Ahead of their global conference on supplier inclusivity and diversity, Procurement Leaders invites MSDUK founder Mayank Shah shares lessons from 10 years of helping businesses make supply chains more inclusive.
An inclusive approach to sourcing brings innovation, positive disruptive new products and services, can mitigate risks within your supply chain, drives competitive advantage and removes all biases, making procurement transparent and sustainable. Better said than done, isn’t it? When sourcing teams are under pressure to deliver cost savings, support a heightened risk agenda and drive consolidation, these words come across as wishful thinking!
I founded MSDUK in 2006 as UK’s first corporate-led organisation that encouraged big firms to drive inclusive procurement behaviour and engage with ethnic minority owned businesses (EMBs). 10 years on, we have worked with sourcing teams of over 100 large firms, more than 500 sourcing professionals and nearly 1000 small and medium size businesses owned by ethnic minorities with a combined turnover in excess of £1bn employing over 13000 people; organised 84 industry specific meet the buyer events, hundreds of learning sessions and 5 global conferences.
Our efforts have supported £70m of spend with EMBs and the communities they are located, creating new jobs in those places. Large firms have in return got access to a new, improved and innovative supply base, but what is more important is that these ten years of real stakeholder engagement has left big lessons – good and bad and proven without doubt that if done smartly and diligently, inclusion of diverse owned SMEs brings real tangible economic and social benefits for everyone in the supply chain.
And if I have to pick a few things that have worked and a few things that have not worked to make supply chain inclusive, they are:
Reasons why supply chain inclusivity is easy:
- The desire for new products and services to support both members client growth/satisfaction and internal efficiency: One of the most critical factors to drive supply chain inclusion is the desire from every single procurement/sourcing team member- from top to bottom- to have the desire and belief that bringing new products and services, breaking the status quo and working with SMEs that bring those new ideas and innovation will improve internal efficiency. Yes, inclusive procurement is a ‘good thing to have’ but what is more important is that it adds ‘value’.
- Corporate endorsement/commitment and individual passion: In my 10 years of working with 100s of large purchasing organisations, many have done extremely well but at the same time there are many organisations that never succeeded in introducing and engaging with EMBs/SMEs. What made some organisations succeed and benefit from inclusive approach? Well, one commonality those organisations had was endorsement and commitment on supply chain inclusion from top management but more importantly it was driven by passionate people within the sourcing team. You have to get both- the top level commitment and individual drive to make inclusion a reality.
Reasons why supply chain inclusivity might be a non-starter:
- Client push with no self-belief: I mentioned earlier about many organisations that we worked with that never succeeded in getting anywhere with their supplier diversity /inclusion programme and in many cases, it was just a ‘tick box’ exercise. There was this push from their clients, asking them questions in tenders and in performance reviews about their supplier diversity programme and lacked a coherent strategy, top level commitment and individual drive to deliver results.
- Project and not a process: Supplier Diversity/Inclusion, if taken as a fixed term project managed by individuals on ad-hoc basis it hardly brings any success. Procurement has to make inclusion part of the sourcing process, invest in educating buyers as well as tier 1 suppliers, make it part of procurement strategy and allocate budget/ resources to manage it. If it is taken up as a project, it will not work.
MSDUK is organising a global conference on inclusive procurement in London on 21st, 22nd Sept with global experts, CPOs, sourcing professionals, policy makers and 100s of enterprising minority business owners will be in attendance, providing opportunity to meet, learn, share knowledge and network.