‘What other needs do you have?’ — Lessons from ConnXus, a supplier relationship expert

Supplier relationship management (SRM) has grown from just sourcing the best deal to really evaluating suppliers for diversity, ability to innovate, value generation and their risk.

In this series on SRM, we’ve discussed how the development of supplier diversity has improved supplier management overall, and we’ve explored how companies can meet their goals to have a robust supply chain that’s diverse.

Businesses now know to get their spend data in order and should know how to measure the impact of that spend. They should be able to develop suppliers and drive innovation. Responsible businesses can protect their brand reputation by assessing their main suppliers (tier 1) and those deeper in the supply chain, as well as having a plan to mitigate risks, like unethical sourcing, forced labor in the supply chain or poor performance in the past. But, it’s also clear that lacking in supplier diversity or being weak in supplier information management (SIM) are risks themselves.

To learn more about these issues, we talked with SRM expert Daryl Hammett, the general manager of ConnXus, a provider that connects buyers and qualified suppliers.

Spend Matters: How have the areas of diverse suppliers and supplier management evolved over the last five or 10 years?

Daryl Hammett: As society has evolved so has the definition of diversity and inclusion. The areas have evolved from small business enterprises (SBEs), to minority-owned (MBEs) and women-owned (WBEs) — to now include LGBT, veterans, mental and physical disability, and more.

Beyond the types of diverse businesses, changes can be seen in how companies go about ensuring that they have diverse suppliers. That process starts by looking at themselves. The companies are really evaluating how their business is set up. That evaluation includes cleaning up ERP data, working across departments to get information for spend analytics and building relationships with suppliers — diverse and non-diverse — to form networks and foster collaboration that can lead to innovation and building value for both businesses.

All of that has made supplier management better too.

Do you still see businesses trying to choose between how to manage diversity suppliers vs. supply management overall?

Yes, they are seeing it as either/or vs. both/and. But supplier management should include supplier diversity and supplier risk.

They are both critical to an organizations overall success in having a sustainable, strong, diverse and inclusive supply chain.

How can SRM plans align with modern corporate supply chain goals?

In an environment where the need for supply chain transparency, supplier risk, sustainability and regularity of supplier data and spend are critical to a supply chain’s success, one platform for getting, maintaining, validating supplier information via supplier relationship management can help support the organization’s overall strategy around managing a sustainable supply chain, innovation in the supply chain and create an environment where diversity can also thrive by inclusion in that supply chain. This can all be achieved by having a strong and robust supplier relationship management platform and an SRM strategy that is connected to the overall organization’s supply chain strategy.

Supplier networks are all the rage now. Why is that, and are there lessons to draw from successful diverse-supplier programs?

Yes, supply chains are trying to leverage networks in multiple areas to make sourcing more efficient and cost effective. As supplier risk and governance has grown as a priority, vetting suppliers is more critical — and if you can leverage existing due diligence through networks, it helps.

What technologies are helping to manage and foster relationships between businesses and suppliers — diverse and non-diverse?

Technology helps to manage and bring together suppliers that are diverse as well as non-diverse.

For example, supplier registration portals. These allow supplier to register and designate themselves as diverse and load their certificates or any documentation related to their diversity classification. From a non-diverse perspective, portals are allowing suppliers to register and maintain all their documentation, all their addresses, all their pertinent information for their businesses.

When you look at managing supplier risk, within certain platforms similar to ConnXus, you can register diverse and non-diverse and add any of your banking information, supplier risk information, or governance information in the same platform so that suppliers have all your information when they’re looking at purchasing your goods or services.

What’s most important to know about supplier management is that you don’t have to have two different platforms. No matter what your level of governance is in terms of managing suppliers, it can all be managed in one place.

Do you have a favorite story about a business and supplier driving innovation together and adding value for both?

A great story is how ConnXus didn’t win a deal with Procter & Gamble.

That sounds odd — but we did end up innovating together on a new product.

We met with Procter & Gamble and talked to them about ConnXus and our products, and they basically did not have a need because they were in a long-term contract with their present provider. At the meeting, we asked them what else they might be thinking about in the future.

We said: “What other needs do you have in supplier diversity and supplier management that we, as a minority-owned software company, can help you with.” They said that they were thinking of something like a virtual matchmaker tool that can help our tier 1 suppliers to be able to source for suppliers for their own needs, diverse and non-diverse. After that discussion came a brainstorming session. For about five months we went back and forth on what a virtual matchmaker looked like. Finally, we reached an agreement with Procter & Gamble and built a fantastic tool that today is called ConnXSmart.

They launched it in 2017 and since then have booked over 200 appointments through the platform so their tier 1 suppliers can have access to more minority suppliers to meet their needs. It was a great opportunity both for Procter & Gamble and for ConnXus, but we also impacted over 200 other suppliers who now have visibility to other opportunities for Procter & Gamble’s tier 1 primes.”