IBM has long recognised that supply chain diversity is critical to fostering innovation and delivering exceptional value to our clients. IBM's supplier diversity program expands purchasing opportunities for businesses owned and operated by minorities, women, lesbian, gay, transgender, bisexual, veterans and service disabled veterans, and disabled persons. By their very nature the vast majority of these companies fit the profile of Small and Medium-sized Enterprises (SMEs).
In 2018 IBM's Supplier Diversity program has celebrated 50 years of existence, pioneering the inclusive supply chain agenda. IBM created the supplier diversity program before the existence of the Equal Rights Amendment and the Department of Commerce’s Minority Business Development Agency (MBDA) in the US in 1968. In 2000, IBM was the first IT company to join the Billion Dollar Roundtable (BDR), in which a company has to spend at least $1 billion annually in business with first-tier diverse suppliers in the US. The BDR encourages corporate entities to grow their supplier diversity programs by increasing commitment and spending levels each year. In 2003, IBM's Global Supplier Diversity Program expanded globally and now operates in every of the 170 countries in which IBM conducts business.
In the UK we are passionate about inclusive supply chains and invest in and work with not for profit organisations to expand our program, year after year.
Why do we make this investment and how do we believe this drives business performance? We believe an inclusive supply chain has a positive social impact with significant potential to boost growth in disadvantaged areas - raising incomes, employment and aspirations in these areas. There is a greater likelihood that diverse businesses are located in an area of Britain which has above average unemployment , poverty and lower educational attainment.
However looking beyond the moral considerations, a strong business case does exist.
Diverse, SME type businesses are agile, responsive, client centric and passionate about what they do. The combination of these traits means they inevitably have a more innovative approach to solving business problems and delivering superior outcomes. These are not just buzz words, IBM has many real life examples operating in a competitive environment where these businesses have flourished. In the UK alone, we have experienced SME success in contingent labour, consulting and network services. The unique differentiator? They were able to go the extra mile, at twice the speed and lower the cost - and fix a critical delivery issue to the delight of our client.
There are challenges too. Traditional sourcing techniques and supplier consolidation programs tend to directly conflict with testing and developing smaller providers. This is a challenge faced by many organisations however if they can rise above a pure numbers based approach, and secure leadership support to do so, this can and will be overcome. Furthermore, this is an initiative that should not be driven by supply chain alone - engagement with senior stakeholders, taking the time to explain the 'what' and the 'why' is critical to future success and growing business value. In 2018, IBM in the UK embarked on a mentoring program aligning a senior executive with the CEO of one of our diverse suppliers (whose business has grown significantly with IBM). The feedback from this mentor/mentee relationship is incredibly positive and one that we wish to replicate further.
In closing and at the risk of using an oft used business term - there is a highly commendable moral consideration in taking a strategic approach to growing inclusive supply chains yet a tangible business imperative too. The Win - Win.
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