Supplier Diversity 101: What’s In It for Women?
As a supply chain executive at Pfizer, a leading pharmaceutical company, I am impressed with the efforts of large corporations to diversify their supply chains. I have had the pleasure of meeting dynamic women entrepreneurs with businesses that are cost competitive, innovative and offer strategic value to large organizations. While women-owned businesses have heard of Supplier Diversity, many aren’t quite sure what’s in it for large corporations.
The business case for Supplier Diversity is simple: Women overwhelmingly make the purchasing decisions in the household. Over 80 percent of all household buying decisions are made by women. Large corporations have taken notice of the purchasing power of women and have focused their attention on this important demographic. The purchasing patterns of women are incorporated into a company’s strategic plans, marketing decisions and, most importantly, their procurement strategies.
Supplier Diversity Programs are designed to provide women business owners with access to corporate contracts and even the playing field for small businesses seeking corporate contracts. Supplier diversity programs have two major objectives: to increase company spending with women owned businesses and firms through mentorship and development.
The business case for supplier diversity is clear: it is a strategic imperative for corporations to partner with those that purchase their goods and services.
In order to take advantage of what supplier diversity programs offer, here are three things you can do to prepare your business:
- Get Certified. Obtaining certification validates that your firm is woman-owned. If you are not certified, your firm may not be considered for procurement opportunities. Certification is key – many firms will not begin the relationship building process if you do not have current certification. Certification can be obtained through the Women’s Business Enterprise National Council (WBENC). WBENC has a number of regional affiliates that will certify your firm within 90 days.
- Know the facts. All corporations don’t operate the same way, so it will be vital to do your research. You may want to visit industry tradeshows so that you can meet and network with the people from the company. Obtain as much insight as possible on the supply chain strategy, supplier optimization and innovation practices. Understand how your firm can fit into the corporate strategy and tailor your business strategy to offer solutions to supply chain issues.
- Be patient. This process takes time. Don’t expect to get a contract on your first try. When working with large corporations, relationships matter. People do business with people they trust, and it may take you months to develop relationships. Procurement executives can be a great resource to help you determine which companies you should target.
I have developed and mentored hundreds of entrepreneurs annually. Over the years, many business owners have asked if their company was too small to partner with large corporate firms. I encourage them to partner with larger firms that will give them scale. Many corporate supplier diversity efforts are focused on development and mentoring. Small businesses and large businesses must demonstrate value, and smaller business partnerships are often the key to making your firm attractive and winning corporate contracts. Partnerships work can be just what your firm needs to take advantage of the supplier diversity opportunity for women.