Social enterprises improve competitiveness

Alex Castle is head of supply chain management at Telereal Trillium Never heard of a social enterprise before? They can play a valuable part in the supply chain, offering real innovation and flexibility, while also helping to enhance a company’s reputation. So why are they often overlooked?

Social enterprises are businesses supplying all kinds of products and services. What makes them different is that they place a firm emphasis on tackling social problems by reinvesting their profits into social or environmental causes.

Telereal Trillium has been committed to sustainable procurement for some time, however we wanted to develop this further by incorporating social enterprises into our supply chain and increasing diversity.

The City of London Corporation, the local authority for the Square Mile, has been promoting increased use of social enterprises. They helped us take our first steps into this type of procurement and three years later, we’re not only buying social, we’re also helping the Corporation develop the award-winning Buy Social Directory and raising awareness with clients and key suppliers alike.

When we first introduced social enterprises into Telereal Trillium’s supply chain, we wanted to demonstrate that the benefits would not only be for us, but could also contribute to our offering for clients, including public bodies like the Department for Work and Pensions and DVLA.

Many procurement professionals in the public sector will be familiar with the Social Value Act. The Act places a duty on public bodies to consider social and environmental value in procurement decisions. While it’s not a mandate to use a social enterprise, the Act is an indicator of intent. We saw this as an opportunity to use social suppliers and enhance client relationships, not only with public sector clients, but also corporate clients who found this to be an important part of their corporate responsibility programmes.

Internally, buying social has helped us raise awareness with staff and highlight the benefits of this type of procurement. The Christmas trees in our buildings were sourced from an enterprise that helps young unemployed people into work, as are our weekly flowers. We’re also very pleased to have recently been acknowledged for our work in building social enterprises into the workplace through our nomination for a national procurement award with Social Enterprise UK.

Social enterprise procurement is an emerging market and introducing it as an everyday corporate initiative did not come without some challenges. For instance, as start-ups, many social enterprises don’t have a long-term financial track record, or may need help with the onboarding process. But we found we were able to manage the risks using a combination of simple control measures, such as limiting spend per annum, using trial periods, and looking for recommendations.

Before I started working with the social enterprise sector, my biggest preconception related to price. In fact, some of our social enterprise suppliers have produced a 15 per cent cost saving for the company. And where social enterprises cannot compete on price, the customer service and flexibility offered has been a real advantage. We also get to make an impact on the community at no extra cost, as investments are made from the supplier’s usual profit margin.

If there is a supply gap and a social enterprise can compete on cost, quality, and service – while doing good for the community – then why not? As part of a diverse portfolio, social enterprise procurement has worked for Telereal Trillium. Maybe it can work for you too?

Alex Castle is head of supply chain management at Telereal Trillium and a member of the City of London Corporation’s steering group for the Buy Social Directory, the UK’s largest online directory for social enterprise procurement

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