Problem solving

Problem solving

Companies in the natural resources sectors need to diversify their supply chains. Here’s how they can make it happen

At an economic forum hosted by the Newfoundland and Labrador Organization of Women Entrepreneurs (NLOWE) a few years ago, I reported that less than one per cent of the businesses in the local petroleum supply chain are female-owned. Some people later questioned the validity of the data, so I challenged them to track participation levels within their organizations. If the data was wrong, I’d be delighted to make a public correction. Unfortunately, there was never any follow-up or new data to refute the statistic.

Even so, they were missing the point. Female-owned businesses are struggling to compete in the supply chains of our province’s largest and most profitable industries. Whether it’s one per cent, two per cent or as high as five per cent, you can’t argue there isn’t a problem.

In fact, businesses led by women are highly under-represented in all large supply chains, including government, institutions and corporations. If politicians really want to increase business activity, this is a great place to start.

Research has proven that small-to-medium sized companies (most female-owned businesses are that size) often experience significant growth in revenue and company size when they become a service provider or supplier in a major supply chain. Major supply chains offer a consistent, higher revenue stream and larger scopes of business. Supplier diversity is a gateway for scaling up female-owned businesses.

Female-owned businesses are struggling to compete in the supply chains of our province’s largest and most profitable industries.
Caron Hawco

I often feel a chill or experience eye rolling when discussing this matter. Thankfully, I’ve learned that for every eye-rolling cynic, there are 10 supporters―both men and women―who agree that change is needed. Still, some feel conflicted because they see women as equal, able to compete toe-to-toe with anyone for business opportunities, and believe that they should not need extra help. It seems like a complex problem to solve. But is it?

To diversify their suppliers, large organizations could consider making the following simple adjustments in their purchasing practices:

• When getting three quotes on a purchase, collect at least one from a female-owned business. To find a list of these companies, try http://supplierdiversitynl.com. Or contact NLOWE directly to learn more.

• Allow companies to self-identify based on gender in your supplier database, then track it. I bet you would be shocked to learn how low the participation level is. (By the way: Let me know if I’m wrong. We can learn from organizations getting this right.)

• Track and recognize the performance of your HR and procurement employees who are supporting your organization’s diversity. There’s nothing like a motivated, ambitious manager with a key performance indicator target to support systemic change.

• If competing bids are equal, select the female-owned business. Approach it like a local content decision, which it is.

• Consider targets. If the American government can allocate five per cent of its procurement to female-owned businesses, why can’t we? (Sadly, five per cent is likely too high a number to start but it would be interesting to try.) This would truly change the game for many female-owned businesses. Waiting for change to happen organically will take decades or longer. We must start somewhere.

Some business leaders have hinted to me that they do not support supplier diversity. It goes against their competitive, private sector DNA. Why should they be disadvantaged because of gender? They say it’s reverse discrimination.

My message to them is simple: This is not a win/lose game. There is room for us all. And it’s not costly. There’s a mountain of research proving businesses that embrace diversity outperform the rest. They have stronger cultures, attract top talent and are more profitable. Your “old school” thinking is actually getting in the way of progress.

Considering the recent global changes on gender, this is an ideal time to adopt a “can do” attitude, reject the status quo and address the gender imbalance within our supply chains. This will strengthen our business community, our society and, ultimately, your company’s bottom line.

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