Tealbook; leveraging tech for supply diversity and agility
Widening the pool of potential suppliers and establishing best practices for inclusive procurement builds agility and promotes a healthy competitive environment for strategic procurement, all while improving quality and innovation and introducing further opportunities to reduce costs.
Yes, ethical procurement makes for a good look, but if done right, it can also be a competitive advantage that benefits society and generates economic opportunity for disadvantaged communities.
And yet, a year after the global pandemic brought to light the ubiquitous problems supply chains face due to lack of supplier information and an inability to react swiftly to supply chain interruptions, leaders the world over continue to spout the need for increased resiliency while seemingly doing little to affect change.
The breaking point
Conducted by Wakefield Research, the Tealbook Survey “On Solid Ground: Building the Data Foundation for Agile Procurement” warns that without immediate foundational improvements, further disruptions to supply chains may push them to their breaking point.
Supporting their fears, the survey found that 72% of procurement leaders are very concerned that their supplier intelligence has still not improved to crisis-proof supply chains and 73% report having not yet made the necessary improvements to future-proof supply chains.
Even more interestingly, however, the survey also found that 96% of procurement professionals believe agility is even more important than cost savings for their companies’ bottom line.
The numbers are, quite frankly, shocking. So I was anxious to sit down with Stephany Lapierre, the Founder and CEO of Tealbook, to talk it out and learn more about the power of supplier data and how Tealbook can help support supplier diversity.
But first, let’s take a deeper look.
What exactly is supplier diversity?
In order to be considered a diverse supplier, a business must be at least 51% owned and operated by an individual or group that is part of a traditionally underrepresented or underserved group. Commonly used classifications include small-business enterprises (SBEs), woman-owned enterprises (WBEs) and minority-owned enterprises (MBEs). However, today the definition of diversity also encompasses businesses owned by other minority groups such as LGBTQ.
According to the US Senate Committee on Small Business & Entrepreneurship, “over the last ten years, minority business enterprises accounted for more than 50 per cent of the two million new businesses started in the United States and created 4.7 million jobs. There are now more than four million minority-owned companies in the United States, with annual sales totalling close to $700 billion.
“Yet, despite that growth, there is still a disparity when it comes to access to capital, contracting opportunities and other entrepreneurial development opportunities for minority-owned firms.” Although minorities make up 32 per cent of the US population, minority business ownership represents only 18 per cent.
Supplier diversity, it’s good for business
Now, more than ever, people (and not just millennials) are aligning their actions with their values and are looking to buy from and work for companies whose values align with theirs. When looking to attract top talent, supplier diversity programs speak to your corporate ethics and make for a good selling point.
According to a UPS survey conducted by Hootology (itself a diverse supplier), 52% of respondents said they want to work for a company that has a supplier diversity and inclusion program. In 2019 another study performed by Hootology for Coca-Cola showed that 25% of respondents were more likely to think favourably about the brand, and 49% were more likely to use Coca-Cola products.
So, if diversity is good for business, then what’s the problem?
Although supplier diversity programs can and should be authentically initiated out of an honest desire to establish a high moral and ethical standard, or even because it makes good business sense, that’s not always the case. Much like greenwashing, they are often created reactively to mitigate brand risk and tend to be more about virtue signalling and brand building than a valued initiative to drive business improvements and align the business with corporate values.
As Kris Oswald, supplier diversity expert for UPS, said, “To truly drive toward economic equality, supplier diversity can’t feel like a secret tucked away in the procurement function; it has to hit the main stage.” It must be taken seriously and influence procurement decisions.
Critically, the pandemic both highlighted and exasperated the need for improved supply chain practices in ESG —yet, according to the survey, 63% still lack full visibility into supplier data to be able to do so.
One of the biggest obstacles procurement leaders face is finding minority-owned vendors is ensuring they are compliant and meet all buyer and customer requirements.
Luckily, Tealbook can help with that.
Tealbook; Easing supplier diversity and agility
“By leveraging AI and machine learning, Tealbook created a supplier intelligence platform that brings transparency to the supply chain ecosystem. Tealbook can help improve supplier diversity and increase agility, easing the way companies obtain supplier data and empowering speedy informed decision making,” says Lapierre.
She further explains that when it comes to supplier diversity and sourcing compliant suppliers quickly, Tealbook’s supplier intelligence platform is a powerful aid, allowing you to search for suppliers based on your requirements.
