A supplier diversity program has been considered one of the best business practices for maintaining high moral and ethical standards. To boost effectiveness, procurement professionals are expected to not only build but aggressively grow and expand their pool of diverse suppliers to maximize the diversity spend.
One of the most powerful ways to scale your supplier diversity program is to analyze, track, and manage multi-tier diversity spend and turn it into insights. Yet, it’s easier said than done.
According to the Deloitte annual Global Chief Procurement Offer (CPO) survey, supply chain transparency is poor, with 65% of procurement leaders having limited or no visibility beyond their tier-one suppliers.
This article will dive deeper into increased Tier-1 & Tier-2 diversity spend visibility and why you need to make it a priority.
What is Multi-Tier Diverse Spend Reporting?
Diverse spend, also known as diverse supplier spend, is the dollar amount spent solely with diverse suppliers. It can be measured by a dollar amount or percentage of total procurement spend.
Multi-tier goes beyond your first tier of diverse suppliers and allows you to gain a complete picture of diverse spend in the supplier network within your supply chain. In other words, it collects data on both direct and indirect spend at Tier 2, Tier 3, and beyond.
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When it comes to supplier diversity spend, there are typically two main supplier categories: Tier-1 and Tier-2. Both of them are critical for supply chain success.
Tier-1 suppliers, also known as prime suppliers, are those businesses that directly sell products and services to a buyer, while Tier-2 provide Tier-1 suppliers with the products and/or services that are sold to that buyer.
The Importance of Increased Tier-1 Tier-2 Diversity Spend Reporting Visibility
Let’s look at a few examples of competitive advantages an organization can gain by implementing transparent multi-tier diverse spend data into their procurement process.
Scale Your Supplier Diversity Program
Tracking beyond your Tier-1 diverse spend is critical for scaling your diversity program. With full visibility and control, procurement teams not only save a lot of time and money to expand their program but can also see their impact more broadly.
Commonly, many small and diverse businesses may not have direct partnerships with major organizations. Instead, they are likely to work with your Tier-1 suppliers. With full visibility and control, you can see your whole supplier network beyond Tier-1, and track and measure how much you indirectly spend and contribute toward supplier diversity.
Champion Small Businesses and Diverse Suppliers
“Without big data analytics, companies are blind and deaf, wandering out onto the web like deer on a freeway.” – Geoffrey Moore
With a clear view of your all-tier diversity spend, you gain deep insight into your Tier-1 suppliers’ performance, success, and spend activities. From there, you can make more strategic decisions to partner with those Tier-1 suppliers that have subcontractors with diverse businesses. In short, you indirectly support growth and job creation for the community.
Align Branding with Organizational Goals
As you expand your diverse spend reporting to Tier-2 and beyond, your program will create a more significant impact on your diverse suppliers and the community. A strong supplier diversity program will demonstrate your commitment to making the world a better place and meeting sustainability and diversity goals, rather than focusing on the bottom line.
Demonstrating a commitment to supplier diversity is not only good branding and marketing practice, but it’s also a key selling point when attracting top talent to your organization.
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Streamline Your Tier-1 Tier-2 Diversity Spend Reporting
Measuring and tracking multi-tier diverse suppliers comes with multiple challenges. Because you don’t directly purchase products or services from Tier-2 suppliers, there is some complexity to tracking this data. The traditional solution has been to engage and coordinate with Tier-1 suppliers to collect and organize this data for every project.
Insights, analysis, and reporting in one streamlined dashboard.
As an organization with thousands of Tier-1 suppliers and hundreds of ongoing projects, automating the process is a must. SupplierGateway provides one-stop-shop solutions to streamline your multi-tier diverse spend management and simple, intuitive reports to demonstrate your diversity impact.
About SupplierGateway Economic Impact Reporting and Supplier Diversity Management Software
Get transparency into which business categories create the most impact, which geographic regions are positively affected, and how many jobs your inclusive activities support.
Economic Impact overview in the SupplierGateway platform.
Our system leverages the BEA RIMS II model to analyze and summarize the Economic Impact of your spend in a comprehensive and user-friendly dashboard. With SupplierGateway, you can:
Boost Your Diversity Spend: Quickly elevate your spending with local diverse suppliers by identifying those you already engage with and establishing a baseline for your program.
Monitor, Analyze, and Report: Effortlessly track the growth of your diversity spend over time. Break down data by spend category, business type, certifications, and more for detailed insights.
Understand Economic Impact: Gain insights into how your business operations contribute to economic development through comprehensive economic impact reports.
Partner with Diverse and Local Suppliers: Effortlessly source local and diverse suppliers that meet your procurement needs within the same platform, enhancing your supplier diversity initiatives.
Find Out More
Ready to transform your approach to diversity spend? Book a demo and see how SupplierGateway can provide a fully transparent, comprehensive view of your diverse supply chain.
