Happy New Year! I trust that the holiday season (at least in the US) provided some amount of rest and recovery for you after a tumultuous 2020.
While the world is still sorting out COVID-19, the good news is that vaccines are now available and being distributed to many citizens around the globe. The more challenging news is that the demand is way ahead of the supply. As a Supply Chain geek, this saga makes for perhaps the most interesting study of a lifetime. As we try to stay safe and healthy, and keep our loved ones that way, we will learn a great deal about global supply connectedness and how we provide for equitable health outcomes in the 21st Century.
But like me, you may not be directly involved in the management of the supply chains charged with COVID relief. That means that the regular day-to-day still has to be addressed and our suppliers and internal partners are in need of our immediate attention. One area we’ve discussed in this regard is Supplier Diversity.
As discussed in my last blog post, recent world events and Black Lives Matter activism has shed a bright light on the work of diversifying Supply Chains and specifically supplier bases. At TMG, we’ve found that many of our Supply Chain colleagues have (and do) struggle with how the goals of a building a diverse supply bases reconciles with good (best practice) Strategic Sourcing. After all, aren’t we primarily charged with finding the best (cheapest and most reliable) suppliers? Doesn’t Supplier Diversity require concessions to that core mission? And where do I get the extra resources to do this activity when we’re struggling to fund the core activities of sourcing?
Ouch! I’ve got a headache…
As a starting point, is this a strategic challenge or a tactical challenge?
I’d submit that there’s an intersection here (or the answer is a bit of each). I’ve always taught that a good sourcing strategy aspires to have an optimal view of the suppliers within each category of spend. Likely the strategy won’t profile every available supplier, but focus on the most capable. The problem becomes, how are we defining most capable? Does that always mean the biggest in size or brand awareness? Does that ignore suppliers that we would define as diverse? And if so, how do we fix that? Great, more questions…
But hold on, I said this is some of each. From a tactical perspective, the problem is greater. First, since sourcing strategies/plans feed your sourcing activities, then the limited vision of capable suppliers discussed earlier impedes your ability to even see these suppliers. As a good sourcing professional, of course, you’re always on the lookout for good suppliers. So this may not be a show stopper. But how prepared is your organization to onboard new suppliers that may have different integration capabilities than your standard Tier 1 supplier? Do you have the skills, resources and experience to integrate this new supplier?
Here are some things for you to consider:
- Given current resources and team strengths, are we better at supplier development or new supplier onboarding? I understand that you are charged with both, but an honest assessment will help define the fastest route to reach your goals
- How can your stakeholders help to get you to your goal? For example, if Sales is hearing from customers that Supplier Diversity is important, how can Sales and their customers help in getting support for additional resources?
- Finally, how do you change the conversation about supplier capability to one that is more inclusive and equitable? There is no one role or department in an organization that can, or should, answer this alone. The discussion requires many perspectives, critical thinking and insight. You know…diversity.
We’re going to be discussing the issues surrounding the intersection of world class Strategic Sourcing and world class Supplier Diversity throughout 2021, and beyond. I look forward to your insights and stories of your successes!