supplier diversityAs I’ve discussed before, MBEs trying to become preferred suppliers for large corporations need to be aware of the many qualifications that these companies consider when choosing who to do business with. To a certain degree, being able to provide the product or services that they are looking for is the easy part, certainly it’s only the first step. Companies have other criteria that they consider important like financial stability, ethical behavior, environmental impact, fair hiring practices, and a host of other things that could negatively impact them if their suppliers were not up to their standards.

More and more companies are setting standards that they expect their third party vendors to comply with if they want to do business with them. Whether they call it “supplier responsibility,” “supplier sustainability,” “supply chain sustainability,” a “supplier code of conduct,” or any other moniker, if you want to be considered as a partner, you should make sure that your company meets all these requirements. If not, it may make no difference how great your product is, you won’t be chosen.

Whether you are a business owner, a program manager, or a procurement professional, if your company doesn’t have formal policies in this area, you may want to consider developing guidelines. Any company that works hard to do the right thing wants those they work with to be held to the same standards. It can be a real business risk if those you do business with run afoul of proper practices. In addition to reputational risk, you can be held co-liable and there is the potential for real monetary and legal penalties in some cases.

Companies make it clear what’s important to them and generally provide the guidelines and regulations to potential partners on their website and/or as part of the procurement process. Increasingly, companies audit their suppliers’ compliance and report the results publicly.

As an MBE preparing to do business with a company, you should research their policies. If you’re looking for information as part of developing your own policies, the same advice applies – do your research. Motorola, Mastercard, Kraft Foods, and CISCO, are all good examples. They also demonstrate how it is a concern across many industries. Obviously companies with significant manufacturing footprints have some very specific and complex areas of concern, especially environmental impact and labor and human rights concerns, but there is also a recognition that all companies have an impact on their community and environment. It’s not just large companies either; it makes sense for any size company to care about its reputation and to be aware of how their external partners are an extension of themselves.

Each company will have its own nuances but common areas of concern include:

Labor and Human Rights – this category covers such issues as forced/slave and child labor, wages and benefits, working hours and conditions, discrimination, compliance with all labor laws and regulations, and the freedom to associate politically and to unionize.

Health and Safety – this relates to things like occupational safety, injury and illness, education and safety training (especially relating to machinery and equipment), sanitation and even emergency preparedness in case of natural disaster.

Environmental Impact – Concerns in this area include everything from pollution prevention and reduction, proper permitting and reporting, treatment of hazardous substances, to the responsible sourcing of minerals and metals.

Ethical Conduct – This is a broad category that touches on the way a company behaves in general but specifically includes business integrity, financial dealings, not engaging in bribery or other illegal practices, respecting intellectual property, and acting properly in terms of advertising and competition.

As an MBE, are you ready to do business on this level? It is more than likely that you are an honest business person and your company complies with all applicable laws and regulations and acts in an ethical manner; make sure this is true and that you can prove it. This is just one more way that you can ensure that you and your company are fully prepared to serve the clients you are targeting.

Likewise, understanding the risks involved when working with external partners and suppliers, and taking measures to reduce or prevent problems in the first place, is just good business sense. Choosing to work with suppliers that share your values and commitment to legal, ethical business dealings will raise the quality of the services you receive overall.

Finding out what’s important in terms of supplier behavior and conduct and ensuring that your company meets these criteria OR letting companies know what you expect from them and hiring those that share your commitment and compliance can be the difference between failure and success!

Angelique Solorio
Corporate Outreach Manager
ATR International

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