benchmarking for supplier diversity · pdf file–managing expectations of indigenous...

Benchmarking for Supplier Diversity Success

Natalie Walker

Founder and Managing Director

Inside Policy

Koorinya Moreton

Project Assistant

Inside Policy

Presented at Connect 2016 by Natalie

Walker & Koorinya Moreton, Inside Policy

2 May 2016

How corporate & government buyers can make it easier for Indigenous suppliers to do business with them.

More than business…

What is “More than business”?Findings of national research into the experiences of Indigenous suppliers who are doing - or are seeking to do -business with corporate & government buyers…

Inside Policy | Clear thinking begins here. 2

… The purpose of which is to help buyers better target their Indigenous procurement efforts to ultimately grow their spend with Indigenous business…


…So, we asked 17 Indigenous suppliers from 8 different industries around the country, “What can buyers do to make it easier to do business with them?”

This is what they said…



#1 Better understand the reasons “why” Indigenous procurement is important to your organisation.

Competitive advantage

Compliance

Corporate Social Responsibility

All of the aboveD

C

B

A

The reason my organisation commits

to buying goods & services from

Indigenous suppliers is:


#2 Implement a coherent system which supports the procurement of goods & services from Indigenous suppliers.

Set asides

Functional buyers

Feedback

Value Indigenous content

Skilled buyers

Bust myths

Visibility


#3 Offer & manage contracts that enable the growth of smaller suppliers.

Payment terms

Continuity

Feedback

Intellectual property

Excessive terms


#4 Engage in opportunities to network & build relationships with suppliers.

Participate

Open doors

Feedback

Engage

…(mis)expectations & (mis)assumptions seem to underlie all of this…



The great wall of expectation:

Employ

Indigenous

people

Less reliable More expensive

Less likely to

deliver

A perception of the buyer’s view of

Indigenous business

A supplier’s perception of doing

business

Exclusion & tokenism

Don’t know the

rules / process

Indigenous

content not valued

…But can be addressed through relationships & understanding…


This means:1. letting go of assumptions / myths

2. building a relationship based on understanding of eachothers’ cultures & lived experiences

3. valuing Indigenous content.



Done well, a virtuous cycle is created where both buyers & suppliers benefit.

Competitive advantage, set asides, feedback

Feedback, relationships,

favourableterms

Feedback, relationships,

favourableterms


Done poorly, the reverse is true. A vicious cycle is created where no-one achieves their goals.

X

X

X

…So what does this all mean when you get back to the office?



The 8 things you can do now to create a virtuous cycle where your organisation & Indigenous suppliers benefit:

Understand the business & the person

8

Give direct & useful feedback, always

Remove burdensome contract terms

Pay invoices in less than 30 days

7

6

5

Connect functional buyers to suppliers

4

Identify the competitive advantage

Set aside future contracts for Indigenous suppliers

Openly promote all and set aside opportunities

3

2

1

Get the full report:• Follow us on twitter

@InsidePolicyAU

• Email [email protected]


Stephanie Knox

Head of Indigenous

Finance and Development

NAB

Benchmarking For Supplier Diversity Success

Stephanie Knox

Head of Indigenous Finance & Development NAB

2 May 2016Founding

Member

Since 2010

NAB Indigenous Business Partnerships

NAB 2015-2017 Elevate Reconciliation Action Plan – our seventh RAP and third at Elevate level

Supports Aboriginal and Torres Strait Islander Business aspirations and leverages NAB’s skills,

networks and resources.

We are passionate about Indigenous businesses and growth of the sector – it’s good for our

customers, suppliers, shareholders and the community.

22

It’s our ambition

to become the bank of

choice for Indigenous

Australia

Sustainable Supply Chain Management at NAB

NAB Group Supplier Sustainability

– Supplier Sustainability program since 2009 – more than 450 suppliers are now signatories

to our principles

– Supplier Sustainability Principles in contracts – minimum requirements for strong

corporate governance, workforce policies and human rights, work health and safety,

environmental management, risk management, supply chain management, community and

supplier diversity

– NAB’s Supplier Diversity program creates inclusion for certified Indigenous Businesses,

Australian Disability Enterprises, Women-owned businesses, and Social Enterprises.

