9 March 2011 | Angeline
Albert
Organisations
must do more to incorporate social enterprises in their supply chain, according
to the latest SM100 poll.
Some
65 per cent of purchasers polled said firms could provide more support to help
businesses that strive to improve social outcomes become suppliers to them. The
opposite view was held by 35 per cent.
Buyers
cited cost concerns and a lack of support from leadership as key barriers preventing
progress in this area.
Karen
Wontner, purchasing manager at CardiffUniversity, said: “We are also under pressure to reduce
spending and to collaborate, which tends to result in aggregated spend and
larger value contracts. Any additional cost will be paid by the procuring
organisation as part of the overall contract price, unless the contractor is
prepared to sacrifice profits to meet the cost. For some, this cost may be
justified as a trade off (put people back into work and it costs them less to
support them) however other public authorities may not be able to produce a
cost-benefit analysis justifying this.”
Most
buyers thought social enterprise firms could pose a greater financial risk. Although
splitting contracts up over between vendors may mitigate this, purchasers said
approving a higher number of suppliers would be resource intensive and costly,
and diversifying the supply base would also push prices up.
Some
respondents argued if purchasing influenced more spend, buyers would be in a
better position to find opportunities where social enterprises could be
integrated into operations.
Others highlighted a lack
of corporate knowledge about social enterprises as another barrier. A senior
buyer in the automotive sector, who did not want to be named, said: “We need to
ensure that these social enterprises can be competitive and win business.
Within some big companies, there is a lack of knowledge about social
enterprises and the services they offer. If they wish to encourage this
activity in large companies, then they need to start approaching these
companies and getting themselves known, this maybe an area where they need some
support.”
