Organisations can experience many benefits when they diversifyÂ their supply chain.
By Michael Switow
Why should HR practitioners and leaders care aboutÂ supply chain diversity? Globally, less than 1 per cent ofÂ corporate spending goes to female-owned businesses,Â yet nearly 40 per cent of the worldâs companies areÂ run by women, according to statistics from WEConnectÂ International, a non-profit organisation that is workingÂ to improve supply chain diversity.
Not all of those female-owned businesses have theÂ capacity to service multinationals and other largeÂ companies. Most, in fact, do not, as the statistic includesÂ many micro-enterprises. Yet WEConnect InternationalÂ estimates there are more than 9 million female-ownedÂ businesses in southeast Asia alone that are capable ofÂ meeting the needs of major companies.
HRO Today APAC spoke with Mrinalini Venkatachalam,Â WEConnect Internationalâs regional director forÂ southeast Asia and Oceania, to discuss how supply chainÂ diversity impacts HR as well as some of the challengesÂ faced by female-owned businesses.
HRO Today APAC: What are the benefits of diversifyingÂ your companyâs supply chain?
Venkatachalam: Companies that have better supplierÂ diversity programmes attract better, more qualifiedÂ talent. Professionals today, particularly millennials andÂ Generation Z employees, prefer to work for a companyÂ that is strategic in all areas, both internal and external.
Diversifying your supply chain is not corporate socialÂ responsibility, nor is it a display of pity for female- orÂ minority-owned businesses. It is simply good business.
The feedback we get is that the women we work withÂ are more effective, more agile, do the work in halfÂ the time, and are extremely competitive in pricing.Â Research shows that these organisations spend less onÂ procurement operationsâin part, because they requireÂ fewer procurement staffâand generate a higher returnÂ on investment.
Female suppliers are good at what they do. They donâtÂ run their businesses as a hobby. They do it becauseÂ theyâre very qualified. They deserve a seat at the tableÂ to pitch for request for proposals. If theyâre good, theyâllÂ win the contract. If theyâre not, then they donât.
HRO Today APAC: How does WEConnect International fosterÂ supply chain diversity?
Venkatachalam: WEConnect International identifies,Â educates, registers, and certifies womenâs businessÂ enterprises based outside the U.S. that are at least 51Â per cent owned, as well as managed and controlled, byÂ one or more women. And we connect them to qualifiedÂ buyers across the globe.
We start by examining the supply chains of largeÂ procurement organisationsâin companies, governments,Â and multilateral agenciesâto understand how much theyÂ currently source from female-owned businesses. We alsoÂ identify relevant suppliers that are owned by women.
WEConnect Internationalâs corporate members controlÂ over U.S.$1 trillion in annual purchasing decisions. These Â companies include Accenture, Apple, Cargill, Dun &Â Bradstreet, and WestPac, to name just a few.
As for suppliers, our network covers nearly every industryÂ imaginable. Approximately one-third of WEConnect Internationalâs suppliers offer professional services.Â Another 11 per cent are involved with manufacturing,Â whilst some 7 per cent are in F&B and food services.Â Other suppliers are more or less evenly divided betweenÂ a host of sectors, including business support services,Â education, health care, human resources, IT, and travel.
Over the past year, WEConnect International hasÂ identified more than 6,500 specific leads for qualifiedÂ suppliers to pitch our corporate members for newÂ business.
HRO Today APAC: In addition to making connections,Â you also work to build the capacities of female-ownedÂ companies. How do you do this?
Venkatachalam: To help female-owned companies thriveÂ and better meet client needs, we offer training on aÂ broad range of topics, including finance, legal resources,Â and how to pitch large corporate organisations, andÂ we do that in partnership with the Proctor & GambleÂ Company.
In addition, together with Moodyâs and the InternationalÂ Finance Corporation, an affiliate of the World Bank, weÂ also provide training on how to access finance.
HRO Today APAC: What sort of resistance do you face fromÂ companies in the region?
Venkatachalam: Sometimes, business leaders are surprisedÂ or even sceptical that female-owned businesses provideÂ the products and services required by their companies.Â Worse yet, Iâve encountered male procurement officersÂ who ask, âDo women really have the time to manageÂ large contracts? Can they balance this with theirÂ responsibilities at home?â
To my surprise, a female entrepreneur expressed theÂ same sentiment to me during a forum in Vietnam. âIf youÂ win a million-dollar contract, couldnât you hire someoneÂ to help you at home?â I asked her in reply, earning theÂ laughter of other women in the room.
At WEConnect International, weâre fighting for femaleÂ suppliers to have a seat at the table. Even though theÂ business case for this is strong, we must still address theÂ cultural issues that foster and support discrimination.
HRO Today APAC: What advice or tips do you have for HRÂ leaders?
Venkatachalam: If a business wants to truly be inclusive,Â it needs to closely link its internal and external diversityÂ and inclusion initiatives. A holistic approach ensuresÂ that a companyâs D&I credo is authentic and reflects allÂ stakeholders.
Yet HR and procurement often work in separate silos.Â Procurement leaders seem to have problems talking toÂ the human resources part of their organisation and viceÂ versa. This dilutes the impact of inclusion programmes onÂ both sides.
So, the number one thing I would like to encourageÂ HR professionals to do is to build bridges with theirÂ counterparts in procurement.