Inclusive Procurement Leadership Summit attendees get advice on growing their own supplier diversity programs
December 6, 2016
by Cassandra Dorrington, President & CEO of CAMSC
TORONTO—Listening to leading North American companies provide first-hand knowledge on key business practices they use for managing and developing best-in-class supplier diversity (SD) programs was nothing short of informative and inspiring.
Attendees at the Inclusive Procurement Leadership Summit, hosted by the Canadian Aboriginal and Minority Supplier Council (CAMSC) in September were given advice on growing their own supplier diversity programs, from some of the best. Companies like RBC, Kellogg, Toyota, GM, BMO, TD and FCA shared their insights and lessons learned while developing their own SD programs.
The Summit followed an evening of recognizing supplier diversity leaders at the CAMSC Business Achievement Awards. This year, BMO was recognized as the Corporation of the Year and RBC was presented with the Collaboration Award at the 12th annual gala.
Building on the previous evening’s theme of supplier diversity leadership, the Inclusive Procurement Leadership Summit started with keynote speaker, Dr. Fred McKinney, Managing Director, MBE Programs, Tuck University. Dr. McKinney spoke about growth through supplier diversity and how utilizing economic and social value drives prosperity in the economy.
The many benefits of SD were evident in the case studies, executive roundtables and a facilitated panel discussion. The various participants represented a number of diverse industries (including financial, automotive and manufacturing). While each had their own perspectives to share, one commonality among all companies with leading SD programs was the commitment from senior management.
The tone from the top was evident—supplier diversity makes sense. And when something makes sense, you build on it. CAMSC members are looking forward to examining the case studies best practices in more detail including training sessions in the near future.
Here are some of the stories of what leading companies are doing to grow their SD programs.
Kellogg believes that a diverse supply chain will allow it to remain globally competitive. They continue to build upon a robust North American supplier diversity program first launched in the 80’s, with expansion into Canada in 2007. This includes continuously aligning the supplier diversity program to changing corporate goals and evolving best practices.
Some key elements involve aligning initiatives to top corporate goals, sharing past successes, and presenting metrics monthly using a dashboard to show goals and how each procurement team is performing to those goals.
Kellogg shared that success in growing a supplier diversity program lies in aligning it with a company’s CSR program and ensuring accountability to stakeholders. When companies understand the strategic benefits of supplier diversity such as the innovation, brand loyalty, quality products, competitive pricing, the economic impacts on the community and job creation that it brings, they (companies and their many stakeholders) are more inclined to embrace it. It is also necessary to revamp and refine the business case such that it is both industry specific and company.
Fiat Chrysler Automobile (FCA)
Growth for Fiat Chrysler Automobiles (FCA) is establishing a Tier 2 program. FCA has set a target for increased Tier 1 spends with Tier 2 minority suppliers of two to 8.5 per cent.
FCA US offers incentives to its Tier 1 suppliers to start Tier 2 programs as a way of providing opportunities for smaller vendors. Success in establishing a Tier 2 program is attributed to being well experienced at the Tier 1 level first. This allows FCA US to understand the potential challenges inherent with establishing a Tier 2 program.
This includes having a good reporting system in place to track supplier diversity spend, and contract language in purchase orders that identifies the expectations FCA US has of Tier 1 suppliers. It is also imperative to have supports such as established sourcing mechanisms (i.e. certification councils like CAMSC) in place, and access to coaching expertise to assist companies to find diverse suppliers.
RBC’s next three-year supplier diversity plan is being developed and includes strengthening partnerships with both internal business partners and external partners and expanding its program to other regions. Specific goals include more broadly communicating the program and its successes internally to educate staff about supplier diversity, create strategic alliances, expand the supplier diversity program beyond Canada and the U.S., introduce potential diverse suppliers to RBC’s business units and engage account managers. RBC also plans to transform their mentorship program into a supplier development program.
Selling a supplier diversity strategy across a large organization requires identifying and engaging champions who will influence their peers, gaining their support and ensuring funding for a program is allocated. Champions must be committed, engaged and take action to promote a culture of innovation and inclusion, leads to smart business decisions in growing a gateway of economic opportunities.