SupplierGATEWAY Appoints Rock Irvin as Chief Commercial Officer
SANTA ANA, Calif., November 2, 2021 (Newswire.com) – SupplierGATEWAY is pleased to announce the appointment of Rock Irvin as the company’s Chief Commercial Officer. Irvin will lead sales, marketing, and product strategy functions and help drive the execution of SupplierGATEWAY’s long-term strategy.
“Rock understands customer value creation and serving customers at a large scale in a way that few executives can hope to, and he has a proven track record of maximizing the growth potential of a variety of businesses,” said Ade Solaru, founder and CEO of SupplierGATEWAY. “He’s joining our energetic team to spearhead SupplierGATEWAY’s expansion at a time when the economic impact of our customers’ supply chain inclusion efforts takes on a new urgency.”
Rock Irvin brings 12 years of product and executive leadership experience, most recently as the Chief Executive Officer of JMG Marketing, a leading provider of data-driven direct marketing solutions. Prior to that, Irvin served as the Head of Data Products for the consulting arm of Vista Equity Partners and the co-founder of the Data Products team at Cars.com.
“I am thrilled to join SupplierGATEWAY’s accomplished legacy and their current efforts to empower corporations to measure, report, and increase their economic impact in diverse businesses and small businesses,” said Rock Irvin. “The SupplierGATEWAY Team is talented and excited about the future. I do not want to miss a chance to live my values of economic diversity and inclusion in the work I do every day and use technology as a catalyst for lasting change.”
In prior roles, Irvin has successfully introduced new products and services, spearheaded sales efforts with global brands, and led merger integrations and organizational transformations.
Irvin received a bachelor’s in business from Howard University and a Master of Business Administration from the University of Chicago Booth School of Business. Irvin has also been a tech entrepreneur and worked in financial services at Northern Trust and ShoreCap Management.
About SupplierGATEWAY:
SupplierGATEWAY is a leading cloud-based, instant-on, best value digital supplier management platform that automates and simplifies supplier and vendor management. SupplierGATEWAY’s tools and solutions can be deployed individually or in any combination and easily integrated with existing AP/ERP infrastructure.
The tools and solutions capabilities encompass Supplier Registration and Enablement, P2P Sourcing & Procurement, Supplier Management, Financial Risk Monitoring, Supplier Compliance Management, Corporate Responsibility / Diversity and Vendor Credentialing.
It’s not an exaggeration to say suppliers are the center of the supply chain’s success. No matter what industry you’re in and the products you sell, you won’t accomplish much without collaboration with suppliers.
Supplier collaboration is among the top priorities for many organizations in today’s growing on-demand economy, where supply chain competitive advantage is a value creator.
What Is A Supplier?
A supplier, also known as “vendor,” is a person, organization or business that provides goods or services to another entity. Their role is to supply a high-quality product or service at the best optimal price to buyers.
The Importance of Suppliers in Business
Suppliers have a significant impact on every stage of the product life cycle. It’s no doubt that the relationship between suppliers and buyers is critical for a solid business foundation. Suppliers play a crucial role in how fast your business grows and maintains your success. Hence, it’s vital to build a strong relationship with suppliers and treat them with utmost respect and loyalty.
Benefits of Supplier Collaboration
Major buyers with advanced procurement practices have been actively looking for ways to build trust and cultivate supplier relationships. Strong collaboration could create significant value and help the supply chain become more resilient.
A survey from McKinsey of 100+ large organizations in multiple sectors has shown regular collaboration has higher growth, lower operating costs, and greater profitability than their competitors.
How To Improve Supplier Collaboration – From Supplier Perspective
Despite value at stake, many procurement professionals still face challenges integrating suppliers into their overall procurement strategies due to ineffective communication, lack of transparency of shared values, and misalignment of goals.
In this article, we list some steps to tackle this issue that you should take into consideration.
Supplier Collaboration is Not Simply Cost-Based:
Successful supplier relationships are not transactional but a close, collaborative partnership. The strategic procurement approach goes above and beyond demanding cost reductions. As an organization is near-transparent by openly sharing their challenges, suppliers feel like they’re a part of the team and more comfortable sharing their insights that potentially deliver results far beyond buyers’ expectations.
Regular Communication From The Early Stages:
Regular communication creates a shared understanding, which avoids confusion and disagreement. Communication is a two-way street, so it’s critical to achieve effective communication by regularly checking in with your suppliers and keeping them engaged in every stage of the project.
SupplierGATEWAY’s clients have utilized QuickConnect Matchmaker tools to optimize their effective communication with potential and existing suppliers. Procurement professionals use our tool to screen and initiate a call online or in-person for a new project.
Collaboration is a Win-Win Strategy
A successful collaboration should be a win-win for both parties. Understanding and facilitating their needs while safeguarding your benefits is the smart way to gain a long-term relationship, which procurement professionals tend to forget.
