Supplier Diversity Success Story: How an MBE Partnership Won a $100M+ Contract

Editor’s note: This is part of a new Spend Matters series of personal tales from the procurement trenches. Know someone with a great procurement story? Tell us in the comments below.

As a procurement professional, I’m primarily tasked with identifying the best ways to utilize our spend and influence to as to create the maximum advantage for my organization. Obviously, this is extremely valuable for the company but can sometimes leave me feeling a bit uninspired. As a purchases manager at a global consumer products company, I was known to say to my closest colleagues, “It’s just soap and toilet paper. We are not changing the world.”

However, several years ago I was presented with a rare chance to make a difference in a way that was highly meaningful for me. I may not have realized it at the time, but I was fortunate to work in an organization that called out supplier diversity as a critical factor in its business strategy. A category plan couldn’t be written that didn’t include a supplier diversity component, and an RFP or business award couldn’t be made without addressing how we will reach our diversity targets.

Additionally, my category of contingent labor was flush with opportunities to source and partner with strong diverse suppliers who had a command on the industry as well as company operations. Some years, almost 50% of our category spend was with Minority and Women-Owned Business Enterprises (MWBE).

Our team was preparing to embark on a significant shift in how the category would be managed on a global basis. We were planning to implement a Managed Service Provider (MSP) model across all regions – essentially outsourcing the selection, management and payment of all contingent labor to a single provider.

This strategy would move all of our current suppliers under the MSP as second-tier, causing us to rely exclusively on the expertise and experience of the MSP to understand how our business is run and manage the supply base. This was a big risk. Our responsibility was to mitigate that risk via our strategy for the RFP.

In supplier diversity forums, they speak often about the opportunity for MWBEs to cultivate joint ventures that will allow them to build capability and generate more business. As we finalized our bidder list inclusive of the major players in the industry, that principle came to mind.

It occurred to me there may be a chance for two of our existing MBEs to explore that approach. One was a long-term and celebrated supplier to our organization, and the other was a supplier via acquisition that operated an MSP model for the acquired company. Together, they had been suppliers to us for over 30 years with established and high-level relationships.

Under the counsel of our supplier diversity organization, I approached both of the existing suppliers about the opportunity this represented for them. There was no doubt our engagement model was changing- did they want to be leading that change or just wait to find out what the impact will be for them? In a relatively short period of time they would need to evaluate the business, come to terms on how they would work together, develop a business model and prepare a compelling value proposition that would exceed what was presented by other bidders.

I figured it was a long shot, but I was confident that, given the chance, these two organizations could out-think, out-innovate and out-strategize many of their competitors. Their size allowed them to be agile, and they had an existing and deep understanding of how the business operates. If they could get it together in time, this might actually work.

I am happy to report that they did manage to get it together to participate in the RFP. We determined that a single global MSP was not a viable solution and decided to make the awards on a regional basis. It was a hard-fought battle, extremely competitive and not without some very intense debates about what factors contribute to a best value determination.

In the end, the newly-formed MBE partnership was selected to run the MSP program in North America. Their innovative response, along with their established records as high performers for our organization, were significant factors in the decision. By maximizing our influence and spirit of collaboration, we were able to create an advantage for our company that changed the game for our organization, the suppliers and the supplier diversity community at large.

Standing in the position of a leader in awarding a $100+ million contract to an MBE, one of the largest in company’s history, remains one of the most meaningful accomplishments of my career. In the end, it turned out to be a little more than soap and toilet paper.

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First Voice

  1. Rod Robinson:

    Great post!

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