Through its Better Tomorrow Plan, Sodexo is committed to local supply chain inclusion for SMEs with a particular focus on those owned and operated by women. Guided by the Better Tomorrow Plan priority to strengthen local communities, this commitment will expand business opportunities for SMEs through a variety of new measures. To increase the number of SMEs in its supply chain, strengthen its existing SME relationships, and increase purchasing from SMEs on a global basis, Sodexo will implement a supply chain inclusion program in all of its business lines including on-site, personal & home, and benefits & rewards services.
First, Sodexo will develop standards for the supply chain inclusion program for global deployment. These will help the local Sodexo operations train and incentivize their supply team to source from SMEs, make the supplier on-boarding process easier for SMEs to navigate, and support the development of SME partners with new training programs. Training programs will help suppliers work more effectively with Sodexo and meet quality standards that will help them serve Sodexo and become more competitive in their marketplace overall.
Sodexo will also continue to work with intermediary organizations, like local cooperatives to expand opportunities for local businesses. For example, in Lao PDR they are working with rice cooperatives to increase the number of participating farmers from 50 to 250 local farmers To ensure effective management of these initiatives Sodexo will develop a system for tracking global spend with SMEs and expand best practices in SME sourcing to new countries.
Through the new supply chain inclusion program Sodexo will promote economic empowerment for the diverse communities it serves. In addition to its focus on SME sourcing, Sodexo will also encourage sourcing from larger businesses that embrace diversity & inclusion in their workforce and supply chains, as well as those businesses owned by women, minorities or other underserved populations. Economic empowerment for women is an emphasis throughout Sodexo's supply chain inclusion programs and will be a focus in every one of the 80 countries it serves.
Standards: Develop local supply chain inclusion program guidelines
Incentives: Develop incentive program to reward supply team professionals that strengthen and expand SME sourcing
Tracking: Expand tracking of SME sourcing to include women owned and operated SMEs
Internal Training: Develop tools and resources for internal supply team training, including guidance to streamline on-boarding for SMEs
Supplier Training: Create plan for training program to help SME suppliers work more effectively with Sodexo and meet quality standards that will help them serve Sodexo and become more competitive in their marketplace overall.
Supplier Training: Create SME supplier training resources for deployment where SME programs exist
Systematize: Deploy tools and resources to bring the programs in 26 countries with some level of activity up to the new standard. This includes streamlining the on-boarding process, deploying the incentive program, training internal staff, measurement protocols, etc.
Standardize: Begin to embed new standard operating procedures that include all the necessary elements of a successful SME program
Expand: Introduce the new SME program to 14 additional countries where Sodexo operates. Currently targeting operations in Africa, Asia and Latin America.
Small and medium sized enterprises (SMEs) are key engines of growth and job creation in developing economies, where they account for between 60 to 70% of GDP and 70 to 95% of total employment. (OECD 2004, Promoting Entrepreneurship and Innovative SMEs in a Global Economy <) When companies effectively integrate SMEs into their supply chains, the benefits for them, for SME owners, and for the communities in which the SMEs operate, can be significant. Expanding SME sourcing helps companies leverage the diversity of their supply base, gain access to innovative products and services, enhance community relationships, increase competition, and better serve the interests of clients and consumers within the communities where they work.
While it is well documented that supporting SMEs can improve quality of life for communities around the globe and that integrating SMEs into larger supply chains can provide significant benefits to companies, a number of challenges still remain. Some of these challenges include efficiency of scale, quality standards, distribution and logistics, stability of supply, and connections and on-boarding. Over the past 20 years, supply management education has responded to these challenges by emphasizing the importance of driving down costs and administrative inefficiencies in order to achieve scale, leading many companies to purchase products and services from larger scale businesses. Another obstacle to supply chain integration is that SMEs need to meet and often verify a range of quality standards, including social, environmental and ethical requirements.
In order to compete, SMEs must also tackle logistical challenges often reserved for larger businesses, including access to distribution channels. Along the same lines, SMEs will have a harder time meeting the production volumes and supply timelines required of larger businesses. They may need assistance in scaling up to meet these demands. Finally, SMEs often find the bureaucracy of larger businesses cumbersome to navigate during on-boarding. In these cases it can be difficult for SMEs, to make the right connections and finding the right SME partners can be a challenge in a particular marketplace.
Sodexo continues to work with organizations that will help identify opportunities to work with high potential SMEs. These organizations provide insights on how to work most effectively with SMEs and help create new market opportunities with existing SMEs.
Sodexo offers market opportunities for qualified SMEs. They also seek to share good stories about their SME partners and other partner organizations. In addition, they will share their expertise about how SMEs can connect better with global supply chains.