Current Debates
OPINION 17
Current Debates
Squaring the supplier diversity circle...
... recognising some of the pitfalls of working with large organisations. Dr Kemal Ahson
In today’ s competitive global economy, supplier diversity( SD) is increasingly considered as a means of improving supply chain efficiencies and gaining business advantage. SD – promoting the provision of goods and services by a wide range of businesses and entrepreneurs – is said to increase value and improve efficiency for large businesses and public sector bodies through maximising the innovation and flexibility of smaller companies. And in London, for instance, Black, Asian and minority ethnic( BAME) and women – owned small and medium sized enterprises( SMEs) are now singled out for targeted business support as they are considered as able to provide a wide range of skills and experience required by large public and private sector purchasing organisations.
Evidently, a wider assessment of SD focuses on the role of SMEs within the supply chain. SMEs’ contribution to business and economic life in Europe is enormous: there are over 20 million SMEs and 40 % of people work in them. And in the UK there are over 3.7 million SMEs of which 2.3 have no employees.
Given their significance in employment and economic terms, then, it is understandable that working with SMEs is exercising the minds of policy makers and people involved in business support. In fact, SMEs seem to be at the heart of most public funded business support initiatives.
And not surprisingly, making the case for promoting SD is becoming easier: the Department of Trade and Industry( DTI), for instance, published a( qualitative) study on the benefits of public sector procurement from small businesses. Similarly, large companies are highlighting the benefits of working with small suppliers; in fact, there is a growing list of private sector SD initiatives, such as Business in the Community and the European Supplier Diversity Programme.
Conspicuous by its absence, though, is any debate on whether SD is good for SMEs. From a public policy perspective this may seem a strange point; that is, if a small business secures work from a large company surely this will enhance its bottom – line and increase its sustainability? But this assessment tends to ignore difficulties SMEs may encounter when working with large businesses or the public sector.
Take the amount of time it takes to win contracts. Winning work is never easy. But often the amount of time required to make contact, develop and submit proposals, and convince a large corporate or public sector client of your value, is greater than what is required when pitching to an owner – manager or SME.
Dr Kemal Ahson
ISSUE THREE 2007 engage | uk