Similar to buyers, financial stability is one of their priorities to maintain their business success and provide the highest quality products and services to you. Cash flow is the heart of a supplier’s business. Over 20 years of experience working with buyers and suppliers, we found that the short payment term has proven practical and appealing to suppliers. It allows them to reserve cash to pay for the things they need to run the business.
A study from Xero has revealed that 70-80% of businesses offer payment terms that have two weeks or less. Besides, over half of these businesses request payment within 7 days.
SupplierGATEWAY’s virtual payments enable buyers to pay suppliers via automated delivery of virtual cards and earn 1.5% or more cash back for every transaction, no matter the size.
Streamline New Opportunity Posting:
All that suppliers want is to have more buyers. To achieve that goal, they have to simultaneously outreach and keep an eye on new opportunities from multiple buyers, which is not easy to manage. As a buyer, keeping them in the loop with this easy-to-use tool is the best way to attract the most talented suppliers into your projects.
It can be a significant challenge to integrate a software-centered approach into your procurement practices, especially considering you may have hundreds or thousands of suppliers. The power of technology simplifies your efforts by delivering turnkey ready to use systems for tracking supplier data, purchase orders and their performance all in one place. What you need to focus on primarily is how to build collaboration momentum with suppliers.
Supplier management software also enables suppliers to effectively manage their lower-tier suppliers and reporting, which gives buyers more control over the lower-tier supplier’s data and ultimately lowering costs and improving quality.
Sustainability Certifications 101 – Definition, Benefits and How To Obtain One
You’re no longer surprised to hear “sustainability” everywhere you go.
As more consumers become conscious of the brands they buy and decide based on the brand’s values, including environmental and social issues, the business practice of sustainability has become a necessity and more than just the “right thing” to do. According to the Pew Research Center report in 2021, 71% of Millennials and 67% of Gen Z said climate should be a top priority to ensure a sustainable planet for future generations.
Due to the change of consumer perspective, many organizations have added sustainability as part of their branding strategies and taken this criterion seriously into their procurement decisions. Hence, it’s critical for suppliers to incorporate that practice into a business.
But how do prospective clients know if your company, product or service is operating sustainably? How do they ensure you meet the sustainability standard? This is where sustainability certification comes in to make it easier for your clients.
What Are Sustainability Certifications?
Sustainability certifications are issued by an independent or third-party organization to a company, product or service. To obtain a certificate, a company must meet specific standards and criteria to demonstrate a strong commitment to good economic, environmental and social business practice.
Though these certifications are not mandated, obtaining one indicates your business practice is socially responsible and is a point of differentiation.
Sustainable Procurement Is Fundamental of Building Resilience In Supply Chain
The Sustainable Procurement Barometer 2021 report shows valuable insights into growing the recognition and awareness of sustainability in procurement with these key findings:
Labor and human rights issues shape procurement strategy.
Procurement is now paying attention to diversity, racism, nondiscrimination and equity.
Sustainable procurement proves key to supply chain resilience.
Sustainability performance is critical for revenue and growth.
Mid-sized companies (from $100M to $1Bn in revenue) are embracing sustainability.
Sustainable procurement practices have been adopted and implemented at scale by many businesses of all sizes. Evaluation of sustainability criteria is becoming a new norm and is predicted to become a mandatory requirement in the future.
Where To Obtain Sustainability Certifications
Depending on the business and product type, a single entity can hold numerous certifications that target different aspects of its business. We have listed below some of the most popular and reputable third-party certifications you can consider.
Business Sustainability Certifications
B Corporation is the only certification that measures a company’s entire social and environmental performance. The B Impact Assessment evaluates how your company’s operations and business model impact your workers, community, environment, and customers.
CarbonFree Certified determines the carbon footprint of the product and associated carbon emissions are offset with reduction projects.
Green Seal-certified products have reduced climate and environmental impacts at one or more stages of their lifecycle.
ENERGY STAR Most Efficient recognizes the best of ENERGY STAR certified products with the highest efficiency and maximum carbon reductions.
Rainforest Alliance’s seal stands for more sustainable farming methods that help improve farmer livelihoods & mitigate climate change.
SMaRT Consensus Sustainable Product Standards is the consensus sustainable products standard and label for building products, fabric, apparel, textile & flooring, covering over 80% of the world’s products with environmental, social, & economic criteria.
Sustainable Forestry Initiative (SFI) has a robust set of forest certification standards that enable forest managers in the United States and Canada. It demonstrates sustainability while measuring quality, biodiversity, wildlife habitat, species at risk, forest conservation value, forest fiber content, and forest product traceability.
EcoVadis provides holistic sustainability rating services of companies, delivered via a global cloud-based SaaS platform. The EcoVadis Rating covers a broad range of non-financial management systems, including Environmental, Labor & Human Rights, Ethics and Sustainable Procurement impacts.
ISO 26000:2010 provides guidance rather than requirements, so it cannot be certified, unlike some other well-known ISO standards. Instead, it helps clarify what social responsibility is, allows businesses and organizations to translate principles into practical actions, and shares best practices relating to social responsibility globally.
