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In simple terms, inclusive procurement, like responsible procurement, refers to a supply chain that integrates businesses owned by underrepresented individuals or groups. Inclusive procurement is about levelling the playing field so that everyone has access to the same opportunities. More importantly, it emphasises the importance of partnering with communities that have been socially and economically underrepresented to help drive innovation within supply chains.
Inclusive Procurement can be defined as purchasing goods or services from traditionally excluded or underrepresented groups, including ethnic minority, women, disabled, LGBTQ+ and veteran suppliers. Sourcing products and services from previously underrepresented suppliers enhances supply chains, it also leads organisations to reflect the demographics of the community in which they operate.
Inclusive Procurement positively affects an organisation’s long-term growth, and a successful inclusive procurement programme leads to long-term relationships that provide superior value in the supply chain.
Inclusive procurement is a deliberate strategy that promotes change and encourages the inclusion of often overlooked suppliers with remarkable capabilities. Ultimately, this strategy aims to create an equal marketplace where opportunities are open to all participants regardless of their gender, race, ethnicity, and sexual orientation.
So Why Should Businesses Prioritise Having an Inclusive Supply Chain?
Having a more inclusive supply chain drives competition as it allows businesses to seek more opportunities to find better and more cost-effective suppliers, resulting in a higher return on investment. By engaging with smaller suppliers, which are usually more ‘local’, you are supporting the local economy, which creates more job opportunities and wealth, impacting the bottom line in the long run.
Additionally, having an inclusive supply chain can also enhance brand reputation. Evidence suggests that consumers (especially the younger generation) are favouring brands that add social value, which will result in stronger brand loyalty.
Minority suppliers can be overlooked by purchasing teams. However, during the COVID-19 pandemic it became clear that in times of limited supply, minority suppliers can help fill in where traditional suppliers are unable to keep up with demand. Additionally, advocacy networks like MSDUK have an integrated ecosystem of innovation, knowledge and procurement hubs which help underrepresented entrepreneurs bring innovative ideas to market, develop business leaders of the future and achieve sustained growth through access to corporate supply chains.
MSDUK’s Minority Businesses Matter report highlights some of the contributions made by businesses from underrepresented communities:
- Combating the coronavirus crisis: Minority businesses have developed rapid, accurate, low-cost Covid tests, sourced life-saving personal protective equipment, kept older people safe in care homes, enabled the NHS to provide online GP consultations, delivered meals to families during the lockdown and developed a virtual events platform.
- Tech progress: Minority businesses in tech include DeepMind, the world’s leading AI, and other unicorns that are leaders in video games technology, small-business finance, data-privacy compliance, and cybersecurity.
- Levelling up: Minority businesses can help the government achieve its top post-Covid priority of ‘levelling up’ deprived areas outside London, notably because 21 of the 39 Top 100 businesses in England located outside London are based in deprived areas, as are four of the five Scottish businesses in the Top 100 and one of the two Welsh ones.