“We built a beautiful, easy to use interface that allows our customers visibility into the vendor master and to gain transparency and visibility across all their suppliers. Reporting, supplier searches and other lightweight functionalities give employees the information they need to better manage things like supplier diversity and react more swiftly to changing conditions, increasing agility.”
Allowing buyers to interact with the data efficiently and on a large scale, affords stronger outcomes. LaPierre offers Tealbook’s work in the UK as an example. In an effort to provide the UK with comprehensive supplier resources of PPE during the Covid-19 outbreak, working with the UK government, Tealbook added 56,000 new suppliers (mainly in India, UK and the US), 22,000 Good Manufacturing Practices for health care certificates and over 250,000 additional ISO certificates.
“We are so honoured to be working with the U.K. government to help them provide for the essential workers and others that are in desperate need of personal protective equipment,” said LaPierre regarding the partnership. “We are here for them now and in the future, as the U.K government expands the search for suppliers in areas beyond PPE.”
Tealbook, giving you a head start on ROI
Tealbook delivers a trusted source of supplier data, providing a data foundation that can be leveraged to optimise other eProcurement solutions and ensure these larger investments are successful.
“For those who are on their pre-transformation journey and are looking to have a data-first transformation and want to deploy something fast and make an impact on driving ROI quickly, Tealbook provides a head start,” says LaPierre.
Using an AI and Machine Learning technology, Tealbook crawls over 400M websites and aggregates the data onto their platform and creates what they call a dynamic universal supplier profile for every B2B company in the world. Tealbook continually gathers fragmented information from disparate and sometimes hidden sources and pulls it all together into a complete and accurate data picture.
LaPierre further explains, "Then, through APIs, we feed that data to any of the systems that our customers have invested in. By doing that, we improve the quality of the data on those systems across a hundred per cent of the suppliers, ensuring that their large software investments are successful.
“This also leads to a more interchangeable and agile technology stack. The analogy I often give is that of losing a phone. There was a time not that long ago when you lost your phone, there was a lot of friction because all the data lived on the phone. So you lost your pictures and all your contacts. But now, if you lose your phone, all of your data remains connected to your watch, your iPad or your computer via the cloud. A phone upgrade now takes seconds. It’s frictionless.” Tealbook gives organisations that same sort of flexibility, so you can change or upgrade software as you wish without having to concern yourself with supplier data.
“Ultimately, you're getting more out of the systems you've invested in because you now have clean, complete, reliable data, and you no longer have to overcome limitations faced by inaccurate or incomplete supplier data.
“With many procurement systems like source-to-pay or spend analytics, the promise of the investment in that software requires having good data upfront. Tealbook provides that, giving you the freedom to choose technologies that best meet the digital requirement of each function. You can upgrade to the newest, coolest digital solution without having to live with that decision forever, and you can implement it faster and get more out of it.“
And so, it seems, the problem of bad or inadequate supplier data has been fixed. We have the technology available to create more diverse and agile supply chains.
To that point, LaPierre shares an analogy, “The obvious analogy here is Covid. We worked so hard in the US to bring the vaccine to fruition. A year later, after all the angst in the supply chain, organisations are saying that if another incident like this happens again, they're not any further along, and they're not prepared. I think that's the huge takeaway here. Why aren't they? It's ready. It's here. This is not a technology that they need to wait on like we needed to wait on the vaccine.”
Perhaps it’s time supply chain leaders take supplier diversity and agility seriously and leverage tech that’s fit-for-purpose.
A Watershed Moment for Sustainability Commitments
Last month saw a landmark ruling where Royal Dutch Shell was instructed to significantly step up its 2030 climate commitments and slash absolute emissions by 45% compared to 2019 levels. This ruling represents a considerable advance on Shell’s stated aim to cut 45% of its emissions intensity compared to 2016 levels by 2035 – a target which provided leeway for increasing emissions as long as the relative carbon emitted per unit of energy produced fell. Now, this imposes a much larger climate obligation on Shell in calling for an urgent absolute reduction.
A ruling that sent ripples through the oil, gas, and energy sector
A watershed moment, this ruling is sure to cause significant alarm amongst fellow oil and gas giants who recognise – for perhaps the first time – that national courts can compel organisations to accelerate their reduction of harmful emissions under the Paris Agreement. Not only does it have "far-reaching" consequences for Shell itself and may even curb the potential growth of the company, but the decision is also likely to set a legal precedent for other energy companies and corporations. According to Thom Wetzer from Oxford University, who heads up the sustainable law programme: “all companies in the energy industry and all heavy emitters will be put on notice and have to accelerate their decarbonisation plans.”