ISO 14000 Family sets out the criteria for an environmental management system and can be certified. It maps out a framework that a company or organization can follow to set up an effective environmental management system.
Consumer Goods Green Business Certifications
Leaping Bunny Certified Cruelty-Free is a certification for cruelty-free products by the Coalition for Consumer Information on Cosmetics (CCIC). The CCIC comprises eight animal protection groups to develop and promote the use of a single, comprehensive standard for cruelty-free and animal-friendly products.
NPA Standard and Certification dictate whether a product can be deemed truly “natural.” It encompasses all cosmetic personal care products regulated and defined by the FDA.
Fairtrade International certification is awarded to producers, farmers, traders, and importers/exporters. The certification process is undertaken by FLOCERT, an independent body originally formed by Fairtrade International but became independent in 2008.
SIP Certified sustainable is a program providing third-party verification that a wine, winery, or vineyard has adopted and implemented stringent sustainable winemaking and wine growing standards. The sustainable certification is based on best practices and is committed to continuous improvement in those areas.
Non-GMO means a product was produced without genetic engineering, and its ingredients are not derived from GMOs.
Demeter’s “biodynamic” certification assures consumers that the product has been certified to a uniform standard. Therefore, Demeter holds these marks and is solely responsible for ensuring their adherence to protecting the integrity of Biodynamic agriculture and the products that result, both for consumers and farmers.
USDA-certified organic foods are grown and processed according to federal guidelines addressing, among many factors, soil quality, animal raising practices, pest and weed control, and use of additives. Organic producers rely on natural substances and physical, mechanical, or biologically based farming methods to the fullest extent possible.
Introduction to Supplier Diversity Certifications
Updated 2/28/2022
The initial goal of Supplier Diversity programs was to combat social injustices in the United States by supporting growth and jobs at underrepresented small businesses. Over the last few years, buyers have also realized that effective inclusive procurement also delivers significant benefits to the bottom line and can drive innovation.
Following the old axiom “What gets measured gets done,” many corporations with Corporate Social Responsibility (CSR) programs measure the effectiveness of their supplier diversity efforts by “counting” every dollar spent with diverse suppliers in all categories. To be sure they are measuring correctly, most companies tend to utilize third-party processes to validate the diversity data.
Diversity Certification for Suppliers is Important
All of these are important to you as a supplier. Why? A “certified” version of you is more attractive to a corporate buyer with a CSR program than a “not certified” version of you (all other things being equal – quality, performance, customer service and price are all still very important.)
Hence, if spending with certified suppliers is deemed more reliable and thus better to count, the smart move is to become certified and make it easier for your prospective customer to pick you.
Now that we know how important inclusion is to your customers, it’s time to do all you can to leverage your position as a diverse-owned business. If you’re curious about how to identify if you’re a diverse-owned business specifically, check out this article for a more in-depth breakdown of different classifications.
Traditional Supplier Diversity Certifications
Below is a list of traditional supplier diversity certification entities. This list is not exhaustive, and there are many more certifying bodies both at the local and state levels depending on where your business is headquartered.
Supplier Diversity Certification in the Digital Age
SupplierGATEWAY uses advanced technology to enable sole proprietorships and small businesses who have limited resources (time and budget) to become certified and ultimately expand the opportunity to do business with major companies.
The Enhanced Digital Certification™ (EDC) is a fast and inexpensive way for a small business to get certified as a diverse-owned organization while at the same time exposing to new opportunities afforded by being in the SupplierGATEWAY network. EDC certifies all of the following categories and you can have more than one diversity category in your certification:
However, many corporations still face the challenge of scaling their diverse supplier engagement in a meaningful way. In other words, expanding the supply base to be more inclusive of companies that are owned by minorities, women, veterans, LGBT and other demographic groups can seem easier said than done.
After more than 20 years of offering supplier diversity solutions to thousands of organizations of all sizes, we have found that technology can be your best friend, empowering you with almost limitless capabilities. The “magic” of digital tools enables you to quickly scale your program quickly and efficiently, even while you’re building and maintaining strong supplier relationships.
The Benefits of Scaling Your Supplier Diversity Program
If you’re wondering why scale matters, consider the following benefits that are available to you when you have a robust supplier diversity program:
Drive innovation and improve the bottom line
Stay competitive by attracting more consumers to shop and work at the organization
Gain widespread recognition for your inclusive supplier diversity practices
Uplift communities and effect economic impact
That said, to achieve your goal of scaling your supplier diversity program for maximum impact, installing new software is not enough. Best practices strongly suggest creating a detailed and concrete plan, and being realistic and disciplined about your implementation goals and timeline – some would say this is the hardest part. The following five methods are great starting points to make full use of technology to achieve your objectives.
