By Adam Spurdle, Strategic Sourcing Director, Tag
Ongoing crisis has changed consumer behavior. Attention is now reserved for brands that can prove their commitment to their communities and the environment. Consumers are making more informed decisions about who they buy from and expect their preferred brands to step up, otherwise consumers will step out and find a brand that does it better.
This is leading companies to review and redefine their Environmental, Social and Governance (ESG) policies and programs, leading procurement executives to review their supplier networks, and to take a deeper look at ethical business practices, economic stability and supplier diversity.
Here is what we’ve learned about supplier diversity and what you can do to either kick-start or re-start your program.
1. Identify diverse suppliers.
The first step in identifying diverse suppliers is to understand what is important.
When it comes to finding the best fit for any supplier, it is important to align with well valued companies. Look not only at how the supplier falls into the category of diversity but what they stand for in terms of sustainability, waste management and ethical practice.
Identifying diverse suppliers isn’t as easy as it should be. There are various categories that include: women owned business enterprise, small business enterprise, veteran owned business enterprises, minority owned business enterprise, minority women owned business enterprise, small business concern. Various independent organizations exist to promote diverse businesses, but in order for us to do our job better, we need a stronger resource.
This leads to the second step: consider how you find your diverse suppliers. Do you have enough information to match talent to task?
The third step is to take it upon yourself to do the work.
At Tag, we are consistently compiling relevant data, divided by category and sub-sector, on diverse suppliers in print, packaging and promotional products, through RFI. We then vet the data, to learn more about each supplier before officially onboarding.
2. Add value, not just cost savings.
We know that cost efficiency is the primary measure of success for procurement, but luckily, it is not the only measure. Know where you need cost savings and know where you need innovation.
Procurement now has the opportunity to go beyond cost savings (once quotas are met, of course) to drive supplier innovation – finding the best solutioned, most valuable supplier partner or supplier mix to support the specific task or overall client goal.
Here is an example. One leading life sciences client consistently needs paper products for print communication. Cost isn’t the top priority, instead the focus is on quality of material, turnaround time and sustainability. The client was looking to expand their diverse supplier commitment and we were able to find a diverse supplier to deliver against client needs. Through continually working together, this supplier has become a strategic partner and advisor to the client.
There are plenty of diverse supplier companies that are specialized, delivering innovation and value add. As procurement experts, specifically marketing procurement, it is our job to change the supplier conversation from how much can you produce and what will it save to how can we best work together to promote growth and success. This will help many diverse suppliers carve their niche in the marketplace, while offering the customer the best solution.
3. Follow the trailblazers.
To accomplish steps one and two, you need to follow the trailblazers, the ones who are consistently getting it right.
We’ve seen from working alongside many leading pharma brands, that the pharmaceutical industry has been leading the charge in marketing procurement supplier diversity. Luckily for us, we’ve been able to support their Tier 1 classification.
Here is what you need to know: successfully actioning a diverse supplier base means knowing exactly what the supplier is good at and what they stand for and then realizing how to right size your supplier mix to include savings and innovation and collectively growing together.
Let’s build the resource to do this.
At Tag, we have more than 50 diverse suppliers onboarded on the marketing procurement category, accounting for over 25% of our Marketing Procurement spend. This is changing and increasing and we continue to find ways to push the envelope, to do better and get it right.