NAB Supplier Diversity Principles

– Authenticity and integrity – Supporting organisations that are genuine and responsible in

their commitment to the community and provision of social benefits

– Alignment with Corporate Social Responsibility – supporting organisations that are aligned

to NAB’s broader corporate responsibility priorities

– Quality Goods and Services – creating social benefits without compromising product

quality

– Sustainable Development – Ensuring those businesses and social enterprises we support

develop in a sustainable and responsible way23

Responsible

Supply Chain

Management

24

2009

Supplier

Sustainabilit

y Program

introduced.

First NAB

RAP

implemented

.

2010

Founding

Member of

Supply

Nation

2011

Supplier

Diversity

Principles

defined and

Pilot direct

purchasing

trial

2012

Focus on Tier 2

Procurement

via contracts

under renewal.

Supplier

Diversity

Working group

established.

2013

NAB attended

US NMSDC

Conference.

Provided

training for 40

Supply Nation

employees on

corporate

procurement.

2014

Focus on

Introductions

to Tier 1s.

2015

Introductions

and spend

targets set in

Elevate RAP

NAB Supplier Diversity Journey

NAB’s Supplier Sustainability Program and Reconciliation Action Plan set the broader context and

created impetus for our Supplier Diversity journey commencing in 2010.

NAB’s Supplier Diversity is now supported by:

– Policy Framework, which clearly states principles and objectives

– Executive level support from our CEO, ELT and General Manager Procurement

– Supplier Diversity strategy, program and working group

– Education and training for Supply Nation, NAB Procurement and Certified Suppliers

– Monitoring and tracking as we do business with Indigenous businesses

NAB Supplier Diversity – Leadership & Advocacy

Shared Value Approach – creating commercial

returns while advancing social and economic

outcomes for shareholders and the community.

Applied to Supplier Diversity it is not only about

creating access to corporate procurement.

Shared value is:

– Supporting employment and training

opportunities,

– Building sustainable business growth, and

– Creating social and financial inclusion.

25

Doing good by

doing business

Support for Supply Nation certified Indigenous businesses

NAB is working to support supplier development and building the capacity of Indigenous businesses.

We have met with a number of Indigenous businesses and Supply Nation to understand what did they

wanted to learn more about. This resulted in the delivery of a:

– Corporate Procurement Awareness program in 2014, and

– Risk and Good Risk Management series of workshops held in 2015.

47 Supply Nation Suppliers attended with 96% finding the sessions to be useful.

Connect 2016 Tradeshow Tomorrow – Andrew Jones, NAB’s Head of IT Procurement will be speaking at an

Opportunity Briefing in the NAB sponsored Networking Lounges from 2.00pm.

26

Tradeshow

Opportunity Briefing:

NAB will be offering

suppliers insights into

corporate procurement

Doing Business with Indigenous Business

2015-2017 NAB Elevate RAP Commitment:

– KPI: Introductions to Tier 1 Suppliers, and

– KPI: spend of $1.2 million over three years.

Results to end 2015:

– 31 Introductions made since 2013

– More than $221,500 spend in FY15

Tracking and Monitoring Progress since 2013

Indigenous Business Suppliers to NAB

27

Certified Indigenous Supplier Introductions

8 815

7 9

9

0

5

10

15

20

25

30

Ind

ige

no

us S

up

plie

rs

SupplierConversion(Direct/Indirect)

Introductions

Key Challenges and Opportunities

The Key Challenges during our six year journey have been:

– Engaging internally right across NAB – procurement, corporate responsibility, buyers – all business

units.

– Managing expectations of Indigenous businesses – takes time to build relationships with suppliers.

Some businesses NAB doesn’t buy the goods and services they offer.

– Buying Indirect vs Direct – Focus on working with our supply chain and Tier 1 and Tier 2 introductions

to Indigenous businesses.

– Difficulties in reporting and capturing indirect spend throughout the supply chain remain challenging.

It’s about much more than just the contract or spend.

Looking Back at our Journey, we’ve now asked…..what can we do to fast-track our progress and share

this with others?

28

Takes time

overcoming

challenges

About more than

contract or spend

How can we

fast-track

improvements?

Supporting Greater Member Collective Impact

NAB is the Principal Partner of the inaugural Australian Supplier Diversity Index

(ASDI) to measure impact of Supplier Diversity practice and performance in

Australia.

What is ASDI?

– Assessment tool to provide Members with feedback and a “big picture” view of

their Supplier Diversity program and practice

– Members gain an understanding of where to focus efforts to build more

comprehensive Supplier Diversity programs – from policy and strategy to

second tier programs

– Enables Members to identify key insights for continuous improvement

Provides Members with their own confidential Report, which includes guidance and

recommendations to improve performance.