How to Scale Supplier Diversity
1) Leverage Your Existing Supplier Relationships
Before looking for more diverse suppliers in the open market, take the time to review your existing supplier population first. You might be surprised by how many diverse suppliers are in your existing supplier base that already meets your requirements, but you didn’t know they were diverse. Expanding opportunities for those suppliers minimizes risk, expands your impact and gets things rolling quickly.
Data Enrichment is a quick and painless way to figure out the demographics of the companies that you are doing business with. It also gives you a chance to establish some baselines for measuring improvement and inclusion growth later.
2) Utilize Supplier Databases To Find New Suppliers
Suppliers of all sizes try their best to maximize their visibility by registering on platforms that allow them to find new opportunities with potential buyers. This is no different for diverse suppliers. It doesn’t hurt to leverage software to find new potential sources, and you may find exceptional value within easy reach.
SupplierGATEWAY’s database is the world’s largest active diverse supplier community with hundreds of thousands of suppliers from different demographics making this your one-stop shop for finding diverse suppliers. Beyond access to important supplier capabilities information, we also make it easy for you to find and engage suppliers of all types and with all certifications, including the new Enhanced Digital Certification.
In addition to searching for suppliers using advanced tools, you can make the process easier by taking advantage of other tools such as the opportunity posting system to find the specific supplier you need.
Our QuickConnect Matchmaker is a unique solution to take things one step further by enabling you to quickly and conveniently organize and schedule one-on-one web meetings, conference calls, or even in-person with potential suppliers at your convenience, with automated scheduling and screening.
3) Promote Your Supplier Diversity Efforts
Another best way to expand your network is to publicize your supplier diversity efforts. There are many channels you can use, such as social media, press releases, podcasts, etc. Depending on your goal, budget and scale size, you set a specific plan for each channel to deliver the messages and potentially reach out to new diverse suppliers.
Innovative programs are not shy about letting prospective suppliers know about the ins and outs of doing business with their company. One popular method is via webinars and briefings through platforms like the SupplierGATEWAY event calendar or other technology tools.
Once your efforts gain traction, you not only attract more potential diverse suppliers but also lead to a positive brand reputation in the public. According to a study in The Hackett Group, top supplier diversity programs have relied on social media to increase market share and promote supplier diversity initiatives.
4) Encourage Suppliers to Become Certified
When talking about doing more business with diverse suppliers, the topic of certification is usually front and centre. The good news is that SupplierGATEWAY’s recently launched Enhanced Digital Certification (EDC), a new fast and low-cost option for suppliers to get certified.
Certification as a diverse supplier opens up access to new networks and new opportunities. Certification also helps buyers meet compliance requirements for small business reporting – so it’s good for both buyers and suppliers.
With this in mind, SupplierGATEWAY Enhanced Digital Certification (EDC) provides a digital platform for diverse suppliers to get certified in less than a day at a low cost of $25.
With more than 11 million diverse businesses in the US and countless more around the world that are currently not certified, SupplierGATEWAY’s Enhanced Digital Certification is proving to be an affordable and attractive fast track way to certify a wide range of suppliers such as sole proprietorships and independent contractors.
5) Sponsor Diverse Suppliers
Depending on the corporate diversity programs, buyers can sponsor certification programs for diversity suppliers at a very low cost. Many of our corporate buyers have found this to be an attractive solution.
For example, for the low sum of $2500, a corporate buyer can sponsor 100 diverse certifications while at the same time having access to SupplierGATEWAY’s multi-million record database of suppliers. Furthermore, as SupplierGATEWAY’s EDC is a one-stop diversity certification for all categories of diverse suppliers such as minorities, women and veterans, buyers do not have to pay separately for access to the different categories of diversity suppliers.
About SupplierGATEWAY:
SupplierGATEWAY is a leading cloud-based, instant-on, low-priced digital supplier management platform, which automates and simplifies supplier and vendor management. SupplierGATEWAY’s tools and solutions can be deployed individually or in any combination, and easily integrated with existing AP/ERP infrastructure.
The tools and solutions capabilities encompass Supplier Registration and Enablement, P2P Sourcing & Procurement, Supplier Management, Financial Risk Monitoring, Supplier Compliance Management, Corporate Responsibility/Diversity and Vendor Credentialing.
What Minority-Owned Businesses Want Is More Customers
More than a year in, the COVID-19 pandemic has cruelly devastated small business owners everywhere, and forced many of them to close their doors permanently. A national poll conducted by Small Business Majority revealed the drastic set of challenges that small business owners are facing today, especially entrepreneurs of color. They are experiencing systemic barriers to access financing and business resources.
Challenges facing minority businesses aren’t new. These issues have stymied business owners of color for generations. Starting a small business as a minority is not so different from challenges faced by other small business owners, except minorities face more hurdles and obstacles to overcome. Ultimately, the goal of all owners is to engage more customers and give customers more than what they expected.
This article specifies three distinct challenges facing minority entrepreneurs and what solutions you should take into consideration.
