Benchmarking for Supplier Diversity Success
Natalie Walker Founder and Managing Director Inside Policy Koorinya Moreton Project Assistant Inside Policy
More than business How corporate & government buyers can make it easier for Indigenous suppliers to do business with them. Presented at Connect 2016 by Natalie Walker & Koorinya Moreton, Inside Policy 2 May 2016
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 Inside Policy Clear thinking begins here. 3
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 Inside Policy Clear thinking begins here. 4
#1 Better understand the reasons why Indigenous procurement is important to your organisation. The reason my organisation commits to buying goods & services from Indigenous suppliers is: A B C D Corporate Social Responsibility Compliance Competitive advantage All of the above Inside Policy Clear thinking begins here. 7
#2 Implement a coherent system which supports the procurement of goods & services from Indigenous suppliers. Set asides Visibility Bust myths Feedback Functional buyers Value Indigenous content Skilled buyers Inside Policy Clear thinking begins here. 8
#3 Offer & manage contracts that enable the growth of smaller suppliers. Payment terms Continuity Feedback Intellectual property Excessive terms Inside Policy Clear thinking begins here. 9
Participate #4 Engage in opportunities to network & build relationships with suppliers. Open doors Engage Feedback Inside Policy Clear thinking begins here. 10
(mis)expectations & (mis)assumptions seem to underlie all of this Inside Policy Clear thinking begins here. 9
The great wall of expectation: Less likely to deliver Less reliable More expensive Indigenous content not valued Employ Indigenous people Don t know the rules / process Exclusion & tokenism A perception of the buyer s view of Indigenous business A supplier s perception of doing business Inside Policy Clear thinking begins here. 12
But can be addressed through relationships & understanding Inside Policy Clear thinking begins here. 9
This means: 1. letting go of assumptions / myths 2. building a relationship based on understanding of eachothers cultures & lived experiences 3. valuing Indigenous content. Inside Policy Clear thinking begins here. 10
Done well, a virtuous cycle is created where both buyers & suppliers benefit. Competitive advantage, set asides, feedback Feedback, relationships, favourable terms Feedback, relationships, favourable terms Inside Policy Clear thinking begins here. 15
Done poorly, the reverse is true. A vicious cycle is created where no-one achieves their goals. X X X Inside Policy Clear thinking begins here. 16
So what does this all mean when you get back to the office? Inside Policy Clear thinking begins here. 13
The 8 things you can do now to create a virtuous cycle where your organisation & Indigenous suppliers benefit: 1 Identify the competitive advantage 5 Give direct & useful feedback, always 2 Set aside future contracts for Indigenous suppliers 6 Remove burdensome contract terms 3 Openly promote all and set aside opportunities 7 Pay invoices in less than 30 days 4 Connect functional buyers to suppliers 8 Understand the business & the person Inside Policy Clear thinking begins here. 18
Get the full report: Follow us on twitter @InsidePolicyAU Email morethanbiz@insidepolicy.com.au Inside Policy Clear thinking begins here. 15
Stephanie Knox Head of Indigenous Finance and Development NAB
Benchmarking For Supplier Diversity Success Stephanie Knox Head of Indigenous Finance & Development NAB 2 May 2016 Founding 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. It s our ambition to become the bank of choice for Indigenous Australia 22
Sustainable Supply Chain Management at NAB NAB Group Supplier Sustainability 23 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 way Responsible Supply Chain Management
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 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 24
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. Doing good by doing business 25
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. Tradeshow Opportunity Briefing: NAB will be offering suppliers insights into corporate procurement 26
Indigenous Suppliers Doing Business with Indigenous Business 2015-2017 NAB Elevate RAP Commitment: Certified Indigenous Supplier Introductions 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 30 25 20 15 10 5 0 7 9 8 8 9 15 Supplier Conversion (Direct/Indire ct) Introductions 27
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? Takes time overcoming challenges About more than contract or spend How can we fast-track improvements? 28
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. ASDI - Providing Supplier Diversity Insights 29
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
Supply Nation ASDI www.supplynation.org.au PRESENTER: Robin Burton
Our Vision A prosperous, vibrant and sustainable Indigenous enterprise sector www.supplynation.org.au
Barriers A Supplier capability B Member capability Pitching Product refinement Quoting Marketing Understanding of procurement process Understanding of best practice Visibility over procurement process Leadership commitment Systems and processes Vision www.supplynation.org.au
www.supplynation.org.au
Practice Performance Reporting www.supplynation.org.au
Best practice www.supplynation.org.au
Partners and providers Principal Partner Research Partner Assurance Provider www.supplynation.org.au
Practice www.supplynation.org.au
Necessary elements of effective supplier diversity Vision & Mission Statement Policy Communication Strategy Program www.supplynation.org.au
12 measurement areas Second Tier Program Diversity Commitment Business Integration Communications & Training Supplier Development Procurement Integration Measurement & Reporting Program Implementation Strategy Indigenous Supplier Diversity Policy Corporate Social Responsibility Integration Continuous Improvement www.supplynation.org.au
Touching on broader supplier diversity Diversity Supplier diversity www.supplynation.org.au
Example: Vision Statement What is a vision statement? a. Typically describes the benefit to businesses and the company of supplier diversity b. 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 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 43 www.supplynation.org.au
Performance www.supplynation.org.au
SpendTrack 1 Annual reporting No longer quarterly End of financial year 2 3 Streamlined process Run supplier ABNs through payables system Upload in new member portal No longer gathering reporting data from suppliers Alignment with ASDI Historical spend data automatically fed into system Holistic measurement of success and sustainability www.supplynation.org.au
Reporting www.supplynation.org.au
3 outputs to help you grow 1 ASDI Snapshot Spider diagram Impact report 2 Action Plan Customised actions to improve your performance Work with your Supplier Diversity consultant to help improve your score 3 Industry Insights Report Annual major report Trends and findings from across the sector De-identified look at industries and their performance www.supplynation.org.au
Not another league table Practice Performance Impact www.supplynation.org.au
$8.4M Spent with Indigenous business to date 130 PAYMENTS MADE YOU SIGNED MORE CONTRACTS IN NSW THAN ANY OTHER STATE $6.2M in contracts signed with Indigenous business 12 CONTRACTS SIGNED LAST YEAR 13/14 14/15 15/16 PURCHASES YOU SPENT WITH 3 NEW CERTIFIED SUPPLIERS THIS FINANCIAL YEAR INDIGENOUS BUSINESS ACCOUNT FOR 0.5% OF YOUR SUPPLY CHAIN. ANOTHER 3% IS NEEDED TO REACH PARITY
Timeline A FY2015/2016 B FY2016/2017 C FY2017/2018 Pilot 40 randomly selected members Establishing baseline Available to all members Continued baseline Publication of first Industry Insights report Benchmarking framework established Publication of second Industry Insights report www.supplynation.org.au
Q&A www.supplynation.org.au
Thankyou