I interviewed Leona Charles who discussed Diversifying the Supply Chain in Sustainable Ways.
Today we're speaking with Leona Charles who is the owner of SPC Business Consulting, LLC, and the topic for today's discussion is diversifying the supply chain in sustainable ways. So, Leona, can you first provide a brief background of yourself?
Sure. Hi, Dustin.Good morning and thank you for having me.So, a brief background on my company. We focus in program management, and we operate in a lot of government areas. We do do some non-profit, and we do some commercial. But I think our bread and butter is government. But we do all areas of program management from [inaudible 00:00:43] solicitations and developing processes for that, all the way to post award where we're managing compliance and things of that nature. So, process improvement and continuous improvement is kind of our bread and butter. And we work really hard with our clients to develop strategies that help them run their business more efficiently without them having to be there, which is the ultimate goal.
Well, what are some of the inefficiencies that are involved with government contracts and supply chains?
I think the biggest inefficiency in government contracting is the regulatory environment. It's very intensive. It's very staff intensive. It's labor intensive. And it's also time intensive, because there's just so many of them, and they're constantly changing, and once you're working with the government, you have an intense amount of liability as a contractor, to comply with all of these regulations that are out there. So, it's a perfect breeding ground for inefficiency, because the liability for small businesses... One bad decision can effectively shut your doors.
Well, how do you develop processes to address these mandates?
One of the biggest mandates that's coming out recently, and something that a lot of companies are struggling with is the mandate to diversify your supply chain. And diversification for many governments means small, minority, veteran-owned, woman-owned businesses. And depending on what your industry is, sometimes this is easier said than done. But the mandate is generally a percentage. I know I work a lot in the D.C. Metro area, which encompasses Virginia, Washington, D.C., and Maryland. And I know in Maryland, if you're doing any state contracts, there's a mandate that 29% of that contract over a certain value has to go to a diverse company. So, you have contractors scrambling to figure out, how can I meet this goal. And not meeting it is, a lot of times, not optional. If it's above a certain dollar threshold, it's usually above $150,000, they have to meet these mandates.
They're going around and picking up people just wherever. And the thing about it is that these people may or may not be qualified. So, diversifying your supply chain is a way to insulate yourself against poor performance, and it's a way to make sure that you're complying with the mandates that are coming out.
Can you share with us where you've seen some success?
Sure. Industries that are really successful at meeting this are manufacturers are really successful in meeting this and construction industries are really successful in meeting these. And part of that is because the award amounts in those industries are typically larger. So, it's a bit easier to get smaller companies on board, because there's a lot of money to be made.
Also, now that I think about, some utilities are doing really well. I know in this area, Washington Gas is one and Pepco is one. They are constantly exceeding their goal. And a lot of that has to do with the way that they've diversified the supply chain and the way that they've reached out to the small business community and the diverse business community, the way that they've set up programs with clear, concise processes and clear directional challenge address. That's not the word. But they address challenges in a clear and direct manner for all of their vendors that come through. If there is an issue, it's addressed very quickly. And it's that particular issue that's addressed. So, it doesn't turn into any type of [inaudible 00:05:00] about things that aren't relevant. It's addressing that issue, addressing [inaudible 00:05:05] successful and what they need to be successful on that particular contract. And it's setting them up for future work.
And I think building a diverse supply has to evolve around sustainability, and that's outside of diverse business. It's outside of small business. It's just about your supply chain. Nobody wants to have a vendor that's going to fold in six months. And to do that, you have to think long term. When you're looking at partnerships, when you're looking at joint ventures, you have to think long term. Is this somebody that I really want to bring into my company, show the ropes, show them how to do this and work with them and grow with them?And that needs to be the priority.
When you're building a diverse supply chain, those things have to be at the forefront. Yes, you want to meet these goals, and you want to be compliant, and you have to be compliant a lot of times. But that compliance should not supersede your strategic development, which is long-term relationships, which will make your supply chain much more successful because your quality will go up. Your added value to your clients will increase. Everything positive will come from building that supply chain in a meaningful way.
And do you have any final recommendations regarding using process improvement to create sustainable supplier diversity programs?
The first thing you have to do is you have to understand whatever your state's guidelines are. You have to understand what they are. You have to have clear lanes to the point of contact for whoever it is that's going to oversee this program, whoever is going to be managing compliance. You have to have a clear path of communication to this person, both internally and externally. And you have to have a clear path for the suppliers to get to this person. They need to understand your program, understand what you're requirements are, and understand who is the person to ask question to. And this person needs to be accessible. They shouldn't be someone that you send an email to, and it goes into a black hole and you never hear from them again. This needs to be someone that you send an email, and they'll pick up the phone and talk with the supply, get them in, meet with them. You have to meet with suppliers. I know this is the age of technology, and I know that we're doing this interview using technology, and it's great. But at the same time, you have to have some human touch in this process. That's what makes it successful. And if you're clear about what you need, clear about what your expectations are, and clear about how you're suppliers can get to you, and what you expect from them once they're there, then you will have a really good program.
Again, we've built these kinds of programs for utilities and for private businesses and government entities before, so if you have questions, please let me know. Dustin, I know that you're very good about giving information. Shoot me an email. If it's something right off the top of my head, I'll be sure to help you with it.
These programs have to be set up in a way that they are going to work. And to that is to make sure that your processes are clear, concise, and your avenues to questions are out there, and they are actually being utilized. If they're not being utilized, then your processes have a problem.
Thanks, Leona, for sharing today.
You're welcome. Thank you for having me. I appreciate it.
About Leona Charles
Owner, SPC Business Consulting LLC