Economic Barriers
It’s a common story where the minority-owned business owner gets rejected in the loan application from the bank due to the lack of personal wealth. Therefore, these entrepreneurs tend to raise their capital from the internal investment from family and friends rather than external loans and debts. According to Biz2Credit, 26.9% of big bank loan applications were approved in November 2020.
One survey from the U.S. Census Bureau indicates that nonminorities’ capital is higher eleven to sixteen times than African American and Hispanic businesses. Similarly, women’s wealth is only 36 percent as much as men’s.
Where To Access To Capital
There are many options out there, but it’s not easy as you may not know where to start. Hence, it’s a trial and error process, and business owners can ask for help from different places such as smaller banks, non-profit organizations. Many of them are free and willing to give you loans or financial advice, including Small Business Development Centers (SBA), Minority Business Development Centers (MBDC), U.S. Chamber of Commerce, Community Development Financial Institutions (CDFI), etc.
To qualify for a loan application, most banks and organizations require diverse ownership certification, which is used to verify your business classification. If your business is not certified yet, we highly recommend you to become certified with Enhanced Digital Certification in minutes and at only $25.
Limited Access To Business Networks
No matter the business size, a business network is a critical factor in growing and expanding a business. Networking is a means for small business owners to form relationships with others in related industries, potentially becoming their new customers or partners. More people you meet, the higher chance your business is being heard and remembered.
Unfortunately, these opportunities are pretty limited to minority-owned businesses. The creation rate of minority entrepreneurs is low, which leads to fewer successful businesses led by minorities. This may be because of the disproportionate impact of professional networking involving people from similar backgrounds. Hence, things are more difficult for these groups to seek advice, gain perspective, draw new ideas or funding.
Step Up The Networking Game
If you have decided to prioritize strategic relationships for your business, these groups may be a good place for you to get started:
Your local chamber of commerce
Service Corps of Retired Executives (SCORE)
Entrepreneurs’ Organization, Business Networking International (BNI)
Young Entrepreneur Council (YEC)
Rotary Club
Local or National Conferences
Note: Don’t also forget to utilize the powerful online tool LinkedIn.
Limited Opportunity For Skill Development
In today’s highly competitive market, many business owners find it critical to participate in training and educational opportunities. It may help bridge the entrepreneurship gap and increase small business prosperity and employment opportunities.
The educational level of a business owner is also positively correlated with business success. One study found a 6 percent gap between African Americans and whites, while 30 percent of the gap is between Hispanics and whites.
Given the lack of available resources and lower educational levels needed to run small businesses, new minority entrepreneurs enter the game with a “desperate” – lack of confidence, not tech-savvy and not having such a mentor to turn into when needed.
Master Your Entrepreneurial Skills
To be successful, consistent improvement should be your priority. Things like monitoring cash flow, managing social media, optimizing marketing strategies, or identifying SWOT can help you secure your business.
Along with learning from your past successes and failures, it’s essential to keep yourself updated with the newest technology, trends or skills. There are many paid and unpaid courses in the online learning platforms like Coursera, Skillshare, Masterclass, Udemy, etc.
Ultimately, Your Goal Is To Grow Your Customer Base
Here at SupplierGATEWAY, we offer a robust platform for minority entrepreneurs where you can gain access to new business opportunities and connect with customers of all sizes – from Fortune 500 companies and globally recognized companies to your local health system, manufacturer or business.
Our easy-to-use app will help you stay connected to the opportunities that could make all the difference to your bottom line. Get started today for FREE!
Understanding The Famous 7 Step Strategic Sourcing Process
In today’s competitive business climate, many professionals are continuously seeking ways to optimize cost but still assure the highest quality of products and services. To achieve that requires a lot of effort on constantly improving and re-evaluating the purchasing activities of a company, which is also known as Strategic Sourcing.
What is Strategic Sourcing?
Strategic Sourcing is a procurement process that creates efficiency across all activities within the procurement cycle to secure the best possible price for a product or service. The main objectives are to save money and improve the acquisition process, supplier performance, and minimize risk.
Strategic sourcing focuses on the shared gains in a collaborative relationship. Strategic partners look for new innovative ways for your products and services. In turn, they want your commitment to the long-term strategic partnership.
In this article, we introduce one of the best practices used by many procurement professionals. No matter the purchasing size, the 7-step strategic sourcing practice, originally developed by A.T. Kearney, has been tested and proven effective for sourcing products and services. The final results could be cost-saving, greater value-added and time saved.
Step 1: Profile The Category
The first step is to identify the sourcing category or commodity, including the volumes (quantity, types and sizes) spent on products and services, current prices and suppliers, and specification details. Also, don’t forget to analyze your users – who they are, where they are located – and departments involved in the supply chain.
Step 2: Supply Market Analysis
Understand your buyer power and category critically to position the sourcing strategy by performing market analysis. Then, you determine what strategy approach better fits with the type of service you’re sourcing.
