Debunking Supplier Diversity Myths – Part 2

Last week we started to look at the most common myths surrounding the topic of supplier diversity. If you missed part 1, you can access it here. This week we will attempt to bust another two myths, both related to vendors.

Myth #3: Small & mid size suppliers can’t handle our volume

Many supplier diversity professionals face this myth in their own workplaces. While the corporate leadership pushes for fewer, larger suppliers, supplier diversity leaders are mandated to bring in smaller, diverse suppliers. This creates constant push and pull internally.

In discussions with Canadian WBEs, they tell us that even though some of them  might not be able to handle large volumes of work today, given the right opportunity, they would gladly ramp up their workforce to support the needs of large corporate or government buyers. Women-owned businesses operate  differently from men-owned businesses in terms of risk-management. They scale up quickly AFTER the opportunity arises as opposed to putting their companies at risk by scaling up too soon without solid opportunities inked on paper.

Companies supporting diverse suppliers through their supply chains quickly become champions of working with women-owned businesses. One of our Corporate Members recently awarded a large 6 figure contract to a certified WBE vendor and the company was not only able to deliver on the promise, but also exceeded company expectations by becoming their fulfillment house by tackling the entire order beginning to end within a short timeframe.

If the corporate mandate is to work with larger suppliers, there is still a way. As BMO’s Catherine Grosz states, “Often diverse suppliers are small businesses and the theme around Supplier diversity is to help them grow in the communities in which we do business.  We will introduce suppliers to some of our larger vendors under Tier II Direct or Indirect opportunities.”

Commitments by large companies to request diversity targets from their large Tier 1 suppliers can be a great pathway to ensuring that women-owned and other diverse businesses will gain access to opportunities to help them scale up and grow their businesses and in return impact the Canadian economy.

WBE Canada manages the database of Canadian Women Business Enterprises (WBEs) that are owned, managed and controlled by women. Our businesses have aggregated revenue of $3.4 billion with average revenues of $14.1 mil. and an average number of employees at 43. Most certified WBEs are ready and willing to scale up their businesses given the right opportunities.

Myth #4: Diverse suppliers are expensive

When it comes to price point large companies are able to easily oust smaller companies. We all know that the arrival of a large chain to a neighbourhood, can quickly “kill” a small Mom and Pop  shop unless the community feverishly puts its support behind them. And chances are a large company takes its profits elsewhere while that small Mom and Pop shop invests money right back into its own community.

Catherine Grosz, BMO agrees, “Yes, sometimes diverse suppliers can be more expensive than your present supplier. However, in the spirit of supplier diversity you can also find smaller suppliers within your community that can support your business at a cost reduction or provide innovative solutions to drive costs out of your program(s).”

At WBE Canada we avoid the generalization that women-owned businesses are  the cheapest solution provider. Often they are not. What we are continually seeing though is that many times they are the best value providers, delivering the same goods and services, but with more options, developing healthy competitive landscapes. They are more flexible and more likely to support your business goals because of your enhanced corporate reputation. With women influencing over 67% of purchases in Canada, imagine the possibilities as more women start impacting your products, services and supply chain, making your business more appealing to your end customers. Partnerships with diverse suppliers can increase your brand loyalty within your  community. Nobody expects you to diversify all your contract opportunities. If you are new to the whole idea, set a goal of 2% diversity spend with diverse suppliers, slowly growing it from there. Supplier diversity is about opening your business to new ideas and solutions from suppliers who might challenge the status quo, therefore moving your business to its next level.

There is no need to reinvent the wheel. Utilize the tools available to you. WBE Canada provides certification services for our Corporate Members. We certify that businesses are majority owned, managed and controlled by women and manage the database of these suppliers for corporate needs. We also organize events to connect buyers with suppliers across variety of industries as well as in regions across Canada and US. If your organization is ready to buy from women-owned businesses, we will gladly connect you to top Canadian women-owned businesses. Start here.

As always, I welcome further conversation on this topic on social media and look forward to learning more about your experiences with these myths or other misconceptions. I’ll “see” you next week with even more myths surrounding supplier diversity.

Ready for more? Continue reading part 3 here.

Silvia Pencak
President, WBE Canada

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