Driving positive change with sustainable and diverse supply chains
At Tag, we help clients reach their marketing procurement and business goals by creating a custom panel of cost-efficient, dependable and forward-thinking vendors, driven by innovation and cost savings, with vertical market specific expertise.
We support sustainable manufacturing and establishing and maintaining a diverse supplier base, upholding our commitment to diversity, equity and inclusion and sustainability, while helping brands stay true to their social and environmental responsibilities.
Through data analysis and comparison across an array of suppliers, we ensure all our clients have a qualified, right sized and well-negotiated vendor panel. All suppliers must follow our market-leading audit process, covering financial stability, operational performance, quality, environmental, security, color, business continuity provisions and price competitiveness. We work to continuously evolve processes to reflect changing requirements, regulations, market conditions and emerging technologies.
Consumers are increasingly holding brands accountable to sustainability goals. Brands who fail to adapt will lose out to those who are operating to the benefit of their triple bottom line of helping society, minimizing environmental impact, and growing profitability.
According to Shopify, 93% of global consumers expect more of the brands they use to support social and environmental issues. We have seen a growing number of companies making statements of commitment to sustainability and diversity goals for 2030 and 2050. However, making those goals a reality requires support from your partners and suppliers.
Many businesses are focusing on consumer-facing aspects of their product offering, rather than addressing the climate impact of their supply chain. McKinsey reports that of the companies that disclose their greenhouse gas emissions figures, only 25% say they engage their suppliers in efforts to reduce emissions.
Companies need to take responsibility for the total cost of ownership of their products. This measurement helps buyers and owners determine the direct and indirect costs of a product or service. Although an end-product’s substituent materials or its packaging are highly visible to consumers, there is mounting pressure for companies to be transparent about the end-to-end lifecycle of a product.
One of the main roadblocks to sustainable innovation is the RFP process. In order to enable supplier innovation, procurement must rethink and restructure the RFP to include their goals rather than just requesting an isolated solution to an immediate problem. We are seeing clients move from RFP to RFS (request for solution). The purpose of the RFS: drive innovation while solving a complex business problem. This involves working with key internal stakeholders to identify immediate needs and long-term goals.
The CPO of a leading technology company at Procurecon Indirect West said that “we know that the supplier base is an untapped resource for innovative ideas. Where procurement fails is that we are focused on transactional needs instead of communicating our overall objectives and revealing our goals and plans. We tend to keep our long-term strategy close to the vest.”
We help brands to meet sustainability goals by identifying and sourcing materials that are low to no impact to the environment. We align with sustainable suppliers and help suppliers who are looking to improve their sustainable solutions by performing robust audits that identify key measurements of supply chain sustainability. This promotes innovative solutions with alternative sources, materials, and processes.
Impactful innovation requires cross-industry expertise. Some industries are better at harnessing data and one-to-one marketing, whilst others are better at organic grass roots efforts. True innovation lies in the ability to lift and shift from other industries that are not thinking in your way.
Societal discussions on diversity and representation apply to the supply chain too. Broad statements of support for social movements such as Black Lives Matter are no longer accepted. Consumers are dissecting business mission statements and looking for evidence of inclusive supply chains that support the business’s claims.
A diverse supplier is a business that is at least 51% owned and operated by an individual or group that is part of a traditionally underrepresented or underserved group. Classifications include small-business enterprises (SBEs), minority-owned enterprises (MBEs), and woman-owned enterprises (WBEs), but these are still expanding to include other groups that are often underrepresented.
Facebook has channeled its buying power into a supplier diversity program since 2016. The company has now spent US$1.12 billion with suppliers of minority, women, veteran, LGBTQIA+ or disabled ownership. From 2021 onwards, they are pledging to spend US$1 billion every year with diverse suppliers. The program helps to remove barriers to small businesses and supports the growth of their businesses by promoting them to their internal Facebook teams in the hopes that they will establish valuable relationships going forwards.
Supporting a diverse supplier panel is crucial for adding value to local communities and economies. This is an excellent way for global businesses to contribute to society. If the moral and ethical argument for diversity is not enough alone to convince you, there are plenty of commercial benefits as well. As diversity becomes a key purchase decision factor, more brands will be leveraging their inclusivity to differentiate themselves from their competition.
In a 2019 study for Coca-Cola by market researcher Hootology, which is a diverse supplier in itself, found that the individuals who were aware of Coca-Cola’s supplier diversity initiatives were 45% more likely to perceive the brand as valuing diversity, 25% were more likely to think favorably about the brand, and 49% were more likely to use Coca-Cola products.
When it comes to finding the best fit for any company, it is important to identify well valued suppliers. 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. We cannot treat each value in isolation. We must encourage broadly encompassing attitudes of business responsibility towards all areas of impact.
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. We are educated and proactive in supporting diversity in manufacturing to fuel equality and create valuable partnerships for our suppliers and our clients. We have compiled information from diverse suppliers, based on vertical market and manufacturing specialty, to create a database that accurately supports responsible business goals for brands and suppliers.
We work as an extension of your marketing procurement team to help you drive speed-to-market, uncover opportunities for cost efficiencies and deliver innovation. Tag is one of the largest, global, independent, supplier-agnostic, sourcing and creative production organizations, focused on supporting diverse suppliers and sustainable manufacturing solutions.
If you would like to know more about how we can improve your panel of suppliers, schedule a call today.