We rely on technology to ease our way in so many areas of our lives, from the automatic coffee maker ensuring we have that first blessed cup in the morning to smartphones that keep us connected to people and information throughout the day. It's time to embrace how technology can enhance our supplier development programs so that we spend less time grinding the coffee by hand and more time connecting with our suppliers.Here's a secret you probably discovered through trial and error: Not all suppliers are a good fit for development. Building strong relationships with every supplier is important for the strength of your supply chain, but selecting your best supplier for development may not always be the automatic choice. Some are already beyond the scope of your supplier development program. Some are growing in other areas and cannot devote resources to growth for your organization just yet. So how do you find those suppliers who would benefit from your supplier development program?
You could spend hours combing through reports, checking parameters, and assessing eligibility. Or you could engage technology to do the work for you, saving time and money.
Data enrichment connects you to a robust, constantly updated database of suppliers. A quick search identifies which of your current suppliers are diverse and/or small, allowing you to filter candidates that align to your specifications by purchasing category, spend, and strategic relationships.
If you wish to expand your program to potential suppliers, a supplier locator tool is the perfect avenue to search the marketplace for diverse and small businesses to engage. Powered by an up-to-date database, the tool allows you to search by industry, location, revenue size, diversity category, and many other attributes to find the right potential suppliers.
Once you have identified current and potential suppliers for your supplier development program, streamline the onboarding process with technology. A supplier registration portal, customized for your organization, can be used to prequalify potential suppliers; gather accurate data about suppliers; and communicate effectively about upcoming bid opportunities, supplier development events, and more.
Measuring the ROI of Supplier Development
The ROI of supplier development encompasses more than just a dollar amount on a spreadsheet. A healthy supply chain affects your company's competitiveness and innovation in the marketplace, improves customer satisfaction, and has a positive economic impact in communities where your suppliers are located. The right technology tools help you provide qualitative evidence of program value in addition to quantitative results for your stakeholders.
Economic impact is an increasingly important metric as we become more aware of how far our supply chain decisions reach. When we talk about economic impact in the context of our supply chain, specifically with small and diverse businesses, we are talking about three things: the revenue generated, the income generated, and the jobs generated within the communities where the suppliers are located. These numbers are measured through direct, indirect, and induced revenue, income, and jobs, which add up to hundreds of billions of dollars in economic impact across the country. In a report from the National Minority Supplier Development Council, its membership alone (approximately 12,000 MBEs) generated more than $400 billion in revenue, 2.2 million jobs, and $49 billion in state and local tax revenue.
Helping diverse businesses build capacity to not only serve your organization more effectively but increase their overall sustainability within the marketplace is good for business. Determining economic impact requires a different set of metrics from what we are used to developing to determine the success of our supplier development programs. Here again, technology can save you time and money: Economic impact modeling helps you track how your procurement spend is impacting underserved communities. It can help you identify suppliers ripe for development or areas where additional spend could have the greatest impact.
Technology is a gift. Let's use it to elevate supplier development so that it benefits us, our supply chain, and the communities we live in.