Supply chain disruptors

Diversity, as a term, is widely considered in the commercial world to do with people, and rightly so. The diversity of your workforce is critical to a breadth of experience, cultures, values and ideas that will feed into the strategy and future of your success. If we accept the premise that diversity is good, then it becomes incumbent on us to consider where else we can seek it out in order to reap the benefits. 

Let’s take that thought and roll with it with our supply chain. Take a piece of paper and write down your top ten suppliers: the ten companies that are contributing most to your business, be it in product, service or ideas. Now, looking through that list, let’s consider the diversity of those businesses, not just from your own but from each other. How many of them are based in the same country or even located in the same place? How many have similar staff profiles to yours? How many have been in business, give or take, the same amount of time? 

I would even challenge you to think of the mission, vision and values of these companies. How many of them could be paraphrased from your own? I don’t know the answer to these questions for you, but I can tell you of the people I have reached out to and asked to complete this exercise the average has been more than 80%. So, here is the crux. If we are now rightly striving for diversity in our own businesses, in our own teams, why not in the business partners with whom we are working? 

Let’s be clear: this is not a revolutionary idea, and I am not the first to write an article about this. But that makes the point no less valid. The research and thought on this subject is deep and justified. A diverse supply chain has, in my opinion, four key benefits to your business.

You will be challenged more often and more directly

A compliant supply base may sound ideal, but think about the times positive change has happened in your organization. It has almost certainly been born from someone or something challenging you to change the game. If your supply chain is full of organizations and indeed people who think, work, look and grow “like you”, then the chance for you to be challenged and pushed outside of your comfort zone diminishes. No one ever really grows or creates meaningful change while they are inside their comfort zone. Wouldn’t you rather have an engaged, dynamic group of business partners who came to you regularly with new ideas and pushed you to think differently, rather than quarterly update meetings where the lasting message is, “Everything’s fine”?

A promotion of innovation

Do what you have always done, get what you have always got. How many joint business planning meetings have you been in where you have discussed marketing budget, NPD and so on. When was the last time someone came to you with a truly innovative and inspirational new idea to make your business more efficient, attractive or successful? Diversity brings a variety of backgrounds, experience and expectations together to form new ideas. Small to medium enterprises are more agile, flexible and faster than their larger counterparties. A study by CPI, for example, identified that small businesses generate 14 times more patents per employee than large ones. Why wouldn’t you want to tap into that?  

Drives a competitive pricing market based on retail differences and not just a race to the bottom 

When sourcing, you will take multiple things into consideration, but price can’t be ignored. A bidding war is one way to reduce prices. Another is smart, fiercely competitive businesses finding their own way to reduce overheads and make the product leaner and more efficient. The drive for innovation is key and a more diverse supplier base is motivated to keep innovating and improving costs. You also can’t ignore the added benefit of being introduced to new markets, networks and therefore the likely addition of new customers. 

Your customers expect it and it supports two of the three key pillars of organizational sustainability

Your customers - I don’t care what industry you’re in, all of them - are expecting you to be sourcing locally, sustainably and fairly. Putting the expectations aside it is one of simple logic - your customers are diverse, so why shouldn’t your supply chain be. The more diversity you find in your supply chain, the more you will be able to be flexible and react to a challenging consumer landscape. 

There are three key pillars to corporate sustainability: environmental responsibility, employee acceptance and social acceptance. In order to be truly accepted by the staff who work for you and the communities where you work, you must represent them and strive to exceed expectations. Diversity in our communities and our workforce is obvious. To be seen as sustainably responsible, an organization must understand that diversity and embrace it. You can have a direct impact on social and commercial growth as well as consumption while promoting job creation outside of your own organization. Developing relationships with small, local or minority businesses in your geography can have a profound effect not just on their worlds, but also on your perspectives and that of the people who do business with you. 

I began this article talking about a disruptive supply chain. Why? Because no one ever grows while inside their comfort zone, and the more your supply chain can push you outside of yours and make you really think about new or different ways of doing things, the better the result. 

Disruptors have changed the game across so many markets – just think discounters, online fashion, start-ups, virtual workspaces. What could a disruptive supply chain do for your business? 

About the author

Freddy Burgess is a negotiation expert with expertise in occupational and behavioral psychology. He began his career at Johnson & Johnson and has since worked across boutique firms, multinationals and SMEs. Now, as the Commercial Lead based in the UK at The Gap Partnership, he helps organizations tackle high-stakes negotiations and delivers lasting behavioral change that drives maximum value.

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