How to Integrate Indigenous Businesses into Your Supply Chain, and Why You Need to
Procurement is making the push for supply chain diversity – but there’s room for improvement. No more excuses – here’s why ensuring diversity into your business needs to be a priority.
Having diversity in your supply chain is not just a nice-to-have, but a need-to-have. Diversity makes business sense: having many different suppliers helps to reduce business risk, and enables your organisation to build relationships with new and varied customers. Beyond that, though, the business case for diversity, in particular for including businesses owned and operated by First Nations peoples in your supply chain, is strong. According to Supply Nation, for every $1 in revenue, a Certified Indigenous Supplier generates $4.41 in social return. That’s a substantial ROI!
Given the historic underrepresentation of these businesses, in Australia there has been a substantial push to incorporate Indigenous businesses in supply chains – and rightly so. This push is echoed around the world, with numerous countries, such as the US, Sweden, Norway and New Zealand, all putting policies in place to ensure Indigenous businesses are included in public procurement, as well as encouraging the private sector to follow suit.
Supply chain diversity isn’t always so simple, though, with numerous companies have recently been accused of ‘blackwashing’ in order to secure government contracts. It is of critical importance, therefore, to incorporate Indigenous suppliers into your organisation with genuinity and respectful practices. So, if you are looking to engage Indigenous businesses, how do you do it? Here’s how to get started:
1. Set reasonable targets
The essential first step towards partnering with Indigenous businesses is to set a reasonable goal for where and how their companies would best be incorporated.
Your focus should be on establishing positive diversity benchmarks, and avoid falling into tokenism. This is to say, maintaining awareness that each supplier is unique and demonstrating your appreciation for the value they contribute to the partnership, rather than simply including an Indigenous supplier to quell criticism and give an appearance of prioritising diversity in the workplace.
When engaging with diverse suppliers, ensure you do it strategically – with a strong plan in place – and for the right reasons.
2. Do the research: seek out suppliers
Whatever your organisation needs, it is highly likely that there is an Indigenous business who can help you. Utilising resources at your disposal to search for suitable organisations is key.
It’s helpful to search a First Nations Peoples’ business directory when looking for suppliers. Here are five Aboriginal and Torres Strait Islander business directories to get you started:
- Supply Nation: Supply Nation is Australia’s largest database of Aboriginal and Torres Strait Islander businesses. Businesses listed on Supply Nation have self-identified as Indigenous. Supply Nation also hosts an annual event, ‘Connect,’ that helps bring together businesses looking to engage with Indigenous suppliers.
- Kinaway Chamber of Commerce: A Victorian-focused organisation, Kinaway Chamber of Commerce supports Aboriginal and Torres Strait Island businesses, and also provides a comprehensive business directory. Kinaway also certifies businesses to ensure they are 51% or more owned and operated by an Aboriginal or Torres Strait Island person.
- The New South Wales Indigenous Chamber of Commerce (NSWICC): This NSW-focused organisation is the central body for Aboriginal and Torres Strait Island businesses in the state. It provides many services for such businesses, and can be consulted by external parties if they are looking for partnership opportunities.
- Aboriginal Business Directory WA: Supported by the Chamber of Commerce WA, the Aboriginal Business Directory WA is a free resource for businesses looking to partner with Indigenous businesses in Western Australia.
- The Aboriginal Business Industry Chamber of South Australia (ABICSA): ABICSA works to connect South Australian businesses with companies for the purposes of procurement.
If in doubt, contact your local business council to help connect you with Indigenous organisations. Outside of Australia, there are many different councils that will be able to help, including, in the US, the National Minority Supplier Development Council, and the U.S. Hispanic Chamber of Commerce.
Alternatively, consider seeking second-tier Indigenous businesses through some of your existing first-tier suppliers, as they may be able to help you discover businesses that you didn’t know existed and put you in touch with their representatives.
3. Nurture the relationship
Like all suppliers, if you onboard a new supplier owned and operated by First Nations peoples, you’ll need to invest in nurturing the relationship. This may mean anything from understanding differences in business customs and practices, to doing what you can to help out financially (for example, reducing payment terms or offering to pay upfront).
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