MSDUK 2018: Open up to new ways of doing business

Harry John

It is essential for procurement executives to remember the ’why’, not just the ’how’, when engaging with minority-owned suppliers

“Small and diverse businesses do things differently,” journalist and broadcaster Krishnan Guru-Murthy told the audience at MSDUK’s annual supplier diversity conference.

Opening the second day, Guru-Murthy warned attendees that to stifle that difference – intentionally or unintentionally – is to miss the point of improving diversity in the supply chain.

Large buying organisations must learn to do things in new and different ways when they engage with diverse suppliers.

During one panel discussion, Jami Bliss, global head, procurement centre of excellence at GSK, outlined how her and her team’s thinking had evolved to improve opportunities for diverse suppliers. One such change, she said, was to create a team dedicated to encouraging new suppliers to submit proposals to solve the pharmaceutical company’s innovation challenges.

“This programme has proved to be an entry point [into our supply chain] for small and diverse businesses,” Bliss explained.

“[Our standard] contracts are big and cumbersome, so we’ve also worked with our legal department to create a two-page contracting process,” she added.

That is a significant change; many small, diverse businesses cannot afford the legal support required to even try to enter corporate contracts.

Kai Nowosel, CPO at Accenture, joined Bliss on the panel. He told attendees his organisation has reviewed its contracting process and managed to whittle its standard 60-page document down to just six.

But that’s not all. The company has also created a self-serve, online pre-qualification process. The idea is that startups and small businesses upload proposals to a website, which is monitored by staff in a 24-hour service centre who quickly determine the viability of those proposals. This process ensures small companies do not waste time and money bidding for business they may not be able to win.

Rules-based progress

You would be hard pressed to find a procurement executive who disagreed with the importance of GSK’s and Accenture’s actions to advancing the supplier diversity agenda. But attendees at the conference were divided on what drives companies to take action.

For GSK’s Bliss, it was about culture. “Rules don’t drive change,” she said. “People drive change”.

Not everybody agreed, however. Although culture certainly plays a role, the stories of some companies represented at MSDUK paid testament to different kinds of inspiration.

Brendan Raju, purchasing leader at manufacturing firm Cummins, explained supplier diversity regulations in South Africa had helped his company win more government contracts, thanks to the 2003 Broad-Based Black Economic Empowerment Act.

Raju described a situation in which he persuaded a global third-party logistics (3PL) supplier to use local transportation providers in South Africa, despite the 3PL’s initial reservations that “there were no diverse suppliers who could do the job”. By tapping into the South African Supplier Diversity Council’s network of certified suppliers, Raju proved the opposite was the case.

Would the 3PL have made that change without the regulatory framework in place? Raju said he believed not. In that scenario, however, he explained that he would have left local transportation out of the request for x for global 3PL services – and tendered for it separately instead.

Also present was High Speed 2 (HS2), the company responsible for building the UK’s high-speed rail network. HS2 must adhere to the UK government’s Equality Duty, which requires public bodies to advance equal opportunities. Within this context, the organisation is enacting some robust measures to drive diversity beyond the first tier of its supply chain.

Mark Lomas, head of equality, diversity and inclusion at HS2, said the organisation’s invitation to tender documents stipulate that tier-1 suppliers must engage with two organisations: MSDUK, which aside from running its conferences is also a membership organisation that drives inclusive procurement; and supplier diversity and women-owned business advocacy group WeConnect. Those firms must also have a supplier diversity representative and must report on their expenditure with diverse suppliers, as well as the points at which diverse suppliers drop out of their tendering processes.

Following rules may not sound as worthy as being guided by your company’s cultural compass, but that’s not to say the work being done by Cummins’ Raju and HS2’s Lomas is any less significant. Where supplier diversity is concerned, all at the conference agreed that embracing lasting change was the goal. As long as businesses remember that, the reasons as to why they seek that change may be less important than how they enact it.

This article is a piece of independent writing by a member of Procurement Leaders’ content team.

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