Kraljic’s Matrix is seen as one of the most effective ways to segment the vendor base. This two-by-two matrix is mapped against two key dimensions: risk and profitability. Risk demonstrates the likelihood of unexpected events occurring that may disrupt the operations. Profitability describes the possibility of impacting the bottom line of the organization.
Once you identify the segmentation of a product and service, you’ll have a clear vision of how the product and service impact the overall business, then be more confident about what strategy and partner relationship you should implement.
Step 3: Develop a Strategic Sourcing Strategy
It is a critical step in deciding where and how to buy while minimizing the risk and cost. To get the best of our supplier pool, you should consider both existing and potential suppliers. Establish your business’ goal and the minimum requirements for suppliers, then list the selection criteria that are most suited to your requirements, capabilities and resources. A cross-functional team with critical stakeholders is highly recommended.
Step 4: Select The Strategic Sourcing Process
Time to solicit bids! The most common method that many businesses are using is Request for Proposal (RFP).
If you’re not familiar with the term, RFP is a document that solicits proposals, which is often used through a bidding process, written by an organization interested in acquiring a product or service from vendors for their project. The document outlines the details of product or service specifications, requirements, pricing breakdown, legal and financial terms and conditions, and evaluation criteria.
To do that, you need to form the best possible team that knows the product or service you want to purchase, which helps ask the right questions to potential suppliers.
Step 6: Implementation and Integration
Communicating with suppliers is an integral part of strategic sourcing. After negotiation, you may have the decision of what suppliers you want to partner with. Make sure you notify those successful suppliers that are going to be involved in the implementation stage. The more complex your product is, the tighter your cooperation and partnership should be. It’s critical to integrate suppliers into your meetings or discussions included in the implementation stage, making sure they’re up-to-date on the most recent changes and updates.
Step 7: Benchmarking
Many people underestimate this step, but it’s a huge mistake to skip it. It’s essential to measure the supplier’s performance over time – starting with benchmarking the current status of the product, continuously monitoring the results and ensuring the goal is being achieved. By doing so, you can quickly identify the problem during the implementation and notify your supplier to address the issue with the lowest business impact.
How SupplierGATEWAY can help with strategic sourcing
In today’s chaotic world, all organizations need strategic sourcing to stay competitive and relevant to the market and deliver the most significant benefits for the organization.
Here at SupplierGATEWAY, we are experts in offering supplier data management and source-to-pay solutions that help businesses employ strategic sourcing easily, quickly, and inexpensively. Our easy-to-use and instant-on software gives you all the tools to post new project opportunities to your suppliers’ list, source and engage with suppliers globally, customize your project’s requirements, solicit bids, and even pay your suppliers with rebates. Everything is automated and managed in one place.
Create an agile supply chain, automate your processes, and start saving your team time and money today! Schedule your demo now.
B2B E-Commerce
The pandemic has disrupted the way businesses operate. Those that had considered e-commerce as an afterthought are now focused on digitizing their sales process. According to Grand View Research, the B2B e-commerce market size was valued at $6.4 trillion in 2020 and is expected to grow by 18.7% by 2028.
What Is B2B E-Commerce?
The B2B e-commerce business model is the act of buying, selling and exchanging goods and products between businesses via online channels. A marketplace is an e-commerce platform where buyers and suppliers are connected and do business. Businesses leverage online marketplaces to reach their potential customers who are looking to buy products and services.
By utilizing B2B E-Commerce, suppliers maximize efficiency, time-saving operations and have a better experience with their current buyers no matter the regions or industries.
3 Main Types of B2B E-Marketplace
Buyer Oriented Marketplace (e-Procurement)
There are few buyers and many suppliers involved in this model. It is most popular among big corporations that have greater purchasing power and high volume purchase. The buyer sets up their online portal and invites potential suppliers to bid on the RFQ. This model benefits buyers to lower their cost of administration and get the best price from suppliers.
As a supplier, a buyer-oriented e-marketplace helps you directly sell your products or services to a pool of potential buyers who are looking to buy.
Supplier Oriented Marketplace (e-Distribution)
There are many buyers and few suppliers involved in this model. This marketplace benefits supplier who is seeking to improve their sales efficiency to a large number of buyers. Suppliers are able to set their own prices based on the buyer’s demand. Usually, they are searchable by the products or services they offer.
Suppliers leverage this marketplace to increase their visibility to potential buyers and open new business opportunities.
Intermediary Oriented Marketplace (e-Exchange)
There are many buyers and suppliers involved in this model. It allows buyers and suppliers to communicate and transact with each other via third-party channels. There are two types of this business model, including the vertical and horizontal marketplaces. While horizontal marketplaces offer services to all industries, vertical marketplaces focus on every segment of a particular industry. The owners of these channels earn profit from a successful transaction.
Choose The Right Ecommerce Marketplace For Your Business
Every model is designed to serve the specific needs of B2B businesses. Leveraging the right e-commerce marketplace is a key to step forward, maximizing your exposure and reaping the maximum profit for your business.
