Tuesday, 21 January 2014

Natural Selection Versus Positive Discrimination – the SME/Diversity debate (Part 1)

Authored by Steven Low

As a buyer, it is becoming increasingly difficult to balance the needs of the organization to save money, getting the best value deals for your organization while ensuring you spend money in the local economy or with suppliers who are in the ‘diverse’ sector (typically disabled, LGBT, Women-owned businesses etc). One of the big negotiating tactics of larger businesses is their size and therefore leverage when it comes to getting a good deal. Large organizations can extract deep discounts out of their supply base for guaranteeing high volumes or high usage. This is not something you can fully utilise with a small local company or a diverse supplier.

That’s not to say that all diverse/small/local companies are expensive to buy from. Many don’t have the large overheads of their competitors and so therefore can be very agile and flexible. However, a substantial number will never be able to complete in the same level playing field as some of their larger competitors.

So what do you do as a buyer? Certainly your organization may have set a stake in the ground regards how they get the right ‘mix’ of suppliers...

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