Diverse suppliers can bring innovation and agility but buyers and suppliers need to collaborate to succeed, a joint MSDUK and CIPS event was told.
The CPO Forum: Supplier Diversity: Unlocking Innovation, Driving Competitiveness and Enhancing Reputation event in London was held to discuss the role of diverse suppliers in unlocking innovation and to mark the launch of a white paper on supplier diversity.
1. We value your feedback
Sid Narang, CEO and founder of thesqua.re, which sources serviced apartments, said communication and feedback were key to the long-term prosperity of suppliers as it can provide valuable lessons to improve and build your business in order to win contracts further down the line.
He said: “Entrepreneurs are scrappy. We don't see any failure as a failure, because it's just the beginning. If we don't get the contract today, we're going to get the contract tomorrow, or we're going to get the business from somewhere else, or another company.”
Farida Gibbs, CEO of Gibbs Hybrid, a talent management consultancy, agreed feedback on tenders was valuable because the ability to take part in a tender was the only way to truly demonstrate the value your business can provide.
She said: “If I don't win, that's okay as long as I understand why I didn't win because that is the opportunity for any business to take that feedback and to go and do better next time or to improve their business. As business owners, all we want is an opportunity to the RFP.”
2. Fast payment can make or break small businesses
Byron Dixon, CEO and founder of Micro-Fresh International, a biotech company, said in the early days of a new business, every day is tough and one of the largest determining factors of the success of a business is money.
He said: “The biggest kids footwear retailer in the UK is Clarks and that is one of the only companies we don't deal with now because, at the time, I couldn't afford to drive to their offices, which today seems bizarre.
“When we start our businesses, being skint in the early days is very tough and every day is a fight and struggle. When you get to where we are today, people sometimes forget that.”
Farooq Mohammed, CEO of es-p, a professional services consultancy, agreed cash flow is a massive challenge for smaller suppliers and delays to payment can disrupt business.
He noted a particular example where payment from a large business had not been paid on time and es-p was due to pay its staff. The situation was ultimately resolved but this required “some contingencies to kick in”, said Mohammed.
3. Take a leap of faith
Gibbs said procurement teams have to take a leap of faith with diverse and small suppliers but it will be one that may pay off. By setting her company apart from her competitors, Gibbs Hybrid secured a contract with IBM.
She said: “I knew that I was willing to work around the clock in order to get and deliver what they needed. A lot of my competitors would log off at five or six o'clock, and so I always made myself available and I think it was through those things that the procurement team started to see the evidence of value.
“IBM took that leap of faith because they said that we were going to give them more than what our competitors offered. They were flexible with things like payment terms, and they made every effort to help us, but what essentially that did was put us on the roadmap, because if we can do business with IBM, then we technically should be able to do business with everyone,” she said.
Malcolm Harrison, group CEO of CIPS said: “Diverse suppliers can bring innovation as well as profit to your organisation, along with socio economic benefits to the wider communities. They are by their very nature smaller, more flexible and agile. This is the perfect environment for incubating innovative ideas that you can deliver to market quickly.”
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