Topic: Embedding Supplier Diversity with Sustainable Procurement
The first MSDUK 2015 Corporate Knowledge Session, held in London on the 26th February 2015 focused on how supplier diversity can be better aligned with sustainable procurement strategy and how success can be measured. This session was attended by a number of MSDUK Corporate members that had a wide ranging discussion on some important areas.
Sustainable Procurement has become an important part of the procurement process with large purchasing organisations adopting a number of sustainable practices. As a concept it takes into consideration the consequences commercial activities of large purchasing organisations and their suppliers have on the wider society and the environment. Sustainable Procurement is constructed on three key pillars; environmental, economic and social (with Supplier Diversity falling into the latter two pillars).
The MSDUK 2015 Corporate Knowledge Session aimed to determine how Supplier Diversity fits in with Sustainable Procurement practices on a practical level and establish the significance of Supplier Diversity in relation to ongoing programmes delivered by our corporate members. The discussion highlighted a number of points as below.
There is a lack in measuring outcomes in relation to the social aspect of Sustainable Procurement and this is true with the majority of Supplier Diversity programmes. This is due to the increased importance of the environmental aspect of Sustainable Procurement but also the perceived challenge that Supplier Diversity provides with regards to measuring outcomes in terms of the tangible benefits such as being cost effective and in relation to ROI.
Suggestions from members focused on agreeing what needs to be measured in order to have a more effective Supplier Diversity programme with greater focus on:
- Measuring interaction between buyers and diverse suppliers in relation to initial introductions
- Measuring the number of contract opportunities for diverse suppliers and the number of suppliers selected to deliver these opportunities
- Monitoring the effects the introduction of diverse suppliers will have on the supply chain in relation to increased competitiveness
- Measuring supplier performance
- Monitoring suppliers’ social impact. For example their contribution towards the local economy with regards to job creation.
Another point raised was the fragmentation within organisations to the delivery of the different Sustainable Procurement programmes that are being managed and delivered by different teams who often do not converge or share information with each other. For example in relation to diversity it is not uncommon that in an organisation there will be separate teams that will deal with ‘Diversity and Inclusion’ and ‘Supplier Diversity.’ There is therefore a greater need for more communication and information sharing in order to increase effectiveness.
There was consensus amongst participants that Corporate Social Responsibility (CSR) has matured from a good thing to more of a value added strategy. It covers wide ranging areas including procurement, citizenship, responsible buying and supplier diversity fits within all three areas. Firms in the UK are seeing supplier diversity as client driven and it is critical for corporate companies with a supplier diversity programme to start measuring impact.
A summary of the discussions key points can be downloaded from the members area please follow the link.
MSDUK’s next Corporate Knowledge Session will take place on the 30th April 2015 at the Grange Holborn Hotel from 9:45am – 12:30pm. The topic of discussion will focus on ‘How to make Supplier Diversity work outside Procurement,’to register please contact Ervin Picari at firstname.lastname@example.org