PSCM 044 - Kenya Methodist University

The research on minority supplier development conducted by the Supply Chain Resource
Cooperative found that leadership was one of the critical success factors differentiating
successful from unsuccessful diverse supplier programs.
Leadership support of diversity goals involves establishing specific strategic objectives and
performance goals that ensure that the initiative is taken seriously. Leaders lead by example,
and this applies to diversity goals as well. A number of best practices, identified through
interviews with executives, are listed below. In each case, the company ensured that senior
executives were motivated to include diverse suppliers in their sourcing decisions and that
efforts were used to promote the policy across business functions. Consider the following:
• An executive diversity council was instituted in one company to review and guide the
supplier diversity program. This council ensured that top management were involved and
participated in the program. One of the pharmaceutical health care companies cited an
example where the CFO took the lead as the program champion, with active sponsorship
of the CEO. This sent a message to the organization that the leadership team was serious
about diversity.
• The CEO and other higher-ranking officers should demonstrate personal commitment to
the supplier diversity program through participating in SDP events, meeting with the
diversity council members and with minority suppliers, and spreading success stories and
personal commitment through formal communication with the organization.
• Supplier diversity goals should be included in executive performance plans. In one of the
leading aerospace companies, implementing the plan has resulted in active executive
leadership at the top and has triggered initiatives such as outreach events, support of
advocacy groups, and travel around the country to find suppliers and make investments to
help promote diverse suppliers.
• Performance reviews of managers involved in buying activities in various departments in
the organization should include supplier diversity program goals. Developing the supplier
diversity program should not be thought of as a responsibility of the procurement
department or the supplier diversity advocates, but should be the responsibility of all
buyers in the organization.
In view of the fact that every industry is unique and has its own challenges and opportunities,
the best practices identified in the SCRC report may need to be synthesized as is appropriate on
a case-by-case basis. The research points to the fact that supplier development is the weakest
link in most companies’ supplier diversity programs. Supply managers need to dedicate more
time and resources toward helping minority suppliers grow and become more capable of
serving the needs of the customers. It is also essential to form a critical mass with competitors
and suppliers to support the supplier development efforts. The new mantra is quickly becoming
“Help your partners to serve you better.”
1. Why do you believe supply management leaders are not inherently motivated to pursue
minority suppliers unless such measures are taken? 5mks
2. What are some specific ways that the CEO and other senior executives can demonstrate
commitment to supplier diversity objectives? 5mks
3. What are the tangible benefits that differentiate the firms in Sourcing Snapshot: The Best
Companies for Minority Supplier Contracting from others? How do they benefit from being on
this list versus others that are not? 5mks
Why is it important to include a policy that outlines the origin and scope of 5mks
purchasing authority? What might happen if such a policy did not exist?
What are the benefits associated with a comprehensive policy and procedure
manual? Is there a downside to the manual’s being too comprehensive?
Discuss the four enablers of purchasing and supply chain excellence and show
how they are important in our organization.
What are the barriers to a JIT purchasing system?
Assume you are responsible for developing a benchmarking program. Describe
how you would go about establishing the benchmarking process. be sure to
discuss the critical issues you must address.
5 What is performance benchmarking? Why is it increasingly being used when 5mks
establishing purchasing performance goals and objectives?
6 What are the three types of performance benchmarking? Which type is most 5mks
commonly used by the purchasing function