MSDUK Conference – CPO Panel Session Gives Good Advice on Inclusive Procurement (Part 1)

In our opinion, the most useful session of the day at last week’s MSDUK conference was the CPO panel discussion. It gave genuinely valuable takeaways that practitioners could take straight back to the office and use. It took the form of panellists and interactive discussions, all steered by the very impressive Kamal Ahmed, BBC Economics Editor – how well and evenly he fielded the questions was admirable.

The panels comprised Tim Millwood, VP Purchasing, Cummins; Al Williams, CPO, Accenture; Larry Phelan, CPO, EY; Malcolm Harrison, CEO Crown Commercial Service; Maria Lepore, Head of Enterprise Technology and Functions Sourcing, Barclays.

To start, each was asked their view of what inclusive procurement means to them, their business and supply chains. Tim defines it as something that must be part of your organisation’s DNA. He believes a more diverse workforce can create better solutions. He advised that it’s a mistake to view it as a project, it should just be ‘part of what you do.’ His firm, he explained, did not add a diversity initiative to its planning, it’s just something they try to advance every year. A $1 billion spend target seems a crazy goal, he said, but they don’t question it, it’s part of their core values and is plainly just ‘the right thing to do.’

Malcolm was asked how the Government target on SMEs fits with the diversity cause. He reiterated Tim’s message that they believe it is indeed the right thing to do, secondly, it encourages UK growth because small businesses are its lifeblood. Small suppliers bring innovation, and diverse suppliers bring even more. In the public sector, he said, it is imperative we are transparent and give value for money, so supporting a wider community of suppliers is essential. He was challenged whether that ‘pressure’ actually fights against the ideal.

He explained that it does depend on the category, some categories are about people (like FM) not large capital investments, so you would out of preference use local, diverse suppliers. The Government does work with big businesses, but they often contract with small businesses in return. Malcolm advises that small, diverse businesses that want to work with Government should continue to use the MSDUK, as their knowledge helps the Government to drive simplicity. And, he advises, show your wares! If you can demonstrate where you’ve created value, you are in a stronger position.

Al was asked how the inclusive supply chain has changed in his business over the years. He explained how once, for them, widening your footprint was seen largely as a US thing. Looking at China, or Toronto for example would not have been considered or discussed, but now it’s a necessity to drive growth. And, his experience tells him that the US is actually ahead of many other countries in terms of supplier diversity uptake. He has seen significant growth in diversity spend targets in US Government and large uptake in the local businesses. But, he believes, some countries that might have come to embrace inclusive procurement later, could actually surpass them, and he cites the UK as one of those countries.

Larry was asked how supplier diversity affects his organisation. He explained that he had been at an event in India hosted by 30+ female-owned businesses. (Women entrepreneurs make a significant contribution to the Indian economy, and account for the employment of millions of people, contributing significantly to industrial output.) When you see the reality of it, he says, it keeps you energised -- supplier diversity can be embraced anywhere. But globalisation doesn’t mean one size fits all. Different suppliers have different values, to some, for example, local regulations are what matter most. So you use what fits, whether local or global suppliers – but you do need to require them to have supplier diversity within their purchasing codes of conduct too. But it is worth remembering that when it comes to innovation, often the larger the supplier, the more they lose the ability to bring it to the table.

Maria explained how citizenship plays a big role for them in terms of shared growth. After all, the people you treat well, may someday become your customer. And in her experience, it is actually easier to do business with SMEs. She joked that, as a very large organisation, when they award a contract, they say the good news is 'you’ve won the contract,' and the bad news is, 'you’ve won the contract'! What she observes with more diverse suppliers is their willingness and ability to do things in different ways when you ask them to. She deems it important in her role to encourage supplier diversity, to challenge the status quo and not allow the business to get too comfortable with what they know, there are a lot of other opportunities out there, she says.

So, some thoughtful and inspiring comments from the procurement leaders. And in Part 2 we’ll see how they responded to questions from the floor.

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