigenous businesses or helping them to become qualified in pertinent aspects of their industry goes a long way towards growth and productivity. All of these elements lead to the Certified Supplier establishing greater output capacity which in turn means that you, the Member, can utilise them to a greater extent.
Establish a joint venture
Consider partnering with an Indigenous Business to create a joint venture. In November 2013, one of the Asia Pacific region’s leading professional services firms PwC Australia established PIC (PwC’s Indigenous Consulting). Majority Indigenous owned, led and managed, it is Australia’s largest Indigenous consulting firm and brings welcome cultural integrity to Indigenous projects, policies and programs. PwC’s Indigenous Consulting will prepare stringent contracts, shareholder arrangements and company agreements to meet Supply Nation certification criteria.
On a smaller scale, you could align with a new Indigenous business and provide them with capital or purchase shares in their enterprise. The much-needed funding can result in the successful establishment of a deserving concept, and support in the all-important start-up phase during which failure is customarily a very real possibility.
Identifying existing Indigenous businesses that could benefit from your funding and expertise is another excellent way to propagate goodwill and a culture of reconciliation and mutual advantage.
An example is IBA (Indigenous Business Australia), which has purchased a 31 per cent stake in Message Stick Communications, a Certified Indigenous Supplier that provides niche technology, communications and media services. By buying shares, IBA was able to invest the capital that Message Stick needed to grow their business and increase their service offering. The benefit to IBA was that the buy-in diversified their own investment portfolio beyond their traditional areas of focus and healthy returns were realised from the beginning.
Perhaps you already deal with Certified Indigenous Suppliers and have identified one whose products you are particularly proud to use and promote? Alternatively you might be seeking an opportunity to invest in an Indigenous business because you believe in the power of fostering minority sectors toward success. A joint venture with a Supply Nation Certified Indigenous Supplier is likely to bring rewards to your business and theirs. As Wiradjuri man and PwC’s Indigenous Consulting co-owner Gavin Brown put it: "With this partnership, we can do more together than any of us could do in three or five generations."
Supply chain introductions
This can occur in a number of ways. For example: You do business with an organisation that manufactures a particular widget and, during a meeting, you discover that they are in need of a new supplier for a smaller component widget. Your mind instantly flashes to a Supply Nation Certified Indigenous Supplier that you’ve heard manufactures that exact component. Introducing first and second tier suppliers represents the very kind of collaboration that can potentially deliver solutions right throughout a supply chain.
Connecting suppliers with other suppliers helps to increase supplier diversity spend and uses collaboration as the conduit to make it happen.
Sustaining Indigenous business
Supplier diversity is also beneficial to businesses whose customers are members of a minority sector. Linking Indigenous customers with Indigenous businesses enables the Indigenous economy to flourish from within. By collaboratively encouraging customer support within the Indigenous pool, sustainability is realised.
Supplier Diversity is not a social program that relies on government funding nor does it depend on private sector philanthropy. Collaboration through investment, introduction and inclusivity will help Indigenous businesses to step onto a more level playing field in the business world overall.