This document discusses challenges and opportunities for engaging small suppliers in supplier diversity programs. It provides results from a survey of over 1,000 professionals which found that 55% lacked knowledge of their company's supplier diversity program. While business units were generally open to small suppliers, 31% felt procurement procedures made engagement difficult. Recommendations include dedicating resources to educate employees on supplier diversity's value and deploying efficient processes to engage diverse suppliers.

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A Small Supplier Perspective on Supplier Diversity Challenges
and Opportunities
Table of Contents
•Supplier Dynamics
•Survey about Supplier Diversity
Perceptions
•Survey Results
•Barriers to Engaging Small Suppliers
•Supplier Engagement Dynamics
•Recommendations
Diversity and Inclusion Leadership Seminars
Forecasting & Measuring Diverse Human Capital
Needs to Execute Business Strategy
02 - 03 May, 2013

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• How companies engaged small suppliers translate into Synergies or lost business opportunities
Supplier Dynamics
Small Supplier
Management Synergies
Innovation Efficiencies Cost Reduction
Procurement
Goals
Supplier
Business Need
Supplier
Diversity
Sweet Spot
Flexible
Procedures to
know new small
suppliers
Ability to scale up
and down SOWs
without repeating
entire contracting
process
Efficient
Contracting
Process
Meeting high
quality
deliverables in a
timely fashion
Procurement &
Supplier Diversity
Goals Aligned
Flexibility to
adopt to changes
out of scope
Realistic payment
conditions Repeatability &
Expansion
Supplier

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Survey about Supplier Diversity
Perceptions
Some Crude #s about Supplier diversity
Survey Methodology :
•Contacted about +1000 Linked In connections( mostly Pharma and Health Care)
between March and April 2013 and ask them to answer an anonymous the survey.
•About 60 responses 5% response rate
•Results are only food for tough to feed a discussions about supplier diversity
Limitations
•Not a statistical representative sample of Linked In professionals
•Not large enough number of responders to make any generalization

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Survey about Supplier Diversity
Perceptions
Do people know about
supplier diversity?

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Survey about Supplier Diversity
Perceptions
Perceptions About Small Business

6. Knowledge About Supplier Diversity Program Among
Company Employees and Business Unit
55% percentage of the respondents to the survey
seem to lack knowledge about supplier diversity at
their company
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Having adequate
resources for educating
employees about
supplier diversity is
important
Survey Results

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Supplier Diversity Manager has low visibility an interactions with some
business units
Survey Results

8. Only 30% will consider doing business with large
companies all or most the time.
Those with contracting
authority only 50% will
consider doing business
with large companies all or
most the time.
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In General People are open to Engage Small Suppliers
Business units are willing to consider small
suppliers
Survey Results

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Business units are willing to consider small
suppliers
In General People are open to Engage Small Suppliers
Survey Results

10. 31% Agree that procurement
procedures make it difficult to
engage small suppliers.
31% don’t have time to get to know
small suppliers.
Small percentage think small
suppliers are unreliable 55% disagree that small suppliers
are unreliable
41% disagree have time to get to
know small suppliers
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There are Barriers to Engaging Small Suppliers
Although Fortune 500 companies have a supplier diversity program and business units are interested in engaging new small
suppliers , there are internal barriers for making this happening.
In certain situations engaging new small suppliers takes business units a lot of time and effort because it may conflict with
procurement procedures, strategies and goals.
Facing this challenges business units opt not to consider engaging small suppliers or try to circumvent procurement and supplier
diversity because their involvement tends to delay or complicate contracting process.
Survey Results

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Barriers to Engaging Small Suppliers
Common Barriers to do business with Small
Suppliers
Small supplier
is not in the
Preferred
Vendor List
Procurement
cost
reduction
goals makes it
harder to
work with
small
suppliers
Insurance
requirements
are too high
for Small
Supplier
Operation
Too many
approvals
needed
Payment
terms (45 to
60 days) can
caused cash
flow
problems

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Supplier Engagement dynamics
Procurement
Goals
Supplier
Business Need
Supplier
Diversity Procurement Goals
Supplier
Business Need
Supplier
Diversity
Supplier meets business needs with no interaction
with Supplier Diversity or Procurement
Supplier has a relationship with Supplier
Diversity or Procurement but does not meet
any business values
Procurement Goals
Supplier
Business Need
Supplier
Diversity
Increase synergies
To drive efficiencies by
enlarging the sweet spot
Suppliers Increase value and
opportunities
Meet more Businesses needs
Meet more Procurement and
Supplier Diversity
Needs

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• Dedicate resources to educate employees and
business units about the business value of supplier
diversity
• Deploy efficient process to engage diverse suppliers
• Build synergies among procurement , Supplier
Diversity, Business units and small suppliers to
maximize business benefits
Recommendations
Contact: Alejandro Jaramillo
Email: alexJ@datameans.com
Cel:732-371-9512