Supply Chains are feeling the impact of the pandemic, natural disasters and cyber-attacks. There have been major delays in orders for PPE and safety supplies, as well as operational supplies and equipment, which have disrupted organizations’ supply chains across the country. While we once took availability for granted, we now understand the critical role of supply chains.
To prepare for uncertainty, more than ever, it is important to infuse value throughout an organization’s supply chain and other critical support functions (e.g., Accounting, Finance and Investment Services, Legal, Marketing, etc.). This incremental value is derived through innovation; enhanced pools of qualified contractors, consultants, and suppliers; and increased competition and quality. Accenture reports that COVID-19 has forced supply chains to assess the abilities of their suppliers of all sizes to meet demand. Recent events continue to reinforce the importance of diverse-owned businesses (i.e., minority-, woman-, and/or veteran-owned), as buyers reach out to local suppliers to avoid disruption. The Hackett Group’s 2017 Supplier Diversity Study found that 99% of diverse suppliers met or exceeded expectations.
Organizations can create greater value through Supply Chain Diversification (SCD) with an expanded pool of qualified, competitive suppliers. SCD programs share the same value-creating objective even though they are often known by many names: Minority & Women Business Development, MWBE, DBE, Historically Utilized Business, Supplier Diversity, Business Diversity and Small Business Utilization programs.
SCD is a business strategy that:
- Recruits and vets quality, reliable, competitive diverse-owned businesses who can meet, or exceed your business and operational needs.
- Maximizes the value of supply chains by providing business units and departments with innovative, cost effective solutions to emerging challenges.
- Expands the pool of qualified contractors, consultants and suppliers.
- Motivates existing contractors, consultants and suppliers to continually improve the competitiveness of their bids and the quality of their performance.
- Reduces long-term operational costs.
- Enhances company market share and stakeholder relationships.
- Creates strong, mutually beneficial relationships across the supply chain and other business operations.
This brief SCD discussion highlights the benefits of Supply Chain Diversification, especially during times of uncertainty. Are you extracting optimal value from the contract awards of your Supply Chain, Purchasing, or other operational departments? If not, maybe SCD can be a differentiator for you.
Innolect’s team of Supply Chain Diversification consultants, with decades of experience, will help you to establish new programs and enhance existing ones.
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