7 benefits to engaging small, local, and diverse suppliers in procurement opportunities
When people think about supporting local, they often imagine grabbing a coffee at their local artisanal coffee shop, ordering from a craft brewery or shopping at a boutique nearby. Supporting local doesn’t only benefit those at the retail level, it can positively impact a community at the business-to-business (B2B) level too.
Many organizations can look in their backyard to source out construction, roof repairs, architecture, snow removal and even tech companies to support their procurement projects. With the variety of services available, organizations can get their projects completed more efficiently while also supporting the community’s local economy. It all starts with integrating local and diverse purchasing guidelines into your procurement plans.
Where to start
The key to engaging local and diverse suppliers is building purchasing guidelines into your policies and public procurement programs. Guidelines lay out qualifications for suppliers by either evaluating in absolute terms or percentages to determine if the supplier meets the objectives of your organization. These guidelines can include geographic location, workforce diversity, manufacturing within the state or province, providing fair wages or following environmentally sustainable practices, based on your organization’s goals.
Looking for extra guidance? Our skilled bids&tenders team has you covered with an eProcurement platform that makes it easy to build purchasing guidelines into your evaluation processes. Contact us for a demo today.
7 benefits of working with small, local, and diverse businesses
There are many benefits to working with small and local businesses in procurement. By exploring these value-adds, consider how you and your organization are working to better your community for a sustainable future. Benefits to sourcing local include:
1. More flexibility, control and speed
Sourcing local is a lot like servicing your car at your community’s mechanic shop. You know the owner by name, trust their advice, and rely on them to remember your vehicle’s specific requirements. This high level of communication and engagement with suppliers allows you to optimize your procurements with more flexible schedules, increased control and fast-tracked deadlines so you can complete your projects successfully.
2. Increased revenue in local economy
It’s simple math. When it comes to engaging local businesses in procurement opportunities, you shrink the supply chain, pay less for transporting goods and bring more money to boost the local economy. Even though it may sometimes initially cost more to invest in a local business, your community will see how this investment blooms into long-term sustainability. This is particularly impactful for municipalities and government agencies looking to procure goods and services in their local community.
3. Reduced bureaucracy
When you don’t have to deal with international suppliers, trade agreements, and border closures to source your projects, your paperwork decreases, approvals become simpler and project timelines are truncated. You gain more time to focus on contract management, allowing your projects to run more efficiently and productively and prevent scope creep.
4. Strong relationships within your community
Imagine if you could call up your supplier to say, “Hey, want to swing by the office to go through our project logistics?” Building strong relationships with local suppliers offers opportunities to converse more often, respond to each other’s business needs, reduce conflicts, and negotiate mutually beneficial terms. The bonds that you can create with your local businesses can add irreplaceable value to your projects and community.
5. Support for diverse and minority-owned businesses
It is likely that your organization supports diversity and inclusion for your internal staff, so why not extend that to outsource diverse suppliers from your local area as well? By supporting underrepresented businesses, like woman-owned enterprises or businesses run by individuals with disabilities, you can help your organization reach your moral and ethical standards across the board.
Your organization will gain more agility and flexibility when you have access to a greater pool of vendors, which also creates healthy competition in the bids they submit. As you award diverse suppliers, you gain different mindsets and perspectives, leading to strong ideation and creativity that sparks great success for your projects.
6. Stimulated local supply chain
The more organizations within a community work together, the more impact the “economic multiplier” local supply chain. With the onset of the COVID-19 pandemic, supporting local businesses has become more of a priority for many community members, and they will appreciate your commitment to these efforts. When you invest in them, they return the favour. They will be more inclined to work with, invest in, and buy from organizations helping the community. A win-win situation for all.
7. Reduced climate change
As people strive to reduce their carbon footprint as individuals, organizations can make a significant difference for the benefit of the environment. By sourcing local, organizations can help eliminate toxins and pollution that are emitted when services and products are sourced from a distance. Less transportation of goods and materials reduces your environmental footprint, and helps nurture a cleaner and more environmentally conscious community.
How eProcurement helps
If your organization is looking to optimize supplier diversity in your procurement processes, consider the added value of eProcurement. eProcurement can help your organization with supplier diversity by increasing bid reach, leveling the playing field for suppliers, and building your organization’s values directly into evaluation templates.
eProcurement platforms are only as good as the supplier network they reach. An eProcurement platform like bids&tenders, with tens of thousands of network suppliers, can help your organization reach a greater number and a more diverse group of eligible bidders. bids&tenders also uses supplier outreach and onboarding, media outlets, and notification systems to ensure your existing supplier list and local community are aware of opportunities.
Organizations accepting paper bids may be inadvertently limiting their bidder pool and discriminating against smaller businesses. The costs and time commitment of professionally designed, full-colour binders of paper, delivered by courier or in person to your offices, may be unacceptable to smaller businesses that could otherwise be a viable candidate. eProcurement templates and online submissions level the playing field by standardizing the submission process.
Building diversity and locally-owned supplier guidelines into posted opportunities and evaluation templates within an eProcurement system can help your evaluation team to select not only the lowest priced bids, but the ones that align best to your supplier goals. An eProcurement system that brings the evaluation process online can also produce auditable records of how bids were awarded, ensuring a fair and transparent selection process.
With eProcurement, your organization can contribute to the economic success of local, minority-owned and small businesses while still seeing overall cost savings of 10-20%.
Reap the benefits of eProcurement! Schedule a demo to see how your organization can successfully adopt supplier diversity into your process today.