Creates Industry Benchmarking - the first ever ASDI Insights Report on program

maturity across Corporate Members and Industry Sectors in Australia will be

released later in 2016.

Greater accountability and transparency – EY Assurance Partner of the ASDI,

bringing a greater level of comfort to Members and Supply Nation with limited

assurance enhancing the integrity of the information reported.

29

ASDI - Providing

Supplier Diversity

Insights

Creating Long Term Sustainable Change

NAB remains committed to:

Our focus on what we can do to bring our supply chain along with us – creating Shared Value.

Listening to Indigenous businesses and our Indigenous customers to better support their needs.

Further developing our Supply Chain to build their Indigenous engagement and Supplier Diversity practice.

Supporting Supply Nation to further lift industry practice as a whole and create greater collective impact

with the Australian Supplier Diversity Index.

30

Robin Burton

Program Innovation Manager

Supply Nation

www.supplynation.org.au

PRESENTER: Robin BurtonASDI

Supply Nation


Our Vision

A prosperous, vibrant and sustainable Indigenous enterprise sector


A B

Barriers

Supplier capability Member capability

• Understanding of best practice

• Visibility over procurement process

• Leadership commitment

• Systems and processes

• Vision

• Pitching

• Product refinement

• Quoting

• Marketing

• Understanding of procurement process

B


Performance

Practice

Reporting


Best practice


Partners and providers

Principal Partner

Research Partner

Assurance Provider


Practice


Necessary elements of effective supplier diversity

Vision & Mission Statement

Strategy

Policy

Program

Communication


12 measurement areas

Diversity Commitment

Strategy

Program Implementation

Indigenous Supplier Diversity

Policy

Corporate Social Responsibility

Integration

Supplier Development

Second Tier Program

Procurement Integration

Communications & Training

Business Integration

Continuous Improvement

Measurement & Reporting


Touching on broader supplier diversity

Supplier diversity

Diversity


43

What is a vision statement?

a. Typically describes the benefit to businesses and the company of supplier diversityb. States where the company wants to be in the future – outlines the desired long-term change c. Aspirational and goal orientated - does not outline the plan to achieve goals

Example: Vision Statement

Example 1: GM “A global culture of diversity and inclusion which will provide a strategic advantage for designing,

building and selling the world’s best vehicles”

Example 2: CISCO “Gain competitive advantage through inclusion of diverse suppliers and partners”

Example 3: Ford “To create a virtuous circle that fosters inclusion of diverse suppliers across the Ford supply chain

and prompts consideration of Ford products among those benefitting from Ford’s business”


Performance


1

2

3

SpendTrackAnnual reporting

Streamlined process

Alignment with ASDI

• No longer quarterly

• End of financial year

• Run supplier ABNs through payables system

• Upload in new member portal

• No longer gathering reporting data from suppliers

• Historical spend data automatically fed into system

• Holistic measurement of success and sustainability


Reporting


1

2

3

3 outputs to help you growASDI Snapshot

Action Plan

Industry Insights Report

• Spider diagram

• Impact report

• Customised actions to improve your performance

• Work with your Supplier Diversity consultant to help improve your score

• Annual major report

• Trends and findings from across the sector

• De-identified look at industries and their performance


Not another league table

• Practice

• Performance

• Impact

$8.4M Spent with Indigenous business to

date

130 PAYMENTS MADE

$6.2M in contracts

signed with

Indigenous business

12 CONTRACTS SIGNED LAST YEAR

13/14 14/15 15/16

PURCHASES

YOU SIGNED MORE CONTRACTS IN NSW

THAN ANY OTHER STATE

INDIGENOUS BUSINESS ACCOUNT FOR 0.5% OF YOUR SUPPLY CHAIN. ANOTHER 3% IS NEEDED TO REACH PARITY

3 NEW CERTIFIED SUPPLIERS

YOU SPENT WITH

THIS FINANCIAL YEAR


A B C

Timeline

FY2015/2016

• Pilot• 40 randomly

selected members

• Establishing baseline

FY2016/2017

• Available to all members

• Continued baseline

• Publication of first Industry Insights report

FY2017/2018

• Benchmarkingframework established

• Publication of second Industry Insights report


Q&A

Thankyou

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