Diversity within the workplace is something that many businesses today strive for. They want teams made up of people from different backgrounds, different countries and different cultures because of the benefits that can bring in terms of ideas as well as more efficient ways of working. The same is true of a company’s supply base with many recognising the benefits that a diverse supply base can bring. Bringing those suppliers on board though has not always been an easy process.
MSDUK, a leading non-profit membership organisation driving inclusive procurement, this week held its 10th anniversary conference in London, bringing together stakeholders to share best practice and discuss how barriers can be broken down.
There was wide agreement that small suppliers from diverse backgrounds can often bring more innovation to the table than larger, more established ones.
Tim Millwood, VP of purchasing at Cummins, said that in his experience smaller suppliers were "hungrier for ways to grow and survive”, therefore they tend to be more creative when it comes to delivering new innovations and they will try to and so, if you go to them with a criterion, they will try to fulfil your expectations. Larger, more established suppliers, he said, tended to be set in their ways of doing things and are less willing to innovate in order to win contracts.
As MSDUK CEO and founder Mayank Shah put it: “If a small city like Leicester can surpass all expectations and win the football league then it shows that you don’t need to be big to do something big.”
If the contract bidding process is cumbersome and difficult for a small supplier to navigate it will discourage them from trying to try work with you. The same goes for the contract itself. If that is full of complex causes filled out over numerous pages the chances of these types of suppliers wanting to work with you will be small.
Big businesses, delegates were told, have to help small suppliers as much as they can in terms of understanding the bidding process and the contracts. There should also be a willingness to adjust contracts so they can be managed by a supplier that perhaps has only one person within finance checking over and managing a contract.
Malcolm Harrison, CEO at Crown Commercial Services, said that, in the UK, small businesses are the lifeblood of the economy and by encouraging the development of SMEs and minority suppliers, public and private sector businesses would actually be contributing to local and national economic growth. Furthermore, local sourcing can reduce a business’ carbon footprint by lowering their transport emissions.
Supplier diversity and inclusive procurement, when done correctly, results in a win-win situation for both procurement and suppliers.
This article is a piece of independent writing by a member of Procurement Leaders’ content team.