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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…
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
Inside Policy | Clear thinking begins here. 7
#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:
Inside Policy | Clear thinking begins here. 8
#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
Inside Policy | Clear thinking begins here. 9
#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. 10
#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…
Inside Policy | Clear thinking begins here. 9
Inside Policy | Clear thinking begins here. 12
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…
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
Inside Policy | Clear thinking begins here. 15
Done well, a virtuous cycle is created where both buyers & suppliers benefit.
Competitive advantage, set asides, feedback
Feedback, relationships,
favourableterms
Feedback, relationships,
favourableterms
Inside Policy | Clear thinking begins here. 16
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?
Inside Policy | Clear thinking begins here. 13
Inside Policy | Clear thinking begins here. 18
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]
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 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
www.supplynation.org.au
Our Vision
A prosperous, vibrant and sustainable Indigenous enterprise sector
www.supplynation.org.au
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
www.supplynation.org.au
www.supplynation.org.au
Performance
Practice
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
Strategy
Policy
Program
Communication
www.supplynation.org.au
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
www.supplynation.org.au
Touching on broader supplier diversity
Supplier diversity
Diversity
www.supplynation.org.au
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”
www.supplynation.org.au
Performance
www.supplynation.org.au
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
www.supplynation.org.au
Reporting
www.supplynation.org.au
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
www.supplynation.org.au
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
www.supplynation.org.au
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
www.supplynation.org.au
Q&A
Thankyou