At SupplierGATEWAY, we offer a robust platform for suppliers where you can gain access to new business opportunities and connect with customers of all sizes – from Fortune 500 companies and globally recognized companies to your local health system, manufacturer or business. Our easy-to-use app will help you stay connected to the opportunities that could make all the difference to your bottom line. Get started today for FREE!
Best Stakeholder Management Practices For Procurement That You Should Know
In an enterprise, Procurement’s job is to ensure stakeholders get the right goods or services provided by suppliers, on time and at the right quality level. Procurement success is tied to how well you work with the stakeholders and what you can do to help them to succeed in what they want to achieve. Their success is not only the company’s success but also yours. As such, it’s crucial for Procurement to have a good stakeholder management strategy.
Who are the stakeholders in the procurement process?
A stakeholder is an individual or organization that benefits from or is affected by the project, product or service. In procurement, stakeholders are broadly divided into two major categories – Internal and External stakeholders.
Key Internal Stakeholders in a procurement activity include those who operate within the organization, such as procurement managers, budget owners, manufacturing, finance and legal team.
Key External Stakeholders are those who contribute to the project but are not directly connected to the organization. Suppliers and other partners are considered external stakeholders.
Why Does It Matter?
Many surveys show that stakeholders often do not cooperate and only give feedback once a major issue arises. This has caused challenges to procurement to successfully do their job due to the limited comprehension of what value/ expectations the stakeholders want.
This article lists six practices that successful procurement professionals leverage to build a solid relationship with stakeholders.
Plan Out Stakeholder Engagement Strategy:
First of all, it’s vital to plan out an engagement strategy and communication plans. By doing so, you identify research your key stakeholders, how much support you will need for the project, and what stakeholders’ communication preference is. Skipping this step directly impacts your outcome, such as missing stakeholders, identifying wrong people as stakeholders, budget variances, or worse – your project can fail.
Understand Your Stakeholder’s Requirements And Speak Their Language
Do your homework before talking to stakeholders. Many stakeholders care about cost and savings, but you may be surprised to find it’s their secondary importance. Start building a relationship first, have an initial exploratory conversation to understand their goals and expectations for that project/activity. What you want is to become an expert that stakeholders will ask relevant questions at a later time.
Don’t forget to speak the stakeholder’s language instead of using unattractive procurement jargon. Modifying the ways in which buyers express opinions or ideas is a more compelling way to build an interpersonal rapport.
Once you build a strong relationship, everything you care about, such as cost or saving, will come later. Otherwise, you may impact their interest right from the beginning.
Internally Prioritize Importance And Relevance of Key Stakeholders:
Not all stakeholders are equally important in any given project. There are two important criteria to help you properly prioritize the needs of stakeholders – the level of interest and influence. As a rule of thumb, those with a high level of interest and influence are considered key stakeholders. Conversely, those with a low level of interest and influence only have a minor impact on decision-making.
Be Proactive And Early Engagement:
It’s critical for procurement professionals to drive a culture of regular communication and mutual collaboration across the organization. These activities include joining the regular meeting with stakeholder’s departments, joining the kick-off meeting to set the project’s foundation, etc.
The earlier you engage with key stakeholders, the better you’re involved in the negotiation process. Positive working relationships add higher value to the outcome and be more likely to be a part of the project’s decision-making process for any changes.
Transparent Procurement Activities And Invest In The Right Tools:
Being transparent in procurement activities is one of the best ways to build trust and enhance clear communication with your stakeholders. Everything is made more accessible and efficient with the right tools. Take the time to explore what technology options are available out there and what solutions these technologies offer are the best for your organization. To identify that, you need to understand what obstacles and bottlenecks that your organization is facing.
How About External Stakeholders?
After discussing with stakeholders and defining what needs to be done, it’s time to implement your procurement plan. It includes identifying, shortlisting, selecting and acquiring suitable goods or services from multiple third-party vendors through direct purchase, competitive bidding, receiving and fulfilling payment, etc., while ensuring timely delivery in the right quality and quantity.
It’s a daunting process for procurement professionals. Fortunately, digital technologies allow you to easily manage suppliers, quickly respond to market demand at a much lower cost than doing it manually. With the right pick of software, procurement is likely to have a game-changing impact across the entire organization.
SupplierGATEWAY’s easy-to-use, instant-on and inexpensive software facilitates the entire procurement and supplier management process to increase operational efficiencies, reduce costs and streamline communication with suppliers. A portal administrator can tailor custom business rules, create unique workflows, and modify user roles and permissions. In addition, the software is configured to quickly accommodate any necessary changes in your project to ensure you source and diversify the best-qualified suppliers while delivering your project on time and within budget.
It’s not an exaggeration to say suppliers are the center of the supply chain’s success. No matter what industry you’re in and the products you sell, you won’t accomplish much without collaboration with suppliers. 
The pandemic has disrupted the way businesses operate. Those that had considered e-commerce as an afterthought are now focused on digitizing their sales process. According to 