The COVID-19 pandemic and subsequent disruption of the global supply chain made one truth abundantly clear to supply chain managers and business leaders across the world: it is vitally important to create a robust, diverse supply chain that can adapt to changing environments and minimize risk for the corporation.
Previous posts have explained how a diverse supply chain can provide a competitive edge and help your company grow its customer base, protect against disruptions, and encourage a wider range of viewpoints and insights. But once your business has decided to invest in supplier diversity programming, how do you track progress and prove the value of your investment?
The importance of measurement in supplier diversity programs
Every supply chain diversity program should start with a clear explanation of your organization’s goals. Are there specific areas of the business you want to develop? Geographic areas you want to extend into? New customer segments you want to attract?
Once the company’s goals are solidified, the supply chain manager should create an action plan for how to achieve those goals. A comprehensive plan involves assessing all members of the existing supply chain and identifying areas that need further development or weaknesses that need to be addressed.
Many supply chain diversity programs take an abstract approach to making and executing this plan. But at Bellewether, we’ve found that real, tangible progress tracking and measurement is key to the success of these programs. Business leaders want to see a return on their investment; they want to see the benefits to their bottom line that a diverse supply chain can create.
Often, a corporation’s goals are quantitative: this many new bids, this many new customers, this shortened delivery time. Additionally, many organizations that work with the state or federal government, or on projects using public funds (e.g. at a public university), are required to set measurable, quantitative goals surrounding supplier diversity (for example, see the FDIC’s Standards for Assessing Diversity Policies and Practices). And the best way to track progress towards quantitative goals, and report on that progress to the appropriate governing bodies, is through measurement. Are you making continual progress towards achieving your goals, or have you plateaued?
Supporting new and existing suppliers through measurement
A quantitative assessment system for new suppliers is a crucial part of a good supply chain diversity program. The only way businesses can decide whether or not to bring a new supplier into the fold is by assessing their strengths, weaknesses, and internal processes–and how all those aspects align with the larger corporation. Not every supplier is right for every corporation, and supply chain managers need objective ways to identify the right suppliers to bring in.
For existing suppliers, companies should have a clear understanding of each supplier’s current state (their on time delivery, quality, consistency, cost effectiveness, etc.) so they can identify areas of growth that will improve the overall supply chain. Then, once they’ve assessed the current state, corporations must guide their suppliers to close gaps and strengthen weak areas–which means they need a way to identify and track incremental progress and growth across time.
To put it simply: measurement allows supply chain managers to work with a scalpel rather than scissors–to channel their investment into the areas that need it most, and make very precise decisions about how to develop suppliers. Measurement also allows companies to demonstrate their supply chain diversity ROI, minimize risk, and show results quicker.
How FLITER® can help companies measure their progress
At Bellewether, we’ve developed a technology-based proprietary solution that can help supply chain managers assess suppliers and measure growth. Designed to help suppliers evolve, FLITER® can provide critical insight into each supplier’s ability to scale and achieve sustainable growth, as well as step-by-step action plans they can follow to achieve quantifiable results.
FLITER® applies a systematic approach to business growth through structure. The system includes a robust assessment tool that helps corporations measure their suppliers across 12 business functions, such as management and finance. Suppliers are scored numerically across each function and placed in a “level.” Then, the FLITER® system provides step-by-step guidance for how to move up to the next level.
The FLITER® solution is research-based, aligned with national competency models, and is a proven resource to guide suppliers towards sustainable growth and track the gains they make. And it all centers around measurement: by pinpointing individual baselines for each supplier, corporations can derive a pathway to quantifiable improvement, allowing them to stabilize their operations to support economic growth and minimize risk.
The bottom line
At the end of the day, business leaders want tangible results. They want to see how each supplier has changed and improved due to their supply chain diversity program. A measurement solution like FLITER® can help companies quantify progress, align their supplier’s goals and strengths with their own business needs, and create a robust supply chain with strong internal processes that can weather global disruption and environmental obstacles.
If you’re ready to take your supply chain to the next level, learn more about Bellewether’s supply chain diversity consulting services.