Supplier Discrimination: Are You Guilty?

Are Your Business Practices Undermining Supplier Diversity?

PurchTips Edition #363 – Click here for the printer-friendly version

Picture of Charles Dominick, SPSM, SPSM2, SPSM3, author of this procurement article on supplier diversity programs.By Charles Dominick, SPSM, SPSM2, SPSM3

Don’t miss updates on Procurement & Supply Chain, Subscribe here!

It’s not uncommon for organizations to have supplier diversity programs. Supplier diversity programs are supposed to encourage buying from a wide variety of suppliers, including small suppliers and businesses owned by people from demographic groups that have been historically discriminated against.

Yet, despite the proliferation of supplier diversity programs, many of the same organizations that have them have business practices that unintentionally, but effectively, discriminate against small suppliers. If your organization has business practices with the following characteristics, your organization is guilty of making it more – and not less – difficult for small suppliers to do business with you:

  • Your organization mandates the use of payment terms that are net 60 or longer. Even net 45 terms can strain a small supplier’s cash flow.
  • Your organization has standard insurance requirements for all transactions – including the most basic – that are beyond the insurance levels typically maintained by small businesses.
  • Your organization uses complex and extensive terms and conditions for all transactions – including the most basic – that can compel small suppliers to seek expensive legal review before they can accept your orders.
  • In your supplier qualification process, your organization requires “audited” financial statements without knowing the immense cost of financial statement auditing or the lower-cost, but often equally acceptable, alternatives of “reviewed” or “compiled” financial statements.
  • Your organization has no policy or goals for awarding bidding opportunities or orders to small or diverse suppliers.

A supplier diversity program is great to have. But if your organization doesn’t supplement the program with small business-friendly business practices, your supplier diversity program may be undermined and your organization may be guilty of de facto discrimination against small suppliers.

Want A More Rewarding Procurement Career?

There is still time left in 2016 to start acquiring the most modern skills, achieving better results, and proving your value to today’s employers! But you have to get started and earn your SPSM® Certification.

You’ll learn modern procurement skills like how to negotiate better, conduct strategic sourcing & much, much more! You’ll get step-by-step instruction on exactly how to deliver exceptional procurement results.

Download the SPSM® Certification Infopack today to learn how to get started.

Download

Need Better Performance From Your Procurement Team?

epm-pic

Are you a procurement leader whose team isn’t achieving the results you know are possible? Maybe it’s not enough cost savings. Or frustrating performance from the supply base. Or dissatisfied internal customers.

You need a performance improvement plan that’s easy to implement and quick to produce results. The NLPA can help.

Download our whitepaper “The Procurement Leader’s Guide To A More Successful Team.” You’ll learn the 7 steps for transforming your staff into a results-producing, world-class procurement team.

Download


final

Want to get more procurement articles by email for free?

Members of the NLPA get great articles just like this by email every two weeks. As a member, you will also get access to:

And the best part is that membership in the NLPA is Free! Sign up today and you'll receive a username and password that will allow you to access all of the benefits that come with the NLPA membership.


Copyright 2016. This article is the property of the Next Level Purchasing Association and may not be copied or republished in any form without the express written consent of the Next Level Purchasing Association. Click here to request republishing permission.

This is the Web-based version of this article. Click here for the printer-friendly version.