Supply Chain Diversity – local small & small diverse businesses

On March 10th, the PR Newswire featured the release of Small Diverse Business and Veteran Small Business Annual Report for Fiscal Year 2015-2016.

“As reflected in this report, one of DGS’ goals was to put a halt to the steady decline in the percentage of state contracting dollars spent with our small and small diverse businesses,” (Kerry L.) Kirkland said. “Thanks to the efforts and hard work of the department, in collaboration with the Governor’s Advisory Council on Diversity, Inclusion and Small Business Opportunities, we’ve met that goal.  Pennsylvania is now in a prime position to build upon the solid program and policy foundation that has been laid to create an increase in the percentage of contract spending with small and small diverse businesses.”

Just to clarify, “small and small diverse business”… According to the Commonwealth definition, a small business is one that has 100 or less FTE employees (compared to the Federal definition of 500 or less) and a small diverse business is a verified minority-owned, woman-owned, service disabled veteran-owned, veteran-owned. “Owned” is defined as 51% or more ownership with responsibilities for daily business operations.  My definition of “small business” is 20 or less FTE employees as 100 seems pretty large these days!

Why such an emphasis on small and small diverse businesses?  Actually, they make up the majority of our business profile in the greater Lehigh Valley.  A fairly consistent figure that has been used over the past 10 – 15 years is that there are 15,000 + businesses in the LV with employees of which approximately 72% have 9 or fewer employees (est.10, 800) and of that 72%, about 50% or 5400 have 5 or fewer. And, according to information related to the federal districts which encompass the Lehigh Valley, there are over 40,000 businesses registered; this difference of 25,000 could be a majority of businesses like mine, solo-entrepreneurs or sole proprietors.  Hence, small business is a major player in our community…and most likely, most communities.

In growing the opportunities for these small businesses, there is a reward to the community – business and social.  For the businesses that engage a small, small/diverse business in their supply chain, they are apt to experience some supply chain optimization through:
lower cost, quicker cycle times, high quality, greater flexibility, customization, innovation, enhanced operational effectiveness and customer satisfaction.  And, these small businesses will provide this while meeting all the other company sourcing criteria as well.
With the growth of revenue opportunities for these small businesses, there is the opportunity to grow the employee base as well, benefiting the overall community.

I recently attended the Institute for Supply Management’s (ISM) Supplier Diversity Conference, as I wanted to have a better understanding of the efforts, opportunities and measurements.  Based on the information shared, there is definitely a case for the larger businesses to integrate supplier diversity (for my definition, local small as well as small diverse) into the supply chain.

TIME – is the great challenge for both sides of this equation.  It takes time to create and incorporate a supplier diversity program and without a directive from the C suite, it may not occur.  And, for the small & small diverse businesses who are already very busy, to become certified and vetted, requires an ongoing time commitment to devote to a potential opportunity that may, over time, result in a revenue source.

What I also learned at this conference is that the Lehigh Valley is ahead of other communities by providing opportunities for large and small businesses to network and start relationships.  There are industry-specific (private and government) “reverse”* trade shows. However, I didn’t find there or in any research, the type of broad industry base reverse trade show that is offered like the bi-annual LV Meet the Buyers., which is coordinated by Lehigh Valley Economic Development Corporation’s Local Sourcing & Business Diversity Council. This effort is the result of the collaboration of 10 community business organizations – Allentown Economic Development Corporation, Community Action Council of the Lehigh Valley, Community Action Development Corporations – Allentown & Bethlehem,Lehigh University’s Small Business Development Center, Lehigh Valley Economic Development Corporation, Lehigh Valley Workforce Development Board,  Manufacturers Resource Center, Nazareth-Bath Regional Chamber of Commerce, Slate Belt Chamber of Commerce, links to partner sites are available on LVMeetheBuyers.com

If you are reading this blog and are a part of the greater Lehigh Valley business community, save the date of October 18th for the next LV Meet the Buyers Expo.  Information about this event is on the website referenced above.

If you are reading this blog and not in the greater Lehigh Valley area, but you are interested in this reverse trade show concept for your community, you are welcome to contact the Local Sourcing & Business Diversity Council of Lehigh Valley Economic Development Corporation.

If you are a business desiring to learn more about establishing a supplier diversity program OR a small diverse business interested in exploring certification, I would welcome the opportunity to sit with you and explore your options – “coffee and conversation with no strings!”

Have an excellent month!
Sally

 

*a reverse trade show is one in which the professional procurement representative is behind the table and small businesses approach them; a traditional trade show is just the opposite.

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