The following article is the second in a series of articles based on one of the most engaging panel discussions at the recent Procurement Foundry FORGE event on supplier diversity. The discussion covered how to make diversity work in procurement.
I don’t care how you come to your decision to engage a supplier, be it purchasing, sourcing, or outsourcing; we will provide you with a quality (diverse) supplier for that opportunity and constrain your choices.
The above was the expressed sentiments of Facebook’s Director, Global Supplier Diversity Jason Trimiew. To the listener, Trimiew’s words may sound like an order bordering on being an ultimatum. Perhaps, but it is a necessary enthusiasm in which constraining a buyer’s choices are in alignment with what he indicates represents or expresses “the values of our company including promoting economic opportunity.”
If you think about it, such mandates are not new. Indeed, using procurement as an economic lever to deliver greater social value has always been a core tenet of the public sector procurement practice. In other words, don’t misinterpret the resolve of Trimiew’s words because behind them is a quantifiable value that extends well beyond the purchase of goods or services that encompass far-reaching social and economic benefits.
By Trimiew’s own admission, Facebook is not as price-sensitive as other companies. That said, the organization has equally pressing needs beyond costs that warrant the “championing” of increasing engagement with diverse businesses.
For example, while the larger, more established suppliers may offer a degree of security to go with their lower prices, the smaller enterprises that comprise a diverse supply base offer the speed and agility that better aligns with Facebook’s needs and business objectives. In short, the currency of savings is as much about the speed of response as it is about dollars.
According to Trimiew, their diverse, small-business supply base is primed and ready to hit the ground running on almost any project.
Recognizing their value, Facebook even went so far as to introduce a receivables financing program. Through the program, they purchased the non-Facebook receivables of their suppliers to ensure that the companies in their network had the needed liquidity to survive and thrive during the pandemic. Of course, when the suppliers received the awaited payments from their other customers, the monies were repaid to the company.
Creativity—including investing in your diverse supply base—has paid significant dividends in supply chain stability and economic and social returns for the company.
One of the things that makes supplier diversity programs such as those championed by companies such as Facebook and Apple successful is that they are not a unilateral exercise or responsibility.
Even though Apple’s Manager of Supplier Diversity Scott Vowels, indicated that the company’s CEO (Tim Cook) publicly stated that when it comes to supplier diversity, “we are going to do better,” the supplier insists Vowels has some responsibility as well.
Supplier development is important, but it is the “responsibility of suppliers” to leverage and utilize the resources Apple provides to develop their business to be identified and engaged. In other words, supplier development is the supplier’s responsibility, while supplier empowerment is Apple’s responsibility.
For example, continues Vowels, “we launched a program in Detroit where we are giving black and brown businesses access to the tools that will help them get their companies noticed.”
It is a position shared by Facebook’s Trimiew, whose company has streamlined the process to identify underutilized suppliers to ensure that they can be quickly identified and efficiently engaged.
Despite the progress that both companies have made in developing and utilizing their diverse supply bases, Trimiew and Vowels state that there is still much work to do to ensure continued traction and growth. Perhaps so, but they are definitely moving in the right direction.