This court mandate applies to not only the Shell group’s own operations but notably also to all the suppliers and customers of the group – strongly implying that Shell is being asked to tackle its Scope 3 emissions. Consequently, it is clear that Shell cannot meet the ruling’s demands alone; to make an impact across all carbon emissions scopes, Shell and other large businesses must immediately look towards forging new, productive partnerships with supplier stakeholders. Failing to do this not only means missed targets and mounting legislative action but also the reputational damage that this will cause to its brand and the company.
Activist investor warns of existential business risk
Reports on the Shell ruling were almost immediately followed by news of a coup attempt in American oil and gas corporation Exxon Mobil. Due to concerns surrounding Exxon’s strategic direction, hedge fund Engine No. 1 ousted sitting board members, stating that the climate crisis poses an "existential threat to the business", which the board has been reluctant to confront.
This small hedge fund accused Exxon of "a failure to take even initial steps towards evolution" and of "obfuscating rather than addressing long-term business risk", partly due to a historical lack of energy industry experience in Exxon’s board. This signalled an imminent shift in the company’s sustainability strategy, which was well received by the market, with Exxon’s shares rising 1.2% the day after the event.
The drive to reduce Scope 3 emissions
And if that wasn’t enough of a shakeup, this was followed by American multinational energy corporation Chevron’s shareholders voting 61% in favour of a proposal to cut Scope 3 emissions at their AGM, signalling frustration with the company’s slack approach towards climate change. Chevron has thus far failed to match its competitors’ net-zero targets with any commitments of its own.
For those less familiar, corporate emissions fall into three categories: Scope 1, 2, and 3. Scope 1 covers emissions from sources that an organisation directly owns or controls. Scope 2 refers to emissions from purchased electricity, steam, heating, and cooling that the reporting company consumes over the course of its operations. And Scope 3 is everything else – all other indirect emissions that occur within an organisation’s value chain, both up and downstream.
Why is this significant? Until now, Scope 3’s heady combination of difficult-to-manage and thus far easy-to-ignore has led large companies to abdicate responsibility for their value chain and sweep its emissions under the carpet. However, the Shell ruling indicates that this approach is no longer viable for big business. With courts stepping in and dictating climate policy to corporations as well as governments, the pressure is mounting on all heavy emitters to tackle their true impact and reduce Scope 3 emissions.
As organisations like Shell, Chevron and Exxon are considered responsible for the actions of their entire ecosystems, sustainability performance becomes contingent on supplier behaviour. The clearest example of this lies in Scope 3 emissions which, for many organisations, considerably exceeds the CO2 they emit directly.
Therefore, the time for green-washing and lip service is now over as pressure mounts from all stakeholder groups for large corporates to take decisive action on sustainability in the supply chain. However, businesses cannot turn promises into concrete progress without actively collaborating with stakeholders across the value chain.
For every five weeks that pass, we lose 1% of the decade
2030, the deadline for achievement of UN SDG-related climate commitments, is fast looming, and with every five weeks that pass, we lose 1% of the decade. The imperative to take immediate action has never been clearer. It’s now down to procurement, wider business leaders, and their associated supplier ecosystems to put sustainability strategy into action by:
● Defining, aligning, and communicating their corporate sustainability goals to focus suppliers, partners and the wider stakeholder groups on how they can make an impact.
● Collaborating systematically through technology using transparent processes that develop trust with suppliers and partners.
● Harnessing the innovation and IP within the supplier ecosystem, turning ideas into projects that can be managed and reported on transparently, and adding clear value trackers to prove impact.
Working closely with stakeholders in the supply chain is an infamously complex process, but it can be made that much simpler using Supplier Collaboration & Innovation (SC&I) technology. This ensures strategic alignment between buyer and supplier and provides comprehensive relationship governance and real-time performance visibility. This allows companies and their suppliers to work on sustainability initiatives more cohesively and develop innovative ideas through collaboration.
Here at Vizibl – through our SC&I platform combined with our knowledge and expertise – we are helping large enterprise organisations in the energy sector better leverage their supplier relationships and move closer to meeting those lofty 2030 sustainability goals.