GETTING A foothold in a large corporate supply chain can be daunting for SMEs. Sodexo’s new supply chain inclusion programme hopes to demystify the process and make it easier for SMEs to work with large organisations. Amy Fetzer reports.
While landing a contract with a big facilities service provider is an aspiration for many SMEs, the complexity of dealing with big business often proves a barrier. Concerns often surround whether they can meet demand in terms of production volumes, as well as getting to grips with the increased number of health and safety requirements and processes.
But SMEs can provide valuable diversity. They can support local sourcing, and allow organisations to reflect their local community or region, whilst supporting those communities by sustaining the businesses within them.
Sodexo recognises this, viewing SMEs as a valuable asset. As part of its drive to increase diversity both within its product range, as well as within its workforce, Sodexo launched a supply chain inclusion programme in July.
The new programme will see up to 18 nominated SME or micro-business suppliers attend three workshops covering everything from logistics, procurement and distribution to technical perspectives over a four month period. It will also give participants the opportunity to network with Sodexo and its supply chain, as well as with each other.
Sodexo has teamed up with a number of agencies to help identify SMEs which meet certain social, diversity or minority criteria set out for the programme.
The suppliers range from fairtrade chocolate makers Divine Chocolate and Good4U, a family-owned health food company whose product range includes sprouted seeds and seed-based snacks, to Joe & Seph’s, a family business with a mission to produce the best-tasting popcorn in the world. There are also a number of non-food SMEs participating in the programme.
“It can be very daunting for SMEs to try and deal with large corporations,” explains Steve Jobson, buying director, Sodexo UK and Ireland. “We deal on a huge scale - we spend $10b globally, and serve 1m meals a day. We provide services at some 2,000 locations across the UK and Ireland. Small companies can often feel out of their depth when dealing with global organisations like Sodexo and this programme is all about looking at ways to help address this issue.
“The challenges are mainly around scale as some may find it hard to keep up with demand. Health and safety is also critical to Sodexo and our requirements can seem intimidating. But there is a very strong business case for getting SMEs on board with programmes like this.
“The first part of the business case links in with our ‘Better Tomorrow Plan’ corporate responsibility roadmap which focuses on the economic and social development of the communities and regions we operate in.
“The second is that it gives us a competitive advantage – we can use the best and most agile suppliers in the market place. Having diversity means we don’t have to rely solely on large suppliers. Third, the government and public sector believes in these programmes, so SME initiatives help us in our relationships with key stakeholders in this area, and we can demonstrate our commitment to assisting government in hitting their published targets on increasing SME spend.
“The fourth sell is innovation. By dealing with smaller, more nimble suppliers, we can get really close to market trends and innovations, which allows us to bring new products to market quicker.”
But what about the issues, such as long payment terms, that SMEs sometimes come across when working with large organisations.
“We already work with 4,500 SMEs outside of our core supply base,” explains Steve, “and for each one, we work with them to ensure issues such as payment terms are agreeable for both parties.
“By the end of the programme, the participants will have clear knowledge of how to work with Sodexo. They know from the outset that the aim of the programme is not necessarily to become a supplier, but that they will be armed with the understanding and confidence that may or may not spur them onto to develop their businesses in order to meet the needs of a large organisation such as Sodexo. For us, if we can develop a supplier relationship with these businesses that would be fantastic. But equally, if we can arm them with valuable information which will help them develop and grow, then for us, the programme will have been a success.”